U.S. banks told to make plans for preventing collapse(reuters.com)
reuters.com
U.S. banks told to make plans for preventing collapse
http://www.reuters.com/article/2012/08/10/us-banks-recoveryplans-idUSBRE87905N20120810
94 comments
At the core of our problems is the John Galt mentality. The idea that you do all these things and other people are mooching off it. The idea that we're anything other than the highly complex and completely inter-dependent society that we really are.
If you're an "entrepreneur"... you didn't build that. Your employees are the result of subsidized education. Your customers get to your location driving on subsidized roads. Your electricity, water, sewage, etc, is all subsidized infrastructure. You depend on subsidized legal infrastructure to mediate your interactions with other businesses and customers. If you're a tech business, then 90% of the theoretical foundations of your business are the product of subsidized research.
You can't create wealth without community. The only real "John Galt's" in the world are primitive hunter/gatherers. Romanticized portrayals aside, these people have no wealth--they constantly live at the edge of death. You're not John Galt. You're privileged to live in a sophisticated, organized, interdependent community.
If you're an "entrepreneur"... you didn't build that. Your employees are the result of subsidized education. Your customers get to your location driving on subsidized roads. Your electricity, water, sewage, etc, is all subsidized infrastructure. You depend on subsidized legal infrastructure to mediate your interactions with other businesses and customers. If you're a tech business, then 90% of the theoretical foundations of your business are the product of subsidized research.
You can't create wealth without community. The only real "John Galt's" in the world are primitive hunter/gatherers. Romanticized portrayals aside, these people have no wealth--they constantly live at the edge of death. You're not John Galt. You're privileged to live in a sophisticated, organized, interdependent community.
This is incorrect, for the USA at least, and I suspect other countries as well, because you are ignoring the facts of history.
Those roads exist because people had to get somewhere. In the beginning, those somewheres were private Trading Posts that were often setup at the crossroads of Indian trails or the confluences of rivers. The successful Trading Posts gradually attracted more settlers and those settlers subsidized the construction and maintenance of the roads to and from the Trading Posts.
You have the cause and effect reversed. The successful entrepreneurs don't exist because of subsidized infrastructure. Subsidized infrastructure exists because of successful entrepreneurs.
Those roads exist because people had to get somewhere. In the beginning, those somewheres were private Trading Posts that were often setup at the crossroads of Indian trails or the confluences of rivers. The successful Trading Posts gradually attracted more settlers and those settlers subsidized the construction and maintenance of the roads to and from the Trading Posts.
You have the cause and effect reversed. The successful entrepreneurs don't exist because of subsidized infrastructure. Subsidized infrastructure exists because of successful entrepreneurs.
History disagrees with you.
http://en.wikipedia.org/wiki/Interstate_Highway_System
http://en.wikipedia.org/wiki/Interstate_Highway_System
Please be more specific. I can think of an example off of the top of my head using the Interstate Highway System to support my argument.
The end points of I-80 are New York City and San Francisco. Both cities predate the Interstate system by a good margin. Both started off as Trading Posts that gradually became more successful (http://en.wikipedia.org/wiki/New_York_City#Early_History, http://en.wikipedia.org/wiki/Mission_San_Francisco_de_As%C3%...). I-80 connects the two cities because that is where the people were. The people were there because of successful entrepreneurship. Furthermore, through tolls and fuel taxes, the people in those areas continue to subsidize the maintenance of the nearby sections of I-80.
*Edited for spelling & grammar.
The end points of I-80 are New York City and San Francisco. Both cities predate the Interstate system by a good margin. Both started off as Trading Posts that gradually became more successful (http://en.wikipedia.org/wiki/New_York_City#Early_History, http://en.wikipedia.org/wiki/Mission_San_Francisco_de_As%C3%...). I-80 connects the two cities because that is where the people were. The people were there because of successful entrepreneurship. Furthermore, through tolls and fuel taxes, the people in those areas continue to subsidize the maintenance of the nearby sections of I-80.
*Edited for spelling & grammar.
> "Both cities predate the Interstate system by a good margin."
And public infrastructure predates them both.
> "You have the cause and effect reversed. The successful entrepreneurs don't exist because of subsidized infrastructure. Subsidized infrastructure exists because of successful entrepreneurs."
This is a false dichotomy. Successful entrepreneurs and subsidized infrastructure exist because of each other. Without economic activity infrastructure would be unaffordable and unjustifiable. Without a baseline level of infrastructure new economic activity cannot develop.
This is also why bootstrapping a city is the hardest thing ever, and all of these planned cities never work out. They either build a bunch of infrastructure nobody needs and it ends up rotting, or they shove a lot of aspiring businesses into a place without the necessary infrastructure and economic base and watch it all collapse.
And public infrastructure predates them both.
> "You have the cause and effect reversed. The successful entrepreneurs don't exist because of subsidized infrastructure. Subsidized infrastructure exists because of successful entrepreneurs."
This is a false dichotomy. Successful entrepreneurs and subsidized infrastructure exist because of each other. Without economic activity infrastructure would be unaffordable and unjustifiable. Without a baseline level of infrastructure new economic activity cannot develop.
This is also why bootstrapping a city is the hardest thing ever, and all of these planned cities never work out. They either build a bunch of infrastructure nobody needs and it ends up rotting, or they shove a lot of aspiring businesses into a place without the necessary infrastructure and economic base and watch it all collapse.
The point I'm trying to make is that in our equation of the relatedness of entrepreneurship and subsidized infrastructure, entrepreneurship is the independent variable and subsidized infrastructure is the dependent variable.
I won't argue that follow-on entrpreneurs don't use subsidized infrastructure. But, subsidized infrastructure cannot exist without the presence of successful entrepreneurs while entrepreneurial activities can exist without subsidized infrastructure.
For example, take the village of Egavik, Alaska (http://www.flickr.com/photos/vallaura/3039481881/). It has no subsidized infrastructure because no one lives there on a year-round full-time basis. But, it is used as a base for private fishing operations, which is an entrepreneurial activity.
Now, I imagine that you'll tell me that those fishermen come from somewhere else and use subsidized infrastructure in the process. But, if you go all the way down to the bottom turtle, you have a caveman ancestor of fishermen who made a spear out of a pointy stick and a hollowed tree as a canoe. He is the independent successful entrepreneur who subsidized infrastructure that later fishermen used.
I won't argue that follow-on entrpreneurs don't use subsidized infrastructure. But, subsidized infrastructure cannot exist without the presence of successful entrepreneurs while entrepreneurial activities can exist without subsidized infrastructure.
For example, take the village of Egavik, Alaska (http://www.flickr.com/photos/vallaura/3039481881/). It has no subsidized infrastructure because no one lives there on a year-round full-time basis. But, it is used as a base for private fishing operations, which is an entrepreneurial activity.
Now, I imagine that you'll tell me that those fishermen come from somewhere else and use subsidized infrastructure in the process. But, if you go all the way down to the bottom turtle, you have a caveman ancestor of fishermen who made a spear out of a pointy stick and a hollowed tree as a canoe. He is the independent successful entrepreneur who subsidized infrastructure that later fishermen used.
Yeah, I'll buy this concept that there was the Ur-entrepreneur from which all subsequent economic activity sprouted, the one who started the cycle of economy -> infrastructure -> economy.
... So what? It's academic trivia that tickles to the brain to think about, but it has no bearing on society today.
The origin of this thread is someone (unsurprisingly, given that this community is biased towards me-first people who think they're better than the plebes) decrying the "moochers" and acting like they are entirely self-made. I think we both agree that train of thought is a load of bull.
This whole argument, every time it comes up, is really just moralizing and brow-beating in the guise of economics. Worse, it's moralizing and brow-beating by the gross and unsubstantiable assumption that the bulk of the world are lazy no-goodniks.
... So what? It's academic trivia that tickles to the brain to think about, but it has no bearing on society today.
The origin of this thread is someone (unsurprisingly, given that this community is biased towards me-first people who think they're better than the plebes) decrying the "moochers" and acting like they are entirely self-made. I think we both agree that train of thought is a load of bull.
This whole argument, every time it comes up, is really just moralizing and brow-beating in the guise of economics. Worse, it's moralizing and brow-beating by the gross and unsubstantiable assumption that the bulk of the world are lazy no-goodniks.
I'll concur that talk of moochers and me-firsters is bullpucky.
But, the danger I'm concerned with (and the reason for me going on and on about the relationship of entrepreneurship and subsidized infrastructure) is that the "you didn't build that" rhetoric, even though it falsely characterizes the relationship, is being used to justify the confiscation of my personal treasure for their infrastructure projects. That rhetoric is telling me that I need their infrastructure for business success while in reality their infrastructure needs me in order to exist.
An alternative to subsidized infrastructure is private infrastructure. For example, my great-grandfather was a self-taught engineer who built a small Pennsylvanian town's first sewer and water system. He literally designed and built the water pumps and clay pipe molds and other technologies himself and he and his employees laid the lines and hooked-up customers themselves. The town council later bought him out and turned it into a public utility they fund to this day through taxes. (I imagine it was an easy sell. "Guten tag! We have water inside the house now. Do you want that too?" "Yes! How much will you charge me?" "Not much, but I will need to bury some pipes through your yard.")
Note: And when I say self-taught I am being quite literal. His parents were immigrants from Germany and he learned to read from the Bible at home. He bought books on advanced mathematics and engineering principles from his savings as a farm-hand on his uncle's cattle farm. I have a few of them that were passed-down. One of his inch-thick pocket books on engineering from 1890 covers the same material that about half of my college courses did. I wish I had gotten it before University because it makes me highly suspicious of the quality and necessity of modern education. But, that's another topic.
But, the danger I'm concerned with (and the reason for me going on and on about the relationship of entrepreneurship and subsidized infrastructure) is that the "you didn't build that" rhetoric, even though it falsely characterizes the relationship, is being used to justify the confiscation of my personal treasure for their infrastructure projects. That rhetoric is telling me that I need their infrastructure for business success while in reality their infrastructure needs me in order to exist.
An alternative to subsidized infrastructure is private infrastructure. For example, my great-grandfather was a self-taught engineer who built a small Pennsylvanian town's first sewer and water system. He literally designed and built the water pumps and clay pipe molds and other technologies himself and he and his employees laid the lines and hooked-up customers themselves. The town council later bought him out and turned it into a public utility they fund to this day through taxes. (I imagine it was an easy sell. "Guten tag! We have water inside the house now. Do you want that too?" "Yes! How much will you charge me?" "Not much, but I will need to bury some pipes through your yard.")
Note: And when I say self-taught I am being quite literal. His parents were immigrants from Germany and he learned to read from the Bible at home. He bought books on advanced mathematics and engineering principles from his savings as a farm-hand on his uncle's cattle farm. I have a few of them that were passed-down. One of his inch-thick pocket books on engineering from 1890 covers the same material that about half of my college courses did. I wish I had gotten it before University because it makes me highly suspicious of the quality and necessity of modern education. But, that's another topic.
There are actually quite a lot of successful planned communities, including Washington, D.C.
http://en.wikipedia.org/wiki/Planned_community
Many of them were started by entrepreneurs.
http://en.wikipedia.org/wiki/Planned_community
Many of them were started by entrepreneurs.
And at least in the case of roads, it's not really "subsidized" at all. At the Federal level they're funded largely through gas taxes and user fees. Localities usually use property taxes, but that's basically a user fee as well, since vanishingly few residents don't use their own local roads.
Sorry if I don't take Naderite PIRG "studies" very seriously.
http://en.wikipedia.org/wiki/Interstate_Highway_System#Finan...
> The federal contribution comes overwhelmingly from motor vehicle and fuel taxes (93.5 percent in 2007), and it makes up about 60 percent of the contributions by the states.
...
> The portion of the user fees spent on highways themselves covers about 57 percent of their costs, with about one-sixth of the user fees being sent to other programs, including the mass transit systems in large cities.
So the driver on the highway is subsidizing mass transit.
http://en.wikipedia.org/wiki/Interstate_Highway_System#Finan...
> The federal contribution comes overwhelmingly from motor vehicle and fuel taxes (93.5 percent in 2007), and it makes up about 60 percent of the contributions by the states.
...
> The portion of the user fees spent on highways themselves covers about 57 percent of their costs, with about one-sixth of the user fees being sent to other programs, including the mass transit systems in large cities.
So the driver on the highway is subsidizing mass transit.
> So the driver on the highway is subsidizing mass transit.
And by doing so, directly benefits the driver on the highway by keeping mass transit users off the highway.
And by doing so, directly benefits the driver on the highway by keeping mass transit users off the highway.
What did come first: The chicken or the egg?
There is no such thing as a "cause" and an "effect" here. There is a highly interdependent system, which, I guess, was the OP's point.
There is no such thing as a "cause" and an "effect" here. There is a highly interdependent system, which, I guess, was the OP's point.
It can become highly interdependent, I won't disagree with that. But, there is a real cause and effect happening.
If the people in a community stops subsidizing infrastructure, what happens to the infrastructure? It crumbles away.
If a community doesn't have subsidized infrastructure does entrepreneurship there die? Nope. Case in point - the show "Flying Wild Alaska" from the Discovery Channel. I used to live in that village. Its only transportation links to the outside world is a private airport and private barge services in the summer. If a local fisherman or craftsman wants to ship his goods to customers outside the village, he doesn't use public, subsidized routes.
If the people in a community stops subsidizing infrastructure, what happens to the infrastructure? It crumbles away.
If a community doesn't have subsidized infrastructure does entrepreneurship there die? Nope. Case in point - the show "Flying Wild Alaska" from the Discovery Channel. I used to live in that village. Its only transportation links to the outside world is a private airport and private barge services in the summer. If a local fisherman or craftsman wants to ship his goods to customers outside the village, he doesn't use public, subsidized routes.
Roads aren't the only form of subsidized infrastructure. The judiciary system, law enforcement and the army are the basic examples where you can't have a working, healthy system without "subsidies" (ie, non voluntary payments or, if you prefer, taxes). What would happen to the entrepreneurs if the same community you were talking about stopped subsidizing law enforcement?
Moreover, that little community only thrives because of commerce with the big, complicated and wealthy external world, with its subsidized roads and so on...
Moreover, that little community only thrives because of commerce with the big, complicated and wealthy external world, with its subsidized roads and so on...
So, Unalakleet has had settlements there for (the best guess I could find) 2100-2600 years [1]. It sits at the ocean-side of a natural portage route between the Bering Sea and the Yukon River (Kaltag is at the Yukon river side of the portage).
People have lived in Unalakleet long before contact with the "big, complicated and wealthy external world" and its subsidized infrastructure like law enforcement. Before whites came with army and police, the eskimos preferred banishment as the way of enforcing societal norms.
[1] http://www.penn.museum/documents/publications/expedition/PDF...
People have lived in Unalakleet long before contact with the "big, complicated and wealthy external world" and its subsidized infrastructure like law enforcement. Before whites came with army and police, the eskimos preferred banishment as the way of enforcing societal norms.
[1] http://www.penn.museum/documents/publications/expedition/PDF...
If you're an "entrepreneur"... you didn't build that. Your employees are the result of subsidized education. Your customers get to your location driving on subsidized roads. Your electricity, water, sewage, etc, is all subsidized infrastructure. You depend on subsidized legal infrastructure to mediate your interactions with other businesses and customers. If you're a tech business, then 90% of the theoretical foundations of your business are the product of subsidized research.
This isn't an argument. It's rhetoric. If it were an argument, it would attempt to establish the criteria for deciding whether a particular set of government programs and the means for paying for them were ideal. Surely there must be some level of democratically ordained wealth redistribution that would qualify as "mooching", no?
This isn't an argument. It's rhetoric. If it were an argument, it would attempt to establish the criteria for deciding whether a particular set of government programs and the means for paying for them were ideal. Surely there must be some level of democratically ordained wealth redistribution that would qualify as "mooching", no?
> This isn't an argument. It's rhetoric. If it were an argument, it would attempt to establish the criteria for deciding whether a particular set of government programs and the means for paying for them was ideal.
That doesn't logically follow. You can make an argument that a particular set of conditions exists without making the argument the particular set of conditions is the ideal balance of conditions.
> Surely there must be some level of democratically ordained wealth redistribution that would qualify as "mooching", no?
Sure. But "mooching" is a value-judgment that only makes sense in the context of some moral framework. There exist more sensible instantiations of that moral framework than I think the popular discourse is willing to admit to.
For example, why should the rules of society not be structured so the wealth created by this joint work is distributed proportionally to the number of hours of our finite and more or less equal-length lives we dedicate to that work? Sure, some people are much smarter than others, and their contributions far more valuable per hour, but people are more or less born with the intelligence they have, so why should they get credit or be penalized for that?
I'm not endorsing that particular distribution, but rather pointing out that it's a logically-defensible one. The point is that because of the structure of our society, it is impossible to precisely determine the value of each person's contribution to the net production (taking into account the whole spectrum of variables such as social stability, etc, over the infinite time horizon). Many people act as if the market equilibrium gives us a precise definition of that value, from which we can derive a definition of "mooching" but it gives us no such thing.
And at the end of the day, once we have labored mightily to determine who is mooching and who is not, what does that buy us? How much more efficient would our society be if nobody was mooching? The conservative Heritage foundation estimates the value of federal welfare spending to be about $175 billion, or 1.3% of GDP. The net social value of that spending is almost certainly more than that (how much would you pay to not live in a society like my native Bangladesh where poor children beg for food in the streets?). "Mooching" is something that has far more value in justifying moral indignation amongst conservatives than it does in any quantifiable economic sense.
That doesn't logically follow. You can make an argument that a particular set of conditions exists without making the argument the particular set of conditions is the ideal balance of conditions.
> Surely there must be some level of democratically ordained wealth redistribution that would qualify as "mooching", no?
Sure. But "mooching" is a value-judgment that only makes sense in the context of some moral framework. There exist more sensible instantiations of that moral framework than I think the popular discourse is willing to admit to.
For example, why should the rules of society not be structured so the wealth created by this joint work is distributed proportionally to the number of hours of our finite and more or less equal-length lives we dedicate to that work? Sure, some people are much smarter than others, and their contributions far more valuable per hour, but people are more or less born with the intelligence they have, so why should they get credit or be penalized for that?
I'm not endorsing that particular distribution, but rather pointing out that it's a logically-defensible one. The point is that because of the structure of our society, it is impossible to precisely determine the value of each person's contribution to the net production (taking into account the whole spectrum of variables such as social stability, etc, over the infinite time horizon). Many people act as if the market equilibrium gives us a precise definition of that value, from which we can derive a definition of "mooching" but it gives us no such thing.
And at the end of the day, once we have labored mightily to determine who is mooching and who is not, what does that buy us? How much more efficient would our society be if nobody was mooching? The conservative Heritage foundation estimates the value of federal welfare spending to be about $175 billion, or 1.3% of GDP. The net social value of that spending is almost certainly more than that (how much would you pay to not live in a society like my native Bangladesh where poor children beg for food in the streets?). "Mooching" is something that has far more value in justifying moral indignation amongst conservatives than it does in any quantifiable economic sense.
The reasoning is flawless.
You need to spend less effort to train your employees because they enjoyed a certain level of schooling (which, chances are, you enjoyed too). If you don't need to build your own roads it's because everyone paid for a shared road system. You don't need to enforce laws yourself because your taxes support law enforcement. Of course, people who pay less taxes have (or should have) the same enforcement as you do but that's because of one other thing - that the law applies equally (or, again, should apply equally) to everyone. As it should, John Galt or not.
"John Galt" is about self-entitlement. Is about ideas without regard who actually executes them.
This community, I thought, understands the fact that ideas, without execution, are worthless. And execution, without employees out of a vastly interdependent society, is a whole lot harder.
You need to spend less effort to train your employees because they enjoyed a certain level of schooling (which, chances are, you enjoyed too). If you don't need to build your own roads it's because everyone paid for a shared road system. You don't need to enforce laws yourself because your taxes support law enforcement. Of course, people who pay less taxes have (or should have) the same enforcement as you do but that's because of one other thing - that the law applies equally (or, again, should apply equally) to everyone. As it should, John Galt or not.
"John Galt" is about self-entitlement. Is about ideas without regard who actually executes them.
This community, I thought, understands the fact that ideas, without execution, are worthless. And execution, without employees out of a vastly interdependent society, is a whole lot harder.
I also don't need to build and program my own computer because Apple has built one I like at a price I'm willing to pay. They're part of the "vastly interdependent society", too. If the scope and cost of government makes it more difficult or expensive for Apple to produce that computer, then my ideas become that much harder to execute as well.
It's a tradeoff, and claiming "you wouldn't be able to do it without government!" doesn't provide any help in determining whether how we're making that tradeoff today is right. You wouldn't be able to do it without other entrepreneurs as well.
It's a tradeoff, and claiming "you wouldn't be able to do it without government!" doesn't provide any help in determining whether how we're making that tradeoff today is right. You wouldn't be able to do it without other entrepreneurs as well.
Nobody is arguing you can do it without other entrepreneurs. The objection is to the idea "I built that" (used in the same sense as a house I built myself with wood I cut from my own trees using a hatchet I made from sticks and rocks myself).
Nobody ever used "I built that" in that silly ex nihilo sense. It's sophistry to claim otherwise. They used "built" in the sense of being a primary, essential contributor.
"Steve Jobs built (and then re-built) Apple" is a completely accurate thing to say. Do you really want to claim it's false?
"Steve Jobs built (and then re-built) Apple" is a completely accurate thing to say. Do you really want to claim it's false?
> They used "built" in the sense of being a primary, essential contributor.
Do they really? What I hear is them complaining that every cent they are taxed is the government taking "their money". If they were willing to acknowledge that they are the primary, not sole, contributor, wouldn't they acknowledge that some part of their income is not an imposition by the government, but rather a collection of something the government is entitled to in the first place by virtue of its contribution?
Do they really? What I hear is them complaining that every cent they are taxed is the government taking "their money". If they were willing to acknowledge that they are the primary, not sole, contributor, wouldn't they acknowledge that some part of their income is not an imposition by the government, but rather a collection of something the government is entitled to in the first place by virtue of its contribution?
> "Surely there must be some level of democratically ordained wealth redistribution that would qualify as "mooching", no?"
You're trying to scientifically and objectively measure "mooching", which itself is entirely an unscientific and subjective concept.
This doesn't work.
You're trying to scientifically and objectively measure "mooching", which itself is entirely an unscientific and subjective concept.
This doesn't work.
It's not that hard. If you are able, but don't work and live off government subsidies for food, housing, and health care then you're definitely mooching off the system.
Define able. Define subsidies.
I don't get food stamps, nor welfare, but I did enjoy substantial government subsidies on education (odds are, so did you). I also drive on government-subsidized roads, and enjoy government services such as the police and fire departments. My drinking water comes from a vast infrastructure built by government funds - not all of which was taxed locally. My electricity comes from similar government-subsidized infrastructure, and wouldn't even exist if the federal government hadn't poured enormous amounts of cash into the research of power generation and transmission technologies.
In short, my life story is one gigantic government subsidy, and odds are, so is yours. So is everyone's, to various degrees - nobody is even close to "clean" in this respect, unless you grew up in a monastery on a mountain top.
Also, it's funny that you mention health care, because by that definition every single person in Western Europe, Canada, and Japan is a moocher.
Ability is also a tricky notion because it is hard to separate from potential. Are we strictly talking about productivity, period, or are we talking about productivity commensurate with one's potential?
What is the morality of someone who, after receiving substantial government subsidization getting an education, who gets a dead end job? He's not on welfare or food stamps, but he sure as hell isn't the high-earning tax payer we hoped he would be, based on the considerable investment made. Is he a moocher of the system? After all, he failed to "pay us back" for the extra investment we made in him (sending him to college, say).
What is the morality of someone who, possessing a substantial intelligence, chooses not to apply himself in school, and ends up in the lowest rung of tax payers? Has he mooched off of us for failing to live up to his potential, or does he get a free pass? Does he have the "ability" to do higher level work?
What about people whose failure to realize their full potential is due to external factors?
This issue is anything but simple.
But let's simplify this grossly: you're referring to people who choose not to work (period) and whose existences require the constant intervention of government above and beyond what government does for "everyone else" (that itself is a tricky notion, but bear with me).
It turns out, we actually track these people, and they are an extremely small part of our society. The vast majority of people in our society work. The ones who do not actively seek to work. The percentage of people in our society who can work but choose not to, and lean on the government as a result is a rounding error. It's amazing how much libertarians and conservatives are willing to magnify this demographic by a thousandfold just to make their point.
I don't get food stamps, nor welfare, but I did enjoy substantial government subsidies on education (odds are, so did you). I also drive on government-subsidized roads, and enjoy government services such as the police and fire departments. My drinking water comes from a vast infrastructure built by government funds - not all of which was taxed locally. My electricity comes from similar government-subsidized infrastructure, and wouldn't even exist if the federal government hadn't poured enormous amounts of cash into the research of power generation and transmission technologies.
In short, my life story is one gigantic government subsidy, and odds are, so is yours. So is everyone's, to various degrees - nobody is even close to "clean" in this respect, unless you grew up in a monastery on a mountain top.
Also, it's funny that you mention health care, because by that definition every single person in Western Europe, Canada, and Japan is a moocher.
Ability is also a tricky notion because it is hard to separate from potential. Are we strictly talking about productivity, period, or are we talking about productivity commensurate with one's potential?
What is the morality of someone who, after receiving substantial government subsidization getting an education, who gets a dead end job? He's not on welfare or food stamps, but he sure as hell isn't the high-earning tax payer we hoped he would be, based on the considerable investment made. Is he a moocher of the system? After all, he failed to "pay us back" for the extra investment we made in him (sending him to college, say).
What is the morality of someone who, possessing a substantial intelligence, chooses not to apply himself in school, and ends up in the lowest rung of tax payers? Has he mooched off of us for failing to live up to his potential, or does he get a free pass? Does he have the "ability" to do higher level work?
What about people whose failure to realize their full potential is due to external factors?
This issue is anything but simple.
But let's simplify this grossly: you're referring to people who choose not to work (period) and whose existences require the constant intervention of government above and beyond what government does for "everyone else" (that itself is a tricky notion, but bear with me).
It turns out, we actually track these people, and they are an extremely small part of our society. The vast majority of people in our society work. The ones who do not actively seek to work. The percentage of people in our society who can work but choose not to, and lean on the government as a result is a rounding error. It's amazing how much libertarians and conservatives are willing to magnify this demographic by a thousandfold just to make their point.
The subsidies you received and I received are the ambient subsidies we all have access to. The point you are not acknowledging is that some people take those subsidies and create additional value and improvements to the quality of life for those around them and others take additional subsidies on top of that ambient level of subsidization and at best create no additional value and at worst create a lower quality of life for others. It's not a tiny demographic, it's double digit percentages of the population, at least 1 out of 5 people and maybe more.
We need to enable and reward the creators and punish the consumers. Our society is currently set up in the reverse manner.
We need to enable and reward the creators and punish the consumers. Our society is currently set up in the reverse manner.
> "It's not a tiny demographic, it's double digit percentages of the population, at least 1 out of 5 people and maybe more."
This is an extraordinary claim that demands substantiation. Everything we know about US labor statistics suggests that the long-term unemployed are a tiny portion of the population (6.16 million as of last month, out of a labor force of 239 million). That's roughly 2.5% of the work force, or 1.98% of the total overall population.
Note also that people who receive unemployment benefits (including food stamps) are required to be part of the work force (i.e., they are not lumped into the substantial out-of-work-force bucket).
There's also the question of just how much these benefits are, and why anyone of sound mind would voluntarily, permanently go on them (even if they could sit on these benefits in perpetuity, which they can't): a single person is only eligible for $200 in food stamp benefits a month, scaling down to $668 for a family of 4. How many people who are on this benefit do you think are there voluntarily, because they're too lazy and $200 a month is such a strong incentive to stay out of work?
There are so many crazy, absurd leaps in logic required for a person to conclude that a large portion of the population is too lazy to get work and just leeching off society. The reality is a hell of a lot more reasonable.
> "We need to enable and reward the creators and punish the consumers."
This is counterproductive and absurd. We don't need to punish the "consumers", we need to help them become creators. This is my problem with libertarian types - you assume the world's problems can be solved by puritanical moralizing, and that people need to be beaten, not led, to productive behavior.
Like I've said elsewhere in this thread, this is moralizing in the guise of economics. Your punitive measures will have no positive effect besides making you feel better about having wrought vengeance upon those you perceive to have wronged creators. There is no rational basis for believing that punitive measures will make net-negative-value people into net-positive-values.
So yeah, if we did things your way the world will go to hell in a hand basket. But that's okay, so long as "justice" is served, and those icky no-goodniks are properly flogged for their icky laziness.
This is an extraordinary claim that demands substantiation. Everything we know about US labor statistics suggests that the long-term unemployed are a tiny portion of the population (6.16 million as of last month, out of a labor force of 239 million). That's roughly 2.5% of the work force, or 1.98% of the total overall population.
Note also that people who receive unemployment benefits (including food stamps) are required to be part of the work force (i.e., they are not lumped into the substantial out-of-work-force bucket).
There's also the question of just how much these benefits are, and why anyone of sound mind would voluntarily, permanently go on them (even if they could sit on these benefits in perpetuity, which they can't): a single person is only eligible for $200 in food stamp benefits a month, scaling down to $668 for a family of 4. How many people who are on this benefit do you think are there voluntarily, because they're too lazy and $200 a month is such a strong incentive to stay out of work?
There are so many crazy, absurd leaps in logic required for a person to conclude that a large portion of the population is too lazy to get work and just leeching off society. The reality is a hell of a lot more reasonable.
> "We need to enable and reward the creators and punish the consumers."
This is counterproductive and absurd. We don't need to punish the "consumers", we need to help them become creators. This is my problem with libertarian types - you assume the world's problems can be solved by puritanical moralizing, and that people need to be beaten, not led, to productive behavior.
Like I've said elsewhere in this thread, this is moralizing in the guise of economics. Your punitive measures will have no positive effect besides making you feel better about having wrought vengeance upon those you perceive to have wronged creators. There is no rational basis for believing that punitive measures will make net-negative-value people into net-positive-values.
So yeah, if we did things your way the world will go to hell in a hand basket. But that's okay, so long as "justice" is served, and those icky no-goodniks are properly flogged for their icky laziness.
So yeah, I believe I am parsing you correctly on your last sentence:
> We need to enable and reward the creators and punish the consumers. Our society is currently set up in the reverse manner.
I believe you mean those lowdown, dirty, rotten moochers to be the consumers. I disagree with you, being on food stamps is a pretty lousy reward. The projects as the only affordable residency option is pretty lousy. Being constantly looked down upon by those with more is pretty lousy. Seems like a lousy reward all around.
However, you may want to reword it anyways. Another reading of it suggests: Consumers can die from our products, they can waste away from our terribly unhealthy foods, in the end we want all the wealth for ourselves regardless of the fact that they're the one's needed for us to have a sustainable future.
Sounds like a lot of companies. Those Facebook users are clearly moochers, they aren't paying anything to Facebook for the privilege of using their services. So Facebook is in the right to punish them by completely breaking down any conventional notion of privacy.</sarcasm> (Because in text form it's never clear).
> We need to enable and reward the creators and punish the consumers. Our society is currently set up in the reverse manner.
I believe you mean those lowdown, dirty, rotten moochers to be the consumers. I disagree with you, being on food stamps is a pretty lousy reward. The projects as the only affordable residency option is pretty lousy. Being constantly looked down upon by those with more is pretty lousy. Seems like a lousy reward all around.
However, you may want to reword it anyways. Another reading of it suggests: Consumers can die from our products, they can waste away from our terribly unhealthy foods, in the end we want all the wealth for ourselves regardless of the fact that they're the one's needed for us to have a sustainable future.
Sounds like a lot of companies. Those Facebook users are clearly moochers, they aren't paying anything to Facebook for the privilege of using their services. So Facebook is in the right to punish them by completely breaking down any conventional notion of privacy.</sarcasm> (Because in text form it's never clear).
I hear this rather frequently, but always sans numbers. What percentage of people on welfare are able bodied and able minded and do no work?
A friend of mine likes to throw out the assertion that 50% of the population doesn't pay taxes. A gross misrepresentation of reality. 50% don't pay income taxes, but if they have a job they pay payroll taxes. If they purchase anything they pay sales tax. If they rent or own a home or apartment they pay property taxes. If they have a vehicle they pay property taxes. How about the companies making record profits that reduce their income tax burden to 0%? In what world is it reasonable to expect the bottom 80% of the population, with about 16% of the country's wealth, to provide a greater percentage of their individual wealth so that the top 20%, owning or controlling 84% of the country's wealth, can pay a lower percentage?
A friend of mine likes to throw out the assertion that 50% of the population doesn't pay taxes. A gross misrepresentation of reality. 50% don't pay income taxes, but if they have a job they pay payroll taxes. If they purchase anything they pay sales tax. If they rent or own a home or apartment they pay property taxes. If they have a vehicle they pay property taxes. How about the companies making record profits that reduce their income tax burden to 0%? In what world is it reasonable to expect the bottom 80% of the population, with about 16% of the country's wealth, to provide a greater percentage of their individual wealth so that the top 20%, owning or controlling 84% of the country's wealth, can pay a lower percentage?
Are Olympic athletes mooches? Are students mooches? Are entrepreneurs who live off unemployment mooches? By your definition they are.
There are lots of "artists" that live off of welfare. Some of theme are mooches, some of them are just developing their craft and will later make millions doing it. How do you tell one from the other? You can't.
There are lots of "artists" that live off of welfare. Some of theme are mooches, some of them are just developing their craft and will later make millions doing it. How do you tell one from the other? You can't.
The criteria are usually based on the Veil of Ignorance - that is, if two people are attempting to determine how to distribute wealth, how would they each choose to do so if they did not know which one of them started off with the wealth?
http://en.wikipedia.org/wiki/Veil_of_ignorance
http://en.wikipedia.org/wiki/Veil_of_ignorance
Wait a second, the man was complaining about society disconnecting from their overall objective. The only people today that understand anything that is going on are the ones trying to contribute. The rest are turning off, tuning away and dropping out through THEIR subsidized living. How do we continue to maintain that? You are basically saying the status quo is a perfectly fine environment for a society when its not. Not at all.
Yes, we are "privileged to live in a sophisticated, organized, interdependent community". Does the rest of the community know this? No, and they're not demonstrating that at all. Just look over the past 100 years and tell me which generations knew they had it good and strived to continue that effort.
Only dead societies can tell the tales we're starting to.
Yes, we are "privileged to live in a sophisticated, organized, interdependent community". Does the rest of the community know this? No, and they're not demonstrating that at all. Just look over the past 100 years and tell me which generations knew they had it good and strived to continue that effort.
Only dead societies can tell the tales we're starting to.
And who do you think built the infrastructure you're describing? I'll give you a hint: it wasn't the leeches.
And what exactly do you think will happen to entrepreneurs who continue to build more infrastructure for future generations as the cost of working within our system begins to outweigh its benefits?
And what exactly do you think will happen to entrepreneurs who continue to build more infrastructure for future generations as the cost of working within our system begins to outweigh its benefits?
"And who do you think built the infrastructure you're describing? I'll give you a hint: it wasn't the leeches."
Exactly. The roads didn't get built using magic money - it was from taxes extracted from those that were getting things done!
Exactly. The roads didn't get built using magic money - it was from taxes extracted from those that were getting things done!
Objectivism: suggesting that we burn the theater down because a few people in there didn't pay for a ticket.
"Your employees are the result of subsidized education, etc, etc, etc"
That's all find and dandy, but the fact is that there are millions out there sitting on their collective assess while the few of us are doing the work.
There are roads, bridges, education, internet, all accessible to them as well, yet they do nothing.
That's all find and dandy, but the fact is that there are millions out there sitting on their collective assess while the few of us are doing the work.
There are roads, bridges, education, internet, all accessible to them as well, yet they do nothing.
"the few of us"? Over 2/3rds of all working age Americans have a job. The majority of those who don't are raising kids. The majority of the remainder want a job but can't get one. There are a few mooches, but the few thousand they get every year in food stamps is a drop in the bucket compared what is stolen from the economy each year by those doing "unproductive work" -- ie work that benefits themselves but does not benefit or actively harms society. HFT, patent trolling, bribing politicians, et cetera.
Bad choice of words maybe, but that is what it feels like. Recent reports show that almost 50% of the country is on some sort of government benefit / entitlement. That's absurd and it's a tipping point.
Agree with you on your other points as well ... entitlements aren't the only thing that need to be reformed in this country and crony-capitalism is alive and well on both sides of the aisle.
Agree with you on your other points as well ... entitlements aren't the only thing that need to be reformed in this country and crony-capitalism is alive and well on both sides of the aisle.
> Bad choice of words maybe, but that is what it feels like.
What it feels like and what it is are often at odds with each other. Emotional appeals allow for very sloppy reasoning. We can, and should, do much better than that especially on a forum like this.
50% of the population doesn't pay income tax. The vast majority of them still pay sales and property taxes (even renters pay property tax, though indirectly). If they drive they pay fuel taxes. The majority of that bottom 50% still works. They are contributing to society. They are contirbuting to companies by doing the jobs the companies want them to do. They spend their money on consumer goods and to various service industries. Companies, outside a few industries, don't exist without those customers.
What it feels like and what it is are often at odds with each other. Emotional appeals allow for very sloppy reasoning. We can, and should, do much better than that especially on a forum like this.
50% of the population doesn't pay income tax. The vast majority of them still pay sales and property taxes (even renters pay property tax, though indirectly). If they drive they pay fuel taxes. The majority of that bottom 50% still works. They are contributing to society. They are contirbuting to companies by doing the jobs the companies want them to do. They spend their money on consumer goods and to various service industries. Companies, outside a few industries, don't exist without those customers.
Property and sales taxes are not what is fueling the benefit/entitlement programs on the federal level, which is what is truly out of control. That is why people cite the 50% of people that don't pay income taxes so much -- we have half of the country paying nothing into the system and about the same amount of people taking out. It's not sustainable.
To say that the government needs to keep handing out entitlements because otherwise companies will run out of customers is such an awful argument - and one that I have heard often. If the government would get out of the way the market would respond like it is supposed to -- and prices would come down. Would some companies go out of business? Possibly. But only the companies that were unsustainable without government propping them up to begin with.
To say that the government needs to keep handing out entitlements because otherwise companies will run out of customers is such an awful argument - and one that I have heard often. If the government would get out of the way the market would respond like it is supposed to -- and prices would come down. Would some companies go out of business? Possibly. But only the companies that were unsustainable without government propping them up to begin with.
Wow, nice reframing.
I didn't say the entitlements (Medicaid, unemployment, and other forms of welfare) permitted them to be customers. If that's what you got from my statement, reread it.
The majority of them aren't freeloaders. The majority of them work - they provide benefits to companies by making things or performing other services. The majority of them pay other taxes (including payroll taxes, the part funding SS and Medicaid). They spend money on goods and services, which inherently means they're supporting the economy as a whole. To disregard this 50% as a bunch of freeloading losers does not make sense.
I didn't say the entitlements (Medicaid, unemployment, and other forms of welfare) permitted them to be customers. If that's what you got from my statement, reread it.
The majority of them aren't freeloaders. The majority of them work - they provide benefits to companies by making things or performing other services. The majority of them pay other taxes (including payroll taxes, the part funding SS and Medicaid). They spend money on goods and services, which inherently means they're supporting the economy as a whole. To disregard this 50% as a bunch of freeloading losers does not make sense.
I just said that 50% of Americans don't pay Federal taxes and about the same amount are on the receiving end of benefits / entitlements. I never called them freeloading losers, I simply stated that those kind of economics are not sustainable.
Sorry, you're right. You just said they sit on their collective asses while the minority does the hard work.
Payroll taxes are federal taxes. If you're working and not exempt (certain state employees, the Amish and some others), you pay payroll taxes. Since 50% of the population isn't unemployed, that means most of them are still paying payroll taxes, therefore they're paying federal taxes.
Payroll taxes are federal taxes. If you're working and not exempt (certain state employees, the Amish and some others), you pay payroll taxes. Since 50% of the population isn't unemployed, that means most of them are still paying payroll taxes, therefore they're paying federal taxes.
The original premise is that successful people owe something to society because there are roads, bridges, technology advancements like the internet, etc, etc. without which they would not be successful.
My point is, what about the people that are doing nothing? They have the same access to the roads, bridges, internet, but they do nothing. Don't they owe some sort of debt to society to go try to work instead of just collecting from others?
What I meant is the federal income tax ... which is what funds a majority of this country's expenditures.
I work. I pay my taxes. I donate money to non-profit organizations. I'm a good citizen. And I'm sick of being told by a bunch of redistributionist minded people that I owe more back to the collective good of society just because I have been successful and someone else hasn't.
My point is, what about the people that are doing nothing? They have the same access to the roads, bridges, internet, but they do nothing. Don't they owe some sort of debt to society to go try to work instead of just collecting from others?
What I meant is the federal income tax ... which is what funds a majority of this country's expenditures.
I work. I pay my taxes. I donate money to non-profit organizations. I'm a good citizen. And I'm sick of being told by a bunch of redistributionist minded people that I owe more back to the collective good of society just because I have been successful and someone else hasn't.
You claim 50% contribute nothing. I offered a rebuttal. You insisted 50% do nothing. I offered a rebuttal.
42% of federal revenue is from income tax. 42% from social security and Medicare taxes.
50% pays no federal income tax due to unemployment or low wages placing them below the poverty line or the use of various deductions. I have not disputed that. You draw a false conclusion that that indicates they contribute nothing. You have expressed a belief based on a feeling rather than fact that 50% of the population is worthless.
42% of federal revenue is from income tax. 42% from social security and Medicare taxes.
50% pays no federal income tax due to unemployment or low wages placing them below the poverty line or the use of various deductions. I have not disputed that. You draw a false conclusion that that indicates they contribute nothing. You have expressed a belief based on a feeling rather than fact that 50% of the population is worthless.
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From where do you think subsidies come from? They don't appear from thin air do they?
They are there as some one is paying taxes.
People are worried about a middle class segment of crowd being taxed to teeth and every body else really leeching on their contributions. Look at it, corporations play every trick valid by the rule book to avoid paying taxes. Rich have their money parked in tax havens. Poor need social security.
The middle class is heavily burdened by taxes.
On top of this government wants to be in endless wars. Most of which makes zero sense. The rich at wall street- most of who are practically adding zero value. They earn the most, and demand the most financial security in case of economic collapses. They take zero responsibilities for their actions. If all this had happened with some ordinary citizens they would go to jail. When you look at all this, it looks like a cartel.
No wonder people are pissed.
Note: I am Indian, staying in Bangalore. I am not a US citizen.
They are there as some one is paying taxes.
People are worried about a middle class segment of crowd being taxed to teeth and every body else really leeching on their contributions. Look at it, corporations play every trick valid by the rule book to avoid paying taxes. Rich have their money parked in tax havens. Poor need social security.
The middle class is heavily burdened by taxes.
On top of this government wants to be in endless wars. Most of which makes zero sense. The rich at wall street- most of who are practically adding zero value. They earn the most, and demand the most financial security in case of economic collapses. They take zero responsibilities for their actions. If all this had happened with some ordinary citizens they would go to jail. When you look at all this, it looks like a cartel.
No wonder people are pissed.
Note: I am Indian, staying in Bangalore. I am not a US citizen.
The middle class is heavily burdened by taxes.
If you run the numbers, this isn't really the case. The middle class is taxed lightly, relative to the benefits they receive. Anyone who's done their income taxes has seen how many tax benefits start dropping off past $60K or so. The top 10% or so pay the majority of income/Medicare/Medicaid taxes, and the way the Social Security benefits formula works, they're also heavily subsidizing the middle class through that program.
That makes some sense, of course: There are way more middle class voters than any other class!
If you run the numbers, this isn't really the case. The middle class is taxed lightly, relative to the benefits they receive. Anyone who's done their income taxes has seen how many tax benefits start dropping off past $60K or so. The top 10% or so pay the majority of income/Medicare/Medicaid taxes, and the way the Social Security benefits formula works, they're also heavily subsidizing the middle class through that program.
That makes some sense, of course: There are way more middle class voters than any other class!
That is partly also because people who earn more, do work in a non linear relation with the money they get.
The tax slabs you talk about apply only to probably 10% of most rich citizens in a country.
If you take all this into consideration. The rich still with their higher tax slabs don't contribute as much taxes as the middle class. As you mentioned that's because the middle class are larger in number.
Also note that I'm not just talking of the US. Throughout the world, the rich really find ways of getting away with taxes.
The tax slabs you talk about apply only to probably 10% of most rich citizens in a country.
If you take all this into consideration. The rich still with their higher tax slabs don't contribute as much taxes as the middle class. As you mentioned that's because the middle class are larger in number.
Also note that I'm not just talking of the US. Throughout the world, the rich really find ways of getting away with taxes.
You have it exactly backwards. Entrepreneurs and workers very much do "build that". Not only that, they build our government. They're the ones who pay taxes. Yes, they get benefit from those taxes but don't forget that they still pay them.
If you're feeling very John Galt take a deep breath. Remember that you're not a fictional character in a fictional society. You're a real person in real society where Entrepreneurs(with a big E) get subsidized security, roads, mail, water, food, electricity, education, health care, etc.
Ayn Rand was a very disturbed individual.
"In her notebooks Ayn Rand worshiped a notorious serial murderer-dismemberer, William Edward Hickman, whose gruesome, sadistic dismemberment of 12-year-old girl named Marion Parker in 1927 shocked the nation. Rand used this killer as an early model for the type of "ideal man" she promoted in her more famous books."
"What did Rand admire so much about Hickman? His sociopathic qualities: "Other people do not exist for him, and he does not see why they should," she wrote, gushing that Hickman had "no regard whatsoever for all that society holds sacred, and with a consciousness all his own. He has the true, innate psychology of a Superman. He can never realize and feel 'other people.'" "
Ayn Rand was a very disturbed individual.
"In her notebooks Ayn Rand worshiped a notorious serial murderer-dismemberer, William Edward Hickman, whose gruesome, sadistic dismemberment of 12-year-old girl named Marion Parker in 1927 shocked the nation. Rand used this killer as an early model for the type of "ideal man" she promoted in her more famous books."
"What did Rand admire so much about Hickman? His sociopathic qualities: "Other people do not exist for him, and he does not see why they should," she wrote, gushing that Hickman had "no regard whatsoever for all that society holds sacred, and with a consciousness all his own. He has the true, innate psychology of a Superman. He can never realize and feel 'other people.'" "
I hate Rand but that was an ad hominem attack and not much else.
But more importantly;
"Entrepreneurs(with a big E) get subsidized security, roads, mail, water, food, electricity, education, health care, etc."
I'm pretty sure it's the other way around. The taxes levied on businesses and individuals pay for the (often shoddy and wasteful) infrastructure and services.
But more importantly;
"Entrepreneurs(with a big E) get subsidized security, roads, mail, water, food, electricity, education, health care, etc."
I'm pretty sure it's the other way around. The taxes levied on businesses and individuals pay for the (often shoddy and wasteful) infrastructure and services.
It's both. The existing gets taxed to pay for the future, including NEW business SBA loans, infrastructure, court systems, securities exchange support, etc. They aren't made without help, and help is not possible without some of them succeeding and being taxable.
It's a giant, systemic feedback loop, one we try to make end up being positive in a good way.
It's a giant, systemic feedback loop, one we try to make end up being positive in a good way.
"You're a real person in real society where Entrepreneurs(with a big E) get subsidized security, roads, mail, water, food, electricity, education, health care, etc."
Just because they get those things, doesn't mean it's the best way to get them, or that they wouldn't prefer to get them in some other way.
Just because they get those things, doesn't mean it's the best way to get them, or that they wouldn't prefer to get them in some other way.
This is a tiresome argument that's been repeated over and over, and is nothing more than an attempt to change the subject.
Inevitably it starts when someone complains about the "parasites", "moochers", or whatever the description of the day is. It's always "waaah! someone undeserving is getting my stuff!"
When the notion that nobody exists as an island is pointed out, and it becomes clear that those complaining about the "moochers" are in fact enormous beneficiaries of the system, the argument becomes "but the system isn't perfect!", as if that somehow justifies the "every man for himself" mentality that started the argument.
Objectivist arguments like this always start with the notion that greater good will arise from an objectivist society. When that stupid argument is thrashed good, the argument turns into one of personal freedoms. It's amazing how many about-faces people will make in order to hang onto the notion that everyone else is a useless good-for-nothing except themselves.
Inevitably it starts when someone complains about the "parasites", "moochers", or whatever the description of the day is. It's always "waaah! someone undeserving is getting my stuff!"
When the notion that nobody exists as an island is pointed out, and it becomes clear that those complaining about the "moochers" are in fact enormous beneficiaries of the system, the argument becomes "but the system isn't perfect!", as if that somehow justifies the "every man for himself" mentality that started the argument.
Objectivist arguments like this always start with the notion that greater good will arise from an objectivist society. When that stupid argument is thrashed good, the argument turns into one of personal freedoms. It's amazing how many about-faces people will make in order to hang onto the notion that everyone else is a useless good-for-nothing except themselves.
> I'm feeling very John Galt here
So do the bankers. After all, they have all that money, all those politicians they paid for and all the money investors gave them to gamble with and those regulators keep intruding into how they should reward themselves for all their initiative.
People not caring enough about the welfare of others, as the parents of those kids, is part of the problem. People feel entitled when, in reality, nobody is "more special" than anyone else. A wonderful quote comes to mind.
"Your position never gives you the right to command. It only imposes on you the duty of so living your life that others may receive your orders without being humiliated" -- Dag Hammarskjöld, then Secretary General of the United Nations
So do the bankers. After all, they have all that money, all those politicians they paid for and all the money investors gave them to gamble with and those regulators keep intruding into how they should reward themselves for all their initiative.
People not caring enough about the welfare of others, as the parents of those kids, is part of the problem. People feel entitled when, in reality, nobody is "more special" than anyone else. A wonderful quote comes to mind.
"Your position never gives you the right to command. It only imposes on you the duty of so living your life that others may receive your orders without being humiliated" -- Dag Hammarskjöld, then Secretary General of the United Nations
I accept your premise but reject your conclusion. Rather than claiming that the problem is an interdependent society and the solution is every man/woman for him/herself consider the following quote by Thomas Paine (a liberty-minded founding father of the United States)
"Personal property is the effect of society; and it is as impossible for an individual to acquire personal property without the aid of society, as it is for him to make land originally.
Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. So inseparably are the means connected with the end, in all cases, that where the former do not exist the latter cannot be obtained. All accumulation, therefore, of personal property, beyond what a man's own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came."
I used to be a fierce Libertarian and then I realized that Ayn Rand's Objectivist utopia ALREADY exists in Somalia and Sudan and many other nations in the world - none of which I would call civilized.
Now if you were to call out the massive corruption in the current system as the root cause, I would jump to your defense.
"Personal property is the effect of society; and it is as impossible for an individual to acquire personal property without the aid of society, as it is for him to make land originally.
Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. So inseparably are the means connected with the end, in all cases, that where the former do not exist the latter cannot be obtained. All accumulation, therefore, of personal property, beyond what a man's own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came."
I used to be a fierce Libertarian and then I realized that Ayn Rand's Objectivist utopia ALREADY exists in Somalia and Sudan and many other nations in the world - none of which I would call civilized.
Now if you were to call out the massive corruption in the current system as the root cause, I would jump to your defense.
Benjamin Franklin on property is also interesting:
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All Property, indeed, except the Savage's temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it. All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition. He that does not like civil Society on these Terms, let him retire and live among Savages. He can have no right to the benefits of Society, who will not pay his Club towards the Support of it.
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All Property, indeed, except the Savage's temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it. All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition. He that does not like civil Society on these Terms, let him retire and live among Savages. He can have no right to the benefits of Society, who will not pay his Club towards the Support of it.
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The only problem is gains from "effect of society" is benefited by everybody. But not every body contributes their equal share.
That is where the problem begins. When a part of the society just refuses to contribute their share, but still expects that other absolutely must. You can't really justify contributing to "effect of the society".
Its difficult to understand why one should pay for economic troubles of HF traders, especially when they are known to cheat on taxes, when they take 0 responsibilities for their actions and above all don't add any value.
A man definitely benefits a lot from the collective contributions of the society. But those benefits apply equally to everybody, yet please note not every one achieves the same things in life as everybody else. There fore to now say the sum total of a man's accomplishments is all due to society is wrong. That is why a man contributes back only as much as what he benefited.
Therefore, take responsibilities for both your successes and failures. Applies not just to individual but to every other entity like corporations and banks. Its difficult to understand why a common man should bail out a bank. While the common man has already contributed his fair share of taxes.
If I make a mistake or do well. I take responsibility for both my successes and failures. So should banks and corporations. Both should contribute their share of taxes. But you almost always see, that the rich and powerful cheat yet benefit from the taxes contributed by everybody else. Same with the poor.
Yet the middle class is always expected to pay up for every body Else's party.
That is where the problem begins. When a part of the society just refuses to contribute their share, but still expects that other absolutely must. You can't really justify contributing to "effect of the society".
Its difficult to understand why one should pay for economic troubles of HF traders, especially when they are known to cheat on taxes, when they take 0 responsibilities for their actions and above all don't add any value.
A man definitely benefits a lot from the collective contributions of the society. But those benefits apply equally to everybody, yet please note not every one achieves the same things in life as everybody else. There fore to now say the sum total of a man's accomplishments is all due to society is wrong. That is why a man contributes back only as much as what he benefited.
Therefore, take responsibilities for both your successes and failures. Applies not just to individual but to every other entity like corporations and banks. Its difficult to understand why a common man should bail out a bank. While the common man has already contributed his fair share of taxes.
If I make a mistake or do well. I take responsibility for both my successes and failures. So should banks and corporations. Both should contribute their share of taxes. But you almost always see, that the rich and powerful cheat yet benefit from the taxes contributed by everybody else. Same with the poor.
Yet the middle class is always expected to pay up for every body Else's party.
The banks have caused immeasurable suffering to millions, tens, no HUNDREDS of millions of people, perhaps even BILLIONS of people...
How does that work, exactly? I mean were Amazon and Qualcomm and eBay responsible for the "suffering" of the dot com crash and the subsequent global recession?
A speculative bubble burst and the result was a serious, systemic credit crunch and a deep recession. That's not a crime.
How does that work, exactly? I mean were Amazon and Qualcomm and eBay responsible for the "suffering" of the dot com crash and the subsequent global recession?
A speculative bubble burst and the result was a serious, systemic credit crunch and a deep recession. That's not a crime.
"A speculative bubble burst and the result was a serious, systemic credit crunch and a deep recession. That's not a crime."
I'll give you an example. Take a look at LIBOR (somebody should, 'cause the mean-stream media has hardly mentioned it):
http://en.wikipedia.org/wiki/Libor_scandal
From CNN: "Libor is the world's most important benchmark for interest rates. Roughly $10 trillion in loans -- including credit card rates, car loans, student loans and adjustable-rate mortgages -- as well as some $350 trillion in derivatives are tied to Libor."
I'll give you an example. Take a look at LIBOR (somebody should, 'cause the mean-stream media has hardly mentioned it):
http://en.wikipedia.org/wiki/Libor_scandal
From CNN: "Libor is the world's most important benchmark for interest rates. Roughly $10 trillion in loans -- including credit card rates, car loans, student loans and adjustable-rate mortgages -- as well as some $350 trillion in derivatives are tied to Libor."
Take a look at LIBOR (somebody should, 'cause the mean-stream media has hardly mentioned it)
There has been extensive coverage of this scandal - and widespread vilification of Barclays and their leadership - in the British mainstream media. It eventually led to the resignation of various senior people within the bank, including the media bête noire Bob Diamond.
There has been extensive coverage of this scandal - and widespread vilification of Barclays and their leadership - in the British mainstream media. It eventually led to the resignation of various senior people within the bank, including the media bête noire Bob Diamond.
How did the LIBOR scandal cause millions or billions to suffer? As I understand it, a big part of the scandal is the rate being set lower than it should have been, because the participating banks were afraid to expose their precarious state.
Regardless, LIBOR, muni bond fixing and all these Taibbi-bait scandals (which of course should be pursued if there's evidence of fraud) are not what caused the credit crunch and subsequent recession and suffering, just as WorldCom's accounting shenanigans didn't cause the dot com crash.
Regardless, LIBOR, muni bond fixing and all these Taibbi-bait scandals (which of course should be pursued if there's evidence of fraud) are not what caused the credit crunch and subsequent recession and suffering, just as WorldCom's accounting shenanigans didn't cause the dot com crash.
"How did the LIBOR scandal cause millions or billions to suffer? As I understand it, a big part of the scandal is the rate being set lower than it should have been..."
Ok, let's assume they were set lower for argument's sake. Then cities, mutual funds, and pension plans would have earned less than they would have had the rate not been manipulated. Let's examine cities from that list - as you look around the the world today, there's not a lot of cities that seem flush with a surplus of cash. They've got a decreasing tax base as a result of a precarious economy and now they've got decreased investment returns as a result of LIBOR being manipulated down. As a result, they either cut services or raise taxes - both of which have a negative impact on the millions and billions living there.
Ok, let's assume they were set lower for argument's sake. Then cities, mutual funds, and pension plans would have earned less than they would have had the rate not been manipulated. Let's examine cities from that list - as you look around the the world today, there's not a lot of cities that seem flush with a surplus of cash. They've got a decreasing tax base as a result of a precarious economy and now they've got decreased investment returns as a result of LIBOR being manipulated down. As a result, they either cut services or raise taxes - both of which have a negative impact on the millions and billions living there.
One could argue that if the expected payoff from LIBOR to cities wasn't so high, then the cities would have invested elsewhere--perhaps in more efficient systems to save money, for one.
Cities are typically net borrowers, not net lenders, so lower interest rates are better for them.
Regardless, a mutual fund growing at a slightly lower rate isn't the "suffering" the original comment was talking about. If the economic crisis had just been about LIBOR fixing, no one would have noticed.
Regardless, a mutual fund growing at a slightly lower rate isn't the "suffering" the original comment was talking about. If the economic crisis had just been about LIBOR fixing, no one would have noticed.
Urgh, Hacker News gets worse and worse every day. When did crazy Libertarian rants become part of the popular discourse here?
When reddit learned to ignore them.
I was thinking the exact same thing!
> I'm responsible -- and I'm starting to wonder, really, what's in it for me?
Do you honestly think the people on food stamps have it easy? You have your reward: happiness, self respect, accomplishment, etc..
Do you honestly think the people on food stamps have it easy? You have your reward: happiness, self respect, accomplishment, etc..
>Isn't escape from this kind of tyranny the reason the first colonists left England?
The power of the banks is harder for people to understand, so banks have been very powerful, yet even less accountable than monarchs.
"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -Thomas Jefferson
The power of the banks is harder for people to understand, so banks have been very powerful, yet even less accountable than monarchs.
"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -Thomas Jefferson
I think we've all had our John Galt moments. A righteous indignation at rentiers, large and small. It comes from a good place--the sense that you are giving something to others.
But there is a lot of give and take in the world, some easily observed and measured, some not. Some attributable, some not, and in proportions that vary over time.
Frankly, I don't know how much I take. Some dimensions are visible and quantified, but not all. So when I do give, I am happy--happy to be filling the well of life.
But there is a lot of give and take in the world, some easily observed and measured, some not. Some attributable, some not, and in proportions that vary over time.
Frankly, I don't know how much I take. Some dimensions are visible and quantified, but not all. So when I do give, I am happy--happy to be filling the well of life.
Who Rules America
http://www2.ucsc.edu/whorulesamerica/power/investment_manage...
HFT doesn't create value for the world.
False. Liquidity. How can you feel like John Galt if you don't know dick about finance?
Before HFT liquidity was measured in 100s of millseconds. Now it's measured in microseconds.
Please tell me how this benefits anybody.
Please tell me how this benefits anybody.
Before HFT spreads were measured in 1/8ths of a dollar. Spreads of a penny (or pennies) matter a lot to your retirement. To the tune of billions a year saved for investors.
Spreads were measured in 1/8ths of a dollar because the stock market was stuck in the stone age. I'm willing to bet that spreads would have tightened substantially after the switch to decimal even without HFT.
Who do you think it was who brought the stock market out of the stone age? That would be the electronic market makers constantly pushing for innovation.
The old guard was perfectly content with eighths and fought as hard as possible to prevent decimalization because they were ripping investors off for billions a year.
The old guard was perfectly content with eighths and fought as hard as possible to prevent decimalization because they were ripping investors off for billions a year.
Liquidity is just cash representation of existing wealth.
HFT doesn't create any value. You take already created wealth and based on demand supply equations some one looses and some one gains. Think of it like a kilogram of potatoes changing 100 hands in a day during some make money and some lose depending on how the demand for potatoes is in a city. The HF traders don't actually do anything to grow potatoes or help the process of growing potatoes.
HFT doesn't create any value. You take already created wealth and based on demand supply equations some one looses and some one gains. Think of it like a kilogram of potatoes changing 100 hands in a day during some make money and some lose depending on how the demand for potatoes is in a city. The HF traders don't actually do anything to grow potatoes or help the process of growing potatoes.
You don't understand how secondary markets work.
Higher liquidity and lower spreads give an investor more confidence in their investment. They always have the option of getting out of the investment and at a lower cost. More confidence in an investment means the investor will pay a premium over the same investment that is less liquid and has higher transaction costs.
This premium means companies shares are valued more in the secondary market. This also means that companies can fetch a higher valuation and thus raise more capital in the primary market. Both of these are a win for investors and the companies themselves.
Higher liquidity and lower spreads give an investor more confidence in their investment. They always have the option of getting out of the investment and at a lower cost. More confidence in an investment means the investor will pay a premium over the same investment that is less liquid and has higher transaction costs.
This premium means companies shares are valued more in the secondary market. This also means that companies can fetch a higher valuation and thus raise more capital in the primary market. Both of these are a win for investors and the companies themselves.
> Higher liquidity and lower spreads give an investor more confidence in their investment
What do huge chaotic fluctuations in the price that have no connection whatsoever to anything that actually effects the economically correct price for the item do for investor confidence?
What do huge chaotic fluctuations in the price that have no connection whatsoever to anything that actually effects the economically correct price for the item do for investor confidence?
The fact is that these huge chaotic fluctuations you refer to have decreased in severity as HFT has become more common. Please show me an academic paper saying these huge fluctuations have gotten worse?
Emphasizing that the banks could not count on government help
Absolute bollocks. If any of the major banks collapse, there will be a crash much, much worse than 2008. There is precisely zero chance of government sitting by and allowing that to happen - and the banks know it.
Absolute bollocks. If any of the major banks collapse, there will be a crash much, much worse than 2008. There is precisely zero chance of government sitting by and allowing that to happen - and the banks know it.
In other news, overweight people told to make plans for heart failure.
Too big to fail is the most obvious economic problem of our time. The real question is why current economic leaders (Bernanke, Geithner, and Obama) have been so slow to support or indeed demand resolution to this issue.
Too big to fail is the most obvious economic problem of our time. The real question is why current economic leaders (Bernanke, Geithner, and Obama) have been so slow to support or indeed demand resolution to this issue.
So, in light of this news, where does FDIC come in? In a calm, yet serious sense, the reason people in the US trust our banks is because our money is insured by the US government. Does what has been said here have any effect on that? --- or, does it at least have the potential for affecting that?
I'm feeling very John Galt here. 10% of the country is getting unemployment. N% additionally is getting subsidized rent, subsidized farmland, subsidized food, subsidized corporations and banks.
I'm an Entrepreneur and I need every penny. Every penny I keep is reinvested into a business that creates value for the world. HFT doesn't create value for the world. Food Stamps. I don't get bailed out when the weather is bad and my garden dies. I don't have any debt. I don't have a car payment or a house payment.
I'm responsible -- and I'm starting to wonder, really, what's in it for me? We are in a drought and our city has banned outside water usage. We can't fill pools, wash cars, or even water our garden, yet, last night, I go for a walk with my wife and what do I see? Two little kids playing in a big pool of fresh clean city drinking water. People don't care enough.
How are we going to fix our society? It's broken fundamentally. It's like people have disconnected from their role in a larger group of people around them. We get food from a store sold by someone we only know by a plastic name tag. We don't grow anything. We don't know anyone except those who work in the next cube and our family and friends who we don't really depend on unless we are a struggling recent college grad who can't find a job and moves home and those stories are mostly not enjoyable tales told by the disgruntled.
The banks have caused immeasurable suffering to millions, tens, no HUNDREDS of millions of people, perhaps even BILLIONS of people -- and the only banking employee arrested or tried or even simply just stopped from doing what they did to cause that pain is a programmer who took some code from Goldman Sachs. Goldman Sachs itself was cleared of ANY wrong doing in this mess: http://www.keyc.tv/story/19239634/goldman-sachs-cleared-in-s...
We have to fix it. It has to be fixed. We can't keep going down this road, but I don't see anything really changing. Why isn't anything really changing? Why aren't we having serious existential conversations that really deeply change our society to one that will not collapse?
Do we really think telling the banks to do it will work? Do we really still trust them?
I'm really dismayed by all this.