The Anti-Capitalist Moment

The American left is truly embracing the Occupy Wall Street moment. Here we have the ever reliable Paul Krugman in the conclusion to his article titled, “Panic of the Plutocrats”:

So who’s really being un-American here? Not the protesters, who are simply trying to get their voices heard. No, the real extremists here are America’s oligarchs, who want to suppress any criticism of the sources of their wealth.

Then there’s this story, “Democrats Seek to Own ‘Occupy Wall Street’ Movement”. This is how the article begins:

A consensus is emerging among Democrats that the ‘Occupy’ movement is worth tapping into, even helping along and joining with in some instances.

‘I support the message to the establishment,’ House Democratic Leader Nancy Pelosi, D-Calif., said on ABC’s ‘This Week.’ ‘Change has to happen. We cannot continue in a way that does not — that is not relevant to their lives. People are angry.’

And then there is this with the interesting title, “Communists hijacking ‘occupy wall street’ movement?” Absolutely unsurprising, of course, but the opening para does add some charming detail:

Not to be outdone by the likes of Venezuela’s Hugo Chavez, who claimed there is ‘horrible repression’ of the ‘Occupy Wall Street’ protesters or by an Iranian commander who called the demonstrations an ‘American Spring,’ Communist Party USA wants in on the ‘Occupy’ protest action.

And to join with the Marxists is the Democrat Party itself which is found to be saying this:

Protestors are assembling in New York and around the country to let billionaires, big oil and big bankers know that we’re not going to let the richest 1% force draconian economic policies and massive cuts to crucial programs on Main Street Americans.

Out-of-touch Republican Majority Leader Eric Cantor said he is ‘increasingly concerned by the growing mobs.’ Mobs? That must be what Republicans refer to as the middle class, or maybe the millions of unemployed Americans across the country.

As Democratic Leader Nancy Pelosi told reporters, ‘The message of the American people is that no longer will the recklessness of some on Wall Street cause massive joblessness on Main Street…’

Help us send a message straight to Eric Cantor, Speaker Boehner, and the rest of reckless Republican leadership in Congress.

The Democrats cannot run on their record. But if they can shift responsibility somewhere else, in this case to those Wall Street bankers, then they are ready to roll. Republicans, having retained a scruple or two, cannot so readily abandon markets and free enterprise whereas it is less than nothing for any Democrat, and especially the President who holds every anti-market sentiment known to man in depth and detail. He may be nervous about the political implications in expressing his true beliefs in the open, but his “share the wealth around” attitudes are never far from the surface.

The politics of the Occupy Wall Street moment are a deadly poison but potentially as effective as any political scam in history. The Republicans may have shoveled an insane amount of money into the banks in 2008 but the Democrats are taking that money back with interest by painting those self same banks as the blackest of villains from whom Americans can only be saved by voting Democrat.

And the thing about banks is that there is not a citizen in a hundred who could tell you what the banks do. I have an article up on Quadrant Online where I try to explain at least some of it. How much even bankers understand their role in a market system you may have to wonder, but this is part of what I wrote:

This is a dangerous moment and it is being fed and fueled by the President. This is part of what is a very clear desire on his part to increase the central direction of the American economy.

The notion that Wall Street is just one large casino with money poured through its channels essentially no different from the roulette wheels of Las Vegas is something easily peddled to those who know nothing about the role of finance in directing economic activity.

In roulette, there is no risk involved until one chooses to bet. It is the betting itself that creates the risk. In finance, the risk is in the world. It is always there. What finance attempts to do is provide avenues for businesses and individuals to unload or at least share some of that risk with others.

No matter what the American President does, the riskiness of running a business or financing activity will not disappear. But what may well disappear is the ability for Wall Street banks to take that risk on themselves.

The speed of descent into a socialised economic mess is astounding. That 60s generation I am part of has completed its march through the institutions and the result is devastation, morally and intellectually, to go along with the economic wreckage they have left behind for which only worse is to come.

When the health system stops working around the same time that the banking system seizes up, there will be no going back. The US will never untrack from the problems that have been created and there will be no saving it or us after that. We are living in the midst of our own fall of the Roman Empire. Will some future Gibbon be able to understand even the half of it.

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235 Responses to The Anti-Capitalist Moment

  1. The election might come down to a contest between the Tea Party Republicans and the Occupy Wall Street Democrats.

    My money would be on the Tea Party winning. Unlike the French, Americans are not socialists at heart.

  2. m0nty

    The OP is completely ridiculous tosh, but I attended the New York occupation today so I guess here’s the place to discuss it on the Cat, along with some pictures I took.

    A few thoughts:
    - The protestors were confined to Zuccotti Park, which is closer to the WTC area than Wall St. I went down to Wall St later and it was barricaded off with coppers in full force, including mounted police.
    - One lady was flying the Aussie flag!
    - If you were a Cat denizen looking for evidence that the communists had inflitrated the occupation, it was there plain to see. One bloke had a sign that said KARL MARX (tick), RON PAUL X. There were various other stereotypical leftie ferals, but not in greater evidence than there would be One Nation and similarly hateful supporters at a rightwing rally, and I don’t think the main body of the protestors were of that persuasion.
    - NBC had a set-up where anyone could walk up and start talking to a camera which was streaming live to the Web. There was a singalong nearby which added to the ambience, if not the politics.
    - There was some shirtless African American dude on a corner wearing a blue bandanna, and he was immediately swamped by a camera crew. I caught his eye and grinned, and he rolled his eyes.
    - The last thing I heard was a nice bit of crowd organisation. Someone got up without a microphone and shouted MIC CHECK, and the crowd shouted MIC CHECK back at him, they did that a few times, then he shouted WE ARE GOING ON A WALKING TOUR, which the crowd repeated, PAST SOME PUBLIC SPACES OWNED AS PRIVATE PROPERTY, which the crowd repeated… effective way of getting your message across. I left before they decamped.

  3. Capitalist Piggy

    I’ve been trying to figure out just what these people actually want, and I found this list of 10 demands:

    1. Eliminate Corporate Personhood
    2. Make Elections Transparent, Verifiable
    3. Enact Term Limits for Congress
    4. End the Wars in Iraq and Afghanistan
    5. Create Jobs Through Public Works
    6. Pass Universal Health Care
    7. Uphold the Constitution
    8. Defend Liberty and Repeal Unjust Laws
    9. Protect the Environment
    10. End Capital Punishment

    http://occupycommunity.org/

  4. I wonder if they include the Second Amendment in No 7.

    Probably not. We are not talking principles here.

  5. cohenite

    1. Eliminate Corporate Personhood

    I think I know what that refers to but perhaps piggy can explain.

    I find most lefties are ego and vanity driven; those that aren’t are weirdos.

  6. Capitalist Piggy

    Point #1 refers to corporatism (crony capitalism) and is explained as follows:

    “No sustainable changes can be made until the corrupting influence of money is taken out of politics. Even for people who agree on this point, finding a solution is more difficult than it might first appear. It is important that any restrictions on campaign finance adhere to first amendment rights. The first amendment was designed to protect the freedom of our citizens to express their opinions without fear of reprisal, but it is being used by corporate entities as a shield against campaign finance regulations since they are currently treated as persons under the law. We need to end this outrageous perversion and make a distinction between human beings and corporate entities. We need to work to preserve rights and freedoms for individuals, not corporations.”

  7. Louis Hissink

    I think we need to remember that George Soros has often stated that his goal is the total elimination of the GOP – which I presume is by any means possible.

    Some mioght dismiss that as rhetoric, but from experience I tend to take such views at face value, just as Maurice Strong’s view of engineering the collapse of the industrialised west. These people are not loonies but powerful politicians with the resources.

    As an interesting diversion, one might look at the empty Chinese cities being built – are these to be populated once the CCP decides it has built enough to move the population into these cities and de populate the countryside? This scenario needs to be viewed in tandem with the Wildland’s scheme for the US and the ever increasing takeover of land by government into national parks, reserves etc, and the activities behind the Murray Darling policies.

    All to easy to be blind sided with trivia only to then miss the bigger picture, one which I suspect Gillard is involved in.

  8. cohenite

    Oh, ok, I thought it was to do with the legal status the corporate form has.

    I agree with that, regulating donations; it would get rid of trade union support of the ALP and the Greens straight away.

  9. TerjeP

    I have no real objection to limiting party donations to those made by real humans rather than those made by trade unions, corporations (and government). However when it comes to restricting third party campaigning it get’s kind of messy.

  10. Adrien

    No, the real extremists here are America’s oligarchs, who want to suppress any criticism of the sources of their wealth.

    In Europe in the 30s the extremists were both on the Left and the Right. The centre didn’t hold. It’s not holding in the States either. Wonder why?

    Sorry guys. The banks were bad. Bad banks. And then they, hypocritically, took taxpayers money and then they preached austerity for everyone else. Result: anger.

    Karl Marx tick? Your attitudes fulfil his prophecy. Ironic considering it was dead and buried only twenty years before.

  11. Peter Patton

    monty

    There were various other stereotypical leftie ferals, but not in greater evidence than there would be One Nation and similarly hateful supporters at a rightwing rally, and I don’t think the main body of the protestors were of that persuasion.

    Do you even know what One Nation was about? Their economic policies were almost identical to these Occupy Wall Street clowns.

  12. Adrien

    1. Eliminate Corporate Personhood

    I think I know what that refers to but perhaps piggy can explain.

    It refers to this. A corporation is, in law, a person.

    Of that ten point programme #5, 6 and possibly #8 are socialist. The rest aren’t.

  13. Rococo Liberal

    I sometimes wish lefties could understand that a company is a classic example of what they say they value above all else, co-operation between human beings to achieve a common goal.

  14. Sean

    Yeah, the Greens are a gentrified version of One Nation when it comes to economics.

  15. Winston Smith

    The police were out in force?
    And you show a picture of two coppers?
    I can only assume you have a picture of four coppers and a horse ready to go, just for a ‘gotcha’ moment.
    Just another example of the peculiar inversion of morality, and intellectual dishonesty the Left get up to.

  16. m0nty

    Do you even know what One Nation was about? Their economic policies were almost identical to these Occupy Wall Street clowns.

    OWS doesn’t really have an agreed-upon platform yet, it would be unfair to ascribe anything but slogans to them at this stage.

    What I was trying to get at was there were about as many commies with Marxist placards as there are idiots with stupid placards at an Aussie rightwing rally spewing hateful claptrap about Gillard’s gender or calling her a witch.

  17. Sean

    Sorry guys. The banks were bad. Bad banks. And then they, hypocritically, took taxpayers money and then they preached austerity for everyone else. Result: anger.

    Stop talking shit!

  18. m0nty

    The police were out in force?
    And you show a picture of two coppers?
    I can only assume you have a picture of four coppers and a horse ready to go, just for a ‘gotcha’ moment.

    Why yes, yes I do! :)

  19. Sean

    It’s a police state M0nty! You should have seen the streets of London a month ago, now that was force.

    These protesters seem to be peaceful. No doubt anarchists will be lining up a chance to join in.

  20. Capitalist Piggy

    “The banks were bad. Bad banks. And then they, hypocritically, took taxpayers money.”

    No they didn’t, the politicians gave them taxpayers money. Actually no, Hank Paulson threatened them if they didn’t take it. Some of them (I think Wells Fargo) didn’t want it.

  21. m0nty

    Agreed, Sean. There weren’t a huge amount of cops, it’s true, because there wasn’t a sense of militancy.

  22. Infidel Tiger

    A million Tea Partiers march on Washington and it receives almost zero media coverage. A few hundred college kids who don’t want to pay back their tutiion fees get stroppy and it’s a global event.

    This is bullshit.

  23. Infidel Tiger

    mOnty, Wall St and the financial district are the most boring parts of New York. Jump the subway and get the fuck outta there.

  24. C.L.

    I think we need to remember that George Soros has often stated that his goal is the total elimination of the GOP…

    No surprise there. He was schooled by the best as a Nazi collaborator in his youth.

  25. Winston Smith

    Seven copper, five on their neddies?
    That’s out in FORCE?

    Why aren’t you freaking out about all the military aged males coming here on boats without ID, then?

  26. JamesK

    As George Will said of the OWS’ers “they do represent the spirit and intellect of the American Left” and for that reason he wishes them “long life and ample publicity”.

    Egggsactly

  27. m0nty

    There were another dozen coppers on the corner of Wall St and Broadway. Still not a huge amount, but evidently they had secured an assurance from the organisers that they wouldn’t rush the barricades, and there is a level of trust there.

  28. JC

    MotyY

    You;re such a bore. You’re in NYC and the first place you visit is where those idiots are protesting?

    By the way fight club bout is booked in for the first Saturday in November. Does that work with you?

  29. m0nty

    You;re such a bore. You’re in NYC and the first place you visit is where those idiots are protesting?

    I was there for the 9/11 Memorial.

  30. JC

    I was there for the 9/11 Memorial.

    Yea right.

  31. JC

    Have you picked any restaurants to go to? Pass the names through me first to get approval. And don’t freaking embarrass me there please.

  32. Boris

    an idea of dismissing popular protests is a silly one. They may be incoherent and confusing, and sure some estsblished forces will try to jump on the bandwagon, but just like the tea party, it is a phenomenon. They are happenning all over the developed world. We had them in Spain, very ugly in the UK, even in Poland and Israel (which sailed through the GFC even better than Australia).

    One demand not mentioned above is NO TO BAILOUT OF BIG BANKS. I would agree with this.

  33. m0nty

    As far as restaurants go, I have had the following recommendations made to me: The Spotted Pig, PDT, Dinosaur BBQ, and Sylvia’s.

  34. Infidel Tiger

    Go to Carnegie Deli and get a Reuben and cream soda. Don’t give the old Jewish waitresses any sass or they’ll deck you.

  35. JC

    The pig is good.

    Try the Gotham Bar and Grill.

    I could offer some other suggestions but they would be too upmarket and you’d feel very uncomfortable there.

    Smith and Wolenski for a decent steak. Also there’s Sparks Steakhouse… John Gotti gunned down Paul Castellano right at the front door.

  36. JC

    Go to Carnegie Deli

    Good idea.
    Literately I’d get sick eating this massive pastrami.

    you can keep the pastrmi down with their Cheese cake too MontY and a milk shake.

  37. Infidel Tiger

    Yep. You must have the cheese cake. It’s as close to heaven as you’ll get.

  38. JC

    IT

    I swear on a stack of Bibles that I could eat that entire Patrami, cheese cake and a coke but not put on any weight when I was there. We’d order in from them once a week at the Office.

    Any other person should go to a cardiologist straight after that Patrami Sanga and get checked out for a blockage.

  39. Adrien

    Stop talking shit!No they didn’t – SilenceStop talking shit!No they didn’tStop talking shit!No they didn’tStop talking shit!No they didn’t

    I can see where it might be possible to have a reasonable discussion viz the iniquities of US bankers and their contribution to this mess. Not.

    The election might come down to a contest between the Tea Party Republicans and the Occupy Wall Street Democrats.

    I’m sure the Democrats will be busy calculating the opportunity/risk factor with respect to this. Unlike the Tea Party it’s not a focused movement.

    One demand not mentioned above is NO TO BAILOUT OF BIG BANKS. I would agree with this.

    Yeah.

  40. Adrien

    I sometimes wish lefties could understand that a company is a classic example of what they say they value above all else, co-operation between human beings to achieve a common goal.

    To which the retort comes: I wish righties would understand that that there are other goals besides money.

  41. Adrien

    Israel (which sailed through the GFC even better than Australia).

    Funny that. :)

  42. JamesK

    Adrienesque inner-space:

    To which the retort comes: I wish righties would understand that that there are other goals besides money.

    The truth:

    “To which the emotional leftist, invariably inane, shallow, first-stage – or even absent – thinking retort comes: I wish righties would understand that that there are other goals besides money”

  43. sdfc

    I’ve got no problem with peaceful protests if that’s what floats your boat however these turkeys need to understand that a banking collapse would very likely have led to an even higher unemployment rate.

    At an estimated cost to the federal government of $19 billion I’d say the TARP was a bargain.

  44. JC

    At an estimated cost to the federal government of $19 billion I’d say the TARP was a bargain

    Ummm

    SFC, you need to avoid omission of facts in case you’re accused of misleading people.

    TARP as pertaining to the banks has netted the government around $20 billion.

    The losses incurred in TARP are the result of the Odumbo administration keeping the UAW pesnion funds intact while fucking over the bondholders as they indirectly transferred $40 Billion to them to keep the union afloat.

  45. Tal

    But Adrien the protesters want money,lots of it :)

  46. Rococo Liberal

    I see nothing in the ten points about getting the banks, though that seems to be the main animus of the protesters that have spoken on the news.

    But of course the OWS people are not really suggesting that corporations actually do anything, their real protest is against the Government for not being strong enough in the face of corporate greed. In that case why aren’t the OWS mob protesting in Washington or at Federal Government offices?

  47. wes george

    The #occupy-whatever protest movement in America is probably the most chilling development in domestic unrest possible just a year out from the 2012 presidential election. Maybe, it will peak too soon and burn out, but just as likely is that 2012 is shaping up to be a socially-networked version of 1968. The unleashing of a new kind of electronically orchestrated anarchy by generation not raised so much on Aristotle as Grand Theft Auto. Something that will make the collective coordination of the running riots of the “Arab Spring” pale in comparison. Cities will burn. States will want to seize control of the Internet. (So much for free speech blogging.)

    The worse case scenario is that the #occupy-whatever anarchy combines with some other crisis–terrorism, financial disruptions, Iranian mischief with Israel, border war with Mexican drug lords, whatever, to give Obama the excuse to suspend habeas corpus and thus the election. From there the spiral downward–not just for the US but for the Pax Americana world order–accelerates into catastrophic failure mode and our children end up speaking Chinese as they work the mines.

    The fact that I can even imagine that scenario shows how far the world has decayed in my short life time. Please tell me I’m nuts.

  48. JC

    Jazza

    That’s a stupid diagram.

    The tea party movement is essentially made up of anti big-government types that want to reduce spending and government in their lives.

    The Wall street loiterers are basically a neo-fascist left movement intending to steal property and income belonging to others for their own personal consumption. They want more government.

    To suggest they have common aims as that silly diagram suggests is impertinent. To link such crap is even more so.

    Next up you’ll be showing us a diagram linking the common causes of the LDP and the Australian whom you support.

    You need to leave uni. as it isn’t good for you.

  49. JC

    oops….Australian Greens…

  50. Capitalist Piggy

    “these turkeys need to understand that a banking collapse would very likely have led to an even higher unemployment rate.”

    And by now (3 years and a bit later) a much lower one.

  51. sdfc

    JC

    I’m not here to make cheap political points I’ll leave that to you.

    The CBO estimate that assistance to the auto industry cost around $14b. Given the risk to employment of allowing a collapse of those companies I would say that is also a bargain. The CBO say nothing of the pension plan.

    CP

    That’s just rhetoric. History tells us that a banking collapse would likely mean higher unemployment not just three years ago but also today.

  52. Jc

    Sdfc

    The average person on the street always relates the TARP to the banks. Most seem unaware that it was also used to compensate the UAW for their losses in the pension plan.

    The fact is that the US government made around 20 billion from the banks. The losses were incurred supporting the administration’s union support base.

    Until you recognize this and admit you’re the one trying to score cheap points, not me.

  53. wes george

    The Tea Party is a conservative mom and pop grass-roots movement organizing within the constitutional structure of the US to dump Obama’s legacy one election at a time. It has very precise goals.

    But the OWS are an entirely different phenomena much more like an orgiastic Dionysian mass hysteria amplified by the power of social media networks and the failure of modern education to instill in people the rational values of the Enlightenment over collectivist victimology of post-mod relativism. The potential for real violence and group madness coming out the #occupy whatever movement is huge.

    For such an irrational collectivist madness powered by the Internet to be germinating just a few seasons out from the summer of 2012 when the most contentious presidential election in modern history is about to be fought is a very dire situation indeed.

    Never let a good crisis go to waste, right? You can practically hear the Machiavellian gears whirling in capitals right around the globe. 2012 is going to be interesting, to borrow from the old Chinese proverb.

  54. sdfc

    Who’s trying to score cheap points JC. The TARP was a Bush administration policy.

    I don’t have time to investigate the intricacies of the bailout for auto companies at the moment I’m supposed to be working.

    Let’s say however that I take what you say on face value. It doesn’t change my basic point to Adrien that the Treasury bank “bailouts” were a bargain.

  55. whatever, to give Obama the excuse to suspend habeas corpus and thus the election.

    No, he can’t do that, regardless of the emergency. The historical precedent just isn’t there, and he doesn’t have the support necessary.

    From there the spiral downward

    I don’t think so. America, cornered, would lash out effectively – at some point Obama would be told to pull his head in and let the Generals run the war, and if he refused he would be impeached. And it would stand.

  56. JC

    For such an irrational collectivist madness powered by the Internet to be germinating just a few seasons out from the summer of 2012 when the most contentious presidential election in modern history is about to be fought is a very dire situation indeed.

    It’s same mob mentality that was seen in 1968 and the end result could be the same. Decades of a GOP presidency other than the brief Carter interruption that was quickly corrected.

  57. Adrien

    Jarrah – Thanks for that diagram. It ain’t stupid, it hits the money.

    The Tea Party and the OWS crew could get toegther but they’d break up over arguments about beer brands, Jesus and kicking Arab arse.

  58. Peter Patton

    sdfc

    History tells us that a banking collapse would likely mean higher unemployment not just three years ago but also today.

    Actually, history tells you nothing. There is nothing in human history like the US in late 2008.

  59. Capitalist Piggy

    “That’s just rhetoric. History tells us that a banking collapse would likely mean higher unemployment not just three years ago but also today.”

    So the term “banking collapse” is not rhetoric? Apart from a few investment banks, I remain unconvinced that the crisis would have spread much further.

  60. Adrien

    But the OWS are an entirely different phenomena much more like an orgiastic Dionysian mass hysteria amplified by the power of social media networks

    I’m not sure I’ve seen the hysteria but if a spontaneous rave rook place on this full moon I wouldn’t be surprised. Maybe the Wall St stiffos should knock off being masters of the universe, drop some ‘E’ and dance for a few days.

    It’d make the world a better place. :)

    and the failure of modern education to instill in people the rational values of the Enlightenment over collectivist victimology of post-mod relativism.

    The Enlightenment is not a coherent system of rational values. Coherent systems of rational values are one of the bad things to come out of the Enlightenment because values aren’t founded on reason but emotion and belief.

    If you mean by ‘Enlightenment’ minds that are trained to be skeptical and cautious, if you mean by that individuals who make a habit of asking themselves what they know and, in admitting their ignorance, submit to understanding a thing before passing a judgement on it, then I see little of it in the Intelligentsia across the board. Here the Wall Street Protestors are vilified as communists; at LP the Tea Party is likewise riled as a bunch of fascists.

    Hey I’ve seen this kinda thing before. Happened a lot in Berlin when the Kit Kat Club was hot.

    Psst I don’t think the Enlightenment’s rational values were much in vogue then either.

  61. JC

    I remain unconvinced that the crisis would have spread much further.

    Really? Then please explain the following.

    On the Friday before the announcement of the TARP, Ben B informed the Congressional banking committee/US Treasury Sec. there was a very real and serious risk the payments system would fail on Monday if there was no Federal government support. This would mean that supermarkets would be unable to approve payments through debt and credit cards as banks would refuse to pay each other and incur daylight credit risk.

    People would be unable to buy food.

    I you have information that supports an opposite conclusion then please share it with us.

    If the large commercial banks failed and placed in bankruptcy, the standard reply from the sceptics is that the bondholders would have moved down to equity level and they would become the new owners.

    That sounds easy as far as it goes, however the legal system does not move like that and there would have been all sorts of cross border claims from different national jurisdictions with competing claims and asset freezes. IT would have been a disaster. Lehman’s bankruptcy is till continuing by the way.

    That would have been an alternative, but it would have been hugely more expensive.

    The government caused the breakdown as a result of various interventions an inappropriate monetary policy at different times of the cycle. They broke, they needed to fix it.

  62. Adrien

    BTW TwoTix – Your comment and your link prove my point and deny yours. ‘They admit they have no idea what they’re doing…’ – Hello!

    People who say this represents 1968 are closer to the money. But this isn’t 1968 either.

  63. C.L.

    Bunyip introduces us to Nick Carson, Occupy Melbourne mastermind:

    http://bunyipitude.blogspot.com/2011/10/fools-squared.html

  64. Capitalist Piggy

    “If you have information that supports an opposite conclusion then please share it with us.”

    The rationale for TARP was that without it the banking system would collapse. But TARP was never implemented, and the banking system did not collapse.

  65. THR

    I’ve got no problem with peaceful protests if that’s what floats your boat however these turkeys need to understand that a banking collapse would very likely have led to an even higher unemployment rate.

    Quite right, sdfc, which is why banking ought to be viewed as a symptom of the problem of capitalism, and not the problem itself.

    And despite the hysteria from certain commentators hear, and Steve Kates Manichean thinking on this, being a critic of capitalism by no means makes one ‘anti-capitalist’. In Paris, May, 1968, many of those in the uprising merely wanted a better capitalism, not no capitalism. It speaks volumes that some here cannot permit of any criticism of capitalism without it being seen as communism. This is at a time when right liberals want to increase unemployment through austerity, and believe that rising inequality is either a non-problem, or the direct fault of the poor. Some of you need a good revolution, to awake you from your dogmatic slumbers.

  66. Peter Patton

    THR

    And yet, since 1968, it is YOU and your ilk, who have had to awaken from their Marxist-Leninist crap, as you have endured one bitchslap after another, as liberalism and liberalisation have been embraced more and more in every corner of the globe.

  67. THR

    You’re off-topic, Poodle, and you’re also rather slow. Where is liberalism embraced? The factories of Guangzhou? In the trillions the US spends on foreign wars and propping up dictators? In the Patriot Act? In Workchoices? You simply aren’t up to a discussion of this importance.

  68. wes george

    If you watch this video and you aren’t chilled to the bone, then you probably don’t have any bones in your body:

    http://blogs.news.com.au/dailytelegraph/timblair/index.php/dailytelegraph/comments/hand_signs_please/

    James Taranto of the WSJ was the first to notice this mob is truly one step away from descending into a Lord of the Flies situation. You can see the shear madness in this chanting collective. Something so terrifying against everything America has ever stood for, I get this sickening feeling we are watching the beginning of the end.

    Individually each one of these creepy losers is an innocuous bus boy, welfare recipient or short order cook whose worse crime is spitting on the burger before closing the bun once. But brought together in a writhing mass of loserism, the potential for mass hysteria and mass violence is almost an inevitable outcome. The face of true evil is banal. How soon before the lynchings begin?

    http://www.politico.com/news/stories/1011/65307.html

    It’s difficult for Australians who don’t travel to the US to grasp how the culture wars, which are fought in this country almost entirely by intellectual elites, in the states are daily battled out on Tee Vee within the popular vernacular. The tea party took the battle to the grass-roots and now OWS is about to escalate the culture wars into literally something resembling civil war…

    My worry is that Obama, with his dialectical Marxist worldview, if he didn’t consciously foment the fetid economic environment conducive to OWS-like mass hysteria is fully capable of manipulating its revolutionary potential for maximum destructive value. After all, it’s all Obama has got left. I suppose the question is how ruthlessly ambitious is he?

  69. THR

    My worry is that Obama, with his dialectical Marxist worldview,

    LOL. You should really wear a diaper before watching these videos.

  70. Infidel Tiger

    Individually each one of these creepy losers is an innocuous bus boy, welfare recipient or short order cook

    Like fuck they are. The bus boys and short order cooks are the life and soul of America. They are predominatnly immigrants and they work the arses off to provide themselves and their families a better life. The pasty white scum currently defecating in parks throughout America are self entitled middle class losers unable to deal with the fact that their $200,000 college tuition debt for a communications degree didn’t get them a $500,000 job and instead made them virtually unemployable.

    Give yourself an upper cut for even comparing the two.

  71. Sean

    Kent Brockman “Professor, without knowing precisely what the danger is, would you say it’s time for our viewers to crack each other’s heads open and feast on the goo inside?”

    Professor “Yes I would, Kent.”

  72. Jc

    But TARP was never implemented, and the banking system did not collapse.

    Cap TARP was the vehicle used to buy preferred stock in the banks.

    It’s rationale was subsequently changed from the outset

  73. Jc

    What IT said.

    What the he’ll is wrong with short order cooks anyway? They make the best meals.

  74. Infidel Tiger

    The denigrating of people who do menial jobs needs to stop. Give me a nntion of ditch diggers, janitors and dish pigs over one of enitled public servants and art students.

  75. C.L.

    Those chanting Atlanta Jonestown Obama supporters should feature in a dozen GOP ads. The Administration fully supports these deranged lunatics. The fact that Democrats believe they’re on a winner associating with them bespeaks a political party and president that have clinically lost touch with reality.

  76. sdfc

    CP

    The crisis had already spread beyond what you say was just a couple of investment banks and threatened to engulf the entire financial system 1930s style.

    The role call of victims as it was is impressive with major credit providers Bear Stearns, Lehman, Merrill Lynch, Wachovia, Washingon Mutual etc all gone while Citi and Bank of America were teetering on the brink of extinction.

    THR

    Banking is not a symptom of the problem with capitalism THR. It is a facilitator of wealth creation for the community at large. Unfortunately it can also drive instability in the system if the necessary speculative aspects of the financial system run out of control.

  77. Capitalist Piggy

    JC,

    Yet the banks were reluctant and Paulson had to threaten them to take the money. Doesn’t that strike you as odd?

  78. Jc

    The banks were bullshitting, cap, playing a game. The only one firm that possibly didn’t need the cash was JPM. They shouldn’t have been forced to take it but that’s not the major point.

    Without TARP the world would be in deep depression by now.

  79. Peter Patton

    THR

    You white middle-class Marxist-Leninists really are hard to keep up with. One minute you are bemoaning the triumph of the post-1970s liberal offensive, yet now you are saying ‘it never happened.’

  80. Jc

    Unfortunately it can also drive instability in the system if the necessary speculative aspects of the financial system run out of control.

    Especially government agencies forcing banks ton lend money to people who can’t afford the loans or the banks would be referred to as racist institutions.

  81. cohenite

    wes; I didn’t get past the infantilism of the malnourished and bearded dickhead directing the audience at the beginning.

    All crowds tend towards the lowest common denominator; for right -wing crowds that is conspiracies and for left-wing ego and vanity of the sort usually found in one year olds.

    Which makes THR’s crack about diapers a tad ironic.

  82. Abu Chowdah

    The denigrating of people who do menial jobs needs to stop. Give me a nntion of ditch diggers, janitors and dish pigs over one of enitled public servants and art students.

    But then what role is reserved for me (self-entitled pube with a Bachelor of Attendance?) in this utopian paradise?

    I know, I’ll be a party official and political commisar!

  83. Dangph

    The chanting and the jazz hands is a public address system for when you don’t have a real PA system. People around you repeat what you are saying so that everyone can hear. It seems a bit redundant for the guy in the video with the megaphone.

    It impressed m0nty a lot when he saw it in action in person.

    It is completely ridiculous of course, but there isn’t really anything sinister about it.

  84. Boy on a bike

    I was doing some work for a large US financial institution at the time of the GFC and they had govt money crammed down their throats – even though they didn’t need it or want it.

  85. Infidel Tiger

    But then what role is reserved for me (self-entitled pube with a Bachelor of Attendance?) in this utopian paradise?

    Can you sling hash or wash dishes?

  86. Peter Patton

    sdfc

    Banking is not a symptom of the problem with capitalism THR. It is a facilitator of wealth creation for the community at large. Unfortunately it can also drive instability in the system if the necessary speculative aspects of the financial system run out of control.

    Quite wrong. It is capitalism itself that is inherently and even by definition unstable. That is where the ‘investment’, ‘competition’, ‘risk-taking’, ‘joint-stock company’ and ‘entrepreneurialism’ bits come into the picture.

    It is banks that democratize the access to capital, thus facilitating all the above, which distinguishes capitalism from feudalism/communism.

  87. Abu Chowdah

    No, but I can tell you how to do it and I like big black limousines, caviar and vodka.

  88. Capitalist Piggy

    “I was doing some work for a large US financial institution at the time of the GFC and they had govt money crammed down their throats – even though they didn’t need it or want it.”

    Moreover, they paid it back quick smart. Which is consistent with “they didn’t need it or want it.”

  89. sdfc

    JC

    The CRA requires that financials not discriminate against low income neighbourhoods. There is no requirement to lend regardless of ability to pay.

    That’s a bollocks talking point for the moronic.

    The crisis was a function of easy monetary policy and financials believing there own bullshit.

  90. sdfc

    We’ve just had the biggest financial crisis since the 30s and yet Pete Patton thinks the financial sector can never be a source of instability. Bizarre.

  91. Adrien

    But brought together in a writhing mass of loserism, the potential for mass hysteria and mass violence is almost an inevitable outcome.

    Ay carumba!

    Which is consistent with “they didn’t need it or want it.

    Yet they screamed blue murder when the GOP nixed the first bail-out bill. What bullshit! They didn’t need it or want it. There’s always this ‘socialists don’t learn from their mistakes’ schpiel about, they’re not the only ones.

  92. Jim Rose

    the financial sector can never be a source of instability

    Under the Bryant and Diamond-Dybvig model of financial intermediation, banks provide maturity and liquidity transformation services that improve efficiency but with first-come, first-serve deposits, and no deposit insurance, the economy is vulnerable to random bank runs.

    The situations where depositors don’t run lead to good outcomes, but when there are bank runs, outcomes are bad. The great deviation helped induce a run on shadow banks in 2008.

    The logic of the Bryant-Diamond-Dybvig model persuaded many in 2008 that if they could arrest the runs by convincing creditors that their short-term deposits to banks were insured, that could be done at little or no eventual cost to the taxpayers.

    The Diamond-Dybvig and Bryant model makes you sensitive to runs and optimistic about the ability of deposit insurance to cure them.

    The Kareken-Wallace story is moral hazard: when you insure a bank, you alter incentives to undertake risks.

    The deposit insurance allows shareholders to gamble on favourable terms with other peoples’ money (the tax payers’), and shareholders want to do this as much as possible.

    The bank is bound to fail sooner or later, and then the government will have to pay the depositors.

    The Kareken and Wallace model’s prediction is that if a government sets up deposit insurance and doesn’t regulate bank portfolios to prevent them from taking too much risk, the government is setting the stage for a financial crisis. This tension is dealt with by requiring much more bank capital.

    Deposit insurance and its sister, lender of last resort is unambiguously bad when unaccompanied by portfolio regulations that prevent banks from taking the excessive risks that deposit insurance and lender of last resort tempt them to accept.

    The financial sector fragility can be a source of occasional instability, but certainly intensifies instability elsewhere. Monetary policy seems to sow the seeds of financial panics through history. Monetary policy errors are the firestarter.

  93. wes george

    Infidel Tiger,

    Point well taken. I slapped myself hard. But maybe you should visit Austin, Texas where half the bus boys and short order cooks have advanced degrees in some kind of victim or peace studies and the other half are rock stars or film makers.

    Writing off collectivist lefties prone to chanting and setting up public safety committees as simply a mob of unemployed poli-sci post grads isn’t particularly accurate and under estimates the deadly serious confluence that has now begun to take shape, the sum being larger than its parts. It misses the point that OWS might be the start of a contagion that could spread far beyond the brat class to moonbats from all walks of loserdom, from 911 Truthers to anyone who is capable of class envy and general ignorance.

    By themselves the #occupy mobs wouldn’t amount to much (they certainly aren’t going to amount to anything here in Australia) but in the states they aren’t happening in a benign environment. There’s 10% unemployment. There’s two wars. There’s an enabling MSM looking to lionise any kind of leftist heroics. There’s desperate Chicago-trained president with his back against the wall and an election looming. There is the Tea party and citizen militia on the border. There are the Oathers. There is further economic stagnation and possibly panics on the horizon, California is virtually bankrupt, there is 30% youth unemployment in the US black communities and powerful demagogues fanning racial tensions, there are rich public sector unions planning election year fraud and violence, there is the potential for civil society completely collapsing in places like Detroit and Compton. There is the fact that should something as simple as a disruption in the grocery store supply chain in a major city collapse total civil chaos would ensue in a matter of days. Primary systems, water, power, food chains, transport and banking are stacked vertically and no longer resilient. If one goes they all fall. Nor are most city dwellers capable of fending for themselves… and there is the unknown power of various new social network media to enhance and amplify group mass hysteria…And finally there are America’s real enemies watching from overseas, seeing that the US is as weak, as volatile as it has ever been. What totally unknown perturbation could one of them toss into this high combustible mix? And how will President Obama respond if civil society begins to crack up?

    The shit has been scheduled to hit the fan in America during the summer of 2012 since at least the town hall fiascos of 2009. And now we can just start to see in the faces of the OWS zombies just how it might go down.

  94. andreas saccularius

    The trouble with banks comes when they extend finance not for productive purposes, but for short-term consumptive purposes and in particular for asset price speculation. This is the problem we have now.

    A bit of speculation may be okay, and indeed good to some extent – for example speculators increasing the liquidity of a market that might otherwise be inactive – but it can turn into mania and cause a market to go ponzi. The global housing bubble – and the sub-prime crisis was merely but the most explosive part of this – is such an example, where initial rising prices create the expectation of further rising prices, encouraging yet more speculators to enter the market, and thus further increasing prices and expectations, meaning yet more speculators entering the market, and so on and so on until, like all ponzi schemes, it collapses in a heap. This happens even without government interference, e.g. a reserve bank setting a below-market interest rate.

    This kind of irrational behaviour is an inherent weakness of capitalism, and indeed humanity. This is why banks are in a critical position, because in extending credit they can massively fuel such bubbles, beyond what they would be otherwise, and spread the damage to many unsuspecting parties (like the many individual depositors, who have little idea what the banks have put their funds toward) when the bubble bursts.

    This is why banks, and the financial system, must be regulated, far more than currently. The West’s problem is that the funds derived from the extension of this massive asset price bubble (and the illusion of wealth it’s created) fuelled demand and consumption, which was also in turn fuelled by a greater willingness to use debt to fund short term purchases – meaning this demand was transitory and can only reverse as the bubble inevitably unwinds.

    Governments at the moment, in attempting to prop up demand, are merely delaying the inevitable for another day. Either that or they must continue on and on to increase the extent of their interference.

  95. JC

    Andreas

    If you don’t want speculation to get out of hand, don’t run inappropriate monetary policy. The US banking system was the most regulated in the world and also suffered the most at the time.

    And you may also want to consider the regulatory requirement they need to hold “risk free” liquid government securities, which are the cause of the European devastation.

  96. Peter Patton

    This kind of irrational behaviour is an inherent weakness of capitalism, and indeed humanity.

    On what basis can you possibly define what “rational” behavior is? And it is not a weakness of capitalism. It IS capitalism. If you don’t like it, join THR in your nappy and demand the State take over.

  97. Adrien

    But maybe you should visit Austin, Texas where half the bus boys and short order cooks have advanced degrees in some kind of victim or peace studies and the other half are rock stars or film makers.

    I know someone from Austin Texas, that sounds like all of her friends. Sorry but they’re a lot nicer than you are. :)

  98. Adrien

    On what basis can you possibly define what “rational” behavior is?

    Oh it’s y’know, thenlightunmunt n’ shit.

  99. Jim Rose

    The US banking system was the most regulated in the world and also suffered the most at the time.

    people often forget this.

    interstate and branch banking was illgal until the 1990s. the notion that having more than one bank branch was illegal has to be explained very careful to those not in the know.

  100. Peter Patton

    “The Enlightenment” is nothing but code for “I hate Roman Catholics”. It is otherwise meaningless.

  101. andreas saccularius

    Well I suppose strictly speaking it’s “rational” to join in in a bubble if you expect to make profits for yourself, but then those profits may come at the cost of society itself, so in that sense it is not rational. If, for example, I’m “investing” in housing, buying a house merely with the hope of selling it again on the back of rising prices and making zero capital improvements, I’m increasing the price of housing for those who need houses, and reducing the stock of available housing (if I don’t rent it). This is not productive for society.

    Also it is not “rational” to pay X for a house, when the rents derived, the actual cash flows, are a pittance, and your expectation of return is reliant solely on an upward-trending market – one that grows ever-more out of touch with reality. If people want to speculate in asset prices fine, let them do so, but where the damage caused by their actions damages society as a whole, then society has an interest in those activities. Speculate with your own money, not bank credit.

  102. wes george

    I know someone from Austin Texas, that sounds like all of her friends. Sorry but they’re a lot nicer than you are.

    Hello? Have we ever met? Maybe at Emo’s? No?

    But you would denounce me for a few hundred words? How nicely you’ll fit into collectivist mob rule.

    Do we have a consensus? Wiggle your fingers citizens! It’s decided then, Wes George must be executed for crimes against niceness!

    But, but, but, Most Honourable Chair of Public Safety, I swear I never shat in public!

    Sillence, capitalist swine, The People sentence you to death!

    http://www.dailymail.co.uk/news/article-2046586/Occupy-Wall-Street-Shocking-photos-protester-defecating-POLICE-CAR.html

    Nice people. :-)

  103. sdfc

    Andreas

    For all its flaws capitalism is the best system we’ve got for generating long-term wealth for the majority of citizens. It’s an unfortunate artifact however that there will always be a certain amount of inequality in a capitalist society.

    Socialism just doesn’t work, it strips people of their initiative.

    And just to be clear I’m definitely to the left of centre and not one of those scum-sucking righties like JC.

  104. wes george

    “The Enlightenment” is nothing but code for “I hate Roman Catholics”.

    Actually, as a lapsed Catholic myself, I was using the Enlightenment as code for rational inquiry and the foundation of the rules of transparent scientific methodology, you know, spiced up with a slice of healthy curiosity and an admittedly naive faith in ability of the human spirit to rise above petty tribal hatreds and embrace reason, evidence and logic above emotion, myth and superstition.

  105. Infidel Tiger

    It’s an unfortunate artifact however that there will always be a certain amount of inequality in a capitalist society.

    Eqaulity is the most over rated outcome on earth. The only way it’s possible is making everyone equally poor and miserable.

  106. sdfc

    That’s kind of the point.

  107. JC

    This is not productive for society.

    Why not, doofus? You allowed the seller to get his money in a voluntary exchange. If you sell it for a higher price later, well and good as that buyer is doing the same for you,

  108. andreas saccularius

    Oh sdfc I’m a scum-sucking conservative and generally on the right. I certainly think that capitalism is the best that we’ve got, but yes it’s not perfect, and needs to have some practical boundaries.

    Inequality, however, I don’t think is one of its weaknesses. We should want inequality, because we are not all equal, some work harder than others and some are smarter than others, hence some deserve more than others. Taking risks to pursue productive enterprise is a good thing, and those who do so should receive the rewards for their success, and bear the costs if they fail. But in some cases failure affects society as a whole and not just the individuals involved, and that’s when some limitations are needed.

    It’s a question of the quality of the regulations, rather than their extent.

  109. wes george

    Well I suppose strictly speaking it’s “rational” to join in in a bubble if you expect to make profits for yourself, but then those profits may come at the cost of society itself, so in that sense it is not rational.

    Bullshit. To hell with rationalism. Participating in the market at whatever level is a benefit to society simply because trading adds liquidity, and this is in and of itself a socio-economic good.

    Markets are ultimately about moving wealth away from the stupid to those who will put it to productive and creative purpose. If you want to play the there-is-a-greater-fool-than-I game, fine. Markets are a moral code unto themselves.

    I’m “investing” in housing, buying a house merely with the hope of selling it again on the back of rising prices and making zero capital improvements, I’m increasing the price of housing for those who need houses, and reducing the stock of available housing (if I don’t rent it). This is not productive for society.

    Bullshit. What you are doing is increasing the incentive to those who can supply new housing to do so. The fact that house prices are sky high in Australia is not because greedy assholes are buying too many houses, but that government over-regulation and over-taxation of the market makes meeting demand with new supply slower than growing demand.

    In a more free market rising house prices should both lower demand and increase supply. But government regulation has skewed the equation so that demand can’t never be met. Policies of liberal land release, deregulating the labour market, rapidly extending services into new suburbs and even importing overseas workers would have allowed supply to balance demand. But, hey, we’d rather build useless desalination plants since it will never rain again, right?

  110. Peter Patton

    sdfc

    It’s an unfortunate artifact however that there will always be a certain amount of inequality in a capitalist society.

    You don’t really understand capitalism at all, do you? First of all you don’t get that instability IS capitalism, not just a manageable intrusion by banks. And now, you don’t get distribution. Inequality is not ‘unfortunate’; it is the VIRTUE of capitalism.

  111. sdfc

    You’re a hoot Peter. Every investment decision is a financial decision and no poverty is not a virtue of capitalism. Thta’s silly even for you.

  112. Infidel Tiger

    Inequality doesn’t equal poverty, sdfc.

  113. JC

    SDFC

    He’s not talking about poverty. Nice attempt at a switcheroo.

  114. andreas saccularius

    Wes, they thought they had an undersupply in the US and in Ireland, did they actually? No. What you had – and across the West – was “investors” entering the market, inflating demand, solely for the capital gain they expected – it was effectively a ponzi scheme, where previous investors are reliant on new investors entering the market, who can only do so by borrowing ever-greater amounts. At some point that has to end, and badly.

    Ideally, yes, those who have been stupid or imprudent should be punished, but where their imprudence has impacted on a whole bunch of unrelated parties, then we have a problem. Which is why some regulation of banks is required. A requirement for a much higher deposit would have been a good start.

    Yes, government intervention does not help these matters much either, but they are not the fundamental cause. In Australia the restrictions on land release may be exacerbating the problem, but then we also have a historically high, as I understand, number of empty dwellings and a low number of people per dwelling – not exactly consistent with a shortage of housing.

  115. JC

    SNAP

    And neither does relative poverty either.

  116. JC

    Andreas:

    You don’t understand what a ponzi scheme is. Every doofus is now referring to ponzi schemes.

    So you want to ban people from ever buying a second home?

  117. Sean

    Bit like the ‘casino capitalism’ meme JC.

    If banks were run like casinos they would be laughing as casinos are based purely on risk, spin the wheel enough times and you win in the long run, rather they work with uncertainty and sound management of this can deliver profits.

  118. sdfc

    The equality I was speaking of earlier was in terms of some living in poverty while others are wealthy. Not in terms of you earn $200k and I only earn $70k. But I forgot the ideological warriors need everything spelled out.

    Relative poverty is a weasel term used by those trying to categorise those below the poverty line in a western country as being relatively rich compared to those in third world countries.

  119. Peter Patton

    This is the Achillee’s Heal in the ‘behavioural economics’ movement. What they call ‘irrationality’ is nothing of the sort.

  120. JC

    Sean

    Take a look at a bank balance sheet. The asset side will show the hard loans. They are either consumer loans, mortgage, commercial loans, industrial and other types.

    Please explain to me why that isn’t “risk” while selling someone a CDS or doing a forward foreign exchange forward is bad risk?

    If there’s anyone that can explain the difference to me I would be all ears.

    As for speculative risk…. it’s all speculative and there are capital requirements and haircuts that demand such risk to be taken into the account in terms of a bank’s overall leverage.

    Take a basic interest rate swap for instance. A bank selling a long term interest rate swap to a client/Small to medium sized firm helps that firm simulate a long term loan as it effectively reduces interest rate risk for the customer thereby assisting them reduce risk.

    The trouble is that there are a lot of people trying to explain banks and their function when they don’t know the first fucking thing about them and what they do.

  121. sdfc

    Neither do you. You don’t even understand bank money creation.

  122. JC

    The equality I was speaking of earlier was in terms of some living in poverty while others are wealthy. Not in terms of you earn $200k and I only earn $70k. But I forgot the ideological warriors need everything spelled out.

    No one should be poor in Australia. There is no reason anyone with physical faculties should be poor or not have a job.

    And sorry, SDFC, if a person is only relatively poor and not absolutely poor , I don’t give a rats and neither do you if truth be told.

  123. JC

    Stop being an idiot, SDFC. The multiplier can only be created through the central banks increasing the base money which the soup for monetary expansion or even at times contraction.

    Shadow banks are not banks even though you stupidly think they are.

  124. Peter Patton

    Same with what they call ‘bias’. God knows where they get their idea that THEY know what is ‘unbiased’ and ‘rational’.

  125. andreas saccularius

    JC, just using the crappy Mac dictionary a ponzi scheme is “a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

    It’s not fraud, no, but it certainly is a ponzi scheme. Hyman Minsky, in his “Financial Instability Hypothesis” uses the term “ponzi borrowers” to refer to those reliant solely on the appreciating value of their assets to meet their debt obligations.

    And no, I certainly don’t want to limit people to a set number of houses. I want people to understand that purchasing a house solely for the profit from selling again in a years time is not productive for society. Might be great for you personally if you get out before it collapses, but not for society as a whole. Ireland’s already found that out.

  126. Jim Rose

    There are a number of direct moral criticisms made of strict equality: it unduly restricts freedom, does not give best effect to equal respect for persons, and conflicts with what people deserve, etc.

    The most common criticism is a welfare-based one: that everyone can be materially better off if incomes are not strictly equal. this partly inspired rawl’s Difference Principle.

    as for ‘The equality I was speaking of earlier was in terms of some living in poverty while others are wealthy’ how does this differ from social insurance.

  127. sdfc

    JC

    There are plenty of people in Australia who are absolutely poor.

    Jim

    People on social insurance are generally poor. No one is getting rich living on the dole or disability pension.

  128. JC

    I want people to understand that purchasing a house solely for the profit from selling again in a years time is not productive for society.

    Fist off, stop with the shociety crap as it’s a bullshit term that carries fascist connotation more than anything else. It’s none of your fucking business what anyone does with their money even buying or selling houses.

    If it has a positive rate of return then it’s a good thing. IF it doesn’t then it isn’t good and the person will stop doing it soon enough as money isn’t limitless.

    Might be great for you personally if you get out before it collapses, but not for society as a whole. Ireland’s already found that out.

    What Ireland found out is that you’re stupid enough to guarantee bank bondholders when you don’t have your own currency or really can’t afford to then you’re fucked.

    It appears to me that you’re one of these nancy pants that wants to eliminate risk… or risk you yourself don’t like. You can’t get rid of risk and you can’t make the business cycle illegal.

  129. Peter Patton

    Jim, all those things are no doubt valid. The only point I am trying to press is to understand what capitalism is about, and to accept that both instability and inequality are not just bugs, or irritants that can be neutered through legislation, they ARE capitalism. Indeed, they are capitalism’s VIRTUES. How one then decides to evaluate capitalism is one’s own prerogative, but folks shouldn’t kid themslves.

  130. sdfc

    No JC banks create money.

    The ratio between central bank money and bank money is the money multiplier. We’ve been through this plenty of times before and yet you still don’t get it.

    You’ve even linked to the money multiplier chart at the St Louis Fed but don’t appear to know what it means.

  131. JC

    There are plenty of people in Australia who are absolutely poor.

    Bullshit. No one goes to bed hungry or unwillingly chooses not to have a roof over their head.

    Some kids may leave home, however there are shelters that will help them and take them in.

    There is no reason not to have a job in Australia.

    I said some time ago that I reckon I could find a job in three hours tops. I would go around restaurants and ask if I can wash dishes for the night.

  132. Dave

    On the question of the critique of capitalism and corporations, Marx does see the joint stock company as a development within capitalism that is moving in the direction of communism and general social administration.

  133. JC

    No JC banks create money.

    Fuck, we’re back to this again.

    We’ve been through these before and for some reason it doesn sink in.

    Here, SDFC create a single transaction and chase it around the banking system and then tell me where the money has been created.

    Go!

    The ratio between central bank money and bank money is the money multiplier. We’ve been through this plenty of times before and yet you still don’t get it.

    What fucking ratio? The multiplier is the bank leverage, you goose.

    You’ve even linked to the money multiplier chart at the St Louis Fed but don’t appear to know what it means

    Please, don’t offend me with your idiocy.

  134. JC

    The multiplier is the bank leverage, you goose.

    That is the banking multiplier.

  135. JC

    On the question of the critique of capitalism and corporations, Marx does see the joint stock company as a development within capitalism that is moving in the direction of communism and general social administration.

    In a way he’s right. That’s right. large companies are basically owned by pension funds. That’s us. we own the firms.

  136. Peter Patton

    Dave

    The joint-stock company evolved and evolves without a clue or care for what or who Marx was or said, let alone Marx’s crystal-ball gazing. It turns out that capitalism and its joint-stock companies had passed Marx by, long before Marx even knew they had arrived.

  137. Jim Rose

    No one is getting rich living on the dole or disability pension.

    They seem to be getting better off.

    when I was an lad, the poor did not have enough to eat. few in my high school class were even stocky.

    these days, the poor face problems of obesity and drug abuse. where do they get the money for that?

    there is also the much higher levels of car and consumer durables ownership among the poor

    Living standards are determined by consumption, not income, so the obsession about income inequality is a distraction from the fact that consumption, and therefore living standards, are distributed more evenly than we think.

    both low-income and higher-income households own many of the same conveniences: colour TVs, cell phones, microwave ovens, dish washers, dryers, DVD players, iPods, computers, etc.

    perhaps 80 and 90 percent of the people below the income poverty line are not truly poor, based on what they are able to consume. life expectancies are improving rapidly too

  138. wes george

    No, Andreas. Read the history. The housing collapse in the US started because a Democratic congress decided that it was “every American’s RIGHT” to owe a house and so they directed massive federal housing loan corporations like Fanny May and Freddie Mac to give low interest loans to super high risk people and then demanded that Wall Street banks bundle these loans to subsidise them with much safer loans. Or else, more Sarbane-Oxley style water boarding for ya!

    Of course, it gets complicated and Wall Street colluded with the government to hide risk rather than properly price it. The whole system fell to a cascade of failures to manage risk properly. But it’s highly unlikely that it could have occurred in a market which wasn’t being massively manipulated by politically motived power and corrupted by crony capitalism with all the moral hazards put forward by leftist, populist demagogues in Congress. I count Bush Jr. as a useful idiot in all this too.

    IMO, those who live by the sword should be allowed the honour to die neatly by the sword.

    The big bank bailouts, while adverting short-term market panic simply traded that swift and morally cleansing catharsis for a long term decline with all the wallowing, conniving, corruption and stifling of free markets that entails. What we’ll end up with is less democracy, weaker civil rights, an entrenched elite-technocrat class, collapsed social mobility and a kind of medieval mercantilist socialism where the state is always the largest corporation in the local economy. Ironically, the worst President in history has achieved his goal to destroy America exceptionalism. God Damn, God damn America!

    We’re on the road to serfdom. Hi Ho, Hi Ho!

    http://www.youtube.com/watch?v=AWtCittJyr0

  139. andreas saccularius

    I don’t want to get rid of risk at all JC, I’m a Jeremy Clarkson fan, the nanny state can piss off and let us get on with living. I would prefer though that the risk falls on those who’ve actually chosen to take the risk, not others. If people are speculating in the price of houses, already that involves a whole lot of people who are just trying to find a roof over their head.

    If we’re all going to have to bail out banks because of idiot clowns speculating in house prices with borrowed money then I certainly do have an interest in what others do, as does “society”, as I’m bloody paying for it.

  140. Dave

    Peter Patton, I don’t think Marx believed he was the cause of the developments that he wrote about….so I don’t really see your point.

  141. Jim Rose

    The housing collapse in the US started because a Democratic congress decided that it was “every American’s RIGHT” to owe a house

    John taylor has shown that the great deviation in monetary policy occured in the USA and EU.

    The Great Deviation is the recent period during which macroeconomic policy became more interventionist, less rules-based, and less predictable.

    policy deviated from the practice of at least the previous two decades, and from the recommendations of most macroeconomic theory and models.

    The Great Deviation killed the Great Moderation, and gave birth to the Great Recession.

    First on the list is the decision by the Federal Reserve during 2003-2005 to hold its target interest rate below the level implied by monetary principles that had been followed for the previous 20 years.

    similar remarks apply to euroland and its housing booms and busts

  142. Peter Patton

    There are plenty of people in Australia who are absolutely poor.

    They are called drug addicts and loons.

  143. Peter Patton

    Jim

    What “Great Recession”?

  144. andreas saccularius

    Wes, I think that the sub-prime crisis was only the most explosive aspect of the housing bubble in the US, it was happening even without those idiot government policies, it just would have taken longer to fall in a heap. It was happening all over the West as well. Here in Australia our first-home owner grants certainly added to problem, but they’re not the ultimate cause.

    I agree with you in the last paragraph. We are in for troubled times ahead.

    Here’s an old but great article by Theodore Dalrymple from City Journal about asset price inflation: Inflation’s Moral Hazard

    But asset inflation—ultimately, the debasement of the currency—as the principal source of wealth corrodes the character of people. It not only undermines the traditional bourgeois virtues but makes them ridiculous and even reverses them. Prudence becomes imprudence, thrift becomes improvidence, sobriety becomes mean-spiritedness, modesty becomes lack of ambition, self-control becomes betrayal of the inner self, patience becomes lack of foresight, steadiness becomes inflexibility: all that was wisdom becomes foolishness. And circumstances force almost everyone to join in the dance.

  145. Adrien

    Wes – Hello? Have we ever met? Maybe at Emo’s? No?

    Ah so you’re one of those guys that works as a fry cook and has a PhD in Whale Studies. Sorry. Do you like that band Yellow Fever?

    But you would denounce me for a few hundred words? How nicely you’ll fit into collectivist mob rule.

    No I tend to upset every group that invites me in. Just ask people here. :)

    Wes George must be executed for crimes against niceness!

    Nah. I’d be first up against the wall.

    The big bank bailouts, while adverting short-term market panic simply traded that swift and morally cleansing catharsis for a long term decline with all the wallowing, conniving, corruption and stifling of free markets that entails. What we’ll end up with is less democracy, weaker civil rights, an entrenched elite-technocrat class, collapsed social mobility and a kind of medieval mercantilist socialism where the state is always the largest corporation in the local economy.

    I agree. And y’know some of that mob down at the Wall St sit-in might too if you stopped stereotyping them as something you should scrape off your shoe.

  146. sdfc

    Go? I’ve explained this to you on at least two previous occasions.

    Let’s say I rock up to a bank and ask for a loan. The bank advances me $100, I make my purchase. The counterparty to my transaction deposits the $100 into the bank. The bank has both an asset in the loan and a liability in the deposit, while the money supply has increased by $100. This is a simplified one bank example of course but it is an accurate description of the miracle of commercial banking.

    The M1 multiplier is M1/MB.

  147. wes george

    Andreas, you’re so right. Big government policy doesn’t exist in a vacuum anymore than big business commitment to fair dinkum free trade is pure as the driven snow.

    Fact is, culturally we are all in this together. One big fractal complex and nonlinear system driven as much by human zeitgeist and irrational emotions as rational self-interest. What is happening to us is what Arnold Toynbee reasoned happens to all civilisations, only because of something like Moore’s Law (the constant acceleration of socio-technological evolution) its happening much faster to us.

    We are committing cultural, economic and demographic suicide…

    A thousand years from now historians will say that we were conquered by the barbarians at our gates, but we living through it will know that we drank our poison long before the Huns stormed the ramparts.

  148. sdfc

    Jim

    these days, the poor face problems of obesity and drug abuse. where do they get the money for that?

    Oh yeah the generic poor, a convenient device used to assume away problems that nevertheless exist.

    The rest of your comment basically concurs with the comment I wrote that kicked this whole discussion off at 6:32.

  149. JC

    1.

    Let’s say I rock up to a bank and ask for a loan.

    Okay

    2.

    The bank advances me $100, I make my purchase.

    No doofus , the bank will have to sell a government bond or withdraw reserves from the central bank to make the loan.

    That’s your first mistake in not following the transaction correctly.

    3.

    The counterparty to my transaction deposits the $100 into the bank.

    Okay.

    4.

    The bank has both an asset in the loan and a liability in the deposit, while the money supply has increased by $100.

    You’re not accounting for the action as a result of the accomadation in the first transaction you doofus.

    The leverage has not expanded as the loan has replaced (the bond or the deposit at the CB) the other asset.

    that’s the second mistake.

    The bank balance sheet is no bigger as a result.

    This is the second mistake you’ve made.

    This is a simplified one bank example of course but it is an accurate description of the miracle of commercial banking.

    We’ve been through this before, SDFC and I presented to you the same points yet you don’t seem to get it.

    A bank’s balance sheet cannot have unlimited leverage and has to be supported by more capital to support more lending.

    You never seem to be able to understand this.

  150. Gab

    I’m sure you two have had this argument before, sdfc/JC.
    Get some new material, please :)

  151. cohenite

    The bank has both an asset in the loan and a liability in the deposit, while the money supply has increased by $100

    I only got to 2nd year economics so obviously I missed something but I don’t see that at all.

    Capitalism is about personal responsibility; sure that gets vitiated with the inclinations towards corruption and monopoly but in terms of the poor what a teacher friend told me is instructive: around the 1970′s the social context as an explanation for behaviour became fashionable; a kid’s delinquency was explained by the terrible homelife they had; but often the kid themselves had contributed to that ‘bad’ environment and more tellingly for every kid from a ‘bad’ environment there would be 9 or 10 from equally ‘bad’ homes who would make a go of it.

    Simply there are people in every society who are hopeless; it would not matter if you spent every minute and every $ on them they would still screw up.

    This fact has been lost in the myopia of suppressed consequences; with no consequences the shitheads proliferate and even though they aren’t the majority they corrupt the system; that goes for bankers at the top of the tree down to the druggies and other dregs.

    Bringing back the stocks and public floggings is perhaps too Islam but only just.

  152. wes george

    I agree. And y’know some of that mob down at the Wall St sit-in might too if you stopped stereotyping them as something you should scrape off your shoe.

    LoL…if you actually went down to an #occupy protest you would literally be scraping shit off your shoe.

    What do we want? Whatever! When do we want it? Whenever!

    They march under the banner of Anarchists Unite! Huh?

    The great mistake of this whole thread is that OWS stands for anything but bloody revolution and ecstatic collectivist chaos. Their issues can not be addressed or redressed, because their only true meaning is total destruction and mayhem.

    You think I’m exaggerating? Maybe you missed this video:

    http://blogs.news.com.au/dailytelegraph/timblair/index.php/dailytelegraph/comments/hand_signs_please/

    You don’t have a clue what demons live in the dark soul of humanity? Fact is, neither do 90 out of 100 of the OWS “citizens.” And they won’t until that night they find themselves cornering a lone riot cop and beat him to death in a righteous release of mob rage. Or experience the thrill of burning park cars and looting shops.

    Then they’ll know what it’s all about. Blood on their hands. The face of pure evil is always pleasantly banal.

    You know, like happy face :-) tweets right before the consensus assembled decides first item on the agenda is to lynch your ass in the interest of total equality.

  153. Infidel Tiger

    Simply there are people in every society who are hopeless; it would not matter if you spent every minute and every $ on them they would still screw up.

    And yet 95% of government policy is framed around stopping these morons hurting themselves.

  154. JC

    The bank has both an asset in the loan and a liability in the deposit, while the money supply has increased by $100

    He loses track, Cohenite.

  155. andreas saccularius

    There’s an interesting article here (link) Wes which you might find interesting. It’s about the British riots, but I think its conclusions largely apply to what’s happening in NY, it’s the same kind of thoughtless, selfish behaviour. The second-to-last paragraph is particularly dynamite, ouch.

  156. sdfc

    JC

    A bank doesn’t have to sell a bond to advance a loan.

    Bank money is a liability of banks. You need to get a handle on the difference between inside and outside money. Otherwise you’ve got no chance of understanding how a modern monetary system works.

    Cohenite

    You don’t get taught banking and finance in undergrad economics courses. However I’m sorry I can’t make it any simpler.

  157. wes george

    Capitalism is about personal responsibility

    Cohenite, my dear old friend. Let’s sort out our categories.

    Capitalism is a very big set. Communism is perhaps the purest, simplest form of Capitalism. Statist and totalitarian to be sure, but definitely a Capitalist system in which all property and means of production are control by the state. In a communist capitalism all personal responsibility is directed toward obedience to the state. Marx and Engels are both radically pro-capitalist philosophers.

    It can be truly said that Capitalism, in whatever form, is the end of history. There is nothing in the human imagination beyond capitalism to evolve towards, thus far.

    To my knowledge only the most lunatic millenarian fringe have ever advocated a return to pre-capitalist subsistence agriculture with a bit of barter or hunting and gathering or an economy based upon cattle and chattel theft or even colonial empire (although that’s a kind of capitalism too.)

    So what is really in question here is the endangered organic ecology of capitalism we call the free markets of goods, services, capital and most important of all, IDEAS. Free markets are ancient and natural indeed and always on the very brink of extinction.

    We are talking about the fundamental human prerogative to pursue life, liberty and happiness with only a merest degree of interference deemed necessary by the state to referee the intercourse of fair exchange.

    I would argue that all over the world, in almost every case, state invasive intrusion into private affairs has reach proportions which obstruct the proper function of market economics and threaten our basic human natural rights, much less our animal spirit to creatively evolve rational adaptions to changing conditions.

    Surely, everyone here agrees. We are not here to argue for capitalism, per se. That’s a given. Capitalism is like politics there are good, ugly and genocidal forms.

    We are here to argue for individual human liberty to freely choose how to live and express one’s self. And we should be clear that such individual autonomy is impossible without free markets as much as free markets are impossible without the basic human rights of representative government, free expression and private property.

    In this sense the #occupy whatever movement is truly the enemy of freedom loving people everywhere.

  158. M Ryutin

    Interesting (if expected) development in Wall Street protests etc. Organised labour and straight Democratic Party involvement is a given (why wouldnt they try and cash in on what would be possibly helpful to them politically?), but it carries ramifications.

    To see it as a ‘spontaneous’ protest has caused a few people to stop and think. Apart from the anarchists and recent obvious presence of organised labour busing in people (SEIU, what else?) there are still plenty of people – apart from the white college kids with large loans – who ARE ill at ease with the economy who have worries and who could be a factor on 2012. It is thgose people (and their potential votes) which all sides are looking at right now when trying to work out how to classify this protest.

    IF it is/becomes an OBVIOUSLY organised Democratic Party/union front, how many of these ‘innocents’ will be pissed off – along with outsiders looking in. What will it mean to the long term future of the ‘protest’ if it is SEEN universally as a political front for Obama?

    The Breitbart ‘Big’ sites have been carrying a lot about it of course, but one particular SEIU involvement has been the longterm planning of manipulating the protest and one tactic was to copy their previous tactics (in Wisconsin and elsewhere) of leading thugs to homes of the “opposition”. The ‘Bigs’ have video of SEIU’s Stephen Lerner at the Van Jones/SEIU ‘Take the American Dream Back’ conference in Washington, D.C., on October 3, 2011, plotting this. See

    http://biggovernment.com/mvadum/2011/10/10/breaking-operation-occupywallstreeters-seius-stephen-lerner-leaks-plan-to-terrorize-corporate-executives/.

    Surprise, surprise, I have just heard that a ‘march’ on the homes of “the rich” in New York is about to take place today.

    With new media and Fox News around, the SEIU manipulation will be ‘out there’. If certain people get their way in Australia, the upcoming media enquiry will get suggestions which might stop Australia from having similar resources to counter such manipulation.

  159. JC

    A bank doesn’t have to sell a bond to advance a loan.

    It may not as, it could have the funds sitting in excess reserves etc. But to suggest a bank does not have to conduct a liquidity management operation or that the money appears out of thing air like you think it does is simply wrong.

    Unless I’m mistaken assets and liabilities + equity have to equal do they not? Or perhaps you think a balance sheet doesn’t have to balance?

    Bank money is a liability of banks.

    That’s something you really really to explain as it makes absolutely no sense.

    You need to get a handle on the difference between inside and outside money.

    Perhaps you were taught different monetary economics out West. Over here, on the East coast that’s something no one has ever heard of.

    Otherwise you’ve got no chance of understanding how a modern monetary system works.

    I suspect you’re not letting me in on something here, SDFC. You’re not a MMT’er are you? Surely not.

  160. andreas saccularius

    sdfc, banks always need to maintain a positive exchange settlement account (i.e. reserves) with the RBA, so they can’t create money out of thin air. If they want to make a loan that would reduce their balance below zero, then they need to scramble around and look for it, that might be in the form of selling a bond – a repo with the RBA.

    Although I think the multiplier is also a function of the willingness of banks to extend those reserves rather than loan them out, and the willingness of customers to take on debt. Bernake has massively increased base money, but most US banks are hoarding their reserves rather than lending them out so it hasn’t had quite the stimulating effects on the economy he would have desired.

    As I understand it, the reserve can’t control interest rates and the money supply at the same time, the money supply is determined in the economy, by the general appetite for debt.

  161. JC

    As I understand it, the reserve can’t control interest rates and the money supply at the same time, the money supply is determined in the economy, by the general appetite for debt.

    Eggsactly. And because we’re on an interest rate target the CB has to supply as much funds as needed in order to hit the target. They can also do reverse repos/permanent adds.

  162. The great mistake of this whole thread is that OWS stands for anything but bloody revolution and ecstatic collectivist chaos.

    I’m not sure about bloody revolution, but I’ll back you on the second one. It seems to be attracting all sorts of loonies, cultists and moonbats who want a platform for their ideas and can smell the smell of the gullible.

    Personally, I’m waiting for the cholera and lice outbreaks to start. That will thin the numbers pretty quickly, and it might even drive home to them the importance of organisation and discipline (and hygiene and sanitation!). But somehow I doubt it.

  163. cohenite

    Wes; I should have said: capitalism is best when it is based on personal responsibility. And the best government is that which maximises the capacity of individuals to be responsible for their own success or failure.

  164. andreas saccularius

    I know you don’t agree JC, but this is why I’m worried about what the debt is actually used for, because the reserve bank is an active participant in the whole process, improving the liquidity of the whole system – because they need to maintain whatever rate they’ve set.

    There are constraints in the form of capital adequacy ratios, and that the banks actually need to have a security to loan to the reserve in the first place, but still – they’re a facilitator in the whole process. The more debt the economy demands the more the reserve has to participate..? Though I suppose it is also not cheap for banks to access.

    I wouldn’t have a problem, except… surely there is a difference between, for example, debt used to go on a holiday, and debt used to finance the purchase of, say, a… shoe-buffer for your shoe-repair business, or whatever – a piece of capital equipment. Surely we should be somewhat concerned if, as there has been, there is a significant increase in the use of debt for ‘frivolous’ purposes. It impacts upon the stability of the whole system.

    Actually I don’t know that I care, we’re buggered either way it would seem.

  165. sdfc

    No JC I’m not an MMT’er. They have an excellent handle on the operational aspects of the monetary system however over the long term their proscriptions are inflationary. Mind you in the short-term higher inflation is exactly what we need.

    I didn’t learn anything about the monetary system at uni. The standard neoclassical and Keynesian stuff I learnt treated money as exogenous to the system. Once I started working in finance I read everything I could to understand how the system works and found that money is endogenous and is closely associated with private sector debt.

    Andreas

    If a bank reduces its ES balance below zero it will simply borrow money at cash from a bank with a positive balance. Don’t forget when a bank creates money it essentially creates a deposit in the banking system leaving another bank with a positive balance.

  166. JC

    If a bank reduces its ES balance below zero it will simply borrow money at cash from a bank with a positive balance.

    Same thing as before. The other bank has a surplus which it is lend out. No biggie.

    If it has an excess on its liability side it will have to create an asset.

    All this is limited by the capital ratios.

    Don’t forget when a bank creates money it essentially creates a deposit in the banking system leaving another bank with a positive balance.

    You have to explain this self invented economics of yours, SDFC.

  167. andreas saccularius

    Yes sdfc, it could look to other banks, but if a bank has an ES balance of 0 then it can’t loan that money to a borrower, and then borrow it later from their bank, because they need the reserves in the first place before they can actually loan it out.

    Is this where you think the reserve steps in, as an intermediary to provide that temporary liquidity? I just don’t know how often banks make use of the facility (and also lend to each other), and whether it’s increased in recent times in step with the increase in debt levels. Shouldn’t there be a graph showing it exploding in the last few decades, that would be highly suggestive, if you are correct.

  168. m0nty

    You don’t have a clue what demons live in the dark soul of humanity? Fact is, neither do 90 out of 100 of the OWS “citizens.” And they won’t until that night they find themselves cornering a lone riot cop and beat him to death in a righteous release of mob rage. Or experience the thrill of burning park cars and looting shops.

    Then they’ll know what it’s all about. Blood on their hands. The face of pure evil is always pleasantly banal.

    The capacity of wingnuts to manufacture ridiculous delusions of victimhood is endless. You guys really would love to have your Rodney King moment, wouldn’t you? Not gonna happen.

  169. Adrien

    Wes – The OWS stands for “anything but bloody revolution and ecstatic collectivist chaos” instead “their only true meaning is total destruction and mayhem”?

    might wanna rethink that pal.

    Maybe you missed this video

    Yeah I’m still missing it.

    You don’t have a clue what demons live in the dark soul of humanity?

    That’s so poetic. But you’re wrong. I too have bought The Chronic I know what evil lurks within the hearts of men. And I had coffee with the Shadow only yesterday.

    Then they’ll know what it’s all about. Blood on their hands. The face of pure evil is always pleasantly banal.

    Well you might find it pleasant. What happened Emo Kid? You get turned down by some foxy hippie chick at Stubbs BBQ or some shit?

    Let’s sort out our categories.

    Okay, let’s :)

    Capitalism is a very big set. Communism is perhaps the purest, simplest form of Capitalism.

    Well if you think that Communism is a form of Capitalism you’re either a Trot or you should cut down to maybe 20 cones of a morning. Personally I think Capitalism is a bogus category because it attempts to form some monolithic unity out of the organic interactions of legal systems, trade and technology. There’s a whole heap of different ‘capitalisms’ the only thing they all have in common is markets and mass production. The only markets the Sovs had were illegal.

    It can be truly said that Capitalism, in whatever form, is the end of history. There is nothing in the human imagination beyond capitalism to evolve towards, thus far.

    Do you realize you finish up by contradicting what you set out to say?

    Economic systems aren’t normally dreamt up by someone, they evolve historically. Where they are the product of design they usually don’t work very well.

    Good luck with the next hippie chick, here’s a hint show a little empathy. You might not end up with a pint in the face next time. :)

  170. Peter Patton

    I like the idea that capitalism is a product of “the human imagination”. I reckon ‘capitalism’ is more a discourse than something material.

  171. Peter Patton

    Economic systems aren’t normally dreamt up by someone, they evolve historically.

    Hmmm…what about ‘Socialism’ and ‘Communism’? I argue that the failures of both were largely a result of ‘being dreamt up’; they were unnatural and unhistoric.

    As for ‘capitalism’ it was ‘dreamt up’ only after it had long been established.

  172. wes george

    Well if you think that Communism is a form of Capitalism you’re either a Trot or you should cut down to maybe 20 cones of a morning.

    Really?

    if you think that communism is not, in fact, a form capitalism where the means of production is simply controlled by the state, then you’ve just outed yourself as economically illiterate, much less having ever bother to read the standard Marxist oeuvre before spouting off at the mouth.

    Isn’t amazing that people who lack a basic tertiary education bother commenting on shit well beyond their intellectual horizon? I mean, like, you won’t find me on Quantumphysicsblog.com parsing the Uncertainty Principle or whether God plays dice with the universe.

    Capitalism is not a synonym for free market economics, son. Free market economics is one of many shades of capitalism.

    Both the Soviets and the Maoists built massive industrial empires wielding immense CAPITAL, employing hundreds of millions of workers complete with factories, inventories, production quotas, distribution networks, even consumer goods, all centrally commanded by an elite technocracy virtually WITHOUT help of market-based economic science.

    I repeat. Communism is simply authoritarian capitalism…

    Capice?

  173. Adrien

    Hmmm…what about ‘Socialism’ and ‘Communism’? I argue that the failures of both were largely a result of ‘being dreamt up’; they were unnatural and unhistoric.

    Peter you might like to contemplate the significance of the qualifier ‘usually’ in the bit you quoted. And proceed to the next sentence in the comment.

  174. wes george

    The capacity of wingnuts to manufacture ridiculous delusions of victimhood is endless. You guys really would love to have your Rodney King moment, wouldn’t you? Not gonna happen.

    Victimhood? Oh, another Peace Studies grad, eh?

    From one wingnut to another, I hope you’re right. But you didn’t bother submitting any evidence for that claim other than your opinion and we all have one of those.

    Meanwhile, the #occupy whatever citizens have begun issuing death threads.

    http://www.politico.com/news/stories/1011/65307.html

  175. Adrien

    if you think that communism is not, in fact, a form capitalism where the means of production is simply controlled by the state, then you’ve just outed yourself as economically illiterate,

    Indeed and the I guess that makes Sinclair Davidson who edits this site, and Jason Soon who founded it and myriad others economists who contribute posts and comments here likewise illiterate because they agree with me.

    Son.

    much less having ever bother to read the standard Marxist oeuvre before spouting off at the mouth.

    Well not for a while it’s deadly dull mostly. The Eighteenth Brumaire of Louis Napoleon is a notable exception. Marx was the one who came up with the term Capitalism. His description of it is of a rationalized market economy. In fact it’s the market with its insatiable appetite for growth which supposedly leads to its downfall.

    Isn’t amazing that people who lack a basic tertiary education bother commenting on shit well beyond their intellectual horizon?

    Doesn’t stop you tho’ does it?

    I repeat. Communism is simply authoritarian capitalism…

    And if I repeated ad nauseam that the world is actually a huge dinner plate balancing precariously on an infinite stack of geese would that then be the truth? To define command economics as another branch of ‘capitalism’ is simply to render the term pointless.

    Here’s some news for you ‘capital’ precedes capitalism by millenia. Capital is merely a good used to make another good. So all the equipment used to make, say, wine, is and was capital.

    How ’bout we just use the term ‘stuff’ from now on? As in, the economic system is an example of, um, stuff. So vague it’s accurate.

    Capice?

  176. Adrien

    From one wingnut to another

    I believe the proper term for a ‘leftwing crazy’ is Moonbat.

    Oh, another Peace Studies grad, eh?

    What did you graduate from? I’m curious. I’ve already eliminated everything that requires logic.

    Meanwhile, the #occupy whatever citizens have begun issuing death threads.

    Someone’s begun issuing death threats, has everyone who sits in Wall St endorsed this?

  177. m0nty

    From one wingnut to another, I hope you’re right. But you didn’t bother submitting any evidence for that claim other than your opinion and we all have one of those.

    Indeed, but it’s your delusions we’re talking about here, which are all in your head.

  178. wes george

    Adrien instead of engaging in Ad Hom and argument from authority logic fallacies, why don’t you just rationally explain to us why Communism IS NOT a form of Capitalism.

    Surely, it won’t be hard, since you’ve already explained how idiotic one would have to be to believe otherwise.

  179. Peter Patton

    why don’t you just rationally explain to us why Communism IS NOT a form of Capitalism

    Why don’t YOU take notice of actual Leninists, Maoists, and Marxists, let alone actual Lenin, Mao, and Marx, before you take notice of actual capitalists, and capitalism.

  180. wes george

    Again, Monty, we got a lot of people with opinions around here, but you blokes seem be pretty short of supporting evidence.

    Btw, here’s some more evidence.

    After threatening to kill rich people the #occupy rabble plans to march on rich people’s houses. It’s getting more and more like the Arab Spring, alright.

    http://www.politico.com/news/stories/1011/65599.html

    No worries, Monty says that violence isn’t “gonna happen.”

  181. Infidel Tiger

    After threatening to kill rich people the #occupy rabble plans to march on rich people’s houses.

    Half of them will be marching on their parent’s gaffs.

  182. wes george

    Peter,

    I’m a big believer in free market economics, free trade, low tax thresholds and basically that government should be very limited indeed, while our civil liberties, particularly freedom of expression and private property should be sacrosanct.

    The fact is that capitalism can be organised in ways that radically restrict individual autonomy. And sadly, for much of modern history that’s the way it’s been.

    We could think of a dozen examples, from Obama’s cozy crony capitalism (government motors, etc) to the various varieties of socialism as practiced from Cuba to the Soviet Union, To just basic thug populist capitalism of Hugo Chavez to nepotist capitalist arrangements like Ferdanan Marcos, the former dictator of the Phillippines. And all sorts of mixed market/command economies in between.

    Still waiting for Adrien to reveal why communism isn’t a form of capitalism.

  183. Adrien

    Wes – Adrien instead of engaging in Ad Hom and argument from authority logic fallacies,

    I’m not using an ad hominem argument. An ad hominem would be: you’re wrong because you’re a maleducated twit. I’m not doing that. I’m saying you’re obviously a maleducated twit because of your argument.

    As for authority. My authority is the dictionary. Words either mean something or they don’t. I’ll give a million bucks if you can find one reliable definition of capitalism that says that private property and market economics are not central to it.

    why don’t you just rationally explain to us why Communism IS NOT a form of Capitalism.

    Okay.

    Capitalism is based on private property and trade in same. Under a capitalist system merchants operate in marketplace which trades in commodities. Under a command system the economy is planned from a central governmental authority, there is no trade.

    By ‘capitalism’ you actually mean industrial mode of production.

    What is fascinating is that you are so assured of your views you are willing to cast aspersions on the education levels of anyone who disagrees with you. Your argument from authority retort doesn’t belong in this discussion because ‘capitalism’ is a term coined and applied to describe an economic system. The meaning of words is generally determined by consensus and ratified by authority. In this case the Oxford dictionary:

    capitalism (noun) an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.

    ‘Arguments from authority’ are, like when you say the Sun goes ’round the Earth ’cause Aristotle said that. Understand? No. Hardly surprising seeing as how you haven’t even got as far in your inquiries as google.

    I suggest you look that up and then proceed to this thing called a book. May I recommend something on your level.

  184. dover_beach

    Adrien, so what is meant by ‘state capitalism’?

  185. wes george

    Adrien,

    Your comments speak for themselves. There isn’t anything I need to add.

    Although, it was wrong of me to call you an economically illiterate bumpkin.

    Please accept my sincere apology for that.

  186. JamesK

    Although, it was wrong of me to call you an economically illiterate bumpkin.

    What even though you’re correct, wes?

  187. Adrien

    Adrien, so what is meant by ‘state capitalism’?

    What is meant by that Dover is that, rather than take responsibility for the tyrannical consequences of command economics, we’ll just use words to make it all capitalism’s fault and therefore avoid all blame.

    Do you think that ol’ Wes is right, that communism is a form of capitalism?

  188. Adrien

    Please accept my sincere apology for that.

    Cheers.

  189. Adrien

    What even though you’re correct, wes?

    Did you guys graduate from the same school, y’know the Institute for the Differently Realitied?

  190. JamesK

    Did you guys graduate from the same school, y’know the Institute for the Differently Realitied?

    Okay, okay..I admit that wasn’t fair on country folk.

    I apologise unreservedly all yokels who almost to a man undrestand far more about economics than Adrien.

  191. dover_beach

    What is meant by that Dover is that, rather than take responsibility for the tyrannical consequences of command economics, we’ll just use words to make it all capitalism’s fault and therefore avoid all blame.

    Yes, I think that is certainly a part of it but then I don’t think its as clear-cut as you seem to believe.

    Do you think that ol’ Wes is right, that communism is a form of capitalism?

    No, I wouldn’t describe communism as a form of capitalism because to my mind there is something inchoate about the characteristics of communism.

  192. Adrien

    DB – Yes, I think that is certainly a part of it but then I don’t think its as clear-cut as you seem to believe.

    We use these terms to make distinctions, yes. That is that utility of categories. The distinction between command and market industrial economies is a pretty important one I would’ve thought. And to say that communism is a form of capitalism mashes them together to make them meaningless.

    Do I think there are resemblances between capitalism and communism. Sure. Communism like a big old clunky corporation with shitloads of managers that has a monopoly on everything and the right to do a lot more than fire you if you point out how fubar it is.

    Works the other way as well. A lot of capitalist corporations are stuffed with people who’d be right at home at Gosplan.

  193. JamesK

    Strikingly thoughtful insight into the equivalence and resemblance of capitalism and communism from and for Adrien.

    Tho’ I suspect Engels would have disagreed.

    So would any modern grown-up but not for the same reasons.

    They’d suspect Gosplan-like employees would be more at home in our universities and civil service.

    Specifically our Climate Change and Treaury departments, for example.

    Adrien would certainly be at home there also.

    Funny that….

  194. Adrien

    Viz the Tea Party/Wall Street comparison. Despite the claims that the tea Party are ‘organic’ and the WSO is not, when one looks at the origins as they can now be traced what is born out is the fundamental similarity of their origins.

    There is no origin point both movements have a precedence but each share a singularity in the media.

    The Wall Street Occupiers’ points of origin are myriad as well but the web site AmpedStatus.org is the main conduit. That website published an article criticizing the American oligarchy which declared:

    It’s time for 99% of Americans to mobilize and aggressively move on common sense political reforms.

    A hacker group known as Anonymous then called for “Operation Empire State Rebellion”; this was the plan to occupy Liberty Park. the first attempt failed dismally due to poor attendance. It’s programe was:

    * End the campaign finance and lobbying racket
    * Break up the Fed & Too Big to Fail banks
    * Enforce RICO laws against organized criminal class
    * Order Ben Bernanke to step down

    This was followed by usual endless debate in which a date was discussed. The magazine adBusters called for a day of rage on the 17th of September. Occupy Wall St and We Are The 99% were quickly established in rapid succession.

    In the Tea Party’s case it was a broadcast by Rick Santelli in February of 2009 where he had a good old go at Obama’s persistence with FDR’ subsidizing of mortgages.

    Like WSO there was a spontaneous establishment of websites like Chicago Tea Party and from this date the national protest movement known as the Tea Party manifested. Their agenda is:

    1. Identify constitutionality of every new law
    2. Reject emissions trading
    3. Demand a balanced federal budget
    4. Simplify the tax system
    5. Audit federal government agencies for waste and constitutionality
    6. Limit annual growth in federal spending
    7. Repeal the healthcare legislation passed on March 23, 2010
    8. Pass an ‘All-of-the-Above’ Energy Policy
    9. Reduce Earmarks
    10. Reduce Taxes

    In neither case is the assertion that these movements are the creatures of the Republicans or Democrats accurate. What is different are the preferred targets. But really if you were to fire a missile at one of those targets the other one’d get torched too. They’re always in bed together.

  195. Adrien

    Oh and there’s a call for a global day of action on October the 15th. I reckon it’s likely to be a fizzer at least here.

  196. Adrien

    Adrien would certainly be at home there also.

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

    Fuck off dipshit you don’t know me at all.

  197. Adrien

    Really James are you truly that stupid or are you just pretending?

  198. Peter Patton

    A global day of ‘action’, eh? What a WHOLE day?

  199. Peter Patton

    Naomi Klein’s probably a bit log in the tooth for all this. Besides, she’s come out of the closet as a collaborationist Keynesian.

  200. Adrien

    From my very scant reading of the WSO there is a lot of dissatisfaction with the Democrats and their attempts to find some fellow feeling with the WSO has been met with scorn.

    The Tea Partiers are likewise critical of most Republicans. The common beef of both groups is the bail-out.

    And, ahem, yeah – the bail-out.

    If this activism persists and grows it will be very interesting watching how the various established players react. Not just the politicians but also the media.

  201. Adrien

    What a WHOLE day?

    Nuh just the mornin’ mate. I gotta go n’ collect me dole check and godatheraces ‘ey! :)

  202. Tillman

    Really James are you truly that stupid or are you just pretending?

    I think he actually might be that stupid.

  203. Peter Patton

    You never really know what’s going on on the streets among 300 million people. Look at England a few weeks ago. The gripes of American hoi polloi are far more substantial than the poms. I hope this movement builds. The American plutocracy is disgusting.

  204. JC

    Specifically our Climate Change and Treaury departments, for example.

    What do people that work in the dept. of Climate Change do all day was a question the Czech president asked out loud.

  205. Adrien

    They work hard to change the climate. They turn on their cars and leave ‘em revving all day long.

  206. They’ve got quite a lot to be gearing up for now, don’t they?

  207. JC

    No seriously wtf do they do? There’s 408 of the clowns working there in a 2010 head count.

    You’d really have to be passionate about the weather to be working in that schlepary.

  208. JC

    They’ve got quite a lot to be gearing up for now, don’t they?

    Like what? Tax collection isn’t their role.

    The libs should cause chaos by informing anyone caught working there that they will be fired and will not be rehired in any other department again.

    That would be really morale boosting.

  209. JC

    Chubby could figuratively be silenced by the libs describing him as the most ideologically bent person to ever hold that position and that they are shocked at the things he says at times.

  210. JamesK

    Wow, Adrien is a denialist like the best of us……

  211. dover_beach

    We use these terms to make distinctions, yes. That is that utility of categories. The distinction between command and market industrial economies is a pretty important one I would’ve thought.

    Well, of course, but the crucial qualifiers there are ‘command’ and ‘market’. Mercantilism and cameralism, for instance, are capitalistic even though it seems to involve strong elements of a ‘command’ economy.

  212. Peter Patton

    Though somehow I doubt this OWS posse is where the revolution starts. Check out this typical tossser.

    At first we couldn’t even find Occupy Wall Street. We biked over the Brooklyn Bridge around noon on Sunday, dodging the tourists and then the cars on Chambers Street. We ended up at Ground Zero and I felt the deep sense of sadness that that place now gives me: sadness over how, what is now in essence just a construction site, changed the world so much for the worse. I also felt a deep sense of sadness for all the tourists taking pictures of a place where many people died ten years ago which is now a testament to capitalism, imperialism, torture, and oppression.

    Ed: What about social injustice, shirley?

    There needs to be a space for a talent show across from anti-patriarchy meetings. There needs to be a food table, medics, and a library. Everyone needs to stop for a second and look around for someone’s phone. And that within all this we will keep talking about Troy Davis and how everyone is affected by a broken, racist, oppressive system. Maybe, maybe this is the way?

    http://overland.org.au/2011/10/so-real-it-hurts-notes-on-occupy-wall-street/

  213. Peter Patton

    Ah, it all makes sense now. OWS is an activist’s space

    Here is the thing though: I’ve had these conversations before, I’m sure a lot of us in activist spaces have had these conversations before, the ones that we need to keep having about how to make sure everyone feels comfortable, how to not assume gender pronouns and gender roles. But there were plenty of people in this meeting who didn’t know what we were doing when we went around and asked for people’s names and preferred gender pronoun. A lot of people looked taken aback by this, who stumbled through it, but also looked interested when we explained what we were doing. They listened to the discussion and then joined the conversation about what to do to make sure that Occupy Wall Street felt like a space safe for everyone. People who said that they had similar experiences and were glad that we were talking about it.

  214. Peter Patton

    Revolutionary Lost In Space!! I kid you not.

    This is important because I think this is what Occupy Wall Street is right now: less of a movement and more of a space. It is a space in which people who feel a similar frustration with the world as it is and as it has been are coming together and thinking about ways to recreate it.

  215. Adrien

    DB – Mercantilism and cameralism, for instance, are capitalistic even though it seems to involve strong elements of a ‘command’ economy.

    Mercantilism is often thought of as a stage in the development of capitalism. Whether or not it’s ‘free market’ depends I think on what end of the Mercantile stick is pointed in your direction. Cameralism is as aspect of rationalized management. This is something all industrial economies have in common like punching the clock.

    Whatever Wes must’ve bought a new bong the week they taught developmental economics in school if he thinks that communism is a species of capitalism.

  216. John H.

    I lean towards the views of Adrien and Peter P. The concentration of wealth in the USA over the last 30 years is a sick joke and people are increasingly fed up with it. Well they should be, it appears that while boats may all rise on a rising tide when the tide goes out many are dashed against the rocks while the bigger boats weigh anchor an head for safer waters. It has to change, the OWS may not be the turning point but it is a harbinger of one coming.

    As to the claim the OWS represents an “anti-capitalist” movement. Fuck off. Moronic, demonising, generalising crapola. These people are not anti-capitalist they are against the current style of capitalism that has allowed a massive concentration wealth and spare me the merit argument. How can anyone be so stupid to mount a merit argument when the current wealth concentration bears no relation to a normal distribution? Idiots.

  217. Adrien

    In Melbourne the Oct 15 thing happens in two locations.

    #1 City Square; Agenda:

    NON-VIOLENTLY sending a message to the financial sector worldwide. Australia too is under the same bind of freedom because of monetary policy and corporate greed. Show your support for Occupy Wall Street! Occupy Australia!!!

    Monetary policy? Commies.

    #2 RMIT University; Agenda:

    It’s time RMIT Unversity started functioning properly

    !!!

    The specter of somethingorother is haunting Margaret Gardner. :)

  218. Peter Patton

    Australian leftists just cannot transcend their angst at not having a green card, can they?

  219. dover_beach

    Mercantilism is often thought of as a stage in the development of capitalism. Whether or not it’s ‘free market’ depends I think on what end of the Mercantile stick is pointed in your direction.

    It is a little silly to be speaking about the development of ‘capitalism’; its not as if we are talking about the development of biological creature here. And, no, it doesn’t matter since what is relevant here is acting under the direction of some central agency.

    Cameralism is as aspect of rationalized management. This is something all industrial economies have in common like punching the clock.

    Again, no, Cameralism involved imagining the state as if it were a corporate entity. The affinity between it and St Simon’s socialism is striking.

  220. Adrien

    Dover, how does ‘imagining the state as if it were a corporate entity’ make it not a form of rationalized management?

    Imagining the state as if it was a corporate entity is quite popular these days and across the board. Also popular is imagining the corporation as if it was a state.

  221. Adrien

    John H – How can anyone be so stupid to mount a merit argument when the current wealth concentration bears no relation to a normal distribution?

    What’s striking in the merit argument is the current practice of the music business. The mainstream music business currently selects its act by having them play in a room full of A&R men. Guys like Dick Rowe who will go down in history for saying ‘guitar bands are on the way out Mr Epstein’. This was the early 60s.

    All of the good bands remain unsigned, largely by their own volition. Possibly something about an objection to ‘rent-seeking’. It’s not really rent seeking when you look at how record companies treaty musicians it’s more like straight up theft.

  222. Adrien

    It is a little silly to be speaking about the development of ‘capitalism’; its not as if we are talking about the development of biological creature here.

    Capitalism didn’t develop? Wow! So it just magically dropped out the sky one morning. At 9am Manchester was all fields and buy noon they were head down mill for the afternoon shift.

    And, no, it doesn’t matter since what is relevant here is acting under the direction of some central agency.

    What exactly is relevant? And what central agency is directing it?

  223. Peter Patton

    Mercantilism is often thought of as a stage in the development of capitalism.

    Only if capitalism actually evolves, otherwise mercantilism has no necessary relationship to capitalism whatsoever. Feudalism maybe.

  224. Peter Patton

    John

    I have worked for Wall Street firms straight out of uni; while they were great employers, and I enjoyed some of the work, the bonuses are just so wrong. For people to so easily be given all that money, without taking even an iota of risk themselves, is just so wrong. But once you are inside that bubble, you are exposed to such an orgy of the most extraordinary wealth, you really do lose all perspective. I mean seriously, if those ferals in OWS knew the extent of it…actually, they couldn’t…

    A true story. My swaps trader 30 year old London flatmate at bonus time was stalking the apartment, coz the phone call he was expecting to tell him the amount of his bonus was 5 minutes late, then 10 minutes. Ultimately, it was 30 minutes late, and he was about to explode. When the call finally did come, 60 seconds later he threw the phone against the wall, deliberately knocked off a row of booze bottles, and started screeching. Why? Coz he only got “800 grand, that’s fucking change, not a bonus”. He was expecting ‘a mill’, and was going to resign the next day. Fortunately, he learnt not long after that his bonus was quoted in pounds, not US$. Thank god, when converted to US$, he comfortably cleared US$ 1 million. he then shouted us all to dinner, champagne, and a lap-dancing club. Thank god for that exchange rate!

  225. dover_beach

    Dover, how does ‘imagining the state as if it were a corporate entity’ make it not a form of rationalized management?

    Any coordinated entity is going to require ‘rationalized management’ whatever that may be, what’s important here is that diverse entities are here being integrated in order to pursue common substantive purposes.

    Capitalism didn’t develop? Wow! So it just magically dropped out the sky one morning. At 9am Manchester was all fields and buy noon they were head down mill for the afternoon shift.

    It’s interesting that you believe that ‘capitalism’ was something sometime about 1300AD, some other thing about 1500AD, and again something else at about 1750AD (mercantilism per chance), and again something else in 1900AD and that each of these things is somehow related to the other developmentally in the same way that a human being is a foetus, then an infant, then an adolescent, then a adult, and so forth. I hope that you now understand the point I previously made.

    What exactly is relevant? And what central agency is directing it?

    The acting under direction in order to achieve this or that common substantive purpose; and the various bureaus, respectively.

    Only if capitalism actually evolves, otherwise mercantilism has no necessary relationship to capitalism whatsoever. Feudalism maybe.

    Ah, PP managed to see what was intimated by your use of ‘development’.

  226. Adrien

    Any coordinated entity is going to require ‘rationalized management’ whatever that may be,

    So a squad of thugs who mug an old lady are acting under rationalized management? Or a bunch of guys playing soccer on a Sunday morning?

    what’s important here is that diverse entities are here being integrated in order to pursue common substantive purposes.

    I think that hunter-gatherer societies could be described as “diverse entities are here being integrated in order to pursue common substantive purposes”. I don’t think they had rationalized management.

    It’s interesting that you believe that ‘capitalism’ was something sometime about 1300AD, some other thing about 1500AD, and again something else at about 1750AD

    I’m not sure capitalism was anything before 1750. There were elements of ‘capitalism’ but I reckon mass production is an essential feature of ‘capitalism’.

    and again something else in 1900AD and that each of these things is somehow related to the other developmentally

    Yeah. It’s called history.

    in the same way that a human being is a foetus, then an infant, then an adolescent, then a adult, and so forth.

    I haven’t used biological metaphors you’re imposing that on me.

    I hope that you now understand the point I previously made.

    Yeah. You’re wrong. :)

    Ah, PP managed to see what was intimated by your use of ‘development’.

    Indeed. But where in the real world is this non-capitalist mercantilism? PP’s point about mercantilism being more closely related to feudalism is apt. In history feudalism doesn’t just stop one day and capitalism begins. It’s a gradual process.

    Mercantilism is supported by feudalism, exclusive license to explore and exploit, say, South America, was granted by the Crown and everything. But capitalism as we know it evolved from an economic situation that involved mercantilism. Therefore the history books talks about movements from mercantile capitalism to industrial capitalism to financial capitalism etc. Maybe they’ve got it wrong.

  227. Adrien

    That all said I’m not sure this discussion proves anything other than capitalism is possibly an error prone category.

  228. sdfc

    JC

    This is goes back to a discussion two days ago but what the hell.

    My comment

    If a bank reduces its ES balance below zero it will simply borrow money at cash from a bank with a positive balance.

    Your reply

    Same thing as before. The other bank has a surplus which it is lend out. No biggie.

    If it has an excess on its liability side it will have to create an asset.

    That the other bank has excess cash is because it also has a liability in the form of a deposit that previously did not exist. The bank already has an asset, cash.

    Capital ratios have nothing to do with it. If it puts a brake on bank balance sheets all it is doing is limiting the rate of credit growth.

    Andreas

    The ES account has to be balanced at the end of the day if you are short of cash you just borrow it from a bank with excess cash. Let’s say a bank that has just had sold a deposit.

    The reserve supplies ES balances to keep the cash rate at target. It costs a bank more for overnight from the RBA I think it’s 10pts over cash while if a bank has a surplus they earn 10pts below cash, although I stand to be corrected on those margins.

  229. .

    Adrien,

    My friend is a trader. He says he saw an Irish dude buy massively discounted bonds and take a haircut, but still make a tidy profit. he said the Irish trader believed Ireland OUGHT to go bankrupt as the Govt. was now underwriting him for the redemption value.

    The Irish trader is right. If people find a way to make money without a bailout and the Government insists, how can you blame the traders etc?

  230. sdfc

    I’ve been wondering the same thing Dot. I’m not a bond trader but Greek bonds look pretty cheap. The price is already reflecting a pretty big haircut.

  231. Adrien

    My friend is a trader… he said the Irish trader believed Ireland OUGHT to go bankrupt..

    But after he’d made the tidy profit ‘ey? Whatever happened to Irish patriotism? :)

  232. dover_beach

    So a squad of thugs who mug an old lady are acting under rationalized management? Or a bunch of guys playing soccer on a Sunday morning?

    You, it seems, are stretching the limits of what could be described as a coordinated entity.

    I think that hunter-gatherer societies could be described as “diverse entities

    Diverse entities in what way? Using societies here is also a bit of a stretch.

    Yeah. It’s called history.

    No it isn’t. History is characterized by contingency and things contingently related are not developmentally related.

    I haven’t used biological metaphors you’re imposing that on me.

    You used the word, development; either you’ve used that thoughtlessly and/ or carelessly.

    PP’s point about mercantilism being more closely related to feudalism is apt. In history feudalism doesn’t just stop one day and capitalism begins. It’s a gradual process.

    Alternatively, we can think that words like ‘feudalism’ and ‘capitalism’ are too general to be of any particular use apart from loosely differentiating one historical period and/ or mode of organisation from another. And that attempts to identify the “essential characteristics” of one or the other are pointless exercises.

    Mercantilism is supported by feudalism, exclusive license to explore and exploit, say, South America, was granted by the Crown and everything.

    What does the Crown have anything to do with feudalism or with mercantilism? If anything, the Crown accelerated the dissolution of feudal ties; and were mercantilist projects only pursued by monarchies?

    But capitalism as we know it evolved from an economic situation that involved mercantilism. Therefore the history books talks about movements from mercantile capitalism to industrial capitalism to financial capitalism etc.

    Yes, but these moves were contingent. There is no reason to believe that each of those movements were necessary passages in the development of finance capitalism. They were merely the road we traveled in this instance.

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