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Political Roundtable Quasar of Mayhem part III

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Re: Political Roundtable Quasar of Mayhem part III 

Post#21 » by montestewart » Thu Aug 4, 2011 6:06 pm

nate33 wrote:
DCZards wrote:
nate33 wrote:
Dczards, ill explain things further when i have access to a keyboard. In short, you are not thinking this through. You have to consider the motivations of the private testing laboratories. What would be the best eay for them to earn money in the long term?


Funny Nate, I thought the exact same thing when I read your plan: "He's not thinking this through." And please don't assume that all or most private testing labs will be motivated by the money they can earn in the long-term when they can get "paid" in the short-term.

That's exactly where you have it wrong. Companies DO think for the long term. Its government that has a short term outlook (the next election). A private testing lab operating in a competitive environment would understand that its credibility is really its only valuable asset and would therefore be more resistant to corruption than a short term oriented government with a monopoly on regulatory control.

Recently (say, the last 20 years) a competing model has emerged, one in which corporate directors define their role in terms of rapid and great share value growth, a model further polluted by directors and top executives receiving ever greater amounts of compensation in the form of shares, building in a further incentive to grow share value.

There's nothing wrong with rewarding efforts to cut costs, raise profits, and increase efficiency, but compensation too closely tied to those efforts can incentivize corrupting the results in order to artificially inflate share value. I don't envision many small, independent laboratories doing the bulk of the privatized work, but rather an ever-smaller pool of large companies, controlled primarily by large shareholders, directors, and top executives, rather than by the public. I wouldn't assume that's such a rosy alternative.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#22 » by nate33 » Thu Aug 4, 2011 7:53 pm

It works very well in the small electronics industry, which uses Underwriters Laboratories. The fire protection industry has UL and Factory Mutual as competing certification labs.

A similar model is how Moody's, Standard and Poor, and Finch rate bonds. They may not always be accurate, but there haven't been many allegations of outright corruption (well, except for the U.S. government leaning on them to maintain the AAA rating of our bonds).

The important thing to understand is that credibility is the most important thing for these agencies. If anybody smells a whiff of corruption, their entire operation becomes worthless. It's just not worth it to except a bribe from a favored customer.

Consider Consumer Reports. They don't even allow advertising in their magazine because they're worried about how it'll affect their credibility and objectivity. As a result, they're the go-to company when you want to comparison shop for a major appliance or automobile. There have a sterling reputation of not being corrupt.

I think a problem many have is in their belief that government is somehow not corrupt due to the lack of a profit motive. I think it's the opposite. Lobbyists lean hard on representatives to allow special regulatory exemptions to favored companies. But with the government crowding out any competition, it's hard for the consumer to even know whether the government is trustworthy because there are no competing models. Also, governments can't be sued. If the FDA screws up and allows a bad drug to kill lots of people, there are no negative ramifications. A private company in the same position would have to be much more cautious.

You people must understand that governments are really really bad at everything. They really should only be counted upon when there are no other viable alternatives.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#23 » by nate33 » Thu Aug 4, 2011 8:12 pm

The Dow dropped 500 today.

This is further proof that Keynesian demand side stimulus doesn't work. It doesn't "prime the pump". It merely pulls forward future demand to temporarily mask how bad things are. When the stimulus expires, the economy collapses again.

I know, I know. It just wasn't "enough" stimulus. $797B is chump change. (And $797B isn't all of it. Also recognize that the spending has generated a new "baseline" from which we are expected to continue to grow government spending.)
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Re: Political Roundtable Quasar of Mayhem part III 

Post#24 » by DCZards » Thu Aug 4, 2011 8:19 pm

nate33 wrote:The Dow dropped 500 today.

This is further proof that Keynesian demand side stimulus doesn't work. It doesn't "prime the pump". It merely pulls forward future demand to temporarily mask how bad things are. When the stimulus expires, the economy collapses again.

I know, I know. It just wasn't "enough" stimulus. $797B is chump change. (And $797B isn't all of it. Also recognize that the spending has generated a new "baseline" from which we are expected to continue to grow government spending.)


Could it be that the market is reacting to the Debt Ceiling deal that the Repubs and the Tea Party shoved down our throats? I'm talking about the debt ceiling deal in which Rep. Boehner said he got 98% of what he wanted. Some economists seem to think that's our current problem---and not a stimulus deal cut almost 2 years ago.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#25 » by Zonkerbl » Thu Aug 4, 2011 8:38 pm

Yeah, I'm tempted to say it's a very Keynesian reaction to an expected cut in demand, as forced through by the Tea Partiers.

But that would be unfair -- it's really a reaction to Greece defaulting, which apparently leaves some other EU countries -- their main creditors -- holding the bag.

Ugh.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#26 » by nate33 » Thu Aug 4, 2011 8:48 pm

What demand cut?

People, please listen to me carefully: There are NO SIGNIFICANT CUTS in the budget deal. None! Estimated cuts in the next two years vary between $7B and $22B, a drop in the bucket when we are talking about annual deficits of $1,400B. And they're not actually a cuts, they're merely a reduction in the expected increase of spending from a post-stimulus-bill starting point.

The $1.1T in cuts that are supposted to take place don't start until 2013. That will be after the next Congressional election and the new Congress won't be bound by the existing budget deal.

The only thing concrete that appears to have happened is that the Republicans have apparently agreed to let the Bush tax cuts expire. (Though that's only implied based on the way CBO has scored it. I don't know if it's codified in the bill.)
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Re: Political Roundtable Quasar of Mayhem part III 

Post#27 » by nate33 » Thu Aug 4, 2011 8:50 pm

DCZards wrote:
nate33 wrote:The Dow dropped 500 today.

This is further proof that Keynesian demand side stimulus doesn't work. It doesn't "prime the pump". It merely pulls forward future demand to temporarily mask how bad things are. When the stimulus expires, the economy collapses again.

I know, I know. It just wasn't "enough" stimulus. $797B is chump change. (And $797B isn't all of it. Also recognize that the spending has generated a new "baseline" from which we are expected to continue to grow government spending.)


Could it be that the market is reacting to the Debt Ceiling deal that the Repubs and the Tea Party shoved down our throats? I'm talking about the debt ceiling deal in which Rep. Boehner said he got 98% of what he wanted. Some economists seem to think that's our current problem---and not a stimulus deal cut almost 2 years ago.

There are no cuts!

I repeat: THERE ARE NO CUTS!

There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts! There are no cuts!
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Re: Political Roundtable Quasar of Mayhem part III 

Post#28 » by DCZards » Thu Aug 4, 2011 9:04 pm

nate33 wrote:There are no cuts!

I repeat: THERE ARE NO CUTS!


Re-read my post before you go off. I never even used the word "cuts." I said the market was reacting, at least in part, to the debt ceiling DEAL.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#29 » by nate33 » Thu Aug 4, 2011 9:09 pm

But what feature of the bill pushed by Republicans do you think caused this market collapse? How can you possibly blame Republicans when they didn't get any of the cuts that they wanted? Their only "achievement" was that they avoided the institution of any new taxes, and you can't possibly believe that the market expected and wanted more taxes.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#30 » by Nivek » Thu Aug 4, 2011 9:16 pm

It could be that investors have been made nervous by what they perceive as Republicans behaving irresponsibly and/or recklessly coupled with the perception that Obama did not stand up to them. Fair or not, those perceptions may be making investors concerned about the future.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#31 » by nate33 » Thu Aug 4, 2011 9:22 pm

Nivek wrote:It could be that investors have been made nervous by what they perceive as Republicans behaving irresponsibly and/or recklessly coupled with the perception that Obama did not stand up to them. Fair or not, those perceptions may be making investors concerned about the future.

That's a real reach, Nivek. First of all, if that were the case, the market would have collapsed yesterday. Yesterday was the only up day in the past two weeks. Secondly, I hardly think a 500 point drop could be caused by such a nebulus concept. Heck, the next budget deal is going to happen with a new Congress and maybe a new President, so why get so worked up about the existing crew?
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Re: Political Roundtable Quasar of Mayhem part III 

Post#32 » by Nivek » Thu Aug 4, 2011 9:41 pm

I agree my thought is a reach, but most of the attempts to explain the drop sound just as reachy. My honest guess is that the debt/budget deal had no effect at all -- or a negligible one. My guess is that concerns about a global economic slowdown are the biggest factor. I also think that while "this thing caused that effect" explanations are somewhat comforting to many, they're often overly simplistic or simply wrong. Sometimes there isn't a simple cause for the outcome we're seeing.

Plus, the stock market could bounce back tomorrow. :)
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Re: Political Roundtable Quasar of Mayhem part III 

Post#33 » by montestewart » Thu Aug 4, 2011 9:41 pm

Nate33, Consumer Reports is an excellent resource that would certainly have condemned Irwin Mainway's "Bag-o-Glass" toy or Sugar Shards crystaline sucrose cereal, but they would have been powerless to keep these products from the market.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#34 » by barelyawake » Thu Aug 4, 2011 10:36 pm

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

That article explains the problem with our economy -- wealth disparity. If that isn't fixed, there will be no recovery and the middle class will vanish. Period. As I said many times, it's a demand problem. It's a customer problem. If you don't allow the middle class spendable income (by paying them 1970s wages and raising prices on everything else), then you have no customers. You can't play poker when one side holds all the chips -- especially when they refuse to even pay the blinds. In short, the wealth needs to be redistributed or this whole circus is going over a cliff.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#35 » by pineappleheadindc » Fri Aug 5, 2011 12:46 am

nate33 wrote:Pine, Zonker,

Just reading those posts got me angry. I can't figure out why you guys won't join me in my hatred of big government. Clearly, any system that is that dysfunctional is a ginormous waste of taxpayer dollars and an inexcusable drain on our economy. Government should be able to do things they do with half the manpower if it could just be run efficiently.

In my idealized world, I would apply the following principles:

1. If it could be done in the private sector, do it privately. That would include regulation of many products. Use the Underwriters Laboratory model: have two or three independent laboratories test and vouch for the effectiveness of a consumer good, a food product or a drug. There is no need for an FDA, or the mess of agencies involved in verifying the safety of automobiles. Likewise, most education could be handled privately. There might need to be a backstop of public schools to handle deprived regions and the mentally handicapped, but 75% of kids in America should be privately educated with voucher and or tax/credit assistance.

2. If it must be handled by government, handle it locally or at the state level. This is basically what the Constitution says. This would include all roads and bridges, all entitlements and programs for the poor, and most regulation for things like workplace safety. Obviously, law enforcement and firefighting would be handled here.

3. If there's no possible way to handle it privately or at the local level, then it is done at the Federal level. This would include national defense, border security, coining money, and interstate regulation for things like environmental pollution and airline travel, etc.

The idea is to first minimize the amount of centralized government we have. Then we can focus on the ways to streamline our government so that they can provide services more efficiently.


I guess I don't join you in the hatred of big government just because of that. The Conservative total hatred of government. I take great personal umbrage whenever there's some Drudge Report talking point about government employees. I'm one. I work my azz off. My colleagues - lateral level managers - work their azzes off. And I'd say that 95% of the folks who have worked for me have been hard-working professionals who only cared about public service. In fact, to reiterate, my biggest problem has been appointees who subsequently burrow and now screw up the entire operation via
their subject-matter ignorance coupled with a blinding, egotistical lack of perspective.

Moreover, I think that it's silly to compare government with business. They're two different functions with two different goals, means, and limitations.

-- There's no profit motive for space exploration. Yet I support it as a taxpayer.

-- There's no profit motive for regulatory activities and no demonstration (in my view) that self-regulation works. Regulation is not meant to create business efficiencies. In fact, they're often (mostly) in conflict.

That's okay. Ease of a business profit isn't my first concern as a look at my life, at what I perceive to be the roles of institutions and businesses. I don't care that corporations don't squeeze out that extra penny per dollar (and I admit, 1% is huge) of revenue for their profit line. Look around, there is no profit squeeze in corporate America. Corporate cash hoarding among the "job creators" is at record highs.

I am old. Like dirt. I remember rivers *CATCHING ON FIRE* for lack of environmental action. LA smog used to be a joke. The lack of effective regulation of Wall Street led to this mess of an economy.

Moreover, and parallel, I do not believe in any philosophy that requires one to *believe* in other individual's motivations. Conservatives cut taxes because the *believe* that it incentivizes businesses to create jobs. But really, businesses are hoarding cash. If you want businesses to hire people, only give out incentives for businesses who have already hired people.

Ditto the trickle down theory. As barely notes, a big issue our society now is wealth disparity. Simply put, the concentration of wealth in too few hands kills our economy, not strengthens it. It's the bicycle theory.

BIKE THEORY: You own a bike shop on two parallel universes. In universe 1, we an imbalanced wealth distribution. It's caused by literally decades of trickle down theory that giving all of the breaks to the uber-rich will mean that they'll be "job creators". No data exists that backs this up, but people still cling to the belief like dogma. The top 400 people have as much wealth as half of our population. Or, expressed in a math formula: 400=150,000,000. How many bike are you gonna sell? 400? In universe 2, wealth isn't concentrated to the wealthiest of us via a nonsensical tax code. There are millions more middle class people. How many bikes are you gonna sell? A lot more? Enough to hire more people for your store (at a better-than-McDonalds wage). The bike factory is gonna hire more assembly workers, buy more steel and rubber, etc.

This is a consumer-based economy and 400 uber-rich individuals can't stimulate the economy as well as 150,000,000 middle class folks.

Anyway, this was too rambling. But there it is. Sorry if it doesn't make too much sense, it's a one-draft, then I got work (off-the-clock, but still doing it, a good-for-nothing-goverment-employee) that'll keep me up past midnight.

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Re: Political Roundtable Quasar of Mayhem part III 

Post#36 » by Induveca » Fri Aug 5, 2011 3:15 am

Not sure why there is even a debate here. The western world is in a major world of hurt. They keep bailing out failing institutions with the same money which supposedly supported them to begin with.........it's a vicious cycle. It's not fixing anything.

The way Americans live off of credit is the major culprit of this entire debacle. Mortgages, car payments, credit cards, cell phone contracts etc etc. The entire economy is hedging their bet on the credit system. Problem is, our credit system is collapsing slowly but surely. Foreclosures, bankruptcies etc are at near all time high levels TODAY.

If you guys were smart, you'd be putting your cash in Hong Kong. Extremely friendly to foreign investment/foreign entrepreneurs, and their currency is about as stable as you're going to find right now.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#37 » by barelyawake » Fri Aug 5, 2011 3:52 am

Why have Americans been living off of credit?

Paying 2010 prices, to sustain a family, on 1970s wages leads one into debt.

In other words, it's ALL because of wealth disparity.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#38 » by nate33 » Fri Aug 5, 2011 4:13 am

barelyawake wrote:Why have Americans been living off of credit?

Paying 2010 prices, to sustain a family, on 1970s wages leads one into debt.

In other words, it's ALL because of wealth disparity.

The reason we have the wealth disparity is because of the credit. The big banks and institutions get the credit first, and buy assets before the prices rise. When the little guy finally gets some credit his way, the prices have already been bid up. The system is designed to help those who are first in line at the printing press: big banks, big government, and financial institutions.

The way to address the wealth disparity problem you rightfully cite is to... do nothing. Sit back and let the Great Default take place and only bail out those with FDIC insurance. That will wipe out the rich who have accumulated their wealth via financial alchemy, without hurting the middle class. Prices will fall across the board, primarily in housing and financial instruments, which will again hurt the wealthy and the banks while minimizing the impact on the little guy (who is already underwater on his mortgage and can just walk away). When prices are low, demand will follow and we can finally have a recovery.

Let them fail! Say it with me now. LET THEM FAIL!

Of course, it won't happen. All the people in power (governments and banks) have a vested interest in maintaining the status quo. We will have more bailouts, more printing of money, and more creative ways to forcefeed debt down our throats until we finally end up with hyperinflation and a currency collapse.
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Re: Political Roundtable Quasar of Mayhem part III 

Post#39 » by Cramer » Fri Aug 5, 2011 4:57 am

barelyawake wrote:Why have Americans been living off of credit?

Paying 2010 prices, to sustain a family, on 1970s wages leads one into debt.

In other words, it's ALL because of wealth disparity.


1970 wages? What the hell are you talking about?
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Re: Political Roundtable Quasar of Mayhem part III 

Post#40 » by barelyawake » Fri Aug 5, 2011 11:29 am

Read the graph in the article. Adjusted for inflation, wages have been flat for 40 years. That's what the hell I am talking about.

The reason that wages have been flat is that we have taken power out of the unions.

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