Is it possible within Capitalism...

[bailey_187]

..to stop housing bubbles?

If not, why?

Why wouldnt reforms work to prevent housing bubbles?

[RadioRaheem84]

At this stage no reforms can work which is why they haven't been implemented. There is nothing but financial speculative growth that's keeping the economy afloat. Bubbles are needed unless there is massive state intervention to spur manufacturing like during WWII. Hope this is what you meant with your question.

[manic expression]

A few thoughts: theoretically, I suppose it's possible. The problem is that if there was no housing bubble, less houses would be built, weakening the economy. Plus, less people would be moving into houses and would still be renting apartments in urban areas, which would likely make the population less supportive of capitalism for more than a few reasons.

The reason why housing is such a central part of the economy is because construction comprises tons of important industries. That's why it's usually used to "take the temperature" of a bourgeois economy. A housing bubble doesn't just mean fatter profits for real estate or loan banks, but for utility, transportation, maintenance, steel/lumber/etc. and of course construction firms, among others. When you get that many capitalists licking their lips...getting them to restrain themselves is practically an impossibility.

[bailey_187]

I should have explained better

I have to write a 2000 word essay answering the question "How do we prevent house price bubbles in the future?"

So i was going to say the Liberatarian view that getting rid of the Fed that keeps interest rates low, and then criticise it.
Then i was going to explain the Sweezy/Monthly Review view that as it is due to the massive surpluses monopoly-capitalists earn, yet lack of outlets for them to invest in the productive economy, leading them to invest in FIRE (finance, insuracne and real estate). So one way would be to make it less profitbale and easy through tax and regulation on real estate? And then critique that. Then i was going to say you could break up monopolies, then explain why thats immpossible and would lead back to monopolies anyway.
What other potential ways to prevent it are there and critques of any possible ways to prevent it and the ones i mentioned above?

Obviously the only sure way would be Socialism we all know, but i cant say that as it is for the Young Economist Competition for the Royal Economics Society that my teacher is making me enter. So i was just going to say it is immpossible within a market/capialist economy.

[Wolf Larson]

Capitalism IS bubbles and bursts [crisis due to overproduction]. Always has been always will be. It is crisis prone by it's very nature. It is the nature of an unplanned economy. Without bubbles there are also no quick massive profits for impatient greedy capitalists. Profits are also funded by tax payers when the bubble [overproduction] bursts. Why do you think the business cycle exists? Why do you think the capitalists have their government/taxes? They don't want to get rid of tax payer funded profits. The capitalist mantra is privatize profit socialize cost. :) EDIT:Sorry, I didn't see your second post.

[RadioRaheem84]

Bailey, go with your plan and it's wise to include the Monthly Review/Sweezy theory as its the best I've heard so far.

How old are you may I ask? I think its great that you have the opportunity to compete in a pretty prestigious society and represent the left perspective!

Good work, comrade! :thumbup1:

[bailey_187]

I'm 18. Anyone can enter the competition in the UK btw i think.

[el_chavista]

Imperialism is characterized by the financial bourgeoisie using of money as a merchandise non related with actual goods produced by the industrial capitalists. Hence it is impossible to stop economic bubbling while the financial capitalists rule society. The Federeal Reserve is like the Central Bank of the USA and it is managed by private banksters, for instance. That's why the banksters got bailed out when the house bubbling poped up due to insolvency of home owners.
If the financial bourgeoisie could pack the citizens' souls in bonuses for reselling, all the people would be already condemned to hell :lol:

[Robocommie]

You should just write, "We're coming to get you, capitalists!" and send THAT to the Royal Economists Society. ;)

[RadioRaheem84]

So i was going to say the Liberatarian view that getting rid of the Fed that keeps interest rates low, and then criticise it.
Then i was going to explain the Sweezy/Monthly Review view that as it is due to the massive surpluses monopoly-capitalists earn, yet lack of outlets for them to invest in the productive economy, leading them to invest in FIRE (finance, insuracne and real estate). So one way would be to make it less profitbale and easy through tax and regulation on real estate? And then critique that. Then i was going to say you could break up monopolies, then explain why thats immpossible and would lead back to monopolies anyway.
What other potential ways to prevent it are there and critques of any possible ways to prevent it and the ones i mentioned above?Read the follow ups to Sweezy and Magdoff by his son Fred and fellow Monthly Review editor John Bellamy Foster, The Great Financial Crisis and the ABCs of the Financial Crisis. The new essay by Foster Monopoly Finance Capital is really good in the latest edition of MR.

Monetarists in the Fed and most of the Central Banks around the world thought that the Central Banks would be the lender of last resort to any major bubble burst. Most of the late twentieth century from the 80s on down was characterized by bubbles and busts, which were at first taken care of by the market as small fish were eaten up by the big fish, well once a monopoly began to form in the financial sector, the government became the lender of last resort. The United States has bailed out several banks before this crisis including the central banks of Mexico and Asia! Look up, Long Term Capital Management, Savings and Loans, Enron, Dot.Com bubble, etc.

The market for these schemes became larger as bankers went after more and more targets to profit from. There was nothing to stop it because it was the only thing keeping the economy from crashing. I find it surprising that policy makers were able to keep a stagnant economy going for THIRTY years until it finally could go no further. There is no amount of reform that could help and there is nothing we can do but seek another growth bubble (if one were to only have capitalist options).

[bailey_187]

Has anyone got any resources of the Libertarian "solutuon" i.e. get rid of the Federal Reserve?

[Klaatu]

Capitalism IS bubbles and bursts [crisis due to overproduction]. Always has been always will be. It is crisis prone by it's very nature. It is the nature of an unplanned economy. Without bubbles there are also no quick massive profits for impatient greedy capitalists. Profits are also funded by tax payers when the bubble [overproduction] bursts. Why do you think the business cycle exists? Why do you think the capitalists have their government/taxes? They don't want to get rid of tax payer funded profits. The capitalist mantra is privatize profit socialize cost.

Couldn't have said it better myself. One of capitalism's biggest pitfalls is the "boom and bust" cycle. A lot of this has to do with fluctuating oil prices, but most of it is due to poor planning (or NO planning) For example, the government cuts spending during recession while increases spending during economic boom times (because they-have-so-much-money-to-spend). This is exactly the opposite of what they should be doing! They should increase spending during recession (to stimulate growth) and cut during boom times (to save money). But Noooo... they do everything bass ackwards. Stupid capitalists with their so called "invisible hand" of the market. That "hand" grips the average worker by the balls. The "hand" is the hand of the elite class. And it's grip is solid.

[Klaatu]

Read the follow ups to Sweezy and Magdoff by his son Fred and fellow Monthly Review editor John Bellamy Foster, The Great Financial Crisis and the ABCs of the Financial Crisis. The new essay by Foster Monopoly Finance Capital is really good in the latest edition of MR.

Monetarists in the Fed and most of the Central Banks around the world thought that the Central Banks would be the lender of last resort to any major bubble burst. Most of the late twentieth century from the 80s on down was characterized by bubbles and busts, which were at first taken care of by the market as small fish were eaten up by the big fish, well once a monopoly began to form in the financial sector, the government became the lender of last resort. The United States has bailed out several banks before this crisis including the central banks of Mexico and Asia! Look up, Long Term Capital Management, Savings and Loans, Enron, Dot.Com bubble, etc.

The market for these schemes became larger as bankers went after more and more targets to profit from. There was nothing to stop it because it was the only thing keeping the economy from crashing. I find it surprising that policy makers were able to keep a stagnant economy going for THIRTY years until it finally could go no further. There is no amount of reform that could help and there is nothing we can do but seek another growth bubble (if one were to only have capitalist options).

It's a big house of cards. What's that old saying: "What a tangled web we weave, when we practice to deceive."

[Klaatu]

Has anyone got any resources of the Libertarian "solutuon" i.e. get rid of the Federal Reserve?

I don't understand this. The Federal Reserve has worked well for the past
century (almost) and suddenly, it isn't working. Well, if Libertarians are
for abolishing it, then I am for preserving it. For me, it's that simple.

[Die Neue Zeit]

Short answer (too exhausted for a long one): I think you can get rid of housing bubbles under capitalism, but you just need to find another bubble elsewhere. The housing bubble was the next bubble after the DOT.COM bubble, and the new bubble that nearly burst along with the housing bubble was the much bigger derivatives bubble.

Look for this bigger bubble in derivatives to burst next.

[RadioRaheem84]

Short answer (too exhausted for a long one): I think you can get rid of housing bubbles under capitalism, but you just need to find another bubble elsewhere. The housing bubble was the next bubble after the DOT.COM bubble, and the new bubble that nearly burst along with the housing bubble was the much bigger derivatives bubble.

Look for this bigger bubble in derivatives to burst next.

I was thinking that the next bubble would be green. Carbon trading is growing.

[Die Neue Zeit]

That is in fact part of the bigger derivatives bubble. In finance, it's more or less a "future." :)