America's Jobs Depression

[RichardAWilson]

An unprecedented share of American jobs are provided by small businesses. According to the Small Business Administration, over 50% of our jobs are provided by small firms.

The super-rich aren't creating American jobs.

Cisco Systems just announced today on the corporate news networks that they’re axing another 10,000 positions in an effort to increase corporate earnings and shareholder returns.

Meanwhile, John Chambers, the CEO of Cisco, pocketed $19 million in 2010 and will be pocketing even more this year.

Furthermore, the actual jobless rate is closer to a fifth of the working-age population.

The truth is that Free Market Capitalism isn't Working.

http://www.bls.gov/news.release/empsit.t15.htm

According to the U-6 Method: 16% of America's labor isn't being utilized.

Millions more have left the labor markets because they couldn't find a job.

As such, they aren't included in the U-6 Statistical Calculation:

http://data.bls.gov/generated_files/graphics/LNS11300000_66376_1310516236146.gif
In addition to the U-6 and the Workforce Participation Rate, a proper analysis of joblessness would have to include some of the 2.3 million men and women that are in prison.

Hundreds of thousands of those are serving time for victimless crimes.

America has a higher incarceration rate than so-called Communist China. We even have a higher rate than the Soviet Union did during the 1970s and 1980s.

http://upload.wikimedia.org/wikipedia/commons/thumb/5/54/US_incarceration_timeline-clean.svg/693px-US_incarceration_timeline-clean.svg.png

[RichardAWilson]

Europe doesn't have the luxury of excluding these "undesirables" from their jobless statistics. After all, you can't serve time for smoking marijuana in Amsterdam.

http://upload.wikimedia.org/wikipedia/commons/thumb/f/fa/Incarceration_rates_worldwide.gif/300px-Incarceration_rates_worldwide.gif

[dude6935]

When you find "free market capitalism" in the US, you let me know. Big segments of the US economy are rooted in socialism, state capitalism, or crony capitalism. Government spending accounts for 39.97 percent of all spending in the US. That is not free market capitalism.


Europe doesn't have the luxury of excluding these "undesirables" from their jobless statistics. After all, you can't serve time for smoking marijuana in Amsterdam.

You can be incarcerated in Europe for numerous marijuana crimes, Amsterdam notwithstanding. And if incarceration were added to unemployment, it would only raise US unemployment relative to Europe by less than 1 percent. (judging by your graph, .65%).

[RichardAWilson]

America has Free-Market Capitalism compared with Canada and the "Socialist" European Countries (Where jobless rates are much lower!) America, Britain and Ireland, the most market-based economies, are the ones suffering with the highest jobless rates.

[RichardAWilson]

Reposting.

[ar734]

Something obviously happened in 1980.

[dude6935]

You are cherry picking. What about Australia (4.9) and France (9.5)? The European Union is .1 point higher than the US.

Wikipedia, List_of_countries_by_unemployment_rate


America has Free-Market Capitalism compared with Canada and the "Socialist" Europen Countries

Out of curiosity, what measure are you using?

[RichardAWilson]

Yeah: It's called the "War on Drugs" and Nancy Reagan's "Just Say No - or else it's off to the pen you go."

[ar734]

When you find "free market capitalism" in the US, you let me know. Big segments of the US economy are rooted in socialism, state capitalism, or crony capitalism. Government spending accounts for 39.97 percent of all spending in the US. That is not free market capitalism.

You're right. It's not free market capitalism. It's called monopoly capitalism.

Where do you get the 40% figure from? The BEA shows that total government spending is about 20% of GDP for the 1st quarter of 2011.

[RichardAWilson]

http://www.bls.gov/ilc/intl_unemployment_rates_monthly.htm#Rtable1

There you go.

America's unemployment rate is the same as France's.

The European Union's overall jobless rate is much lower than America's when you exclude the PIGS (Portugal, Ireland, Greece and Spain).

Ireland is a Anglo-Saxon Market-Based Economy.

Spain had a housing bubble due to American-Style Financial Deregulation.

[dude6935]

Where do you get the 40% figure from?
Some fascist has decreed that I shall not post links. So I hope you have luck with Google....

JK. It was from Wikipedia under the article List_of_countries_by_unemployment_rate


The European Union's overall jobless rate is much lower than America's when you exclude the PIGS (Portugal, Ireland, Greece and Spain).

And US unemployment would be low if you excluded every state but Texas. That is a silly argument. They are part of Europe, you can just exclude them arbitrarily.

[RichardAWilson]

http://www.bls.gov/ilc/chart1.gif

[RichardAWilson]

I can exclude them because they embraced U.S.-Style Deregulation! The Core so-called Socialist European Countries that didn't deregulate have strong and growing economies with much lower jobless rates.

[RichardAWilson]

Total Public Spending is 40% of GDP (Once you include State and Local Spending). Federal Spending is around 25% of GDP.

However, spending rates are much higher through Western-Europe (such as in Denmark, Germany, the Netherlands, etc.) Here in America, public-sector spending is often wasted on such things as corporate welfare and subsidies, prisons and the Armed Forces --- which benefit the super-rich at the expense of working class Americans. We can't have universal health care like the Canadians because we're giving large contracts and subsidies to Agribusinesses, Boeing and Lockheed-Martin.

If you want to see Pure Capitalism: Look at Somalia.

[dude6935]

I can exclude them because they embraced U.S.-Style Deregulation! The Core so-called Socialist European Countries that didn't deregulate have strong and growing economies with much lower jobless rates.

Deregulation of what? Could you be more vague? And did all of the PIGS deregulate in similar ways?

And if the free market caused the failure of the US housing sector, why do government sponsored entities own the vast majority of all mortgages? That's right, most home loans are owned by the US government, not by public banks!

And what about Australia? Explain its low unemployment.

[RichardAWilson]

Australia is a resource-based economy. You should know that much! They're booming by supplying China with natural resources and metals.

[RichardAWilson]

http://online.wsj.com/article/SB10001424052748703842004576163544152098816.html

There's your answer on Australia. That's why I haven't cited Australia - as it is an exception to the rule.

[RichardAWilson]

BTW: In case you weren't aware: Freddie and Fannie were PRIVATE SHAREHOLDER OWNED COMPANIES!

Yes, they started as state owned enterprises. However, it didn't take long for them to be privatized and auctioned to institutional investors on Wall Street.

[RichardAWilson]

Deregulation allowed the housing bubble to happen and super-rich bankers on the St. inflated the bubble more and more by bundling trash into tradable securities that they could sell to "suckers."

Meanwhile, the Credit Rating Agencies (the same ones that are now screwing Greece's working class) were giving Triple-A Ratings to Wall Street's worthless Mortgage-Backed Securities.

[ar734]

BTW: In case you weren't aware: Freddie and Fannie were PRIVATE SHAREHOLDER OWNED COMPANIES!

Yes, they started as state owned enterprises. However, it didn't take long for them to be privatized and auctioned to institutional investors on Wall Street.

Yes, but still 100% protected by taxpayers.

[RichardAWilson]

Wrong! There were NO GURANTEES! that Washington would save them. Investors just assumed that Washington would save them... That's Capitalism for you. The rich use the taxpayer dollar to save themselves. They take risks with our money.

[RichardAWilson]

Was Wachovia a state owned company? Was it state insured? How do you explain all the bad mortgages that Wachovia and Countrywide provided? What about AIG!?

[ar734]

Here is a chart based on BEA figures. Total GDP and total government spending.

[URL="http://www.bea.gov/iTable"]

[dude6935]

On Somalia:

According to the CIA and the Central Bank of Somalia, despite experiencing civil unrest, Somalia has maintained a healthy informal economy, based mainly on livestock, remittance/money transfer companies and telecommunications.[2][27] Due to a dearth of formal government statistics and the recent civil war, it is difficult to gauge the size or growth of the economy. For 1994, the CIA estimated the GDP at $3.3 billion.[165] In 2001, it was estimated to be $4.1 billion.[166] By 2009, the CIA estimated that the GDP had grown to $5.731 billion, with a projected real growth rate of 2.6%.[2] According to a 2007 British Chambers of Commerce report, the private sector also grew, particularly in the service sector. Unlike the pre-civil war period when most services and the industrial sector were government-run, there has been substantial, albeit unmeasured, private investment in commercial activities; this has been largely financed by the Somali diaspora, and includes trade and marketing, money transfer services, transportation, communications, fishery equipment, airlines, telecommunications, education, health, construction and hotels.[167] Libertarian economist Peter T. Leeson attributes this increased economic activity to the Somali customary law (referred to as Xeer), which he suggests provides a stable environment to conduct business in.[138]
The Central Bank of Somalia indicates that the country's GDP per capita is $333, which is lower than that of Kenya at $350, but better than that of Tanzania at $280 as well as Eritrea at $190 and Ethiopia at $100. About 43% of the population live on less than 1 US dollar a day, with about 24% of those found in urban areas and 54% living in rural areas.

You are partly right. Actually the federal government is invested in and funds Freddie and Fanny. It also charted the entities and set them up. They are not free market entities.
The Treasury committed to invest as much as US$200 billion in preferred stock and extend credit through 2009 to keep the GSEs solvent and operating. The two GSEs have outstanding more than US$ 5 trillion in mortgage backed securities (MBS) and debt; the debt portion alone is $1.6 trillion.[6] The conservatorship action has been described as "one of the most sweeping government interventions in private financial markets in decades,"[7] and one that "could turn into the biggest and costliest government bailout ever of private companies"

[dude6935]

Was Wachovia a state owned company? Was it state insured? How do you explain all the bad mortgages that Wachovia and Countrywide provided? What about AIG!?

FDIC insurance.

Also FED/treasury printing presses.

[ar734]

Was Wachovia a state owned company? Was it state insured? How do you explain all the bad mortgages that Wachovia and Countrywide provided? What about AIG!?

All of the bad mortgages were insured by taxpayers. The risk was socialized, but the profit was privatized. Same with AIG.

[dude6935]

Australia is a resource-based economy. You should know that much! They're booming by supplying China with natural resources and metals.

Australia GDP by sector:
agriculture: 4%
industry: 24.8%
services: 71.2% (2010 est.)

Export Partners:
China 21.8%, Japan 19.2%, South Korea 7.9%, India 7.5%, US 4.9%, UK 4.4%, NZ 4.1% (2009)

Looks like supplying China with resources is maybe a fifth of the Australian economy.

[dude6935]

Deregulation allowed the housing bubble to happen and super-rich bankers on the St. inflated the bubble more and more by bundling trash into tradable securities that they could sell to "suckers."

Meanwhile, the Credit Rating Agencies (the same ones that are now screwing Greece's working class) were giving Triple-A Ratings to Wall Street's worthless Mortgage-Backed Securities.

GSEs literally invented mortgage-backed securities.

Exactly which deregulatory actions are you referring to?

[RichardAWilson]

I cited the Wall St. Journal. Mainstream economists are attributing Australia's growth to the boom in resource extraction and metals.

Australia's resource boom is also supporting an unsustainable housing bubble that's larger than America's in 2007.

Consider this information on Australia:


Total household debt as a percentage of disposable income was about 45% in 1990 and 155% in 2009.



Between 1998 and 2008 inflation was about 36% and property prices increased by more than 300% in all capital cities except Melbourne (up 280%) and Sydney (up 180%).




The Economist (21 Oct 2010) found that Australian house prices were overvalued by 63.2%


Yeah, Australian Capitalism is a wonderful model for you to cite.

[RGacky3]

Also keep in mind the real US unemployment is closer to 20%.


Australia GDP by sector:
agriculture: 4%
industry: 24.8%
services: 71.2% (2010 est.)

Export Partners:
China 21.8%, Japan 19.2%, South Korea 7.9%, India 7.5%, US 4.9%, UK 4.4%, NZ 4.1% (2009)

Looks like supplying China with resources is maybe a fifth of the Australian economy.

Engineering counts as services btw, if you take a closer look most of those services probably have to do with resources.


You are partly right. Actually the federal government is invested in and funds Freddie and Fanny. It also charted the entities and set them up. They are not free market entities.

Fanny and Freddie were privatized in the 70s, and funtioned as essencailly 100% private banking agencies, they are as free market as goldman sachs, and maryll lynch.

You can't say they were not free market entities, juts because origionally they were chartered by the state, so were many many industries that are now part of the free market.


And US unemployment would be low if you excluded every state but Texas. That is a silly argument. They are part of Europe, you can just exclude them arbitrarily.

And California, and the south, and a big swash of the mid-west-

We can exclude them if we are talking about countries with specific policies. NO leftist supported Ireland's privatizing of banks for example, almost all leftists supported Norways oil being nationalized for example, differeny policies lead to different outcomes.


Deregulation of what? Could you be more vague? And did all of the PIGS deregulate in similar ways?


Mainly of the financial sector, but its also goes into more deregulation, like labor deregulation, corporate management deregulation, taking down of tarriffs and so on, but the big one was financial deregulaiton.

Most of the PIGS did, what all the pigs did in common was free up the financial sector, greece did something special which was privatizations and tax cuts (leading to debt) which when mixed with the deregulation of the financial sector (who are the debtees) lead to a disaster.


And if the free market caused the failure of the US housing sector, why do government sponsored entities own the vast majority of all mortgages? That's right, most home loans are owned by the US government, not by public banks!


Because they bought them to save the banks ....

BTW the mortgages were not the main sources of the crash, it was the Credit default swaps and Collaterized debt obligations and other derivatives that came from them.

[RGacky3]

When you find "free market capitalism" in the US, you let me know. Big segments of the US economy are rooted in socialism, state capitalism, or crony capitalism. Government spending accounts for 39.97 percent of all spending in the US. That is not free market capitalism.


Take out the military, (that is not socialism), and corporate subsidies (thats not socialism) and its MUCH MUCH lower.

The US is really the world poster child for Capitalism, they ahve the most market based economy arouond.

[RGacky3]

(good thread btw)

[RichardAWilson]

Union Thug, thank you for filling in the blanks. Your response is exactly what mine would have been!

[dude6935]

Take out the military, (that is not socialism),[...]

Uhh.... Yah it is. It is a service produced by government factors of production for the benefit of (and funded by) all citizens. That is pretty much textbook socialism by any definition of socialism I understand.



The US is really the world poster child for Capitalism, they ahve the most market based economy arouond.

The US does not have the most market based economy around. The Heritage foundation ranks Hong Kong 1st on the economic freedom index. Singapore is 2nd. The US is 9th.

Can't post links or I could show you. :thumbdown:

Just count the monopolies. There is only one option for mailing a simple letter, the US post office. There is only one option for electricity, water, and sewage in most areas. These are protected "markets" carved up by government at all levels. There is only one option for police, fire, and military services in most areas. There is only one option for roads in most areas, the vast majority are all public. Courts, mostly public. Laws, public. Insurance, limited greatly by state regulations. Light bulbs, regulated. Toilets, regulated. Mattresses, regulated. Obviously there are more; I am sure you can think of some.

[dude6935]

Freddie Mac is overseen by the US government, specifically the Department of Housing and Urban Development. GSEs also get loans from the government at very low rates. Only the well connected get those kinds of hand outs. That is not a free market. Any market that contains pervasive taxation is not very free.


The Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") revised and standardized the regulation of both Fannie Mae and Freddie Mac. Prior to this act, Freddie Mac was owned by the Federal Home Loan Bank System and governed by the Federal Home Loan Bank Board, which was reorganized into the Office of Thrift Supervision by the Act. The Act severed Freddie Mac's ties to the Federal Home Loan Bank System, created an 18-member board of directors, and subjected it to oversight by the U.S. Department of Housing and Urban Development (HUD).
In 1995, Freddie Mac began receiving affordable housing credit for buying subprime securities, and by 2004, HUD suggested the company was lagging behind and should "do more."[12]
Freddie Mac was put under a conservatorship of the U.S. Federal government on Sunday, September 7, 2008.

[La Peur Rouge]

Uhh.... Yah it is. It is a service produced by government factors of production for the benefit of (and funded by) all citizens. That is pretty much textbook socialism by any definition of socialism I understand.



I'm till trying to figure out how you can put "funded" and "socialism" in the same sentence, and still understand socialism. Besides that, "government provided services" is not socialism.

[RichardAWilson]

According to the Heritage Foundation, Canada has a more market-based economy than us (and) they enjoy free socialized medicine, low college tuitions and higher minimum wages (in Ontario and Quebec).

As for Singapore:

It should be remembered that the modern economy that Singapore has become was made possible by State Capitalism, Industrial Policies and Forced Saving Schemes. The same can be said of Japan, South Korea and Taiwan.

I wonder the reason why Heritage didn't list Somalia?

[RGacky3]

Uhh.... Yah it is. It is a service produced by government factors of production for the benefit of (and funded by) all citizens. That is pretty much textbook socialism by any definition of socialism I understand.


For the benefit of all citizens??? Common now.


The US does not have the most market based economy around. The Heritage foundation ranks Hong Kong 1st on the economic freedom index. Singapore is 2nd. The US is 9th.


All I need to know, also just parrot RichardAwilson, Singapore is a State capitalist economy, it should also been noted that Hong Kong is extremely dependant on mainland China, and that like China the land is still state owned (just leased out).

The United States, has full private property rights, a pretty open market, and a for profit system, the United States IS a free market economy, and it is the BIGGEST free market economy in the world.


Just count the monopolies. There is only one option for mailing a simple letter, the US post office.

Thats because mailing simple letters at an affordable price is'nt profitable for private companies, you CAN mail a letter with DHL or UPS, but you'll have to pay market prices which includes overhead, there is nothing stopping private companies to compete.


There is only one option for electricity, water, and sewage in most areas.

for electricity most of it is privatized and competition is possible (the market just does'nt facilitate it), as for water and sewage, yeah, no shit.


There is only one option for police, fire, and military services in most areas. There is only one option for roads in most areas, the vast majority are all public. Courts, mostly public. Laws, public. Insurance, limited greatly by state regulations. Light bulbs, regulated. Toilets, regulated. Mattresses, regulated. Obviously there are more; I am sure you can think of some.

Yeah, and I'm sure I can find a private barber shop in cuba, or a woman selling trinkets, does'nt make it Capitalist.

Your making a stupid argument, if you measure the SIZE of the economy and how much of it is private its probably over 90% private.

And no we don't have competing police agencies because that would be insane, that does'nt make the US not capitalist.

[RichardAWilson]

Look at what happens when energy markets aren't regulated (Can you say Enron and California?)

[Ocean Seal]

RichardAWilson, I don't really mind when people double post, but your posts are within minutes of one another and have been up to 4 in a row. In the future, it would help if you just used the edit function to consolidate your posts.

[DinodudeEpic]

A market economy =/= Capitalism

Words like capitalism and socialism should refer to who owns the means of production. Not about the exchange of goods.

Capitalism = Corporations owned by bourgeois

Socialism = Owned by the workers (Has nothing to do with sharing/government services/government control)

[RichardAWilson]

I agree with the aforementioned. State-owned companies can still contribute to the alienation of labor and the further accumulation of capital by the bourgeoisie.

Socialism and capitalism differ in who owns and controls the means of production and distribution.

[dude6935]

Thats because mailing simple letters at an affordable price is'nt profitable for private companies, you CAN mail a letter with DHL or UPS, but you'll have to pay market prices which includes overhead, there is nothing stopping private companies to compete.

Yes there is. Its called the law. Only the USPS can legally sell postage and move first class mail. Individual companies can only move mail if the USPS says they can, AND they have to pay regular postage on top of the company's postage.

Somalia probably isn't listed in the heritage foundation's index because it is a failed state and because data is hard to come by.

You can't cherry pick a country's data to prove it is more or less socialist. You have to look at the whole economy. Sure Canada has socialized medicine, but that is only a part of a comparatively free market.


I'm till trying to figure out how you can put "funded" and "socialism" in the same sentence, and still understand socialism.

Socialism still has money and funding. I think you are thinking that socialism and communism are the same thing. If Canada has socialized medicine, it also has a socialized military.


It should be remembered that the modern economy that Singapore has become was made possible by State Capitalism, Industrial Policies and Forced Saving Schemes. The same can be said of Japan, South Korea and Taiwan.


And the same can be said of the US. You are forcing me to point out the obvious. Please be intellectually honest and you will save us all some keystrokes.

[dude6935]

Look at what happens when energy markets aren't regulated (Can you say Enron and California?)

This is not evidence of anything. This is empty rhetoric.

[cb9's_unity]

Dude6935, I would like to know what your distinction is between government and socialism. You make it seem as though any act by the government is by definition a socialist one.

Socialism has to do with who owns and operates the means of production (the working class). Considering that it's basically undeniable that the government is heavily influenced by the will of corporations, it's impossible to call any form of modern state ownership socialistic.

From what I've studied, the conservative definition of socialism only really came into existence around the time of the first world war. The SPD started to drop any of its truly socialist policy's and basically started to create capitalism with a human face. Thus there was about half a century of socialist political development before some corrupted party with holdover socialist name began to pretend that social safety nets and government intervention in the economy could be considered socialism. Conservatives didn't need an excuse to conflate liberals with scary sounding socialists and thus helped promote a definition of socialism that completely ignored the existence of 19th century politics.

That was probably me getting too sidetracked, but it important for people to be working with the same definitions. I'm really enjoying the in-depth economic discussion that's going on, but some basics are needed too.

[RichardAWilson]

It proves more than you're willing to debate.

California deregulated the state's energy markets and Enron reallocated power and created artificial shortages as a means of price gouging the consumer.

It goes to show that certain sectors of the economy are regulated for a reason, which is often to the benefit of other capitalists.

News Article (Wall St.) on Enron and California: http://www.marketwatch.com/story/enron-caused-california-blackouts-traders-say

For this reason, California's high-tech businesses supported regulating the energy sector. (I.e. San Francisco, the Valley, San Jose).



The traders also said that Enron's retail unit, Enron Energy Services, or EES, used the fear created by the blackouts to push large California businesses into more than $1 billion in long-term energy contracts.


As you can see: Regulations in certain sectors are needed to make capitalism healthier. Otherwise, there'd be a certain level of self-destruction within the system. As I have said: Look at Somalia. Now look at China and Korea. Which is doing better? Why?

[Reznov]

oh hai I found a job yeahhhhhh yayyyyyy i are happy!!!!!!

[RGacky3]

Yes there is. Its called the law. Only the USPS can legally sell postage and move first class mail. Individual companies can only move mail if the USPS says they can, AND they have to pay regular postage on top of the company's postage.


They only have to pay regular postage if they are using USPS post boxes, which is not always the case, Also individual companies can only start airlines if the government says they can to, thats with a lot of companies.


Somalia probably isn't listed in the heritage foundation's index because it is a failed state and because data is hard to come by.


It is'nt there, but it should be, because thats what a totally government less market looks like.


You can't cherry pick a country's data to prove it is more or less socialist. You have to look at the whole economy. Sure Canada has socialized medicine, but that is only a part of a comparatively free market.


Absolutely, but what I can pick is how much of the economy is under public control, how strong are the unions and what effects those have, and compare them to non-unionized places and where the more sectors are privatized.


And the same can be said of the US. You are forcing me to point out the obvious. Please be intellectually honest and you will save us all some keystrokes.

Yeah, but the point is capitalism does'nt work.

[dude6935]

It proves more than you're willing to debate.

1. I am willing to debate anything.
2. It was a bare assertion with no evidence. Only after my goading have you attempted to provide evidence.



California deregulated the state's energy markets and Enron reallocated power and created artificial shortages as a means of price gouging the consumer.

Yes and no. The consumer didn't see higher prices. The wholesale companies did. Enron screwed the wholesale companies because California's price ceilings on energy were fixed. Wholesalers could not increase their prices and so they were squeezed.

Quote from Wikipedia:


Traders were thus able to sell power at premium prices, sometimes up to a factor of 20 times its normal value. Because the state Government had a cap on retail electricity charges, this market manipulation squeezed the industry's revenue margins, causing the bankruptcy of Pacific Gas and Electric Company (PG&E) and near bankruptcy of Southern California Edison in early 2001.[8]
The financial crisis was possible because of partial deregulation legislation instituted in 1996 by Governor Pete Wilson. Enron took advantage of this deregulation and was involved in economic withholding and inflated price bidding in California's spot markets.[9] The crisis cost $40 to $45 billion.

The problem wasn't caused by no regulation. It was caused by bad regulation. When the government sets prices, it distorts the market and causes losses for everyone.

You also neglect to mention that California regulates construction and licensing of power plants. In a free market, high prices would bring in more power.

You are pointing to the failure of a regulated market and calling for more regulation to solve the problem. This is a never ending cycle. Regulation can't do what the market does naturally. There will always be a perceived need for more regulation to fix some new problem. Regulated markets are not as efficient as unregulated markets because regulations are arbitrary and only serve to keep markets from reaching equilibrium.


Also individual companies can only start airlines if the government says they can to, thats with a lot of companies.

Yah, that's a problem. And that isn't much of a free market.


Dude6935, I would like to know what your distinction is between government and socialism. You make it seem as though any act by the government is by definition a socialist one.

Thank you for a good question.

When I see public ownership of schools and the military, I see that as socialism. I see state ownership of the means of production as socialism. I see public, stateless ownership of the means of production as communism. I see private ownership (and control) of the means of production as capitalism. I oppose the state. Period. I support freedom. If people want to form collectives, I support that. If people want to avoid collectives, I support that as well. I oppose using force to collectivize or decollectivize.

If corporations are so powerful, why do we have minimum wage laws and unions? The answer is that no one group controls government. Its policies are chaotic. To some extent, the working class does control government. But it must share control with other groups. The level of control also varies with time and circumstance. And of course, the US military defends America from invasion. Surely this benefits the American working class.

[RichardAWilson]

We have minimum wage laws and unions because of the Depression. The capitalists knew they had to give some table scraps to maintain their wealth and hold over the nation's capital. Laissez-faire had failed them and they had to embrace new ideas and solutions - I.e. Keynesianism.

Furthermore, minimum wage laws benefit the big capitalists by weeding the smaller businesses and allowing the markets to further consolidate in the hands of fewer and fewer Corporations.

Minimum wage laws make it harder for small businesses to compete against big box retailers and companies. For this reason, Wal-Mart has often supported a higher minimum wage.

As for California: Enron scammed the entire state.

The problem was a lack of regulation which allowed those traders to rip them off. Had the wholesalers passed on the increased expenses, California's consumers would have suffered even more and thousands would have been dead. You're forgetting that it takes years to build and bring a new power generating facility online. What was to happen during the transition period?

Furthermore, supply wasn't the problem. California was producing more than enough energy to attain equilibrium. The problem was that Enron's traders were sending that energy out-of-state and paying the power plants to close down - thus creating artificial shortages that otherwise weren't an issue.

California's energy markets worked fine before deregulation.

[dude6935]

I don't disagree with a lot of that. Regulations do benefit large firms at the expense of small firms. Which means that fewer regulations benefit smaller firms.

The usefulness of Keynesian is less than zero, IMO. The multiplier effect never materialized.

You say that it takes years to build new capacity, which is true. But you also talk about power being sold out of state. It should then be obvious that power can also be sold into the state. If retail prices could rise, power would flow into the state chasing higher profits.

Artificial price ceilings = shortages.

Artificial price floors = unsold overstock.

This is econ 101. California suffered power shortages induced by price ceilings.

[RichardAWilson]

Enron created the shortages to begin with.

http://www.guardian.co.uk/business/2005/feb/05/enron.usnews

You're right about price controls. However: It doesn't matter when a trading firm is manipulating and reducing Aggregate Supply as a means of forcing costs above the normal equilibrium price.

Your classical economics is as practical as Efficient Market Theory (I.e. Random Walk).

They (Classical Economics and EMT) work in theory and fail when tested in the real world.

[RGacky3]

The problem wasn't caused by no regulation. It was caused by bad regulation. When the government sets prices, it distorts the market and causes losses for everyone.

You also neglect to mention that California regulates construction and licensing of power plants. In a free market, high prices would bring in more power.

You are pointing to the failure of a regulated market and calling for more regulation to solve the problem. This is a never ending cycle. Regulation can't do what the market does naturally. There will always be a perceived need for more regulation to fix some new problem. Regulated markets are not as efficient as unregulated markets because regulations are arbitrary and only serve to keep markets from reaching equilibrium.


See heres the thing, they cut regulations and disaster, and your calling for more Cuts.

But I'm glad you see the difference between good and bad regulation.

As far as efficiency it depends for what? Yeah they are more efficient for making profits, but not more efficient for the consumer, and the worker and general society.

Markets NEVER reach equilibrium, nor do they have a trend toward equilibrium.


Yah, that's a problem. And that isn't much of a free market.


But we have empirical evidence that countries that liberalize and liberalize the economy and then .... Iceland, Argentina ... Ireland and so on.


When I see public ownership of schools and the military, I see that as socialism. I see state ownership of the means of production as socialism. I see public, stateless ownership of the means of production as communism. I see private ownership (and control) of the means of production as capitalism. I oppose the state. Period. I support freedom. If people want to form collectives, I support that. If people want to avoid collectives, I support that as well. I oppose using force to collectivize or decollectivize.


State ownership is'nt enough, if that were the cast than absolute monarchies are socialist.

State control ONLY means public control if the state is a legitimate arm of public will, which means a functioning democracy (a good test of that is comparing public policy to public opinion).

I oppose the state as well and support freedom, which means that I oppose state protected private property.

Socialism is basically public control of economy and workers control of industry. I would say communism is the same but without a state and without markets (I'd say communism is just purer socialism).


Artificial price ceilings = shortages.

Artificial price floors = unsold overstock.

This is econ 101. California suffered power shortages induced by price ceilings.

Except it was ENRON that make the artificial shortages. If prices went up on consumers it would'nt have changed anything, where else could they go?

Market equilibrium is a myth and it totally ignores externalities and different markets that effect one another.

Keynsian economics is more than the multiplier effect, and it did materialize, hell thats a lot of what got us out of the great depression (not everyone worked for the state during the recovery).

[RichardAWilson]

The Keynesian Multiplier is questionable during certain periods (I.e. when the private sector is growing, public deficits can "crowd" private sector savings and investments). However, when additional money is going to be hoarded, like during the depression, those same deficits do stimulate the economy and create jobs.

I would argue that deficits during the Reagan and Bush Administration were harmful.

However, this Administration's deficits were needed to maintain total (aggregate) demand during the financial crisis and housing meltdown. As the banks are still sitting on cash and businesses aren't investing, Washington should embrace infrastructure spending. No one is worried with short-term deficits. Investors and financiers are concerned with our longer-term liabilities.

[La Comédie Noire]

Oh great another libertarian. *Yawn*

[dude6935]

See heres the thing, they cut regulations and disaster, and your calling for more Cuts.

But I'm glad you see the difference between good and bad regulation.

Cutting regulations stupidly is just as bad as adding regulations stupidly. Surely you can agree. So that really isn't an argument about direction.


As far as efficiency it depends for what? Yeah they are more efficient for making profits, but not more efficient for the consumer, and the worker and general society.

I disagree. A consumer profits from every transaction that he freely and knowingly enters into. When he buys a coke, he profits, and so does the seller. If he didn't profit, he would not make the transaction.


Markets NEVER reach equilibrium, nor do they have a trend toward equilibrium.

That is absolutely false. I work in retail. I can tell you that if we decided to go out of business, our inventory would clear. We would sell out at some price, any price, and close the doors. Every uncoerced/non-fraudulent deal ever made is a point of equilibrium.


But we have empirical evidence that countries that liberalize and liberalize the economy and then .... Iceland, Argentina ... Ireland and so on.

Well, you didn't quite finish that argument. What happened in Ireland?


State ownership is'nt enough, if that were the cast than absolute monarchies are socialist.

State control ONLY means public control if the state is a legitimate arm of public will, which means a functioning democracy (a good test of that is comparing public policy to public opinion).

I oppose the state as well and support freedom, which means that I oppose state protected private property.

Socialism is basically public control of economy and workers control of industry. I would say communism is the same but without a state and without markets (I'd say communism is just purer socialism).

I agree. I would say that public policy is close to public opinion in the US. Therefore, is see public programs in the US (such as public schools and a public military) as socialist. I oppose state protected private property too. Our politics are very similar. Only our economics are different. We are both anarchists. We oppose the state.



Except it was ENRON that make the artificial shortages. If prices went up on consumers it would'nt have changed anything, where else could they go?

One firm can't cause a market wide shortage for any length of time. If consumer prices could rise, outside firms would sell energy into the state and the blackouts and brownouts would have stopped. The problem was that whole-sellers lost money when they sold energy. So they stopped selling it. Without price controls, they could have made money (or lost less money) and they would have sold the energy. Sure consumers would have to pay more, but at least they would have the option of turning their lights on. Who is to say what the proper price of power should be anyway?


Market equilibrium is a myth and it totally ignores externalities and different markets that effect one another.

Say if I go to a cattle auction for example. People bid, say all of the cattle are sold. How is that not an example of market equilibrium?

People can remedy extenalities. They can refuse to do business with polluters for example. And polluters are subject to violence from activists as well. If pollution causes harm to me, I will resort to actions of self defense to remedy the problem. The market does have means of dealing with externalities.


Keynsian economics is more than the multiplier effect,
Not really. Without the multiplier effect, there is no benefit in public spending. Without it, every dollar spent just creates inflation.


and it did materialize, hell thats a lot of what got us out of the great depression (not everyone worked for the state during the recovery).

If it does work, why isn't it working well now? This is becoming a very long and weak recovery.

[RichardAWilson]

Keynesian economics hasn't been tried during this recession. Writing an $800 billion check to Wall Street and General Motors isn't Keynesian Economics. Most of the so-called "Keynesian Deficit" can be attributed to the revenue side of the equation (I.e. an automatic stabilizer) than with so-called stimulus spending.

The public-sector hasn't been creating jobs during this recession like it did during the Depression. Furthermore, where Keynesian Policies have been applied, they've been largely effective.

China, for instance, had maintained strong growth and job creation even during the downturn.

[RGacky3]

Cutting regulations stupidly is just as bad as adding regulations stupidly. Surely you can agree. So that really isn't an argument about direction.


Exactly, so the question is'nt how much or how little regulation, its WHAT regulation.


I disagree. A consumer profits from every transaction that he freely and knowingly enters into. When he buys a coke, he profits, and so does the seller. If he didn't profit, he would not make the transaction.


Not really, especially when the transaction is exploitation, where the option is surviving, or living a crappy life, but the fact is that choice he's forced to make is a false choice.


That is absolutely false. I work in retail. I can tell you that if we decided to go out of business, our inventory would clear. We would sell out at some price, any price, and close the doors. Every uncoerced/non-fraudulent deal ever made is a point of equilibrium.


Thats not equilibrium, because ... YOUR GOING OUT OF BUISINESS!!! Its not juts buying and selling, its labor, and demand, and supply and so on.

Every deal under capitalism is in a way coerced and fraudulent, and all of them are with unequal power, its coerced because the poor are forced to respect capitalist property rights and fradulent because prices and wages are controlled by the wealthy.


Well, you didn't quite finish that argument. What happened in Ireland?


The privatized and de-regulated national banks ... And ... Now you have a crash.


I agree. I would say that public policy is close to public opinion in the US. Therefore, is see public programs in the US (such as public schools and a public military) as socialist. I oppose state protected private property too. Our politics are very similar. Only our economics are different. We are both anarchists. We oppose the state.

Public policy is NOT close to public opinion in the US at all ... over 70 percent wanted national healthcare, over 60-70 percent wanted higher taxes for the rich, the vast majority want to reign in the banks. Public policy in the US is wayyyy to the left of the government.

ALL (Capitalist) PRIVATE PROPERTY IS STATE PROTECTED!!! Without Capitalist property, which is state protected, you can't have a proper capitalist market economy.


One firm can't cause a market wide shortage for any length of time. If consumer prices could rise, outside firms would sell energy into the state and the blackouts and brownouts would have stopped. The problem was that whole-sellers lost money when they sold energy. So they stopped selling it. Without price controls, they could have made money (or lost less money) and they would have sold the energy. Sure consumers would have to pay more, but at least they would have the option of turning their lights on. Who is to say what the proper price of power should be anyway?


When it comes to energy ... Yes, and it does'nt take a length of time to raise the prices. The infustructure needed for energy is very very expensive and most other companies would'nt want to spend all that money just to try and compete with someone that is artificially raising price (which actually benefits the other company too because they can raise prices as well).

Sure consumers would have to pay more, and poor people might die in the summer, but hey, thats Capitalism.


Say if I go to a cattle auction for example. People bid, say all of the cattle are sold. How is that not an example of market equilibrium?

People can remedy extenalities. They can refuse to do business with polluters for example. And polluters are subject to violence from activists as well. If pollution causes harm to me, I will resort to actions of self defense to remedy the problem. The market does have means of dealing with externalities.


Capitalism is much more complicataed than that. YOu have the people you hire to raise the cattle, you have investors, and over time as wages drop overall, you have less buyers, and so on and so forth, buy a book on economics :).

Externatlities are almost impossible to stop through the market, because by definition it cannot be fixed unless you first know about it (which is rarely the case), and then you have to get together to do something about it, and you can't juts attack one company (because then their competator will outprice them), you'll have to actually set up agencies to monitor these companies, it can't be for profit because then it would get bought out and only basically be for the rich, and it would have to regulate these companies.

What I juts described is a form of democratic control. But then again why not juts put the economy under democratic control from the start.


Not really. Without the multiplier effect, there is no benefit in public spending. Without it, every dollar spent just creates inflation.


No, infastructure, taking care of externalities, redistribution of wealth and so on.


If it does work, why isn't it working well now? This is becoming a very long and weak recovery.

Its not working now because its top down economics, Obama just gave it to the rich.

[dude6935]

Keynesian economics hasn't been tried during this recession. Writing an $800 billion check to Wall Street and General Motors isn't Keynesian Economics.

That isn't true. That is an exaggeration at best. Lots of money went into infrastructure. Weatherizing homes, road construction, energy grid "modernization"...

Even so, Keynesian stimulus does not specify what you must spend it on. Tax cuts can be Keynesian too if it creates a deficit. That is the whole point.

http://www.propublica.org/special/the-stimulus-plan-a-detailed-list-of-spending

[RichardAWilson]

Citing your own article, we find the following:


Appropriations section of the bill details spending in excess of $311 billion

In a $14 trillion economy, $311 billion over two years is nothing! I mean come on dude, you're smarter than this.

Furthermore, Keynes did state how the money should be used. I.e. Infrastructure and Public Works Spending! Keynes didn't support tax cutting during a recession. You should know this! He believed reducing taxes during a recession would lead to more savings and hoarding. Please read the General Theory, which is available for free online.

http://www.marxists.org/reference/subject/economics/keynes/general-theory/

According to the American Society of Civil Engineers, we will need to be investing $2.2 trillion to maintain the condition of our roads, highways, bridges and pipelines. You don’t have to be a genius to see the problem.

http://www.infrastructurereportcard.org/ (http://www.infrastructurereportcard.org/)

Our Interstate Highways are eroding from beneath us. A Keynesian approach would appropriate the needed funding for rebuilding our infrastructure and creating jobs.

[dude6935]

Furthermore, Keynes did state how the money should be used. I.e. Infrastructure and Public Works Spending! Keynes didn't support tax cutting during a recession. You should know this! He believed reducing taxes during a recession would lead to more savings and hoarding. Please read the General Theory, which is available for free online.

That is incorrect.

"For example, Keynesians see Herbert Hoover's June 1932 tax increase as making the Depression worse and would advise tax cuts instead."

http://en.wikipedia.org/wiki/Keynesian_economics#Active_fiscal_policy

I grant that a better quote on the subject might exist. If you can find a quote from Keynes that is definitively against cutting taxes in a recession, I would love to see it. Keynes supported increasing investment in the economy through a short term deficit. You can do that by either increasing spending or cutting taxes.

Just because you wanted infrastructure spending to be bigger doesn't mean it didn't exist. We also spend a lot of money on infrastructure in the normal budget outside of the 'stimulus' plans. 18 cents out of every gallon of gas funds road maintenance and construction, if memory serves.

[RichardAWilson]

Like I said: $155 billion a year in a $14 trillion economy is nothing! GTFO Dude. Hell, reductions in state and local spending more than offset the "stimulus spending."

http://www.huffingtonpost.com/2011/06/27/state-funding-cuts_n_885438.html

I guess you think it works to throw a thimble of water at a brush fire?

Like I said: Read the General Theory. Keynes believed spending had a much higher multiplier than tax reductions, which would often yield a multiplier of less than one. Nonetheless, even that's better than nothing.

[Ingraham Effingham]

Reading this thread reminds me how much I hated economics in school.

[dude6935]

Every deal under capitalism is in a way coerced and fraudulent, and all of them are with unequal power, its coerced because the poor are forced to respect capitalist property rights and fradulent because prices and wages are controlled by the wealthy.
...
They privatized and de-regulated national banks ... And ... Now you have a crash.
...
Public policy is NOT close to public opinion in the US at all ... over 70 percent wanted national healthcare, over 60-70 percent wanted higher taxes for the rich, the vast majority want to reign in the banks. Public policy in the US is wayyyy to the left of the government.

ALL (Capitalist) PRIVATE PROPERTY IS STATE PROTECTED!!! Without Capitalist property, which is state protected, you can't have a proper capitalist market economy.
...
When it comes to energy ... Yes, and it does'nt take a length of time to raise the prices. The infustructure needed for energy is very very expensive and most other companies would'nt want to spend all that money just to try and compete with someone that is artificially raising price (which actually benefits the other company too because they can raise prices as well).

Sure consumers would have to pay more, and poor people might die in the summer, but hey, thats Capitalism.

Capitalism is much more complicataed than that. YOu have the people you hire to raise the cattle, you have investors, and over time as wages drop overall, you have less buyers, and so on and so forth, buy a book on economics :).

Externatlities are almost impossible to stop through the market, because by definition it cannot be fixed unless you first know about it (which is rarely the case), and then you have to get together to do something about it, and you can't juts attack one company (because then their competator will outprice them), you'll have to actually set up agencies to monitor these companies, it can't be for profit because then it would get bought out and only basically be for the rich, and it would have to regulate these companies.
...
Its not working now because its top down economics, Obama just gave it to the rich.

Unions exist. The wealthy cannot dictate wages unilaterally. Unions will exist without the state.

Externalities:
If we found out that coke was polluting the atmosphere and killing 1% of all Americans. Coke would flounder under the backlash. People would stop buying their products and Coke would be forced to change. Pepsi would not embrace coke's polluting ways for fear of suffering the same backlash.

What if a region democratically endorses capitalism. What your your opinion of that be? Would it be ok for them to be capitalist?

I truly don't understand your position that markets don't clear. I can't argue against an idea I don't understand. I expect we are using different definitions for equilibrium. I see markets reach equilibrium every time we buy and sell merchandise and every time we hire an employee.

But we do have public healthcare for many Americas (medicare, medicaid). You are spotlighting controversial issues. Americans support public roads don't they? They support public education. They support public courts, public police, food regulations, and so forth. Public opinion is closer to public policy that you think.

Compare a list of economic freedom to a list of standard of living. Countries with high freedom have a higher standard of living. Ireland is among the top in both categories.

[dude6935]

Like I said: $155 billion a year in a $14 trillion economy is nothing! GTFO Dude. Hell, reductions in state and local spending more than offset the "stimulus spending."

Your link doesn't support your point. It makes a totally different argument.

Total combined state and local spending has been increasing.


Like I said: Read the General Theory. Keynes believed spending had a much higher multiplier than tax reductions, which would often yield a multiplier of less than one. Nonetheless, even that's better than nothing.

I am not going to sit here and read a book to find one quote. The burden of proof is on you.


I guess you think it works to throw a thimble of water at a brush fire?

If the thimble magically multiplies, why not? Doesn't the math make stimulus more than 1% of the economy? If it multiplies 3 times, that is more than 3% of the economy. That is significant.

[RichardAWilson]

You're making simplistic generalizations because you don't understand Keynesian Economics. You need to read the General Theory because, until you do, the burden of proof is with you.

http://www.marxists.org/reference/subject/economics/keynes/general-theory/ch10.htm

The multiplier from the so-called "stimulus spending" wasn't three. Where the hell did you procure such a figure?

Furthermore, total state and local spending fell during the recession (2009 and 2010) as tax collections declined due to lower housing values and corporate income.

[dude6935]

The burden on proof is not on me since you've never read Keynes. You're just making simplistic generalizations because you don't even understand Keynesian Economics.

I provided a quote on the position of Keynesians to prove my point. You have given zero evidence to support your position. I won't beg you to prove me wrong. If you have no interest in providing evidence, that is of no concern to me.


The multiplier from the so-called "stimulus spending" wasn't three. Where the hell did you procure such a figure?

It was a hypothetical. I didn't say it was 3. What was the multiplier?


Furthermore, total state and local spending fell during the recession (2009 and 2010) as local and state tax collections fell due to lower housing values and net income.

Incorrect.
http://www.usgovernmentspending.com/downchart_gs.php?year=2000_2015&view=1&expand=&units=p&log=linear&fy=fy12&chart=F0-total&bar=0&stack=1&size=m&title=&state=US&color=c&local=s

[RichardAWilson]

http://www.marxists.org/reference/su...heory/ch10.htm (http://www.marxists.org/reference/su...heory/ch10.htm)

There's my evidence. If you can't read a single Chapter of the Book, then it's whatever.

[RichardAWilson]

That's total spending! State and local spending fell. Your source is estimated and projected after 2008. The Bureau of Economic Analysis offers the Actual Figures.

http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=86&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=2007&LastYear=2011&3Place=N&Update=Update&JavaBox=no

As you can see: Consumption expenditures didn't increase much. Most of the increase in federal spending can be attributed to automatic stabilizers (I.e. Unemployment Benefits, Food Stamps, Medicaid, Housing Assistance, Etc.) and declines in federal, state and local tax revenue. These automatic stabilizers often have a lower multiplier than infrastructure spending.

Nonetheless, they (the stabilizers) did their job and saved us from a depression.

Reviewing the Net Income Accounts, you'll find that gross national investing collapsed during the recession. Those automatic stabilizers softened the recession and saved jobs.

Even with the increase in federal spending and the fall in federal, state and local tax revenue, our nation's net national borrowing fell during the period as the growth in corporate and individual savings was even faster than the growth in the fiscal imbalance. (I.e. The decline in consumer and business spending was larger than the stimulus could handle.)

http://bea.gov/national/nipaweb/TableView.asp?SelectedTable=137&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=2007&LastYear=2011&3Place=N&Update=Update&JavaBox=no

http://bea.gov/national/nipaweb/TableView.asp?SelectedTable=146&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=2006&LastYear=2010&3Place=N&Update=Update&JavaBox=no