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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu May 24, 2012 2:37 am 
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simple schoolboy wrote:
VinylGuy wrote:
its so sad to see how the greek are going to a massive crisis like we had here in argentina because of the FMI plans, its incredible they think thats the solution even when there are so many examples of the opposite.


I understand that Argentina's currency and credit rating did recover after a reasonable period, but has the government really undertaken the necessary reforms? Didn't they take over private pensions just a couple of years ago?


This is even further from the thread topic, but it is Argentina related. One of my coworkers is the daughter of a south american missionary (apparently she has dual colombian- us citizenship because they are cool about that kind of thing) Anyhoo, she spent several of her formative years in Argentina and thought that I had made up the Falkland Islands war.

*edit* forgot something important, eh?


Last edited by simple schoolboy on Thu May 24, 2012 11:22 pm, edited 1 time in total.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu May 24, 2012 11:21 pm 
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simple schoolboy wrote:
simple schoolboy wrote:
VinylGuy wrote:
its so sad to see how the greek are going to a massive crisis like we had here in argentina because of the FMI plans, its incredible they think thats the solution even when there are so many examples of the opposite.


I understand that Argentina's currency and credit rating did recover after a reasonable period, but has the government really undertaken the necessary reforms? Didn't they take over private pensions just a couple of years ago?


This is even further from the thread topic, but it is Argentina related. One of my coworkers is the daughter of a south american missionary (apparently she has dual colombian- us citizenship because they are cool about that kind of thing) Anyhoo, she spent several of her formative years and thought that I had made up the Falkland Islands war.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu May 24, 2012 11:24 pm 
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Owl_Farmer wrote:
simple schoolboy wrote:
simple schoolboy wrote:
VinylGuy wrote:
its so sad to see how the greek are going to a massive crisis like we had here in argentina because of the FMI plans, its incredible they think thats the solution even when there are so many examples of the opposite.


I understand that Argentina's currency and credit rating did recover after a reasonable period, but has the government really undertaken the necessary reforms? Didn't they take over private pensions just a couple of years ago?


This is even further from the thread topic, but it is Argentina related. One of my coworkers is the daughter of a south american missionary (apparently she has dual colombian- us citizenship because they are cool about that kind of thing) Anyhoo, she spent several of her formative years and thought that I had made up the Falkland Islands war.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri May 25, 2012 1:13 am 
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dkfan9 wrote:
Owl_Farmer wrote:
simple schoolboy wrote:
simple schoolboy wrote:
VinylGuy wrote:
its so sad to see how the greek are going to a massive crisis like we had here in argentina because of the FMI plans, its incredible they think thats the solution even when there are so many examples of the opposite.


I understand that Argentina's currency and credit rating did recover after a reasonable period, but has the government really undertaken the necessary reforms? Didn't they take over private pensions just a couple of years ago?


This is even further from the thread topic, but it is Argentina related. One of my coworkers is the daughter of a south american missionary (apparently she has dual colombian- us citizenship because they are cool about that kind of thing) Anyhoo, she spent several of her formative years and thought that I had made up the Falkland Islands war.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Sat May 26, 2012 8:44 am 
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The Argentina situation is being brought up more & more on some alternative news sites, but I think it's being shut out a bit from the mainstream press. Lots of big Western European banks (Deutsche Bank being the main one) will make major losses if the Greeks quit the Euro zone. They badly want to keep them in. The whole threatening to kick them out of the Euro zone is in my opinion nothing more than trying to influence the new Greek elections. If Syriza wins those, I think the Euro zone might be more fucked than Greece. Just my two cents.


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 Post subject: Re: Greece Financial Bailout
PostPosted: Sat May 26, 2012 4:41 pm 
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It wouldn't be the best thing for Greece if they go through bankruptcy just to continue their ludicrous economic and social policies. I mean, that is unless Greece really likes defaulting every couple of decades.


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 Post subject: Re: Greece Financial Bailout
PostPosted: Sat May 26, 2012 9:31 pm 
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simple schoolboy wrote:
It wouldn't be the best thing for Greece if they go through bankruptcy just to continue their ludicrous economic and social policies. I mean, that is unless Greece really likes defaulting every couple of decades.

I would think they'd have trouble issuing debts at all if they continued their policies as they were. I'm just not sure that they benefit that much from leaving the EZ--either way, they have to make big changes, though if they default (and presumably exit) they at least won't be stuck with a debt burden to pay down in the future. I guess if they can balance their budgets and hope their currency doesn't depreciate/devalue too much (for consumers' sake), they would probably be better off without their debts and therefore without the euro.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Sun May 27, 2012 7:09 am 
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they have to exit so theyc an devalue, otherwise they won't be able to achieve competitiveness just through reformm, since it's politically unfeasible.

sad thing is, they should've done it 3 years ago. right now they'd be well on their way to recobry.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Sun May 27, 2012 7:31 am 
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Owl_Farmer wrote:
they have to exit so theyc an devalue, otherwise they won't be able to achieve competitiveness just through reformm, since it's politically unfeasible.

sad thing is, they should've done it 3 years ago. right now they'd be well on their way to recobry.

You're right. But in the short run, consumers will suffer greatly from increased import prices, and the j-curve indicates that too harsh a devaluation would initially put the current account in even worse shape.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Sun May 27, 2012 10:30 am 
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y'all are having your serious conversation, so i'll spoiler the sarcastic/non-sense that i'd typically just throw in a thread to amuse myself:

Spoiler: show
why doesn't the US pay off all the Greek debt and make them the 51st state?

a seat at the table in the EU would be in our interests, not to mention, its a nice strategic post for our military... maybe we could give israel a sweet land deal in exchange for their halting of new settlements beyond their current borders.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 1:01 pm 
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dkfan9 wrote:
Owl_Farmer wrote:
they have to exit so theyc an devalue, otherwise they won't be able to achieve competitiveness just through reformm, since it's politically unfeasible.

sad thing is, they should've done it 3 years ago. right now they'd be well on their way to recobry.

You're right. But in the short run, consumers will suffer greatly from increased import prices, and the j-curve indicates that too harsh a devaluation would initially put the current account in even worse shape.


This is precisely what Greece needs. Consumers will suffer, due to import prices being so high, because their entire economy, their entire society, is inept and unable to take care of itself. High import prices and being cut off from the rest of the world's credit line will be the best impetus for this broken nation to learn how to effectively take care of itself. Anything else just renders the Greeks as zombie consumers.

Europe had best think long and hard about they approach Greece. If they turn them into a chronic welfare state it will set the precedent of expectations for Italy, Spain, Portugal, and other nations that there's no need reform the things that brought them down in the first place. Germany, France (which can't even afford it), and a few other nations will simply back their neverending credit line. Europe is a continent of absurdity at this point.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 7:00 pm 
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LittleWing wrote:
Europe is a continent of absurdity at this point.


I hear this a lot, and I'm sure it's somewhat true even if the problems are not evenly spread throughout the continent. What I wonder though, is how come the countries with more elaborate safety nets and better workers rights are doing much better (Germany, Scandinavia, The Netherlands and to some degree France) than the southern and western states that have imposed austerity and are pretty much going in the same direction as the USA.

I also wonder why it isn't the USA that's considered the nation of absurdity since we have the highest debt of all. Current debt here stands at $15.5 trillion, which is almost $200k per family of four. Is it at all realistic that our debt is ever paid? How much would be required in both austerity programs and higher taxes for everyone? How low do we allow our standard of living to go?

My biggest source of confusion, though, is why this is considered a crisis of anything other than the economic system. Some say it's just a financial crisis, some say it's a gov't spending crisis. Everyone has a scapegoat. Why aren't people at least debating the current usefulness of capitalism in general? I mean, if we have a system that requires more spending every year, but we don't allow the government to pick up the slack when the private sector won't spend or hire, then a recovery will always be out of reach.

If productivity rises every year and the real wage stays flat, how is capitalism working for anyone other than those at the top? If governments are being squeezed more and more every year to pay interest to the very people who were bailed out while cutting services that are need by an ever increasing lower class, then how is capitalism working? If we are operating at 78% production capacity (a Federal reserve stat) with an unemployment rate of over 8% and another 7-8% of the working class too discouraged to keep looking or working part time when they want full time work, then how can anyone say that capitalism is efficient and working for the mass of people?

I dunno. That's just a little rant from someone who has not studied this stuff as much as any of you. Just seems like everyone studies every last detail, all the balance sheets, etc... Basically, what's debated is all the reasons that everyone is in debt except for the system that for the last 35 years has relied on debt to sustain itself (at least here in the US).

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 9:58 pm 
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*cue thodoks's post about corporatism =/= capitalism

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 10:22 pm 
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Sandler wrote:
Basically, what's debated is all the reasons that everyone is in debt except for the system that for the last 35 years has relied on debt to sustain itself (at least here in the US).

I don't watch or listen or pay attention to most media outlets to know what they do and don't talk about, but I know I've talked about this a bunch here. I've been pretty adamant that the US is the king-pin of fiscal and monetary insanity. What you're seeing in Europe moves state-side after Europe somehow resolves their problems. Also, this post.

Most of what you describe are the consequences of unconstrained money/credit creation (both public and private), selectively enforced intra- and international legal constructs, increasing centralization of fiscal and monetary decision-making, and an attempt on the part of politicians and monetary/fiscal authorities to subvert and "manage" much of the volatility inherent in economic activity. Aside from the tendency of banking and financial institutions to create credit instruments that behave like a form of money (most derivatives in general), capitalism can be impugned on none of these phenomena.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 10:33 pm 
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Owl_Farmer wrote:
*cue thodoks's post about corporatism =/= capitalism


I know that corporatism =/= capitalism. I use the term capitalism because it's recognized as the economic model in most 'wealthy' countries.

If capitalism has progressed to corporatism, it'd make no sense to reform our way back to capitalism. If we even found a way to lessen the control/influence of corporations, it would be only temporary. They'd have the means (through capitalism) to rebuild their wealth and again become too big to fail and have overwhelming power/influence. This is the problem with just hitting the reset button. If you don't fundamentally change the model (or at least the rules), you will end up in the same pickle.

So my question stands. Why is the end of capitalism, or at least a heavily regulated version of it (not something I'd want, but maybe a logical step) not even on the table? FDR was a big business, wealthy man who at first talked of balanced budgets and austerity, but even he understood that capitalism was on its way out, which is why he saved it with massive gov't spending and a federal jobs program that actually hired millions of people. Why is the man who half the nation believes is a socialist, not even proposing an alternative? All the new deal did, and all these current bailouts & gov't takeovers (AIG & GM) have done, is save a system that is completely unstable and becoming less useful (especially in the era of deregulation) for the mass of people while really serving a small minority.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 10:45 pm 
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thodoks wrote:
Aside from the tendency of banking and financial institutions to create credit instruments that behave like a form of money (most derivatives in general), capitalism can be impugned on none of these phenomena.



See, I just don't agree with this. If capitalism relies on constant growth, then what do you do when growth can no longer be sustained? I think if you look back at the last 30+ years, capitalism has worked as it should. Technology and a growing workforce allowed our cherished job creators to outsource and end the phenomena of rising wages. Why? Because it was the most profitable course of action, and in capitalism, that's the bottom line. At this point, capitalism is in serious trouble. They create a credit bubble to sustain the growth (and get richer and more powerful doing so). The bubble pops in 2007-2008, and now we the public suffer austerity and high unemployment. So how is a rollback to a "better, more pure or fair capitalism" the answer? If the economic model is not fundamentally changed, how can the ultimate results be fundamentally different?

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Last edited by Sandler on Mon May 28, 2012 10:52 pm, edited 2 times in total.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 10:50 pm 
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And again, how come the countries with massive, comprehensive social programs are doing very well? To point to Greece, Spain and Italy and say "europe is in serious trouble" may be an actual true statement, but that's more because of the weird way Europe is united. The core is more "socialist" than those countries and doing just fine.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 10:56 pm 
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Sandler wrote:
LittleWing wrote:
Europe is a continent of absurdity at this point.


I hear this a lot, and I'm sure it's somewhat true even if the problems are not evenly spread throughout the continent. What I wonder though, is how come the countries with more elaborate safety nets and better workers rights are doing much better (Germany, Scandinavia, The Netherlands and to some degree France) than the southern and western states that have imposed austerity and are pretty much going in the same direction as the USA.

I also wonder why it isn't the USA that's considered the nation of absurdity since we have the highest debt of all. Current debt here stands at $15.5 trillion, which is almost $200k per family of four. Is it at all realistic that our debt is ever paid? How much would be required in both austerity programs and higher taxes for everyone? How low do we allow our standard of living to go?

My biggest source of confusion, though, is why this is considered a crisis of anything other than the economic system. Some say it's just a financial crisis, some say it's a gov't spending crisis. Everyone has a scapegoat. Why aren't people at least debating the current usefulness of capitalism in general? I mean, if we have a system that requires more spending every year, but we don't allow the government to pick up the slack when the private sector won't spend or hire, then a recovery will always be out of reach.

If productivity rises every year and the real wage stays flat, how is capitalism working for anyone other than those at the top? If governments are being squeezed more and more every year to pay interest to the very people who were bailed out while cutting services that are need by an ever increasing lower class, then how is capitalism working? If we are operating at 78% production capacity (a Federal reserve stat) with an unemployment rate of over 8% and another 7-8% of the working class too discouraged to keep looking or working part time when they want full time work, then how can anyone say that capitalism is efficient and working for the mass of people?

I dunno. That's just a little rant from someone who has not studied this stuff as much as any of you. Just seems like everyone studies every last detail, all the balance sheets, etc... Basically, what's debated is all the reasons that everyone is in debt except for the system that for the last 35 years has relied on debt to sustain itself (at least here in the US).


Elaborate safety nets and better workers rights? Please do elaborate on the meaningful differences between the safety nets that once existed in any of the European nations? Aside from Switzerland, which nation doesn't have "strong workers rights" and deep pillowy safety nets? The amount of money per GDP spent in these nations, aside from Switzerland, on social welfare and strong workers rights and early retirements was, and forever has been, in a very close ballpark.

You are foolish to think the Netherlands and France are doing well. We just had a discussion and thread about the Netherlands problems. Both of these nations are fucked by endemic bank contagion and the debts of the southern European nations and their own internal sloth. There is NO nation in the west, except for maybe Canada, that has anything but the most anemic economic growth. There is no Eurozone nation with even 2.5% growth.

Austerity isn't a measure to improve an economy. It's nothing but a life preserver. It is a little bit of debt and learning your way again, or no debt spending and reversion to sub-third world status without it. These nations are broken from within.

Looking at nominal debt is not meaningful. It is debt to GDP, what people have the ability to produce, and what debt is spent on, that renders one an absurd nation or not. In some respects, we are absurd, and headed on a fast road to absurdity. Austerity? You call a trillion dollar deficit to be austere? Really? Is it realistic that our debts will ever be paid? Not if we continue with the welfare system that we have and continue our bad investments. Not if we continue our foreign adventures with no end and no definition of victory. Not if our people continue to hold education in disdain and expect the life that they desire to be provided by a benevolent government provider.

Why on EARTH do you think that this is a crisis of an economic system, as opposed to a people problem? Why is Canada, with austerity mind you, now growing? Why is Switzerland immune to recession? Why, if Germany had no foreign debts, would Germany be sound and strong? Why has Scandinavia shielded itself from the debts of southern Europe and limited their participation in the Eurozone?

This isn't an economic system problem. Scandinavia IS a capitalist system. Canada IS capitalist. Switzerland IS capitalist. The problem is people. Whether you look at America, France, or any of the soon to be shitholes of southern Europe, it is a people problem. Austerity is a means of addressing the people problem. The people of the broken nations have lost their way, while Scandinavia, Switzerland, and Canada, have their financial houses in order, remain united, value education, and can TAKE CARE OF THEMSELVES without foreigners purchasing their bonds! These are nations that can stand on their own without the crutch of foreign debts.

It's not a governments duty to spend and hire when the private sector won't.

Real WAGES have stayed flat, yes, total median compensation has risen. But let me ask you a question. What does a dishwasher do today that adds to productivity that he didn't do in the 1960s? What does the janitor do today to add to productivity that he didn't do in the 1960s? Taxi drivers? Waiters? Bus boys? Fork lift drivers? Parts pickers? Assembly men? Tell me, what do these people do to improve productivity? The answer? Nothing. The fry cook is still the fry cook. The register clerk is still the register clerk. The garbageman is still the garbageman. Get the idea?

Which begs the question. If the low skill jobs that garnered a certain wage before don't provide any productivity improvements or additional value, why should they be given a free ride on the backs of those who ARE providing productivity improvements? Simply because they exist? Because they happen to have won the sperm lottery and have been born in the company of talented people?

Do you know why Greece, Italy, Spain, and Portugal are failed states? Because they thought a purer form of capitalism was a failure for abandoning the poor and working people. They erected soft comfortable safety nets. Strong workers rights. They strengthened the unions. Taxed the rich so that the many could benefit instead of the few. And as a result their people stopped adding to productivity and those that were productive were driven away. Leaving a country of helpless beings subsiding on bond holders in foreign banks. They forgot what it was to be an industrialist and to make stuff. They forgot what it was to actually be a society and to take care of one another. And now they are collapsing.

Wages rise only through scarcity. If you want the life of a productive individual, then by all means, become productive. Abandon the dregs of society and start a business, become a doctor, an engineer, do things that add value and improve productivity. Do things that society, a global society, actually want. The idea that you should be able to subside at the bottom as a grown adult and lay stake to the claim of the fruits of another mans labor simply because you share a fucking nation with him is rather disgusting. No man is an island. There are two sides to that coin.

Capitalism IS working. It does work. It requires grown, mature, responsible adults to participate in it. It requires the human capital of society to flow where labor is in demand. If the society refuses to go where it is in demand (STEM, business, banking, medicine, technology in general, any job that pays good) and instead chooses to, ohhhhh, I don't know: drop out of high school, not go to college, pay an immense amount for a degree that nobody cares about, then "capitalism breaks down." When in actuality it's not capitalism that is broken, merely its people, who willfully ignore the signals given by a greater society with high wages, and instead choose another less fruitful path. Then they expect a government to hire them to do a shovel ready job filling ditches while another man digs one when nobody will hire them.

No economic system works for the masses of the people. That's not the point. It is PEOPLE that work for SOCIETY. The purpose of a society, of an economy, of any system, is for people do things for another. It is my job to figure out things that you want, and for you to figure out things that I want so that we gain some mutual benefit from our cooperation with on another. We specialize and exchange our talents to obtain the life we wish. It doesn't matter if it is socialism, communism, anarcho-capitalism, syndicalism, anarchism, a welfare state, or capitalism: An economy is predicated on what it's people are willing to do, and what they are capable of doing. Our economy has languishing unemployment because the people are not willing to do what is actually in demand. They have lost their entrepreneurial spirit. They have no desire to learn. The people of the west want a job, but they do not want to work, and thus the presence of millions of illegal immigrants who are doing the jobs that Americans just won't do (while they decry outsoucing of jobs they don't want to do). I'll spare you my anecdotes about how my company, all of our customers, and all of our suppliers are struggling to find good help. But we have a people problem. A skills gap problem. A work ethic problem. An education problem. The majority of our society has stagnated in the face of a dynamic, globalized world. It yearns for a time that is gone, and refuses to change and adapt. It wants nothing to do with the jobs that actually pay well, they just want to be paid. And if our nation doesn't change? It will die like Greece.

If you were to take all of America's unemployed, evacuate the state of Iowa, and plop all of our unemployed in that state, and wall them in. What do you think would happen? Why? I would venture a guess that they'd all either kill each other or face massive famine. Not because Capitalism would fail them, not because ANY system had failed them, but because they are generally useless people with nothing meaningful to offer one another. Just like the Greeks, Italians, Spanish, and Portuguese.

Has America been sustaining itself on debt and bubbles? Sure has. But that is not a failure of capitalism. That is a failure of people, and an abject failure in leadership. Starting with Carter. Economic managers are destined to lead countries to ruin.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 11:13 pm 
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It's always easier to discuss first principles than it is to talk over and past one another.

Sandler, what is your definition of "capitalism?"

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon May 28, 2012 11:24 pm 
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Sandler wrote:
thodoks wrote:
Aside from the tendency of banking and financial institutions to create credit instruments that behave like a form of money (most derivatives in general), capitalism can be impugned on none of these phenomena.



See, I just don't agree with this. If capitalism relies on constant growth, then what do you do when growth can no longer be sustained? I think if you look back at the last 30+ years, capitalism has worked as it should. Technology and a growing workforce allowed our cherished job creators to outsource and end the phenomena of rising wages. Why? Because it was the most profitable course of action, and in capitalism, that's the bottom line. At this point, capitalism is in serious trouble. They create a credit bubble to sustain the growth (and get richer and more powerful doing so). The bubble pops in 2007-2008, and now we the public suffer austerity and high unemployment. So how is a rollback to a "better, more pure or fair capitalism" the answer? If the economic model is not fundamentally changed, how can the ultimate results be fundamentally different?


That's the flaw in the logic of economic managers. Capitalism DOESN'T rely on constant growth. Political campaigns rely on constant growth because the people expect their lives to constantly improve.

In the early 1900s capitalism worked and allowed Henry Ford to destroy the livelihoods of carriage drivers all over the country. They sit back and weep at the loss of their livelihoods? No. They went and did more useful things for the economy. Your comment about "cherished job creators outsourcing jobs and the end of rising wages" is precisely what is wrong with todays society. We are a society of carriage drivers looking to put a halt to Henry Ford inventing an assembly line to mass produce cars without realizing that if the economy does not change, that progress stops.

Capitalism is not the problem. The problem is people refusing to change and adjust to the new information age. There are plenty of good paying jobs out there waiting to be had. Tons of unseen products, software, automated processes, product improvements, creature comforts, consumer demands, medical inventions, new drugs, an enormous demand for doctors. Instead of filling these demands, we sit and pout about how capitalism has failed us and that it's in serious trouble. Our leaders have created credit bubbles in lieu of addressing meaningful changes in societal attitudes. It's much easier to beg a bond purchaser than tell an entire nation that the days of good paying factory jobs are over, and that it's time to get in the lab, start inventing, learn calculus, type code, or run a CNC machine.

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