Detroit

Re: Detroit

PostBy: SMITTY On: Fri Jul 26, 2013 2:40 pm

Why is it always gloom and doom with you as soon as someone makes a common sense (REAL common sense!) statement about the free market? America wasn't born with regulations at every turn Sam. How do you think we made it this far? This regulate-everything mentality has only been going full steam for the last 100 years or so of our history. The first 130+ years set the foundation for our continued success. The last 100 years is why we're in the economic septic tank we're in right now.

We could shitcan insurance companies, and all government entities, and the free market would take over. If unscrupulous individuals try to screw people, the buying public will vote with their wallets and put them out of business. That's how the free market system is SUPPOSED to work. Get the damn government the hell out of our lives and let us do business!!
SMITTY
 
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Re: Detroit

PostBy: franco b On: Fri Jul 26, 2013 4:28 pm

I do think there is a role for government regulation in helping markets to remain free from monopoly by both predatory companies and labor. Banking regulations to at least inhibit scoundrels. Safety standards for workers.

Here is an interesting essay on the subject of government intervention with a surprising hero.

A Long List of Disasters

Just look up “Warren Harding” on Wikipedia. The first entry you will find is not the 29th president of the United States of America, but a rock climber with the same name.

But what do you expect? History is nothing but a long list of disasters in chronological order. Historians love calamity. And they reserve their highest accolades for those who cause them. The same is true in financial history. Those who make it big are those who make it worse.

It is safe to assume that no one working at the Federal Reserve or at the White House has a picture of Warren Gamaliel Harding over his desk. Yet if American presidents were ranked on the basis of how well they faced up to financial disaster, Warren G. Harding might be somebody. His handsome face would be carved on Rushmore. His likeness would grace the $100 bill.

Harding was the last American president to deal honestly with a major financial crisis. Every president since has tried to scam his way out of it.

A Moral World

By the time Harding took office in 1921 the Panic of 1920 was taking the unemployment rate from 4% to nearly 12%. GDP fell 17%. Then, as now, the president’s subordinates urged him to intervene.

Secretary of Commerce Herbert Hoover wanted to meddle — as he would 10 years later. But Harding resisted. No bailouts. No stimulus. No monetary policy. No fiscal policy. Harding had a better approach; he cut government spending and went out to play poker:

We will attempt intelligent and courageous deflation and strike at government borrowing which enlarges the evil, and we will attack high cost of government with every energy and facility which attend Republican capacity… it will be an example to stimulate thrift and economy in private life.
Let us call… for a nationwide drive against extravagance and luxury, to a recommittal to simplicity of living, to that prudent and normal plan of life which is the health of the republic.

Within a decade, Harding’s views were collectibles. But in 1921, he still saw the economic world as a moral world ordered not by man, but by God. This was not the result of long study or deep reflection on his part. He was probably the dummy everybody said he was. As Keynes pointed out, politicians are always in thrall to some dead economist. At least Harding was in thrall to the good ones.

“No statute enacted by man can repeal the inexorable laws of nature,” he announced. “Our most dangerous tendency is to expect too much of government…”

The Product of Virtue

Harding was not the first to see the economy as a natural order… one that you disturbed at your peril. A Taoist named Zhuangzi, who lived about the same time as Alexander the Great, observed: “Good order results spontaneously when things are let alone.”

Later, economists of the Scottish enlightenment, notably Adam Smith and Adam Ferguson, elaborated. Smith, like Harding, saw the economy ordered by the invisible hand of God. Ferguson saw markets as a “spontaneous order,” which were the “result of human action, but not the execution of any human design.”

The same basic insight led Irving Fisher — the greatest economist of the 1920s — to come up with his debt-deflation theory of depressions. After people had borrowed, they needed to pay back. Busts followed booms; there was no getting around it.

Warren Harding may never have been the brightest bulb on the White House porch, but intuitively he understood that proper macroeconomic policies were more the product of virtue than of genius. Debt led to trouble; that’s all he needed to know.

The Lost Lesson

Keynes came along a few years later. Keynes was a genius; everybody said so. And he had an answer for everything. Nature? Government could do better. Debt? Don’t worry about it, he said. Why not just let capitalism sort itself out? Without government intervention, it will only get worse, said Keynes.

But Harding had already proved him wrong. Harding did the very opposite of what Keynes recommended. Instead of increasing government spending, he reduced it. He cut the budget almost in half. He slashed taxes too… and cut the national debt by a third.

Japan at the time struggled with the same downturn. But it had no Harding at the helm. Instead, its masters prefigured Keynes, trying to stay the correction using price controls and other interventions. The result was a long-drawn-out affair that lasted until 1927 and ended in a bank crisis. In America, meanwhile, by 1922 unemployment was back down to 6.7%. By 1923 it was down further — to 2.4%.

This lesson was entirely lost on the world’s economists. When the next crisis hit a decade later, they turned to Keynes. Of course, it turned out to be a moral world after all. They got what they deserved.

Regards,

Bill Bonner
franco b
 
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Re: Detroit

PostBy: jpete On: Fri Jul 26, 2013 5:24 pm

franco b wrote:I do think there is a role for government regulation in helping markets to remain free from monopoly by both predatory companies and labor. Banking regulations to at least inhibit scoundrels. Safety standards for workers.


What is wrong with a monopoly if it gave you the products you wanted at the prices you wanted to pay? The only thing that makes a monopoly POSSIBLE is government regulations that inhibit people from undercutting existing businesses. And while government is "protecting" us from monopoly, you'll notice THEY don't relinquish their monopoly on the use of force!

Same thing with bad bankers. Government allows them to exist. If the laws were upheld, and criminals were punished, things would work themselves out. Whether a man steals from you with a gun or a pen, he's still a crook and should be prosecuted as such.

The same goes doubly for worker safety. If a business owner cuts corners and refuses to provide for the safety of his workers, then he should be looking at a negligent homicide charge.

Government DOES have a role. That is to uphold the laws, not whore themselves out to the highest bidder.
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Re: Detroit

PostBy: lsayre On: Fri Jul 26, 2013 5:57 pm

SMITTY wrote:We could shitcan insurance companies, and all government entities, and the free market would take over. If unscrupulous individuals try to screw people, the buying public will vote with their wallets and put them out of business. That's how the free market system is SUPPOSED to work. Get the damn government the hell out of our lives and let us do business!!



i like your thinking here!!! :D
lsayre
 
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Re: Detroit

PostBy: samhill On: Fri Jul 26, 2013 6:16 pm

To both of you, do you really think for one nano second that big business would give a fair days wage for a fair day of work on their own, really? I believe it's been tried before & that's how we eventually got to where we are today. Sounds great get rid of all Gov. taxes, rules & regulation but then you still want protection from bad banks, businesses practices, unsafe work practices, the list goes on, great except you just got rid of all that stuff, there are no rules or regulations or anyone to enforce them for that matter, remember that's what you didn't want or is it you just don't to pay for anything & you only want laws that regulate others & not yourself, perhaps instead you all should just run for Congress. :o :D
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Re: Detroit

PostBy: lsayre On: Fri Jul 26, 2013 6:19 pm

samhill wrote:To both of you, do you really think for one nano second that big business would give a fair days wage for a fair day of work on their own, really? I believe it's been tried before & that's how we eventually got to where we are today. Sounds great get rid of all Gov. taxes, rules & regulation but then you still want protection from bad banks, businesses practices, unsafe work practices, the list goes on, great except you just got rid of all that stuff, there are no rules or regulations or anyone to enforce them for that matter, remember that's what you didn't want or is it you just don't to pay for anything & you only want laws that regulate others & not yourself, perhaps instead you all should just run for Congress. :o :D


Define a fair days wage.
lsayre
 
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Re: Detroit

PostBy: samhill On: Fri Jul 26, 2013 6:40 pm

A mutually agreed upon wage by parties involved, usually enough for a family of (normally four) to be able to live off of with the hopes of bettering their lives & their children to hopefully live better than they. Or I could copy & paste some crap for you if that's what you want.
Tell me if you really think business would voluntarily treat workers like something more than an expendable item. You can even look back into history, as I said there were reasons why things were done but as always greed takes over & both sides are guilty. People in high places trying to justify their being when things are running smooth & they realize that they may no longer be needed.
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Re: Detroit

PostBy: franco b On: Fri Jul 26, 2013 6:46 pm

jpete wrote:Government DOES have a role. That is to uphold the laws, not whore themselves out to the highest bidder.

Regulations are laws, so the first part of that statement is sort of self contradictory. The second part obviously depends on honest government which we do not have.

Did government create Standard Oil?

The Triangle Shirtwaist fire led to regulation of dangerous working conditions. Should we have waited for more fires before doing something? Actually there were regulations that were not enforced.

Sweat shops in the garment industry were in large part that way because fierce competition made it very hard to do otherwise by employers. The Ladies Garment Workers Union helped to level the playing field and led to better conditions.

Regulations to keep markets free and honest are fine, but I agree with you that too often they are designed to favor one group over another or for political advantage. Regulation by law makers that that are mostly ignorant of what they are regulating leads to lobbyists to explain things and too often simply bribe their way.

With Bernie Madoff in jail and Corzine free in seems there is still a lot to fix in blatant ignoring of what law we have including the Constitution. The hope for honest statesmen and politicians might be naive, but I am not sure the near anarchy you advocate would be better.

The fact that in NY the serious candidacies of Weiner and Spitzer kind of illustrate how low expectations have become and probably reflect a general lowering of standards in the population. Would more regulation help or make it worse or would none? At least in the days of the robber barons more lip service was given to ideals which today are laughed at.
franco b
 
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Re: Detroit

PostBy: Dave 1234 On: Fri Jul 26, 2013 7:29 pm

Great location, plenty of demand for the product that Detroit makes.
Get rid of the parasites and sell all of the delinquent properties to "highest bidder".

Too simple,

Dave
Dave 1234
 
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Re: Detroit

PostBy: franco b On: Fri Jul 26, 2013 7:31 pm

samhill wrote:A mutually agreed upon wage by parties involved, usually enough for a family of (normally four) to be able to live off of with the hopes of bettering their lives & their children to hopefully live better than they. Or I could copy & paste some crap for you if that's what you want.

So the guy that sweeps the floor should get as much as the engineer that designs the product?

Free markets have checks and balances and employers have to stick to prices that keep them in business. That does make employees expendable and CEO also if they don't pull their weight. Eliminate that and you wind up with things like our educational system. The private sector can't just print money or raise taxes to do what is nice. Government can't either as we will find out in time.

You seem to think all private companies are evil because they have to conform to economic necessity. When you start eating that goose that lays the golden eggs you wind up eventually with the workers paradise of Soviet Russia. There are thousands of companies that treat their people very well, or at least as well as they are able. The best conditions are what is possible not what you would necessarily prefer.
franco b
 
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Re: Detroit

PostBy: jpete On: Fri Jul 26, 2013 7:38 pm

franco b wrote:
jpete wrote:Government DOES have a role. That is to uphold the laws, not whore themselves out to the highest bidder.

Regulations are laws, so the first part of that statement is sort of self contradictory. The second part obviously depends on honest government which we do not have.

Did government create Standard Oil?

The Triangle Shirtwaist fire led to regulation of dangerous working conditions. Should we have waited for more fires before doing something? Actually there were regulations that were not enforced.

Sweat shops in the garment industry were in large part that way because fierce competition made it very hard to do otherwise by employers. The Ladies Garment Workers Union helped to level the playing field and led to better conditions.

Regulations to keep markets free and honest are fine, but I agree with you that too often they are designed to favor one group over another or for political advantage. Regulation by law makers that that are mostly ignorant of what they are regulating leads to lobbyists to explain things and too often simply bribe their way.

With Bernie Madoff in jail and Corzine free in seems there is still a lot to fix in blatant ignoring of what law we have including the Constitution. The hope for honest statesmen and politicians might be naive, but I am not sure the near anarchy you advocate would be better.

The fact that in NY the serious candidacies of Weiner and Spitzer kind of illustrate how low expectations have become and probably reflect a general lowering of standards in the population. Would more regulation help or make it worse or would none? At least in the days of the robber barons more lip service was given to ideals which today are laughed at.


Regulations AREN'T laws. Laws come from Congress, not the EPA.

What was wrong with Standard Oil? Could you buy oil at a price you wanted to pay?

Was the owner of the Triangle Shirtwaist Company thrown in jail for multiple counts of homicide? If he did, would other garment factory owners paid attention? Would the union have been necessary at that point?

I have no problem with collective bargaining until the government steps in and forces an employer to deal with them.

Your example of the dichotomy between Madoff and Corzine is apt. Why have regulations when you enforce them for some and not others? It would be better to have none at all.

The only thing regulations do is give those lobbyists you mentioned a job. If there is no REASON to buy people off, then the people paying the bribes are out of a job aren't they?
jpete
 
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Re: Detroit

PostBy: samhill On: Fri Jul 26, 2013 8:22 pm

Franco, just where did I say that everyone should get the same wage? But there again would that also mean that the CEO (which they didn't have) would get the same as the other two? I never said private companies are evil or unions good just that there have been reasons for both & good & evil in both. I do think that history is on my side in saying that the companies are the ones that forced the creation of unions, if treated fairly there is no need at all for a union.
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Re: Detroit

PostBy: franco b On: Fri Jul 26, 2013 8:28 pm

jpete wrote:Regulations AREN'T laws. Laws come from Congress, not the EPA.

What was wrong with Standard Oil? Could you buy oil at a price you wanted to pay?

Was the owner of the Triangle Shirtwaist Company thrown in jail for multiple counts of homicide? If he did, would other garment factory owners paid attention? Would the union have been necessary at that point?

Regulations are sub sets or details of the laws that empower them. A state might devise a building code containing regulations as to how structures are built and might also empower a local community to set their own regulations in certain cases. For example historic buildings or communities. Should we have no building code?

I don't know if prices came down when Standard Oil was broken up, but it did enable more companies to provide competition.

The owners of the Triangle factory were found not guilty of manslaughter.

When the Titanic went down it became law to have enough lifeboats for the passengers on board. Was that wrong?

I agree with you and isayre that excessive regulation can throttle an economy and should be held to a minimum but to let the free market determine what is best in all cases, which in time it would do could also lead to an awful lot of easily preventable loss.
franco b
 
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Re: Detroit

PostBy: franco b On: Fri Jul 26, 2013 8:46 pm

samhill wrote:Franco, just where did I say that everyone should get the same wage? But there again would that also mean that the CEO (which they didn't have) would get the same as the other two? I never said private companies are evil or unions good just that there have been reasons for both & good & evil in both. I do think that history is on my side in saying that the companies are the ones that forced the creation of unions, if treated fairly there is no need at all for a union.

You stated a living wage so if the engineer gets that then the sweeper should too.

That rotten companies precipitated a need for collective action on the part of employees I agree with you. People driving recklessly on the highway cause laws to be passed to discourage that behaviour though few of us behave that way. It's the same way with companies when they get tarred with the same brush as the bad apples. Then regulation or unions can become micro management to the degree it kills business and all suffer.
franco b
 
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Re: Detroit

PostBy: jpete On: Fri Jul 26, 2013 9:56 pm

franco b wrote:I agree with you and isayre that excessive regulation can throttle an economy and should be held to a minimum but to let the free market determine what is best in all cases, which in time it would do could also lead to an awful lot of easily preventable loss.



Look at the preventable losses that occur now with the tons of regulations we have.

E coli on the vegetables. Contaminated peanut butter coming from a plant that the FDA didn't even know existed. Heck, how many deaths occur from "FDA approved" drugs?

I'm not saying the free market is necessarily "better" than government regulation. I'm saying that the 535 guys in D.C. can't possibly know how to provide the "best" products and services so why add in the middle man who doesn't add any value but just skims money off the top?
jpete
 
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