Obama: Do what I say to address economic crisis, or else!

[Trumplestiltskin 5,791]

Matt - you need only look at the thread from a few weeks ago, about the blind guy refused service in a restaurant because the proprietor objected to his guide dog for religious reasons.

You can argue that the business should fold by customers word of mouth about the discrimination, but in practice its unlikely to happen - because the offended party is a member of a minority group and because others are not always unified about discrimination that doesn't affect them directly.

So the only thing the free market would do for the blind man would be to tell him to eat elsewhere (and maybe get served)

A pure free market is essentially feudalism.

.

You can't argue that the one proprietor's refusal was another proprietor's profit. Whether or not the restaurant goes out of business is pretty irrelevant. The restaurant owner was exercising his own freedom. Whether it is due to religious reasons or just a genuine dislike for dogs, it is his freedom to do that. But I guarantee you this, that man and his dog gave their business to a different restaurant.

As I said, it sounds great in theory - but as with communism the reality may be quite ugly.

[mRx 16]

As I said, it sounds great in theory - but as with communism the reality may be quite ugly.

I don't really understand the attempted connection between communism and free market capitalism. Communism isn't an easily identifiable ideology. It is abstract, just as Marxism, Leninism, Liberalism, Conservatism, etc. While they may differ in tactics and methods; they all support the same underlying condition of bigger government intervention. Free market capitalism, on the other hand, is not abstract. It is a belief that even though intervention and regulation may occur, the free market will continue to operate. And any regulation used to coerce or restrict the market can only be detrimental to the free market. It is the exact opposite of other economic intervention ideologies. Therefore saying that communism doesn't work, which is preaching to the choir, doesn't prove that free market capitalism doesn't work.

It is true, however, that intervention doesn't work. And it never has. Look no further than our current recession. This was caused primarily by the business cycle. The boom is over, and the bust is the painful, but necessary adjustment needed to liquidate the malinvestments. We wouldn't need an adjustment if the market was left alone to begin with.

[Trumplestiltskin 5,791]

But that's just the point - free market economics IS an abstract idea.

You're pushing a "pure" theory regardless of the fact that there are (quite a few) practical drawbacks to it; and more pertinently perhaps - that there are no "pure" examples of it in the real world (as with communism).

[HAL 9000 96]

I think calling the private sector efficient is a bit of a fallacy, certainly when it comes to job creation.

Even now there are still people who doss about on the internet all day, file frivolous expense claims or do work that ends up being pointless or duplicated - because departments don't communicate effectively.

The government get's it's income through the profits of the private sector. Businesses earn profits by efficiently managing costs/prices.

There are inefficient companies within the private sector, I agree. But free-market mechanisms tend to force the inefficient companies out of business.

It's foolhardy to believe that a government official can manage your money better than you can manage it yourself. There is no incentive or risk for government run programs. It's not their money to lose, and their salary stays the same either way. Therefore it is doomed from the get-go.

Wholesale privatisation tends to have unwanted side-effects - for example, lowering living standards (healthcare) and political freedoms (university education).

This free market stuff you are pushing seems to me to be a pure economic theory. Nothing wrong with that (in theory) but what I don't agree with is that it tends to treat ethics and morality as separate subjects (or things that can simply be assumed).

The American economy currently follows the Keynesian economic theory. Pretty much every economic advisor advocates one form of intervention or another, all the while remaining lockstep with Lord Keynes' theory. The problem is; there are other theories out there. Ones that are far more sound.

Obviously I totally disagree with your assumption that privatization causes low living standards. In fact, it's quite the opposite.

I think healthcare is a subject entirely different from privatization. In fact, healthcare would be much more affordable and the supply of it much more abundant if it was allowed to operate without coercive restrictions such as the FDA, AMA, and HMO act. So I think healthcare should be freed as well.

Yes in theory - which is why I contested the idea that a completely free market economy could operate without inevitably compromising morality or ethics to the deteriment of the public (specifically the poorest and least able to participate in the economy).

I don't disagree that we have a labyrinthine amount of regulation, some of which is excessive, some of which is redundant. I don't dispute that. I do think there is a place for government to regulate the economy to ensure a level playing field for its citizens - certainly on things like education or healthcare.

Not to go too far down that route - but the general quality of healthcare as provided by socialized healthcare in Europe doesn't bear out the experience that quality care can't be provided in a relatively cost-effective manner by government.

I don't know where you are going with morality and ethics. These are subjective values anyways. But that is the glory of free market competition. A business owner can only be so greedy and evil, before an alternative pops up on the market. Now, if regulation clears out any possibility for this business owner to experience competition, then he is free to charge what he wants and operate how he pleases.

Healthcare in Europe is very different than healthcare here. I don't know if Europe has healthcare cartels that lobby for limiting the supply of healthcare and drugs like the AMA and FDA do in the USA.

Edit: Hit post too soon.

You have several different directions of regulators and lobbyists in that post, Matt. One thing is to protect the consumer/patient (FDA). Another is to lobby for practitioner standards of living (AMA). And yet another is the lobby of the pharmaceutical and insurance sectors to keep control favoring their profit margin- as is the case now.

Those definitions, while promising and uplifting, are not the real intention of these cartels.

The AMA limits the amount of students wishing to enter the healthcare field. This keeps supply down, and costs up.

The FDA controls the amount of new drugs allowed to enter the US market. Here's an interesting point on the FDA: On 31 December 2008, CFC propelled asthma inhalers were banned. This was promoted as a "Go green" achievement. But a look behind the smoke and mirrors reveals something much different. First, the new alternatives, using HFA albuterol, are already patented by drug companies, and cost over 3 times as much as the regular inhalers! So was this ban of CFC inhalers (which account for less than 1% of CFC products) really driven by a yearning to protect our planet, or by FDA directors catering to their favorite pharmacuetical companies? You decide.

Funny, I thought what you wrote and what I wrote where in fact, the same thing. I think I can speak for intentions in the medical and pharmaceutical industries, too... since I live and work in those fields.

[Niels Bohr 72]

I agree with PD.

The US gives an illusion of Free Market to many people. But, in a basic econ class in college the prof tells you otherwise. It is controlled by the US government to a degree such as min. wage, weights and measure, monopoly, oligopoly, no cartels, etc...

[Trumplestiltskin 5,791]

I agree with PD.

The US gives an illusion of Free Market to many people. But, in a basic econ class in college the prof tells you otherwise. It is controlled by the US government to a degree such as min. wage, weights and measure, monopoly, oligopoly, no cartels, etc...

Well he's talking about Free Market Theory, an economy which would be subject to no government intervention/regulation whatsoever. That doesn't describe the US economy (though it may employ more free market principles than other countries).

The theory is certainly a useful one - I'll grant that. But practically speaking, I don't think there are any examples of national economies which are entirely free of government intervention.

[mRx 16]

I agree with PD.

The US gives an illusion of Free Market to many people. But, in a basic econ class in college the prof tells you otherwise. It is controlled by the US government to a degree such as min. wage, weights and measure, monopoly, oligopoly, no cartels, etc...

That's because the college professor is educated in Keynesian economics. Nearly every economic magazine, economic advisor, and college promotes the works of John Keynes.

If I remember correctly there are only a handful of colleges that teach alternative economic theory.

So much for opening the mind to new theories.

The theory is certainly a useful one - I'll grant that. But practically speaking, I don't think there are any examples of national economies which are entirely free of government intervention.

Well I can say that there were 0 recessions, depressions, or downturns before the creation of governmental central banking (the most coercive intervention of them all).

If government intervention is detrimental to the economy (see Great Depression, the New Deal, etc), and non-intervention solutions cause rapid healing of the economy (see Harding's non intervention policy toward the recession of 20-21), then one's mind should tend to favor non-intervention, and see intervention as harmful, and massive intervention (the road FDR took, and the road Obama is veering towards) as very harmful. Granted, this is just one comparison, but it is a direct comparison of the different governmental approaches to the bust phase of the business cycle.

[Trumplestiltskin 5,791]

I agree with PD.

The US gives an illusion of Free Market to many people. But, in a basic econ class in college the prof tells you otherwise. It is controlled by the US government to a degree such as min. wage, weights and measure, monopoly, oligopoly, no cartels, etc...

That's because the college professor is educated in Keynesian economics. Nearly every economic magazine, economic advisor, and college promotes the works of John Keynes.

If I remember correctly there are only a handful of colleges that teach alternative economic theory.

So much for opening the mind to new theories.

The theory is certainly a useful one - I'll grant that. But practically speaking, I don't think there are any examples of national economies which are entirely free of government intervention.

Well I can say that there were 0 recessions, depressions, or downturns before the creation of governmental central banking (the most coercive intervention of them all).

If government intervention is detrimental to the economy (see Great Depression, the New Deal, etc), and non-intervention solutions cause rapid healing of the economy (see Harding's non intervention policy toward the recession of 20-21), then one's mind should tend to favor non-intervention, and see intervention as harmful, and massive intervention (the road FDR took, and the road Obama is veering towards) as very harmful. Granted, this is just one comparison, but it is a direct comparison of the different governmental approaches to the bust phase of the business cycle.

There are certainly situations where intervention or indeed non-intervention in the running of economy can be convincingly argued.

While I don't disagree that intervention can and has caused more than its fair share of problems, there are some significant criticisms of a completely deregulated free-market economy which you must be aware of. I'm not saying this to rubbish the theory - but to point out that compromise is inevitable when it comes to apply abstract academic theories to real life. They can rarely exist in their pure form.

Probably explains why Keynes' work is so influential - it assumes compromise.

[mawilson 2,133]

Well I can say that there were 0 recessions, depressions, or downturns before the creation of governmental central banking (the most coercive intervention of them all).

Wait a minute. There were a number of financial panics in the 19th and early 20th centuries,

with the Panic of 1907 being the most severe, which directly led to the creation of the Federal

Reserve System in 1913.

[mRx 16]

Well I can say that there were 0 recessions, depressions, or downturns before the creation of governmental central banking (the most coercive intervention of them all).

Wait a minute. There were a number of financial panics in the 19th and early 20th centuries,

with the Panic of 1907 being the most severe, which directly led to the creation of the Federal

Reserve System in 1913.

Complete centralized control over the money supply began with the Banking Act of 1863, some 50 years before the Fed Act was even passed.