Taxes, equity, and gov bailouts

[Sheepdog]

Not corporate tax rates. I don't know about regulation, but if Ireland has more it just helps prove my point. And production on its own is irrelevant. For an economy to be successful, it needs to be self-sufficient. Massive production requires massive consumption. If there's no consumption there's no demand and the production becomes irrelevant. If anything the US currently consumes more than it produces (hence the growing deficit, both at federal level and in the lives of the average moron who insists on living a lifestyle well beyond what they can afford). What do you think will happen when the deficit becomes too big to ignore? Two options: dictatorship or collapse. Take your pick.

in this day and age no country has a self-sufficient economy.

even before globalization, your country only prospered if it can trade with other countries.

Fine. Here's mine:

The free market consists of three types of individuals:

Type 1: Individuals who seek to help others only and require only the base necessities for themselves.
Type 2: individuals who seek a mutually beneficial agreement.
Type 3: Individuals who seek only to benefit themselves regardless of the toll this takes on everybody else.

Since the first and second type of individual have restrictions on what they're willing to do while the third does not, the third type is guaranteed to prevail if given enough time. As such, a 3rd party is required to interfere, one that by its nature is required to benefit all other parties involved.

if type 3 is consistent, he is actually the most hamstrung, because he will either become a thief, or be limited dealings like that of type 2. the reason for this is that with few exceptions, all contracts benefit more than one of the parties involved. the only transaction that consistently benefits only one party is outright theft or fraud. even in free market societies theft and fraud are illegal.

And since the marketer in me is just screaming out for a comment on yours: the free market can and does produce fake demand. The quickest way to get rich is to be a good salesman, and selling is the art of convincing people to buy crap they don't actually need.

or subsidize that crap through government intervention. as a matter of fact, the reason the US economy keeps having bubbles and collapses is because there is so much fake demand, as you describe it, and the government rewarding inefficiencies or punishing effective business though preferential subsidies, regulation, and taxation. really, does anyone believe corn-based ethanol would ever be viable without the subsidies it gets?

Yeah, for type 3. Everyone else is screwed. Since ethics interfere with efficiency, type 3 will be more efficient, allowing it to snuff out its competition and thus achieving a monopoly on an industry. The only thing that could possibly prevent it is pure luck (IE: every type 3 at a time is a complete dumbass, which allows the more common type 2 to outmaneuver them despite their own restrictions). But even so, in the long run the free market would evolve into an oligarchy where the type 3s eventually crush everyone else, and once they're in power they can benefit from mutual cooperation to screw everybody else. For example, if one type 3 owns the metal mining and processing industry, they can effectively kill competition for the type 3 who owns the auto industry, or the tool industry, since any potential competition can't get the raw materials necessary to even start.

this doesn't pan out in history. you may have in mind the "robber barons" in US history, but in fact the true robber barons were the ones who used government subsidies and regulation to gain a competitive advantage. in other words, the monopolies of the pre-Depression era were political entrepreneurs, not entrepeneurs. The most offensive example I can think of is the Pacific Railway Act of 1862. The Union Pacific and Central Pacific railroad companies were charged with the task of connecting the Pacific Coast with the East and Midwest. The game plan was to reward the railroads with low interest loans and land grants in proportion to the amount of rail they laid. Now think about that for a second, and tell me you don't see the problem. The two railroads laid track as fast as they could with little to no concern for quality. They went out of their way to find the shortest possible route. Since the bill granted more loans for building in mountainous terrain, they would intentionally build on land that was less suitable for the rails. And when they started getting closer to the point where the railroads were supposed to connect, they started to build in parallel!!! Overall the land grants were obscene. According to Paul Johnson, they were distributed a forth of Minnesota, 1/4 of Washington, 20% of Wisconson, Iowa, Kansas, North Dakota, and Montana, and 12.5% of California!

on the other hand, you have the Carnegies and the Rockefellors. These were real economic giants. Yet, if you look at their activities over all, they fit more into Type 2 or even Type 1 categories. Of the money they made in their businesses, these entrepreneurs gave back gobs and gobs of wealth in the form of philanthropy. Even recently Bill Gates has become more of a philanthropist than a money making machine.

every time the US government raises the minimum wage, the CEO's of Walmart sleep better at night. why is that? it is because they know that to pay for the marginal increase in labor cost, they just need to quietly raise their prices a few pennies. On the other hand, the mom-and-pops who want to compete with Walmart will be priced out of business, leaving Walmart with less competition. costs of entry due to regulation is probably a bigger hurdle to newer and smaller businesses than cost of entry due to the opponent being a monopoly.

A pure free market is fiscal anarchy, and will turn into fiscal dictatorship for the same reason normal anarchy does: because the most ruthless, Machiavelian business owners will get to the top.

just FYI, Machiavellian has two "l's" in it.

Who said anything about a government CONTROLLED economy? I specifically spoke out against communism which directly implies I don't support any such thing. A government controlled economy would just lead to the same problem a pure free market has: rampant abuse of power.

I support a free market with a degree of regulation from the government. Regulation that ensures a level of balance between corporations and workers.

what you describe is more or less what the US has now. you might have been edumacated by the school system* to believe we have a free market, but we don't. and we haven't had one since the 1930's. the problem is that what you describe is a pipe dream. you outline three types of businessmen, forgetting that the same three types apply to politicians. except, it's the type-3 that is more attracted to the business of policy than the business of business. (in fact, i suspect that type-3s actually fail quite frequently in the economy, which is why they are driven work in the government.) the government doesn't always regulate in a way that is altruistic and to the benefit of society. in fact, it frequently governs to expansion of its own power and control, despiting the economy or the people. if you have to destroy the economy to do it, like i don't know, say for example, creating a housing bubble then popping it for the purpose of riding in to the rescue... then so be it.

*(Canadian school system, of course. i presume yours is at least as left leaning as ours)

[Sheepdog]

And monopolies are not coercive. Who cares if there is a monopoly? We control the prices, do people forget that? If one business has a monopoly on pencils, and decides to raise the price too high, we won't buy it. We will drive the price down by a decrease in demand. We control monopolies, and WE are the only one's that can give them power. If a monopoly behaves badly, it will fail. You have a pretty typical view on monopolies. They are these big evil things out of our control. Oh my God, they own the coal industry, what shall we ever do? We will find an alternative. We will cut back on demand, drive down prices. And no matter what you say, monopolies or not, it does not change into anything besides a free market. It doesn't become a Oligarchy like you say, or anything. It remains anarchy.

Also, monopolies don't last long where the barriers to entry aren't insanely prohibitive. If the price of pencils go high enough, another company can always enter the market at the point where the revenues from high priced pencils outpace the barriers of entry. then when those barriers are gone, you lower prices and knock the monopoly off its high horse.

this is what kept happening to Microsoft. they bought into the conventional wisdom of predatory pricing. if you have the market power, you can price your opponent out of the market. then when you have control of the market, you can set your price as high as you want. the problem? every time Microsoft had market control and tried to raise prices, someone would come along put a hole in their balloon. they priced Netscape out of the web browsing market by making Internet Explorer free, but now IE is locked into forever being free, because there are many free browser alternatives which can viably compete with IE. then there's Apple, which has always been a thorn in the side of MS.


FWIW, i'm not an anarchist. i'm just less "statist" than Darth a lot less

[uberliber]

what you describe is more or less what the US has now. you might have been edumacated by the school system* to believe we have a free market, but we don't. and we haven't had one since the 1930's.

We have never had a free market. But I know what you're saying. And I would actually say that the mixed economy you are thinking of ended in 1913, not 1929.

[uberliber]

Also, monopolies don't last long where the barriers to entry aren't insanely prohibitive. If the price of pencils go high enough, another company can always enter the market at the point where the revenues from high priced pencils outpace the barriers of entry. then when those barriers are gone, you lower prices and knock the monopoly off its high horse.

this is what kept happening to Microsoft. they bought into the conventional wisdom of predatory pricing. if you have the market power, you can price your opponent out of the market. then when you have control of the market, you can set your price as high as you want. the problem? every time Microsoft had market control and tried to raise prices, someone would come along put a hole in their balloon. they priced Netscape out of the web browsing market by making Internet Explorer free, but now IE is locked into forever being free, because there are many free browser alternatives which can viably compete with IE. then there's Apple, which has always been a thorn in the side of MS.


FWIW, i'm not an anarchist. i'm just less "statist" than Darth a lot less

Ha, well the less of a statist, the better. By the way, I love that quote you have in your signature.

[Andius]

Also, monopolies don't last long where the barriers to entry aren't insanely prohibitive. If the price of pencils go high enough, another company can always enter the market at the point where the revenues from high priced pencils outpace the barriers of entry. then when those barriers are gone, you lower prices and knock the monopoly off its high horse.

this is what kept happening to Microsoft. they bought into the conventional wisdom of predatory pricing. if you have the market power, you can price your opponent out of the market. then when you have control of the market, you can set your price as high as you want. the problem? every time Microsoft had market control and tried to raise prices, someone would come along put a hole in their balloon. they priced Netscape out of the web browsing market by making Internet Explorer free, but now IE is locked into forever being free, because there are many free browser alternatives which can viably compete with IE. then there's Apple, which has always been a thorn in the side of MS.


FWIW, i'm not an anarchist. i'm just less "statist" than Darth a lot less

Sheepdog and Uber, most impressive analysis on your enunciations regarding monopolies. I can see caballeros that you are adherents to the Austrian School.

I do have one question though. I am in full agreement that the consumer is the one who ultimately dictates the price of a product, and the reason many monopolies (or at least competitors that own like 90%-99% of the market since Austrians don't believe in pure monopolies) have ended is due to the overpricing or/and the lowering of quality in the product, and the consumers have merely reduced their purchase of such product.

However, that has me begging the following question: What then of products or services are unconditionally indispensible where it is not possible to reduce at all or consumership of it? This is the following I have thought off, with the product being water:

Lets say a water distribution company manages to outcompete its competitors, and manages to purchase all the known properties where water is obtained, and becomes the sole distributor of water in it's market. The company begins to raise the prices or reduce investment in the quality with the goal of increasing it's profits. Since it purchased all of the known properties where water is obtained, the possibility of a new competition arising is virtually impossible since this company is not foolish enough to give away property that they purchased with the mutual consent of both parties.

Unlike say pencils, which are somewhat trivial to our survival and its possibibility to reduce the consumership of it, water is something we really don't have a choice to reduce or stop consuming if we wanted to (Unless we had a death wish of massive proportions ), since a reduction of it's consumership would lead to sub-par nutrition intake, literally, voluntary dehydration. Assuming the society chooses to continue to purchase the water to avoid such conditions, it would still have to deal with the high prices, or low quality of water, or both of them, in this case, the consumer is the loser here, since at best, he can ration out the consumership of water. Either way, the choice is reduced to:

A) Purchasing water, sacrificing costs in other purchases (although there are lots of variable expenses here, so I admit that this one might be somewhat relative, since the price it pays is relative to it's income)
B) Reducing purchase of water at the cost of a lower quality life (less water intake and hygiene).

From these 2 choices (if there are more that could be named, I am open for it ), either way, it suffers in a sector of it's everyday life. Of course, there is this third option (assuming all this happens in a specific region):

C) Just simply move out of the country and find one where it's market allows for lower priced water (admittedly, this one also has lots of variables with graded difficulties, such as family size, governmen restrictions in leaving and entering a country, travel capacity, travel risk, etc.)

Of course, assuming this is taking place in one single country or region, this is what I can think off as the obvious solution

The classical (Not in classical liberal mind you, I am using the word in sense to it's inmortality, like when I say this car is a classic , just to avoid confusion) Free Market one (my prefferred one since my major is International Relationships) is simply to get rid of the tariffs and allow the purchase of water from other nations and regions, effectively breaking the monopoly, fusing markets (and this goes wether the tariff is national or regional as is the case of the economic discriminations found in most Free Trade Agreements), and forcing the water company to reduce it's prices and increasing it's quality if wan't to stay in the market Of course, this might anger the local company, and the variable that would be my concern is of how much influence does it exert to the government. Because:

a) If the water company exerts much influence inside the government (in the case where the company propriaters also hold positions in government or political parties), odds are that they will attempt to persue in preventing other competitors in entering the market (since it will threaten their interests in having easy profits, who wouldn't want easy profits?), and likely use the government and her guns to insure it won't happen. (This sorta thing happened in Latinamerica all the time during the 19th century)
b) But if the water company has little to no influence in the government, and the government decided to relax big time their interference in tariffs in this area, then they are screwed on this aspect , and the consumer might benefit in this sector.

The other "solutions", uuggh, and to my chagrin, the more "popular ones" that my professors and students alike have suggested:

A) Government interference. Either they appropriates themselves of the property where water is obtained and distribute it on their own, or force the company somehow to reduce it's prices. Of course, I am awares how the Austrians detest theft and their misostatism (I don't mean that as an insult, is just can't help but giggle a bit on some Libertarians like Lew Rockwell constantly rants about how evil the government is, hehe. But I still respect the view though). Especially since I have read in Austrian literature that in the long run, these "solutions" are not solutions at all, since they screw over both the company and the consumer in the long run, creating artifical prices that are not accord to the expenses of the company.

B) REVOLUTION!!! Amongs my contemporaries of Marxist bent (and whom I have NO respect at all). They see companies (and anything with the label capitalism as bad, sheessh), and see that the only solution is the violent overthrow of the burguousie. Again, their solution is no better, since the crux of the problem lies in their deficiency in not knowing HOW to measure the needs of the individual human beings (Mises stated that most clearly)

So the two above I discard as ineffective in my opinion on the basis of the historical evidence of the failure of implenting such things. The 1st solution regarding allowing Free Trade is the good solution I can think off, but that is assuming there are other markets out there where it is possible to access, be it in other countries or other regional blocks, and that cannot always be the case all the time (which in real life terms, it would translate, say, a company actually is the propriater of EVERY water source in the world, and I do recognize the improbability of such a scenario, but I consider it folly to discard it).


It all boils down to this, which is where I wish the council of the knowledge of TWebbers more practiced in the economic matters than I am:

What can be done in the event of a that there is a monopoly to which the consumption of a good cannot be reduced at all? Since I have tried searching throughout the Mises Institute online archives regarding this matter, and my searches have been fruitless.

I am open to numerous answers, but preferably, one where a type of free market (or a partial one) can still be preserved. Also... pleeaaassee, if there is any flaw in the scenario I have planted, do please point it out. I am majoring in International Relationships, and our curriculum doesn't cover full speciality in economics (I study Economics informally, reading from the University Library and scholarly online sources such as the Mises Inst. to not only gain an edge in my classes and arguments, but also to discover the truth behind the workings in economy, just as I did when I studied the reliability of the truth conveyed in the Bible). I have huge commited towards Truth.

[Sheepdog]

There are real examples of such natural monopolies, like for example your local gas or electric company. It's unfeasible for multiple gas companies to run gas lines through the same area, so typically your local gas utility is a monopoly in your market.

a third alternative is for people to vote with their feet. however, i'll admit it's impractical for all the people in an area with high utility costs to move to another area.

i'm not sure what can be done about natural monopolies. we tried breaking them up in the POTS (plain old telephone system) industry with the Telecom Act of 1992. we broke up the ma bells, and allowed non-incumbents enter the market, only to see the bells coagulate and the non-incumbents vaporize.

uberliber might have an interesting idea. i've only recently turned from a soft-interventionist into a hard supply-sider, and there areas i'm still ignorant on.

[uberliber]

Sheepdog and Uber, most impressive analysis on your enunciations regarding monopolies. I can see caballeros that you are adherents to the Austrian School.

I do have one question though. I am in full agreement that the consumer is the one who ultimately dictates the price of a product, and the reason many monopolies (or at least competitors that own like 90%-99% of the market since Austrians don't believe in pure monopolies) have ended is due to the overpricing or/and the lowering of quality in the product, and the consumers have merely reduced their purchase of such product.

However, that has me begging the following question: What then of products or services are unconditionally indispensible where it is not possible to reduce at all or consumership of it? This is the following I have thought off, with the product being water:

Lets say a water distribution company manages to outcompete its competitors, and manages to purchase all the known properties where water is obtained, and becomes the sole distributor of water in it's market. The company begins to raise the prices or reduce investment in the quality with the goal of increasing it's profits. Since it purchased all of the known properties where water is obtained, the possibility of a new competition arising is virtually impossible since this company is not foolish enough to give away property that they purchased with the mutual consent of both parties.

Unlike say pencils, which are somewhat trivial to our survival and its possibibility to reduce the consumership of it, water is something we really don't have a choice to reduce or stop consuming if we wanted to (Unless we had a death wish of massive proportions ), since a reduction of it's consumership would lead to sub-par nutrition intake, literally, voluntary dehydration. Assuming the society chooses to continue to purchase the water to avoid such conditions, it would still have to deal with the high prices, or low quality of water, or both of them, in this case, the consumer is the loser here, since at best, he can ration out the consumership of water. Either way, the choice is reduced to:

A) Purchasing water, sacrificing costs in other purchases (although there are lots of variable expenses here, so I admit that this one might be somewhat relative, since the price it pays is relative to it's income)
B) Reducing purchase of water at the cost of a lower quality life (less water intake and hygiene).

From these 2 choices (if there are more that could be named, I am open for it ), either way, it suffers in a sector of it's everyday life. Of course, there is this third option (assuming all this happens in a specific region):

C) Just simply move out of the country and find one where it's market allows for lower priced water (admittedly, this one also has lots of variables with graded difficulties, such as family size, governmen restrictions in leaving and entering a country, travel capacity, travel risk, etc.)

Of course, assuming this is taking place in one single country or region, this is what I can think off as the obvious solution

The classical (Not in classical liberal mind you, I am using the word in sense to it's inmortality, like when I say this car is a classic , just to avoid confusion) Free Market one (my prefferred one since my major is International Relationships) is simply to get rid of the tariffs and allow the purchase of water from other nations and regions, effectively breaking the monopoly, fusing markets (and this goes wether the tariff is national or regional as is the case of the economic discriminations found in most Free Trade Agreements), and forcing the water company to reduce it's prices and increasing it's quality if wan't to stay in the market Of course, this might anger the local company, and the variable that would be my concern is of how much influence does it exert to the government. Because:

a) If the water company exerts much influence inside the government (in the case where the company propriaters also hold positions in government or political parties), odds are that they will attempt to persue in preventing other competitors in entering the market (since it will threaten their interests in having easy profits, who wouldn't want easy profits?), and likely use the government and her guns to insure it won't happen. (This sorta thing happened in Latinamerica all the time during the 19th century)
b) But if the water company has little to no influence in the government, and the government decided to relax big time their interference in tariffs in this area, then they are screwed on this aspect , and the consumer might benefit in this sector.

The other "solutions", uuggh, and to my chagrin, the more "popular ones" that my professors and students alike have suggested:

A) Government interference. Either they appropriates themselves of the property where water is obtained and distribute it on their own, or force the company somehow to reduce it's prices. Of course, I am awares how the Austrians detest theft and their misostatism (I don't mean that as an insult, is just can't help but giggle a bit on some Libertarians like Lew Rockwell constantly rants about how evil the government is, hehe. But I still respect the view though). Especially since I have read in Austrian literature that in the long run, these "solutions" are not solutions at all, since they screw over both the company and the consumer in the long run, creating artifical prices that are not accord to the expenses of the company.

B) REVOLUTION!!! Amongs my contemporaries of Marxist bent (and whom I have NO respect at all). They see companies (and anything with the label capitalism as bad, sheessh), and see that the only solution is the violent overthrow of the burguousie. Again, their solution is no better, since the crux of the problem lies in their deficiency in not knowing HOW to measure the needs of the individual human beings (Mises stated that most clearly)

So the two above I discard as ineffective in my opinion on the basis of the historical evidence of the failure of implenting such things. The 1st solution regarding allowing Free Trade is the good solution I can think off, but that is assuming there are other markets out there where it is possible to access, be it in other countries or other regional blocks, and that cannot always be the case all the time (which in real life terms, it would translate, say, a company actually is the propriater of EVERY water source in the world, and I do recognize the improbability of such a scenario, but I consider it folly to discard it).


It all boils down to this, which is where I wish the council of the knowledge of TWebbers more practiced in the economic matters than I am:

What can be done in the event of a that there is a monopoly to which the consumption of a good cannot be reduced at all? Since I have tried searching throughout the Mises Institute online archives regarding this matter, and my searches have been fruitless.

I am open to numerous answers, but preferably, one where a type of free market (or a partial one) can still be preserved. Also... pleeaaassee, if there is any flaw in the scenario I have planted, do please point it out. I am majoring in International Relationships, and our curriculum doesn't cover full speciality in economics (I study Economics informally, reading from the University Library and scholarly online sources such as the Mises Inst. to not only gain an edge in my classes and arguments, but also to discover the truth behind the workings in economy, just as I did when I studied the reliability of the truth conveyed in the Bible). I have huge commited towards Truth.

Hey, I enjoyed this post a lot. This is something that I struggled with for a long time as well. Mises won't be able to help you on this. To figure this out, I direct you towards John Locke.

though individuals have a right to acquire private property from nature, that they must leave "enough and as good in common...to others."

This is called the Lockean Proviso. And this is where I had to make the choice between libertarianism and anarchy.

You either believe in moral rights or legal rights. Believers in the free market cannot believe in legal rights, because established legality cannot exist in a free market. So they believe in moral rights. This is where I stand.

I would say "OH, you are evil for keeping the prices of water so high" But of course I wouldn't advocate any legal action. I would simply say that they are breaking moral rules which they should be obligated to follow. At the same time, they very well may be taking away my right to life by having the price so high. So using force against the water company would not be out of the question. Not because I don't think it's fair, but because they are holding back my ability of free will by potentially killing me.

Now the libertarian on the other hand would say that this violates out legal rights. They would say that our legal right to life is being violated, and should be dealt with. So a libertarian would typically resort to dealing with the issue by setting up a minimal government which protects our life, liberty, and property. But at the same time, they are violated our rights by trying to protect them with a coercive government.

While I don't think this situation would ever be a problem, it is the cause of the divisions of anarchists like me and libertarians like sheepdog. Honestly, it's all an opinion. You are either a statists or anarchist. To remain consistent, I must disagree with any form of coercion. This applies to government and individuals. This does not allow for a legal system. But it does allow for voluntary society to set rules. I would support living in a society where there are regulations on businesses, as long as they had the option to opt out of society and had the ability to exercise their free will elsewhere.

Hope this helps!

[Andius]

There are real examples of such natural monopolies, like for example your local gas or electric company. It's unfeasible for multiple gas companies to run gas lines through the same area, so typically your local gas utility is a monopoly in your market.

Mmhhh, I had failed to think of those, since they do actually have a true 100% of the market. I am gonna have to memo my libertarian college friend regarding what he thinks of these.

A third alternative is for people to vote with their feet. however, i'll admit it's impractical for all the people in an area with high utility costs to move to another area.

Mmhh, point taken

i'm not sure what can be done about natural monopolies. we tried breaking them up in the POTS (plain old telephone system) industry with the Telecom Act of 1992. we broke up the ma bells, and allowed non-incumbents enter the market, only to see the bells coagulate and the non-incumbents vaporize.

Oy, thas a shame to hear.

Oh, I have no problem with monopolies themselves, after all, they are the ones who truly are satisfying the demand. Since after all, in monopolies where there is a real possibility of competitions rising, it will have to maintain it's quality product if it pretends to stay on top. The moment they let their guard down in pricing or quality is the que for an interprenuer to take advantage of the slacking of his competitor and enter in the fray, and take a shot in making himself a quickbuck and a name for himself. That is, according to Austrian Theory, and the culture already has imprinted a sense of cultural enterpreneurship in it's people.

It really becomes a problem to me the moment it enters the following conditions (And it's gotta be both):
A) The moment it starts raising the prices that are far too high, or starts slacking in keeping up with the quality desired by the clients.
B) The possibility of another competitor entering is stifled

Then I would truly call it an exploitative monopoly, which would be the only kind of monopoly I am opposed. If it's of the benevolent type (having the meaning where it maintains good quality and prices, and people still have a desire to purchase it) then it is fine by my book.

uberliber might have an interesting idea. i've only recently turned from a soft-interventionist into a hard supply-sider, and there areas i'm still ignorant on.

Mmhh, I see. Looks like Uber has just gotten the answer and about to read his reply. :) you caballero have been most informative.

[Andius]

Hey, I enjoyed this post a lot. This is something that I struggled with for a long time as well. Mises won't be able to help you on this. To figure this out, I direct you towards John Locke.

I am flattered good caballero.

Darn, guess Austrian Economics can't cover every single angle in my inquiries I guess. Mmhh, John Locke has always been a favorite political philosopher.

though individuals have a right to acquire private property from nature, that they must leave "enough and as good in common...to others."

Oy, I must have missed reading this enunciation during my studies of Locke!

This is called the Lockean Proviso. And this is where I had to make the choice between libertarianism and anarchy.

Oooh, I like the sound of that ^^. But what is the difference between the two here? I thought anarchism (specifically, anarcho-capitalism) was a subset of the ranks of the adherents of libertarianism. Or did I miss out on something?

You either believe in moral rights or legal rights. Believers in the free market cannot believe in legal rights, because established legality cannot exist in a free market. So they believe in moral rights. This is where I stand.

I see. This goes consistently with the Austrian School's enunciation on the necessity of an absolutist ethics. But I thought that it would be possible to practice private law to enforce legality in the absence of a centralized entity that enforces the legal rights based on moral rights.

I would say "OH, you are evil for keeping the prices of water so high" But of course I wouldn't advocate any legal action. I would simply say that they are breaking moral rules which they should be obligated to follow. At the same time, they very well may be taking away my right to life by having the price so high. So using force against the water company would not be out of the question. Not because I don't think it's fair, but because they are holding back my ability of free will by potentially killing me.

Mmhhh, I never thought about it that way. Considering you are using their terms in order to take action against the water company (the use of their liberty threatening the liberty of those that rely on water. The denial of their rights, etc. I am actually most impressed )

And this would also be consistent with Christ's command on us to love (agapeos) one another. Which would be looking after the best interest of the group as a whole (To maintain in context the meaning of the word). And this water company and it's practices, are an evident threat to the survival and well being of the group (in this case, being society). So yeah, stopping them with force would be a warrantable action in this case (the how and after the "overthrow" of the companies practice would be the tricky part though. And admittedly, I would have no clue at the moment how I would restore competition here.)

Now the libertarian on the other hand would say that this violates out legal rights. They would say that our legal right to life is being violated, and should be dealt with. So a libertarian would typically resort to dealing with the issue by setting up a minimal government which protects our life, liberty, and property. But at the same time, they are violated our rights by trying to protect them with a coercive government.

Mmmhh, I guess it is reduced to which one is the moral imperative here based on a moral hierarchy. Because if there is clear irrefutable proof that this monopoly is a danger to the survival of the society, then it is better off with a government that is coercive, but it at least garuantees to protect the life, liberty, and property, and just to add these categories, the survival and well being of a society, preventing it from falling into chaos. At least, fullfills these in part (it would actually be a bit of a miracle if actually fullfilled all of those things to the letter now THAT I wouldn't mind paying my taxes for, hehe).

While I don't think this situation would ever be a problem, it is the cause of the divisions of anarchists like me and libertarians like sheepdog. Honestly, it's all an opinion. You are either a statists or anarchist. To remain consistent, I must disagree with any form of coercion. This applies to government and individuals. This does not allow for a legal system. But it does allow for voluntary society to set rules. I would support living in a society where there are regulations on businesses, as long as they had the option to opt out of society and had the ability to exercise their free will elsewhere.

Yeah, I did notice how these divisions plague a bit the integrity of the libertarian movements. Tis a shame really.

Darn, so the dichotamy of moral rules and legal rules is really that bad of a crux? I had no idea it was that divisive when it comes to societies with centralization, and those without it (or at least, a reduced form of it, since I am awares that history hasn't really produced a pure anarchical society like the one anarchists want).

Mmhh, your proposition is fair enough regarding the type of society you support, considering Libertarians hold individual freedom as the supreme value (admittedly, I dont hold freedom as the supreme value though, I consider love to occupy that spot, which has effectively branded me as a deviant to libertarian ethics ). Don't know if such thing will be possible in the future, unless there is reformatation of the World Order.


Funny how you mentioned the desire of ease of mobility between one society to another. Cuz I have also been toying with that idea myself these past 3 months ever since I learned about the Austrian School. The current World Order is based on governments forming regional blocks to achieve greater economic power and well being for their respective nations, aka, Globalization. I am student of International Relationships, and this is one of the subjects of great interest to me and a couple of my peers here in Guatemala.

I personally have been thinking of this possible type of World Order regarding granting ease of mobility to the individuals. In which case, I have an interest in reformatting the state to behave more or less like a business company, abiding by the laws of the market as any other business. Plus, in the model of the Patron-client relationship that we have in with God, where everyone of us who are Christians willingly joined this covenant, I have wanted to reformat the government to act in the role of the patron that we willingly submit to, offering it's services of protection, and whatever benefits or terms it might give, and we return pay our hard earned wages for it's services. All in all, a mutual agreement with the patron government, and we her willing clients. It's competion of course would be the governments of other nations. Wether it stays that way, or gradually converts to anarcho-capitalism, where the business entities become the basis of the nations, is of little interest to me (Since I fundamentally don't care how a society formats itself, all I am interested is in it's effective functionality). Of course, I try to carefully tread this path of individualism. Because I for one reject atomistic conceptions of human beings, which I consider a mutation of individualism, and unnatural to human beings. I am not very fond of some lines of individualistic thinking, especially of the kind that places the well being of individual peculiar needs at the expense of the well being of the group.

Of course, I haven't really formalized it, still being in the conceptual stages, and I am only merely a student with two years with much to learn still. God willing, I am hoping I am not making some huge mistake here that might jeoperdize the well being of people in the same way Marxists did. I truly pray to God to these matters and beg much of him to give me discernment over these matters.

Hope this helps!

It has, thank you very much for the commentary :)

[uberliber]

I am flattered good caballero.

Darn, guess Austrian Economics can't cover every single angle in my inquiries I guess. Mmhh, John Locke has always been a favorite political philosopher.



Oy, I must have missed reading this enunciation during my studies of Locke!



Oooh, I like the sound of that ^^. But what is the difference between the two here? I thought anarchism (specifically, anarcho-capitalism) was a subset of the ranks of the adherents of libertarianism. Or did I miss out on something?



I see. This goes consistently with the Austrian School's enunciation on the necessity of an absolutist ethics. But I thought that it would be possible to practice private law to enforce legality in the absence of a centralized entity that enforces the legal rights based on moral rights.



Mmhhh, I never thought about it that way. Considering you are using their terms in order to take action against the water company (the use of their liberty threatening the liberty of those that rely on water. The denial of their rights, etc. I am actually most impressed )

And this would also be consistent with Christ's command on us to love (agapeos) one another. Which would be looking after the best interest of the group as a whole (To maintain in context the meaning of the word). And this water company and it's practices, are an evident threat to the survival and well being of the group (in this case, being society). So yeah, stopping them with force would be a warrantable action in this case (the how and after the "overthrow" of the companies practice would be the tricky part though. And admittedly, I would have no clue at the moment how I would restore competition here.)



Mmmhh, I guess it is reduced to which one is the moral imperative here based on a moral hierarchy. Because if there is clear irrefutable proof that this monopoly is a danger to the survival of the society, then it is better off with a government that is coercive, but it at least garuantees to protect the life, liberty, and property, and just to add these categories, the survival and well being of a society, preventing it from falling into chaos. At least, fullfills these in part (it would actually be a bit of a miracle if actually fullfilled all of those things to the letter now THAT I wouldn't mind paying my taxes for, hehe).



Yeah, I did notice how these divisions plague a bit the integrity of the libertarian movements. Tis a shame really.

Darn, so the dichotamy of moral rules and legal rules is really that bad of a crux? I had no idea it was that divisive when it comes to societies with centralization, and those without it (or at least, a reduced form of it, since I am awares that history hasn't really produced a pure anarchical society like the one anarchists want).

Mmhh, your proposition is fair enough regarding the type of society you support, considering Libertarians hold individual freedom as the supreme value (admittedly, I dont hold freedom as the supreme value though, I consider love to occupy that spot, which has effectively branded me as a deviant to libertarian ethics ). Don't know if such thing will be possible in the future, unless there is reformatation of the World Order.


Funny how you mentioned the desire of ease of mobility between one society to another. Cuz I have also been toying with that idea myself these past 3 months ever since I learned about the Austrian School. The current World Order is based on governments forming regional blocks to achieve greater economic power and well being for their respective nations, aka, Globalization. I am student of International Relationships, and this is one of the subjects of great interest to me and a couple of my peers here in Guatemala.

I personally have been thinking of this possible type of World Order regarding granting ease of mobility to the individuals. In which case, I have an interest in reformatting the state to behave more or less like a business company, abiding by the laws of the market as any other business. Plus, in the model of the Patron-client relationship that we have in with God, where everyone of us who are Christians willingly joined this covenant, I have wanted to reformat the government to act in the role of the patron that we willingly submit to, offering it's services of protection, and whatever benefits or terms it might give, and we return pay our hard earned wages for it's services. All in all, a mutual agreement with the patron government, and we her willing clients. It's competion of course would be the governments of other nations. Wether it stays that way, or gradually converts to anarcho-capitalism, where the business entities become the basis of the nations, is of little interest to me (Since I fundamentally don't care how a society formats itself, all I am interested is in it's effective functionality). Of course, I try to carefully tread this path of individualism. Because I for one reject atomistic conceptions of human beings, which I consider a mutation of individualism, and unnatural to human beings. I am not very fond of some lines of individualistic thinking, especially of the kind that places the well being of individual peculiar needs at the expense of the well being of the group.

Of course, I haven't really formalized it, still being in the conceptual stages, and I am only merely a student with two years with much to learn still. God willing, I am hoping I am not making some huge mistake here that might jeoperdize the well being of people in the same way Marxists did. I truly pray to God to these matters and beg much of him to give me discernment over these matters.



It has, thank you very much for the commentary :)

Well, there is a misconception of the link between anarchists and libertarians. Libertarians believe in a state. Anarchists do not believe in a state, they believe coercion is not permissible in any form. It's true that libertarians favor small government, but the premise of that still shows that they favor government, the question is just to what extent. Anarchists will have none of this.

With regards to moral and legal rights, private law enforcement is permissible for anarchists. But if that is the case, there is no law governing people, but rather individuals setting limits of what people can do to them. It is simply a restriction on what people can do to do. For example, with pure anarchy, if I don't want someone to harm me, I will try to gather other individuals together and have us all pay for protection. Is this law? No. But it is us making sure our moral rights are protected.

A libertarian would just say that law enforcement is necessary to protect our legal rights. The problem is that this violates our rights which they are meant to protect by forcing us into the system. So the difference between us and libertarians is consistency.

Having a system enforce legal rights based on moral rights is a violation of our moral rights. Libertarians have no defense to this, and it is really where the divide takes place. Sadly.

Fortunately, God has blessed humans with reason. As an anarchist, I know what things should be like in theory. But at the same time, I am aware enough to the point where I am willing to compromise. I know that government will exist. As much as I don't want to, I accept it. Since that is the case, I usually accept the libertarian position in practicality. Not because I feel it's right, but because I feel that it is the best realistic alternative to the current state.

So basically, I'm a anarchist in theory, libertarian in reality. I think that this ability to reason has been very helpful to the libertarian movement. Prominent anarchists have fought for the libertarian position because they realize that we don't live in a story book. Lew Rockwell and Murray Rothbard are excellent examples of this. While they oppose the state entirely in theory, they would settle for minimal government in reality. That's why an anarchist like Lew Rockwell calls himself a libertarian and supported Ron Paul in the election. He understands that the libertarian movement is too important to shun because it is so much close to anarchist principles than our current system.

I saw that you were talking about the results of a coercive monopoly being better than having a harmful monopoly. If that is the case, then you have clearly taken a utilitarian approach to ethics. As a Christian, we should never do this. Why do you serve God? Is it because you will get to heaven and be better off? It shouldn't be. The reason should be because it is right to do so. When it comes to morality, we should care about the right principles rather than getting good results. This is the Christian way.

Also, you said you are not fond of some individualistic thought because it may hurt the group. As a hardcore individualistic person, I have some disagreements there. I want to help others. I want to give money to the poor, help people with healthcare, and basically embrace most liberal values. But at the same time, I want this to be done right. I want to help society as a whole so that the end results will be good. But I am not willing to violate our God-given morality to do so.

God gave us free will for a reason. He wanted us to have the choice to do good or evil. Letting other people suffer is an immoral thing to do. So God wants us to CHOOSE to help these people, and do the right thing. If we are forced to do these things, we are not exercising our free will to do good, but rather forced. And if we don't have the choice to do good or evil, then are we really committing a sin or doing a good thing? No. Morality cannot exist without free will. I want individuals to choose to do good, not use force to accomplish certain ends.

Also, only caring out yourself can be very helpful to the group. It is usually in our own best interest to help other's. Wealth of Nations expands on that concept very much and shows how free will breeds all mutually beneficial exchanges.

So to sum it up, free will is the purpose that God created us. He wanted us to choose to follow him and do good in this world. So I think it is very important that we keep this free will safe, and not have a coercive force making us do things.

[Andius]

Well, there is a misconception of the link between anarchists and libertarians. Libertarians believe in a state. Anarchists do not believe in a state, they believe coercion is not permissible in any form. It's true that libertarians favor small government, but the premise of that still shows that they favor government, the question is just to what extent. Anarchists will have none of this.

Point taken caballero. I will mind that from now on.

With regards to moral and legal rights, private law enforcement is permissible for anarchists. But if that is the case, there is no law governing people, but rather individuals setting limits of what people can do to them. It is simply a restriction on what people can do to do. For example, with pure anarchy, if I don't want someone to harm me, I will try to gather other individuals together and have us all pay for protection. Is this law? No. But it is us making sure our moral rights are protected.

Fair enough. No Civil Law governing a group people is definately something that I had always wondered if it can manifest itself in reality, only history will tell if the anarchist project becomes a success, hopefully with positive results. The restrictions that individuals set on themselves is fair enough. But would it still be necessary that those restrictions be in harmony to attempt to benefit each individual as a corporate whole? And yeah, the gathering of other individuals in your defense is an excellent idea. I just hope they posess enough common sense to come to your aid (since these individuals will be in function wether it be their personal obligation to come to your aid or not, a cultural variable, and in a manner of speaking, a variable in courage as well. But assuming all the people here are rational, I guess it's safe to assume that most of them will pay for a private security force, or organize a militia, assuming the one attempting to harm you doesn't have backup of his own).

A libertarian would just say that law enforcement is necessary to protect our legal rights. The problem is that this violates our rights which they are meant to protect by forcing us into the system. So the difference between us and libertarians is consistency.

also point taken caballero.

Having a system enforce legal rights based on moral rights is a violation of our moral rights. Libertarians have no defense to this, and it is really where the divide takes place. Sadly.

Mmhhh, another point taken.

In that case, the only thing. The only way I think that the Libertarians could actually make the case where the inconsistency would be tolerated, is if the Libertarian can actually demonstrate empirically that a society without legal rights is disfunctional and unsustainable.

Fortunately, God has blessed humans with reason. As an anarchist, I know what things should be like in theory. But at the same time, I am aware enough to the point where I am willing to compromise. I know that government will exist. As much as I don't want to, I accept it. Since that is the case, I usually accept the libertarian position in practicality. Not because I feel it's right, but because I feel that it is the best realistic alternative to the current state.

Agreed. God has endowed humanity with reason, but I can't say everyone one of them will adhere to our God-given reason, John Loftus is living proof .

So basically, I'm a anarchist in theory, libertarian in reality. I think that this ability to reason has been very helpful to the libertarian movement. Prominent anarchists have fought for the libertarian position because they realize that we don't live in a story book. Lew Rockwell and Murray Rothbard are excellent examples of this. While they oppose the state entirely in theory, they would settle for minimal government in reality. That's why an anarchist like Lew Rockwell calls himself a libertarian and supported Ron Paul in the election. He understands that the libertarian movement is too important to shun because it is so much close to anarchist principles than our current system.

Mmmhhh, this is almost the same manner why God tolerates divorce in us humans, despite the fact that is is something evil and dispicable in God's eyes. It's all a matter of moral hierarchy no?

I saw that you were talking about the results of a coercive monopoly being better than having a harmful monopoly. If that is the case, then you have clearly taken a utilitarian approach to ethics.

Oy, I had not noticed this. Thanks for the point out.

As a Christian, we should never do this. Why do you serve God? Is it because you will get to heaven and be better off? It shouldn't be. The reason should be because it is right to do so. When it comes to morality, we should care about the right principles rather than getting good results. This is the Christian way.

Agreed.

I guess what drove me to suggest the coercive monopoly, is this; I in principle adhere to Graded Absolutism in Ethics. (Here is where I picked up the concept http://www.equip.org/site/c.muI1LaMN...B2E7/DE198.htm). Because we live an in imperfect world, we are bound to run into situations where two moral principles will come into conflict (In this case, the principles in conflict are the Principle of Liberty vrs the Principal of Survival and Well Being). In my case, I choose the Principle of Survival and Well Being, because what good is Liberty if we are all malnutritioned and dying, all because we refused to intervene in the water company's so called right to liberty to adjust the prices to high proportions. In the same fashion that many Germans hid Jewish refugees by lying to the NAZI authorities, effectively misleading them, the Israelites slaughtering Ammonite raiders in their lands in the times of Judges, and even God tolerating the way King David and his men transported the Ark back to Jerusalem (they did not follow the orders as prescribed by God in carrying the ark, such as covering it in a mantle, check it for yourself http://www.christian-thinktank.com/gutripper.html might need to search it a bit, I can't pinpoint the starting section, try typing "Ark of the Covenant in your Word Search in your browser). (Pardon if the the examples I use where a bit crass).

I hope this reveals a bit the background I have regarding ethics. My intent was not to be utilitarian, but to look after the greater good.

Also, you said you are not fond of some individualistic thought because it may hurt the group. As a hardcore individualistic person, I have some disagreements there. I want to help others. I want to give money to the poor, help people with healthcare, and basically embrace most liberal values. But at the same time, I want this to be done right. I want to help society as a whole so that the end results will be good. But I am not willing to violate our God-given morality to do so.

Mmhhh, that's actually an individualism that I approve and I myself adhere.

Mmmhh, I guess to clear things up and to avoid misunderstandings, I am not entirely opposed to to individualism itself, just certain types of it. For example; The purpose of individualism is to give recognition and dignity to the individual person. And that's actually pretty good.

At the moment, I cannot post on the types of individualism that I am opposed off, since my time is a bit limited and it is pretty extensice. If you'd like, I can explain myself on those details in a pm, a thread, or right here.

God gave us free will for a reason. He wanted us to have the choice to do good or evil. Letting other people suffer is an immoral thing to do. So God wants us to CHOOSE to help these people, and do the right thing. If we are forced to do these things, we are not exercising our free will to do good, but rather forced. And if we don't have the choice to do good or evil, then are we really committing a sin or doing a good thing? No. Morality cannot exist without free will. I want individuals to choose to do good, not use force to accomplish certain ends.

Amen to that. Free Will is a prerequisite for us human beings to do good. When it comes to Christian Liberty of the type found in Romans 6, Jesus sacrifice at the cross effectively freed us from sin and the penalty that the law required, which was death. However, I am also mindfull that the ancients did not hold our concept of freedom, which is thought off as merely being capable of doing something without some sort of coercion, but understood as the capacity to serve to any patron of their choice. And staying true to the Bible in my case involves not inserting anachronisms in it.

Also, only caring out yourself can be very helpful to the group. It is usually in our own best interest to help other's. Wealth of Nations expands on that concept very much and shows how free will breeds all mutually beneficial exchanges.

Can't argue with that. Because we live in an abundant goods world, such self interest is beneficial when applied in capitalistic systems, I agree with you there. However, I am still mindfull though that in the limited goods world that the people in the Bible found themselves in, such form of thing was a deviance that could have dire consequence to the survival of their respective societies (and these are peoples that practically lived on the edge of a social collapse all the time). I don't consider self interest inherently wrong, but I will have a problem when that self interest converts into rampart greediness (Which would also include denying one's workers their rightfull wages).

So to sum it up, free will is the purpose that God created us. He wanted us to choose to follow him and do good in this world. So I think it is very important that we keep this free will safe, and not have a coercive force making us do things.

On that I agree of course . Just to rip off a quote from Wing Commander IV :P "Eternal Vigilance is the price of Freedom"


May you have a Merry Christmas Uber, you have been most informative, and have been learning much.

[uberliber]

Great talking to you! Have a Merry Christmas and God bless! PM me if you ever want to chat again

[Andius]

Great talking to you! Have a Merry Christmas and God bless! PM me if you ever want to chat again

Will do

And we can safely conclude here, considering I kinda derailed off the topic. I better stop before Palinator with the sign.

Expect some pms in the future amigo.

[Denonymous]

First of all, no, Ireland is not more free. Look at the rankings. The production capacity of the US is way beyond anyone else right now...WAY beyond. And we have much less regulations and lower taxation than Ireland.

I will gladly take that bet that a government controlled economy could be more successful than a free market. We can either bet, or discuss it. What argument do you give?

Mine is this: The free market consists of nothing more than individuals participating in mutually beneficial exchanges, benefiting all parties at all time. The only things that are produced are goods that are in demand, so value is always created.

The value of the currency would be in a constant state of incline because more wealth would be created, but not more fiat money. There would be maximum efficiency, incentive, competition, and success.

How does a government controlled economy excel over the free market?

Sorry I got into this discussion late, but I just joined Tweb!

Preface to my answers here: I'm a 20-year banker, which really only means I have a lot of experience that might be relevant, or it might not! The fact is, NO ONE has experienced the type of economic crises we face right now.

In theory, I would agree with your argument for free markets. Supply and demand equal out over time and determine general price and availability of goods. Seller and purchaser negotiate prices that provide the seller an acceptable profit and with value provided to the purchaser, etc, etc, etc. Sounds logical, and would work well ASSUMING PEOPLE ACT WITH LOGIC, based not only on short-term needs, but long-term as well. Our current economy is driven by the capital provided to public companies via the stock market. Logic would dictate that investors would buy stock in companies that have a strong history of performance, or at least a viable product and business plan, and a better than average chance of future success. However, the stock market is driven more by short-term gratification of the investors (GREED) and investor sentiment (currently a state of fear) which is driven more by the actions of other investors, rather than the quality of the underlying investment. This sets up the capital markets for wild swings based on greed and emotion, not logic, and that is EXACTLY what we are seeing now.

Basically, the availability of capital necessary for companies, employers, employees, contractors, etc, to operate and grow is based on a system that has thrown logic and ethics out the window. The housing/mortgage "bubble" that has started this downward spiral is a perfect example. Mortgage giants Fannie Mae and Freddie Mac were originally created to purchase mortgages from banks so that money for more mortgages would be provided and Americans could more readily achieve home ownership (banks literally "run out" of money to lend when loans equal deposits). In the last decade, mortgages available to sell to these agents were instead "packaged" together and interests in the packages were sold on the market for an expected return (Mortgage-backed securities). This flooded even more capital into the mortgage lending business, making home mortgages more affordable. Cheaper money led to more demand for housing, with a resulting increase in prices. Greedy mortgage brokers (and home buyers) gobbled up adjustable rate mortgages so they could afford large homes with little regard to the possible rate increases. Rates rise, defaults on mortgages rise, MBS lose their value, money comes out of the system at an alarming rate, mortgages become harder to obtain, home values decline massively, construction declines (which leaves many workers unable to pay house payments, buy cars, spend money, etc.) and all this ripples through the economy. Investors in many foreign nations invested heavily in MBS, which has led to a global market decline. And all this because a relatively new, market-driven, method of providing capital to the mortgage markets was fundamentally flawed (based on the whims of the market, not on the probability of loan repayment), and driven by GREED. Research the fall of Washington Mutual and Countrywide. Previous CEO's received huge salaries and bonuses for driving their companies in the ground, and damaging the global economy in the process.

Sorry for the long rant. I could definitely go on much longer. As a banker, I've definitely always been against government regulation, but the fact is this global disaster could have been averted had any of our regulatory agencies been doing their jobs (look at the Bernie Madoff scandal). Greed really can't be good for a free market, but logical self-interest is. It's just that those driving our economy are truly greedy. The state of our current economic situation truly saddens me, because it has shown a really ugly side of human nature. I pray our nation learns from it, but I fear we won't.

[Denonymous]

I read an article that mentioned how the increased debt from gov bailouts of things like investment banks can hurt the financial situation in the country right now because of the increased risk in those companies because they will have more debt instead of more equity. According to another article, one thing that S. Korea is doing or may do to protect itself from global fallout right now is to give tax cuts to investors. Could tax cuts for people who buy stocks right now be a beneficial thing for our economy?

OK, back to the original questions. Short answer: No one really knows for sure! We are living at the dawn of numerous economic developments (global economies, instant access to the markets/information via the web, sophisticated (though flawed) financial instruments and investments never before offered, lagging (or non-existent) regulation of those new instruments (credit-default swaps? Hello, AIG??). These factors make it impossible to rely on the past to predict the future, which makes it all a coin-toss. That's comforting,huh??

My best guesses: On the debt/equity question, I would agree with the article that increased debt always affects the value of a company and it's associated stock. However, having additional debt beats going out of business. The real question is how likely it is that the debt to the gov't. (us) will be repaid according to terms, and I certainly don't know the answer to that one. Hopefully the majority will be repaid timely, because the government taking over active ownership of corporations is a recipe for disaster. But then again, we're already in a disaster, so maybe it won't be too bad....relatively.

On the question of tax cuts for investors, I think that's not a bad idea. How that idea might work out is less clear. It's highly likely it would cause more capital to be injected into the markets, which is a good thing in our current situation. However, on a long-term basis, we're propping-up the capital markets without improving the fundamentals it operates (or should operate) on, namely the underlying performance of the companies issuing stock. If the tax cut is removed in the future, we'd face a similar outflow of capital again. I think their was way too much capital in the equity markets anyway, which necessarily caused inflated stock prices. Market speculation is a HUGE problem. Look at the futures market. The price of gasoline isn't driven by supply and demand; it's driven by the price of oil on the futures market, which is pretty much a sophisticated form of gambling (in my opinion). Plus, the tax cuts will be going to those WHO CAN AFFORD TO INVEST IN THE MARKETS, meaning the richest people will be getting the most benefit. This will just lead to more of the lopsided distribution of wealth. The rich keep getting richer and poor get poorer, and the middle-class is facing extinction. The tax cuts could end up working as poorly as the capital the Fed is feeding banks and investment banks. The theory was pretty sound: provide additional capital to banks so they can continue to make loans and the economy can keep moving (businesses require financing for facilities expansion, account receivable financing, people need financing to purchase cars, homes, big TV's, etc). Our economy is largely based on credit. However, banks are borrowing the capital from the Fed (it's cheap, so it makes sense) AND THEY'RE JUST KEEPING IT. Banks continue to keep credit very tight, contributing to strangling our economy. The capital injection made sense in theory, it's just not working because it relied on banks/bankers/owners to do the right thing, instead of hording capital for self-preservation.

Anyway, I wish I had better ideas how to actually fix this. I really feel it has to be a "ground-up" approach, though. The fundamentals our economic system are based on are broken, particularly regarding the availability of capital.