REAL WORLD EVENT DISCUSSIONS

Limits of State Power

POSTED BY: SERGEANTX
UPDATED: Monday, May 25, 2009 08:03
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Monday, May 18, 2009 11:09 AM

MAGONSDAUGHTER


Quote:

Originally posted by SergeantX:
Quote:

Originally posted by Magonsdaughter:
So in other words, Serg, I want government to have less control over personal decisions that I make that affect myself..who I marry or have relationships with, whether I carry a child to term or not, whether to smoke or take drugs. I think we should be responsible for ourselves and our own families, but I think the provision of a good healthcare and education system will benefit everyone. I think there should be a welfare net, but some mutual obligation for using it.



Ahhh... but do you see how these two aims conflict? Setting up government in a caretaker role gives them a vested interest, and a powerful incentive, for exerting more control over society. The healhcare example is good case in point. If we're all responsible for our own health care, it's acceptable to take a live and let live approach to personal decisions affecting health - like dangerous hobbies, tobacco/alcohol/drug use or unhealthy diets and such.

But when we declare health care to be a right, that must be supplied gratis by the community, suddenly there's a compelling reason to control our personal decisions - since personal health is no longer a private matter, and very much the business of the state.


You are quite right, serg. It is a conflict. I also see that the conflict is there with private insurance as well, and the capacity to sue when things go wrong, hence laws get made to reduce the chances of payouts being made.

Regardless of who pays (public monies vs private monies), people have become very poor at taking responsibility for their own decisions regarding their lives, and seek to blame and receive due compensation when things go wrong.

You and I have had this conversation many times before, serg. You are an idealist, I am not. I think the conflict exists but we can do the best we can, and sometimes it can work okay. An example is drugs, if government can actually legalise and then tax drugs, it can commit the money obtained to the resulting need for treatment and rehab that will inevitable arise from the increase in supply (a bit like the casino model we have here)

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Monday, May 18, 2009 12:18 PM

SERGEANTX


Quote:

Originally posted by Magonsdaughter:
I also see that the conflict is there with private insurance as well, and the capacity to sue when things go wrong, hence laws get made to reduce the chances of payouts being made.



But private insurance companies don't have the ability to control people themselves. They can only do that by manipulating government - and we need to put a stop to that.

Quote:

Regardless of who pays (public monies vs private monies), people have become very poor at taking responsibility for their own decisions regarding their lives, and seek to blame and receive due compensation when things go wrong.


Are you saying we should indulge this habit? Most of the safety net programs do just that. In response, we crank up the nanny-state to force them to behave responsibly (as the state defines it). Not only is the whole cycle unnecessary, but it trashes the concept of constitutionally limited government in the process.

Quote:

You and I have had this conversation many times before, serg. You are an idealist, I am not. I think the conflict exists but we can do the best we can, and sometimes it can work okay.


Honestly, that assumption seems far more idealistic to me. The pragmatic reality is that such policies will expand caretaker government and diminish personal responsibility.

SergeantX

"It's cold and it's a broken hallelujah"

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Monday, May 18, 2009 1:59 PM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by rue:
Geezer

"From what I've been reading of the government's involvement with GM and Chrysler reorganization plans ..."

Cites, references please.



Well, I had cited sources in other threads, but since you insist, here's some more.

"Treasury advisers are handling the effort and keeping GM and Chrysler informed of the steps through back-door channels, said the people familiar with the matter. The interplay between the government, auto makers and the markets is proving to be complicated."
http://online.wsj.com/article/SB123535613910745405.html

"A group of salaried retirees met with the Treasury Department a senior adviser on the auto task force Friday morning in a bid to make sure salaried workers weren't forgotten in negotiations on the fate of GM and Chrysler."
http://news.ino.com/headlines/?newsid=689780419790


For a nice eample of threat and response, see the next two.

"GM, for example, is under pressure from Wall Street and the Obama administration to strip 2,700 stores from its remaining 6,273 dealerships by 2010."
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/15/AR2009
051501341_2.html



"GM is hoping that by reducing competition between its dealers, it can raise prices and increase sales at each remaining outlet, shrinking margins and boosting profits. It's told the Obama administration it plans to cut all but 3,600 dealerships. Many of the remaining cuts will be dealers trading exclusively in the Saturn, Saab, Hummer and Pontiac brands GM intends to put to pasture."
http://www.newser.com/story/59117/gm-to-close-1100-dealerships.html

This is the kind of stuff I've been seeing. Treasury advisors all through the process, and the Administration pressuring for their policy to be adopted.







"Keep the Shiny side up"

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Monday, May 18, 2009 2:24 PM

JKIDDO


Quote:

But private insurance companies don't have the ability to control people themselves.
You're assuming that their ability to control people is based on competition, that is, if one insurance company sets onerous requirements then the customer can always choose another. That unfortunately is not the case. Most people get their insurance through work, which offers only one or two plans. In addition, health insurance carriers are getting bigger and bigger in their never-ending quest for profit
Quote:


Health insurance industry consolidation a potential threat to providers
April 8, 2009

The nation's largest health insurance companies are poised to consolidate, although Aetna and UnitedHealth Group, among others, have not confirmed wide-held suspicions, reports the Chicago Tribune. Consolidation could provide already large players with economies of scale, and significant and arguably overwhelming leverage toward establishing reimbursement rates with doctors and hospitals. UnitedHealth is rumored to be interested in acquiring Coventry Health Care, while Aetna is reportedly keen to buy Humana. At the same time, smaller yet significant players such as Health Net are looking to divest themselves of some of their members that could be attractive to larger firms.

"In general, hospitals do worry if the super-insurers get bigger," said Melinda Hatton, general counsel for the American Hospital Association. The American Medical Association reports that one in six metropolitan areas in more than 300 U.S. markets is dominated by a single health insurer that covers at least 70 percent of patients enrolled in HMOs or PPOs.

"It becomes difficult for patients to have choice and doctors to get their patients the care that is needed because a monopoly has been created," Dr. James Rohack, a Texas cardiologist and AMA president-elect said. "Patients don't have as many other options."


www.fiercehealthcare.com/story/health-insurance-industry-consolidation
-potential-threat-providers/2009-04-08?utm_medium=rss&utm_source=rss&cmp-id=OTC-RSS-FH0


And while you're worried about theoretical intrusion into your life by government, the business is far ahead of you....
Quote:

The Health Coach/Insurance Company – Employer plan to uses devices and phones for employees to prove their physical activity. So here we are thinking that monitors are only for seniors and children, well think again as here comes the health coach, reduced premiums for participating and showing proof of what you are doing, electronically. The Muve Gruve Device Measures your Inactivity –

... This device will even keep track of your sleep too, so how far will devices go?
The Human Audit Trail to automatically track your fitness and sleep and a few other things…It does sound a lot like big brother. The map is fine and pretty standard with many other sites and plans, but the human audit trail is still a bit scary, but if you go along, you earn a few dollars, so there’s an incentive to go along with the electronic umbilical cord and everybody gets to be friends with their running partners (in the video on the site). Many employers who still provide insurance are now requiring participation in their wellness programs for coverage. Risk management for the employer might reduce the rates if employees electronically connect to the audit trail.


http://ducknetweb.blogspot.com/2009/04/health-coachinsurance-company-e
mployer.html

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Monday, May 18, 2009 3:04 PM

SERGEANTX


Quote:

Originally posted by JKiddo:
You're assuming that their ability to control people is based on competition



Hmmm... no, I'm not.

Quote:


Health insurance industry consolidation a potential threat to providers
April 8, 2009

The nation's largest health insurance companies are poised to consolidate, although Aetna and UnitedHealth Group, among others, have not confirmed wide-held suspicions, reports the Chicago Tribune.


Yeah... the consolidation trend is bad news all around.

Quote:

And while you're worried about theoretical intrusion into your life by government, the business is far ahead of you....


So, that makes it ok for the government?? Not clear what position you're taking here.

It's funny how, whenever anyone complains about government intrusion, big-government fans start harping about the evils of corporate excess - as though that justifies the government doing it too. How's about neither?

SergeantX

"It's cold and it's a broken hallelujah"

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Monday, May 18, 2009 3:47 PM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by SergeantX:
It's funny how, whenever anyone complains about government intrusion, big-government fans start harping about the evils of corporate excess - as though that justifies the government doing it too. How's about neither?



What's really funny is how the same folk who are absolutely horrified at the government when it goes to war or tries to maintain national security are the ones who would absolutely trust it to perfectly run national health care or the national economy.

"Keep the Shiny side up"

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Monday, May 18, 2009 5:59 PM

CITIZEN


Quote:

Originally posted by JKiddo:
it is if the debt is based on a bubble, like a real estate or stock bubble. If I borrow $100,000 against a house which is valued at $500,000 and on which I owe a $400,000 mortgage, and the value of the house drops to $400,000, that $100,000 which I spent no longer exists.


No, the house is no longer worth $500,000, but the money still exists. It's in the bank account of the person you bought the house from. The only end effect is that YOU no longer have that money, either in capitol or in assets, but the money still exists somewhere. If you had a $400,000 mortgage, someone gave you $400,000 of real money, which you gave to someone else for the asset. That the asset has subsequently devalued, doesn't mean money has evaporated.

That $100,000 still exists, you can check the bank accounts of the people you paid to confirm.
Quote:

Banks routinely lend out money which does not exist. They lend out based on their capital (which is "real money"- typically about 5% of bank value) plus their assets- ie performing loans. If those assets should go under that money has in effect evaporated. I know its a screwed system, but that's the way it currently works.

You're talking about leverage, and no the money is real. The banks can't just make money up on the spot, what sort of economic system could we possibly have where money can be made up? If a private bank can do it, why not a private citizen? "No I don't like only having $20 in my account, I think I'm going to add a few zeros to the end of that number." The value of money would be meaningless, in fact non-existent. In fact everywhere would be like Zimbabwe if what you said were true.

No banks don't lend imaginary money. Through leverage banks lend money they themselves have borrowed from other people, but at no point is that money imaginary. It is real and it comes from somewhere, always.

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Monday, May 18, 2009 7:21 PM

JKIDDO


Quote:

what sort of economic system could we possibly have where money can be made up?
It's the one we have today. Speculative value forms an alternate currency with all the functions. The only difference is that the government has less control of it.

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Monday, May 18, 2009 7:26 PM

JKIDDO


Quote:

It's funny how, whenever anyone complains about government intrusion, big-government fans start harping about the evils of corporate excess - as though that justifies the government doing it too. How's about neither?
Yes, now about neither? But you seem to always harp on the evils of government, and only when your nose is rubbed in it will you look at the mess corporations have made. Mostly, you seem to trust business. Haven't you noticed each business exists to maximize profit and take over the market? Where does that leave you?
Quote:

What's really funny is how the same folk who are absolutely horrified at the government when it goes to war or tries to maintain national security are the ones who would absolutely trust it to perfectly run national health care or the national economy.
It seems to work reasonably well in other countries- certainly better than in America.

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Monday, May 18, 2009 7:31 PM

CITIZEN


Quote:

Originally posted by JKiddo:
It's the one we have today. Speculative value forms an alternate currency with all the functions. The only difference is that the government has less control of it.


No, you're getting confused between speculation, futures markets, and real money. Debt isn't inventing money, it people who have money, but don't need it, giving it too people who don't have money but need it, on the promise it'll be paid back, with a further payment for the service (interest) at a later date. Try it out, go into a shop and say "I'd like to buy that, I'm betting I'll have the money next week". Even when you buy things hire purchase, or on instalments, it doesn't work that way.

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Monday, May 18, 2009 7:32 PM

SERGEANTX


Quote:

Originally posted by JKiddo:
But you seem to always harp on the evils of government, and only when your nose is rubbed in it will you look at the mess corporations have made.


Uh.. well, that's just not the case. Perhaps you're mixing me up with someone else.

SergeantX

"It's cold and it's a broken hallelujah"

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Tuesday, May 19, 2009 1:35 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Originally posted by Geezer:
Quote:

Originally posted by SergeantX:
It's funny how, whenever anyone complains about government intrusion, big-government fans start harping about the evils of corporate excess - as though that justifies the government doing it too. How's about neither?



What's really funny is how the same folk who are absolutely horrified at the government when it goes to war or tries to maintain national security are the ones who would absolutely trust it to perfectly run national health care or the national economy.

"Keep the Shiny side up"



Of course, that cuts both ways - It's really funny how the same folks who are so distrustful of government when it comes to regulation and oversight are the same ones who absolutely trusted it when it came to Iraq, the Global War on Terror, the 9/11 Commission, etc., and insisted that the government was 100% right.

Mike

Build a man a fire and he'll be warm for a day...
Set a man on fire and he'll be warm for the rest of his life.

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Tuesday, May 19, 2009 1:52 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


One thing I notice every time this argument gets going:

Those opposed to universal health care always seem to assume that if you give government MORE control and oversight (not "total" control, but *more* control) over the insurance industry, it ALWAYS gets characterized as letting the government take over the entire insurance industry. And just as often, the argument against national health care goes along the lines of "If the government gets into health care, private practice doctors will be forced out of business."

It's as if people think that having a BASIC MINIMUM STANDARD of healthcare is automatically and immediately jumping us into a 100% socialist system of government.

Having a basic minimum level of care for everybody doesn't preclude ANYBODY from buying supplemental insurance on their own dime, or from upgrading their coverage, lowering their copay, etc. Think of your auto insurance: most states require you to carry a minimum amount of coverage, but none of them limit the MAXIMUM amount of insurance you can buy if you want to. And if nationalized universal health care would drive small private practices out of business, then why do independent paint and body shops still exist?

It seems to me that we should be able, in this country, to have a basic minimum level of health care available to everybody, regardless of their net worth. It doesn't have to be the best health care in the world (apparently our Congresscritters reserve that right for themselves, and bill us for it), but shouldn't it, as a source of national pride if nothing else, be at least better than the system in place in Cuba? We harp on all day long about how much better a nation we are than "those gutless commies", yet they offer the average citizen there a level of health care that we can only dream of.

Does that bother anyone else, or is it just me?

Mike

Build a man a fire and he'll be warm for a day...
Set a man on fire and he'll be warm for the rest of his life.

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Tuesday, May 19, 2009 2:55 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by Kwicko:
One thing I notice every time this argument gets going:

Those opposed to universal health care always seem to assume that if you give government MORE control and oversight (not "total" control, but *more* control) over the insurance industry, it ALWAYS gets characterized as letting the government take over the entire insurance industry.



I was listening to the Diane Rehm Show on single-payer healthcare yesterday (05/18). One of the guests was Senator Bernie Sanders of Vermont. He was proposing exactly that; letting the government take over the entire health insurance industry. When asked what would happen to the insurance industry, he said it'd go away and the employees would need to be retrained for other jobs.

There's a link to the recorded broadcast here: http://wamu.org/programs/dr/09/05/18.php#26151

"Keep the Shiny side up"

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Tuesday, May 19, 2009 3:24 AM

JKIDDO


Quote:

Try it out, go into a shop and say "I'd like to buy that, I'm betting I'll have the money next week"
That is EXACTLY what happens. I buy it on credit with the idea that I'll have the money next month. And since people DON'T have the money, a lot of credit cards users go into default.

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Tuesday, May 19, 2009 3:41 AM

CITIZEN


Quote:

Originally posted by JKiddo:
Quote:

Try it out, go into a shop and say "I'd like to buy that, I'm betting I'll have the money next week"
That is EXACTLY what happens. I buy it on credit with the idea that I'll have the money next month. And since people DON'T have the money, a lot of credit cards users go into default.


But there's no fake money there. YOU don't have the money, but the credit card company DOES. The shop receives real money. If you default on your informal loan, the credit company then takes steps to get back the real money that really exists that they handed over before. The money hasn't been invented.

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Tuesday, May 19, 2009 3:46 AM

JKIDDO


Quote:

I was listening to the Diane Rehm Show on single-payer healthcare yesterday (05/18). One of the guests was Senator Bernie Sanders of Vermont. He was proposing exactly that; letting the government take over the entire health insurance industry. When asked what would happen to the insurance industry, he said it'd go away and the employees would need to be retrained for other jobs.
My personal opinion on that is: GOOD. These people- particularly the executives who tied up insurance money into venture capital- represent an parasitic drain on the economy which affected every industry paying into the system. They got people in a "Pay or die" stranglehold, and instead of making the insurance industry more efficient, they made it more profitable (big difference) through denial of coverage and denial of service. The move towards single-payer health care is a legitimate reaction to the screwed -up nightmare we have now. If the health insurances hadn't been so overwhelmingly greedy, if the market had functioned properly for the past five decades, nobody would be looking for an alternative.

So. speaking of alternatives... what are yours? You're very clear about what you don't want. but what do YOU suggest as options? Please don't say "more of the same". We've had "more of the same" for 50 years.

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Tuesday, May 19, 2009 3:48 AM

JKIDDO


dbl

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Tuesday, May 19, 2009 3:49 AM

JKIDDO


Quote:

But there's no fake money there. YOU don't have the money, but the credit card company DOES. The shop receives real money. If you default on your informal loan, the credit company then takes steps to get back the real money that really exists that they handed over before. The money hasn't been invented.
Let's extend this to houses, because credit cards are unsecured debt. So, the lender moves to get the money back, which in this case is backed by real estate values. Only now, they are owed more money than the house is "worth". Now what?

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Tuesday, May 19, 2009 4:22 AM

SERGEANTX


Quote:

Originally posted by Kwicko:
Those opposed to universal health care always seem to assume that if you give government MORE control and oversight (not "total" control, but *more* control) over the insurance industry, it ALWAYS gets characterized as letting the government take over the entire insurance industry.



From my perspective, it's the "oversight" that's killing us. The most dangerous aspect of our current situation is the trend toward corporatism and national regulatory schemes only fuel that fire. As I've stated in other threads, if we insist on making government responsible for our health care, then we should provide it as a straight up government service and avoid the "partnership" between business and government.

Quote:

... but shouldn't it, as a source of national pride if nothing else, be at least better than the system in place in Cuba?


Well, no? The thing is, I don't want caretaker government. So, if other nations do it better than us, I'm not particularly bothered. I AM bothered that we've allowed a cartel to control health care and essentially hold us hostage - that we've allowed corporations to hijack our government and use it to consolidate their control of our health care.

SergeantX

"It's a cold and it's a broken hallelujah"

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Tuesday, May 19, 2009 5:22 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

I AM bothered that we've allowed a cartel to control health care and essentially hold us hostage - that we've allowed corporations to hijack our government and use it to consolidate their control of our health care.
Cites and quote please.

Most peeps who claim that our health-care system is screwed due to "government regulations" typically can't cite even ONE regulation to back that claim. I've been thru this before: Hospitals, labs and facilities are accredited by a private non-profit (The Joint Commission), doctors, nurses and therapists are licensed by private Boards (confusingly called State Boards, but not run by states at all), insurance companies are marginally controlled by individual states (for fraud and breach of contract), malpractice insurance is controlled by- you guessed it- the insurance industry, the medical schools are controlled by the AMA, and so forth. As far as I can tell, this is a mostly industry-regulated industry. Unless you provide SOME data to back up that oft-told story (it's all the government's fault) I'm gonna consider it an oft-told story and nothing more.

Also, I would like to know what alternatives you propose. That derives partly from your response to the first question. IF you find that certain laws, regulations etc. have a significant impact on health insurance performance, it should be an easy fix to suggest law changes which would help. I'm a little tired of people handwaving with generalized, ideology-based concpets which have little basis in fact. So be specific. Look at where the rubber meets the road. Enlighten us.

----------------------
We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy

Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy

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Tuesday, May 19, 2009 5:40 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Sarge wrote:

From my perspective, it's the "oversight" that's killing us. The most dangerous aspect of our current situation is the trend toward corporatism and national regulatory schemes only fuel that fire.



If you can figure out how to achieve your seemingly-contradictory goals, please let us know how. You're arguing AGAINST government oversight, yet also AGAINST corporatism. How do you curb corporatism without oversight? In other words, if you remove all government oversight (which seems to be the goal, going by everything you've posted), won't the corporations run wild and roughshod over us?

On another note, how do you feel about Tort Reform? Are you in favor of that kind of government oversight (limiting punitive and actual damage payment caps by government mandate), or do you prefer to let juries decide what is fair compensation for corporations gone wild?

I'm trying to figure out where it is you're coming from.

Oh, and Geezer: Because Bernie Sanders said it, do you take it as given that it's going to happen, or that it's got widespread support?

Mike

Build a man a fire and he'll be warm for a day...
Set a man on fire and he'll be warm for the rest of his life.

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Tuesday, May 19, 2009 5:42 AM

RUE

I have a vote and I'm not afraid to use it!


When the Haileys sued Blue Shield after their 2001 rescission, the practice was largely hidden. Since then, the state's (California) five largest insurers have been shown to have engaged in systematic efforts to rescind individual policyholders AFTER expensive medical care.

Several insurers set up departments devoted to rescission. They pulled members' medical records from as far back as 20 years and scoured them for details not disclosed on their applications for coverage. Those discrepancies were used to justify rescissions.

In many cases, individuals were rescinded for omissions that had nothing to do with the illness or injury that triggered the investigation. And, in many cases, the individuals contended, they were confused by the application or unaware of a notation that their insurer found in an old medical chart. (Do you know ALL the notations and notes in ALL your medical charts and records ?)

Rescinding thousands of policyholders a year enabled California insurers to save millions of dollars. Health Net Inc., for example, figured that it avoided $35 million in medical expenses over six years. (A 'savings' I might note that doesn't result in lower premiums, but in increased profits.) The loss of coverage left individuals awash in medical bills and without healthcare when they needed it most, and it left many hospitals and physicians with uncollectable debt.

The disclosure of systematic rescissions triggered a firestorm of criticism and scrutiny. Lawmakers complained loudly, and regulators opened investigations.

In Blue Shield's case, Insurance Commissioner Steve Poizner in 2007 accused its Life & Health Insurance Co. unit of 1,262 "serious violations" over a four-year period that, he said, "completely undermine the public's trust in our healthcare system and are potentially devastating to patients." Poizner proposed $12.6 million in fines but ultimately declined to impose any.

Blue Shield became suspicious in February 2001 that the Haileys had withheld information, the appellate court noted. Steve's car accident occurred in March. But Blue Shield did not notify the couple of its rescission until June. By then, Steve had run up more than $400,000 in medical charges.

Had Blue Shield notified the couple more promptly, the Haileys argue, Cindy would have had the chance to get coverage through her employer before the accident, avoiding the dispute, financial ruin for the family and delays in his care.



***************************************************************

Fuck them. They need to be cut out of the game.


ETA: you and your family are one serious accident or illness away from being pay-as-you-go bankrupt. And then there is always old age, which is expensive. Maybe we just need to encourage the old, injured and sick people to take a walk on the freeway, eh ? (There being no handy ice-floes available.)

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Tuesday, May 19, 2009 5:50 AM

SIGNYM

I believe in solving problems, not sharing them.


RUE: Agreed.

GEEZER, SARGE: still waiitng for your proposed alternatives.

----------------------
We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy

Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy

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Tuesday, May 19, 2009 6:11 AM

SIGNYM

I believe in solving problems, not sharing them.


Apparently neither of you have come up with a good alternative yet. Keep at it.



----------------------
We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy

Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy

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Tuesday, May 19, 2009 6:28 AM

CITIZEN


Quote:

Originally posted by JKiddo:
Let's extend this to houses, because credit cards are unsecured debt. So, the lender moves to get the money back, which in this case is backed by real estate values. Only now, they are owed more money than the house is "worth". Now what?


They might not get their money back, but that doesn't mean the money has ceased to exist. Lets assume, for the sake of simplicity and argument, that the person you bought the house from just put the money straight into their savings account, and haven't touched it.

Lets say this house is up for $500,000, you have $100,000 in the bank, so you need an 80% mortgage, $400,000. You borrow that from a mortgage lender, and it's transferred into your account. You now have $500,000 of real, not made up, not future money in your account. If you went to the bank and said "I want to close my account" you'd get $500,000 of crisp new bills, it's tangible real now money.

You buy the house, you hand over the $500,000 and it goes into the sellers savings account. Two weeks later "implausible terrible scenario #4" occurs, your house loses fifty percent of it's value, and you lose your job and can't pay the mortgage. The bank forecloses, but can only get $250,000 for the house on the open market.

"Ah" you say, "that means $250,000 has just vanished into thin air!"

No. Take a look at the Sellers savings account, it still says "$500,000". The money wasn't made up, and it hasn't vanished. It's just in a place that isn't so great for either you or the bank. All the money that was ever in the system, is still in the system, it's just some assets aren't worth as much as they used to be. But the amount of capitol in the system hasn't changed.

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Tuesday, May 19, 2009 7:47 AM

RUE

I have a vote and I'm not afraid to use it!


It's true that somebody walks away with the cash. The problem is the banks and homeowners. The banks loan money they do not have - they just assume it will come in later ... and then they end up with an asset which is not worth the loan they made. And the homeowner loses whatever equity they have in the house.

It's exactly the same as when the stock market or an individual stock drops. The people who hold stock at the moment lose. But somebody walked away with the cash.

But in the case of loans, the banks created new money and dropped it into the system.

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Tuesday, May 19, 2009 8:00 AM

JKIDDO


Quote:

You buy the house, you hand over the $500,000 and it goes into the sellers savings account. Two weeks later "implausible terrible scenario #4" occurs, your house loses fifty percent of it's value, and you lose your job and can't pay the mortgage. The bank forecloses, but can only get $250,000 for the house on the open market.

"Ah" you say, "that means $250,000 has just vanished into thin air!"

No. Take a look at the Sellers savings account, it still says "$500,000".

And what I was saying is tha loans based on ephermal values are a form of currency CREATION. Where did that money come from? By putting a five with a bunch of zeros behind it into to the seller's account. What is backing that amount? A $250,000 value and a promise to pay which fell through. Yes, the seller has nice new crisp bills... it was the loan itself which turned "nothing" into "real money", the reason why some mortgage institutions are flirting with insolvency, and also why Obama is printing money as fast as he can ... to backfill all of that created money with actual currency.

To put a historical distance on the topic, think of the tulip bulb craze of the 1630s
Quote:

When: 1634-1637
Where: Holland
The amount the market declined from peak to bottom: This number is difficult to calculate, but, we can tell you that at the peak of the market, a person could trade a single tulip for an entire estate, and, at the bottom, one tulip was the price of a common onion.

In this case, TULIP BULBS became, in effect, and alternate currency. In other cases, stocks become an alternate currency. In still others, real estate or commercial real estate. Or gold or diamonds. www.investopedia.com/features/crashes/crashes2.asp

I don't think we'll ever agree on this, but I think the facts (deflation in the past 6-9 months) suports my POV.

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Tuesday, May 19, 2009 8:59 AM

SIGNYM

I believe in solving problems, not sharing them.


Meanwhile, neither Geezer nor Sarge have devised a viable alternative to the cluster-f*ck which is our very own privately-run health care system.


----------------------
We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy

Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy

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Tuesday, May 19, 2009 9:09 AM

BIGDAMNNOBODY


Patience is a virtue. Not everyone can spend as much time here as you obviously can.

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Tuesday, May 19, 2009 9:24 AM

RUE

I have a vote and I'm not afraid to use it!


Thanks for bumping the thread to keep it up top while we wait on Finn and Geezer.

Can we count on you posting your stupid posts and at least get some value out of your presence ? Twice a day at about 12 hour intervals would be nice.

***************************************************************

Silence is consent.

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Tuesday, May 19, 2009 9:51 AM

BIGDAMNNOBODY


Quote:

Originally posted by rue:
Thanks for bumping the thread to keep it up top while we wait on Finn and Geezer.


I thought Signy was waiting on Sarge and Geezer. Was that a freudian slip?
Quote:

Originally posted by rue:
Can we count on you posting your stupid posts and at least get some value out of your presence ? Twice a day at about 12 hour intervals would be nice.


I'd take twice a day at twelve hour intervals over several times a day at half hour intervals any day of the week.

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Tuesday, May 19, 2009 10:22 AM

RUE

I have a vote and I'm not afraid to use it!


You mean I can't be interested in their reply ? If that's true, then you should have NOTHING to post anything not directed TO YOU.

That'd be nice.


***************************************************************

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Tuesday, May 19, 2009 10:31 AM

CITIZEN


Quote:

Originally posted by JKiddo:
And what I was saying is tha loans based on ephermal values are a form of currency CREATION. Where did that money come from? By putting a five with a bunch of zeros behind it into to the seller's account. What is backing that amount? A $250,000 value and a promise to pay which fell through. Yes, the seller has nice new crisp bills... it was the loan itself which turned "nothing" into "real money", the reason why some mortgage institutions are flirting with insolvency, and also why Obama is printing money as fast as he can ... to backfill all of that created money with actual currency.


No, no currency was ever created at any point. The currency you spent came from the bank, it wasn't created out of thin air. If the bank was leveraged it was the money that belonged to investors and savers, but it always existed. The money didn't just materialise when you walked through the door. The loan didn't turn "nothing" into money. It didn't invent money. If you're hungry, and I have two eggs, and I agree to give you an egg now so you can have an omelette tonight, with the understanding you'll replace it tomorrow when you've been to the store, I haven't created an egg through magic. The act of handing an Egg that I have in my possession to you, it hasn't been created from "nothing". If you then go to the store the next day and they have no eggs, that means I don't get my eggs back, but it doesn't that the fact the store doesn't have any, has made any eggs vanish into the ether.
Quote:

I don't think we'll ever agree on this, but I think the facts (deflation in the past 6-9 months) suports my POV.

Unless I'm completely misunderstanding what you're POV is, the fact of deflation doesn't support what you've been saying. It doesn't support your point of view, so it's a mute point here. The fact that the entire economic system hasn't collapsed in entirety, that we're all not multibillionaires holding currency that's worthless than the paper it's printed on disproves your POV. If money was just magicked into existence when someone took out a lone, money would have no intrinsic value.

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Tuesday, May 19, 2009 10:38 AM

BIGDAMNNOBODY


Quote:

Originally posted by rue:
You mean I can't be interested in their reply ?


You'll keep the crows away with that statement for sure.
Quote:

Originally posted by rue:
If that's true, then you should have NOTHING to post anything not directed TO YOU.

That'd be nice.


You lost me there Rue, care to re-phrase?

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Tuesday, May 19, 2009 11:07 AM

RUE

I have a vote and I'm not afraid to use it!


"currency was (n)ever created at any point"

Currency wasn't created - it takes a mint or a printing press to do that ! - but (currency denominated) wealth was.

If my house goes from 100,000 to 500,000 (for illustration purposes only !) and someone goes to the bank and gets a loan to buy it - where does that 500,000 come from ? Remember, banks aren't required to have all the value of the loans that they write on-hand, or to even show that they are guaranteed that money in the future.

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Tuesday, May 19, 2009 11:42 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by SignyM:
Meanwhile, neither Geezer nor Sarge have devised a viable alternative to the cluster-f*ck which is our very own privately-run health care system.



Geezer and Sarge actually have lives that prevent them from instant response to your every question. Geezer, for example, has been doing yardwork and reconnecting the stereo/DVD/TV after a remodel. Wait for it.

"Keep the Shiny side up"

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Tuesday, May 19, 2009 3:39 PM

SERGEANTX


Heh... and Sarge has been traveling all day.

Quote:

Originally posted by SignyM:
I'm a little tired of people handwaving with generalized, ideology-based concpets which have little basis in fact. So be specific. Look at where the rubber meets the road. Enlighten us.



Repeal all legislation that prohibits people from providing health care to others who want it. Period.

But since that's not going to happen, about the only other option is to nationalize it. Which will lead to the situation I'm concerned about - strong incentives for intrusive government and a national ethos that is largely apathetic toward, and/or ignorant of, the concept of constitutionally limited government.

SergeantX

"It's cold and it's a broken hallelujah"

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Tuesday, May 19, 2009 3:49 PM

SERGEANTX


Quote:

Originally posted by Kwicko:

If you can figure out how to achieve your seemingly-contradictory goals, please let us know how. You're arguing AGAINST government oversight, yet also AGAINST corporatism. How do you curb corporatism without oversight? In other words, if you remove all government oversight (which seems to be the goal, going by everything you've posted), won't the corporations run wild and roughshod over us?]



No. The thing is, the oversight and the corporatism are two sides of the same coin. That's the point I've been making all along. If you look closely at how large interest groups ("corporations" in the sense of corporatism) express their power, it's through their manipulation of the political. They use it to curb competition and consolidate, and they use it to enhance their own position at the expense of other groups. That's really what modern politics boil down to - large, focused groups manipulating government for advantage.

It's possible to use government in way that applies sane, reasonable rules to all players evenly, in ways that aren't designed to favor some over others. But we've blown by that long ago. Until we get control over government, expanding it more is merely feeding the monster - and building more corporatist power.

Quote:

On another note, how do you feel about Tort Reform? Are you in favor of that kind of government oversight (limiting punitive and actual damage payment caps by government mandate), or do you prefer to let juries decide what is fair compensation for corporations gone wild?


I'm not really sure on that one. The problem seems to be the presumption that insurance will cover the excessive awards. Juries see themselves consoling a victim, but not destroying the life of someone who's made a mistake. Honestly, a nationwide moratorium on insurance is appealing, though not likely practical. It does seem that insurance creates all kinds of screwed up moral hazard.

SergeantX

"It's cold and it's a broken hallelujah"


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Tuesday, May 19, 2009 6:17 PM

RUE

I have a vote and I'm not afraid to use it!



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Tuesday, May 19, 2009 8:07 PM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

Repeal all legislation that prohibits people from providing health care to others who want it. Period.
And then? Just to take your thought experiment a little farther, then health care could be anything from stem cell research to snake oil sold from the trunk of a car. I suppose that could be countered by consumers unions... those with extra money get to buy into better health-care knowledge, so the rich have more information about what works and what doesn't. But that still doesn't address the problem that even with a wide variety of TYPES of medical care available, and even with the full cognizance of insurances, certain types of medical care - like major surgery - will be necessarily expensive. There is simply no way around it. And since no family (except the very wealthy) could ever possibly hope to save enough for a true medical emergency, we're back to the concept of health insurance. And under your circumstances, I see no limit to the kinds of abuses that insurance companies currently engage in.

I know you really want to create a system of many providers and true competition, but inevitably it devolves into monopolism, whether the government is involved or not, due to economies of scale and other economic (not political) factors).
Quote:

That's the point I've been making all along.
yes, we get it. But your point is only partially true.
Quote:

If you look closely at how large interest groups ("corporations" in the sense of corporatism) express their power, it's through their manipulation of the political. They use it to curb competition and consolidate
Those large wads of cash sticking out of their pocket help too. Consolidation doesn't work unless you are able to BUY the competition. Hence, big businesses gobble up little ones and not the other way around.
Quote:

and they use it to enhance their own position at the expense of other groups. That's really what modern economicsboils down to - large, focused groups manipulating the economy for advantage.
Sarge, for god's sake study some economics.

----------------------
We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy

Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy

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Wednesday, May 20, 2009 1:47 AM

SERGEANTX


Quote:

Originally posted by SignyM:
I know you really want to create a system of many providers and true competition, but inevitably it devolves into monopolism, whether the government is involved or not, due to economies of scale and other economic (not political) factors).


I've studied a fair bit of economics, Signy. And what I've found is that this inevitable momentum toward monopoly that you tout as a "fact" of capitalism, isn't. It's Marxist mythology. And the cruel irony is that its used to justify the ultimate monopoly of state socialism.

In a real free market, large companies face a long list if disadvantages from their lumbering size that offset the advantages you focus on. They're slow to react to changing conditions and tend to eat themselves up from the inside out with waste and inefficiencies. They become deeply invested in the status quo and squelch free-thinking innovation in their ranks. These disadvantages translate into opportunities for smaller, focused companies.

The thing is, whether you believe corporations have orchestrated it or not, we've created a legal framework that negates those opportunities and overwhelmingly favors the corporate behemoths. This isn't an ideological fantasy, it's daily reality. We're currently inundated with examples of large, corporate interests that have pushed this imbalance to the point where they're imploding on themselves. In a free market, they'd have been gone long ago.


SergeantX

"It's cold and it's a broken hallelujah"

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Wednesday, May 20, 2009 5:39 AM

RUE

I have a vote and I'm not afraid to use it!


"These disadvantages translate into opportunities for smaller, focused companies."

Which then get bought out by the larger ones - Ben & Jerry's\ Unilever; Apple\ Microsoft. Because that is what the smaller companies are after - to MAKE THE MOST MONEY POSSIBLE. And if that means being significant enough to be bought out by the larger company, well then, that's the way to go. Anything ELSE is NOT capitalism. It's pride, or being a contrarian, or feeling responsible to your employees ...


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Wednesday, May 20, 2009 6:11 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

In a real free market, large companies face a long list if disadvantages from their lumbering size that offset the advantages you focus on. They're slow to react to changing conditions and tend to eat themselves up from the inside out with waste and inefficiencies. They become deeply invested in the status quo and squelch free-thinking innovation in their ranks. These disadvantages translate into opportunities for smaller, focused companies.
Bull puckies. Large companies have efficiencies of scale. To give you an example, an enviromental organization did a study on which food had the largest carbon footprint: locally grown organic; medium-sized commercially farmed shipped within the USA; or foreign-grown, shipped out-of season from the southern hemisphere. And the answer is....

Select to view spoiler:


Foreign-grown. The carbon footprint is dominated by transportation costs, and cargo ships are more efficient than trains/ semis, which are in turn more efficient than smaller trucks. Bulk shipping is a significant advantage.



A somewhat similar economy of scale is a better division of labor. Adam Smith said it best: a man shifting from one task to another is less efficient than a person given a single task. So a large insurance company, for example, can have ONE person looking at contracts, another one doing the billing, a third bird-dogging lapsed payments, a fourth looking at utilization of care, a fifth looking at outcomes studies, a sixth doing the accounts etc.

Another advantage is that large companies can bring a huge economic weight to bear against smaller ones. Walmart can pick off markets one by one because it costs them next to nothing (compared to their revenues) to starve out a mom-and-pop shop. Hence Intel v AMD, Microsoft v Borland, Walmart v any retailer, etc.

And that's assuming that the company doesn't form a vertical monopoly, tying together the raw products, manufacuring, shipping and retail all into one big bundle. Or a horizontal monopoly; geographically dominating a single sector.

Another significant advantage is that large companies can afford to automate more. Large companies also have the whip-hand in driving down wages. Finally, large companies do have an investment in the status quo. That's because their equipment and technology, which was once new and expensive, has been paid off and is sheer profit. That's why large companies buy up small innovative ones and kill them off if they represent a significant competitive threat.

Face it, Sarge, large companies produce goods FAR more cheaply than small ones. Even Frem knows this! And in a system which is based SOLEY on economics, large companies will almost always win.

Small companies have only one advantage as far as I can tell: In the realm of venture capital they are the best poised to make use of EMERGING technologies. But technologies don't usually emerge quickly enough to sustain a constant bubbling up of new businesses, and the aim of these small companies - like the aim of ANY company- is to become the dominant player and squeeze out the competition.

----------------------
The one thing capitalists hate most is competition.

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Wednesday, May 20, 2009 6:28 AM

CITIZEN


Quote:

Originally posted by rue:
"currency was (n)ever created at any point"

Currency wasn't created - it takes a mint or a printing press to do that ! - but (currency denominated) wealth was.


Wasn't the issue. The Issue was whether capitol came to exist from the ether. "wealth" is a different subject, though in a bubble wealth isn't created, since a bubble is the process of an asset value exceeding an intrinsic value, and the bubble bursting is merely resetting that position. Wealth isn't created in a bubble, it's a temporary aberration, that makes wealth appear to be created, then vanish again.
Quote:

If my house goes from 100,000 to 500,000 (for illustration purposes only !) and someone goes to the bank and gets a loan to buy it - where does that 500,000 come from ? Remember, banks aren't required to have all the value of the loans that they write on-hand, or to even show that they are guaranteed that money in the future.

Must I explain it again? Leverage isn't where a bank invents money, it's where a bank borrows it from elsewhere in order to loan it on. Banks don't have to have all their own money, or asset values, to back the loans they're writing, but they HAVE to have real money to hand out. The $500,000 comes from loans the bank has taken out, and savings held for other customers.

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Wednesday, May 20, 2009 7:01 AM

SERGEANTX


Signy,

Sure, small companies have precious little advantage left in the current climate. That was the point I was trying to make. We've created barriers to entry to protect vested players and we routinely pass legislation that beefs up/and or bails out entrenched corporations in the name of "promoting economic growth" or averting trumped up economic disaster (read the daily headlines if there's any doubt).

Look at the current situation with the auto manufacturers. By all rights they should be going out of business, opening up opportunities for smaller companies. Even with decades of government support - both in the form of bailouts and competition killing regulation - their size and complacency has become a detriment as they collapse under their own weight. But through the same kinds of scare tactics used to sell us the police-state/military adventures of the Bush administration, we're bamboozled into government intervention that perpetuates the dinosaurs.

Honestly though, if government intervention was constrained to breaking up the monopolies you believe to be inevitable, I'd have no complaints. But the vast bulk of state policy does exactly the opposite. It stifles competition, punishes innovation, and works to maintain the status quo. The amount of effort spent combating monopolies is minuscule in comparison.

SergeantX

"It's cold and it's a broken hallelujah"

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Wednesday, May 20, 2009 7:14 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

Sure, small companies have precious little advantage left in the current climate
Sarge, small companies have a hard time in ANY climate. Just look through history. The trend has always been towards larger and larger production units.

I'm not claiming that government regulation doesn't have a hand in assisting large corporations. But you OTOH seem to be totally blind to the fact that economic factors play heavily in the formation of monopolies. The end result of unconscious economic forces: economies of scale, the big eating the smaller and less profitable, combined with the conscious desire to GET RID OF THE COMPETITION - virtually ensures that with or WITHOUT government assistance, the trend is from small to larger to monopoly.

If you truly had studied economics you would know this, and your blind faith in competition is puzzling.

----------------------
The one thing capitalists hate more than anythign is competition.

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Wednesday, May 20, 2009 7:16 AM

RUE

I have a vote and I'm not afraid to use it!


http://carolynbaker.net/site/content/view/95/

"Banks create money, not from their own earnings or from the funds deposited by customers, but from the borrowers' promises to repay loans. Most importantly, borrowers not only promise to repay, but to repay with interest, and the bank writes the amount of money of both into the borrower's account."

http://www.discusseconomics.com/banking/where-do-banks-get-their-money/

"Turns out money creation sometimes appears out of thin air. All banks lend based on a reserve ratio of their deposit: they must keep a certain % of each deposit at the bank but can lend out the rest. Of course, the whole system is dependent on a) the bank being responsible with lending, b) everyone not defaulting on their loans. If these two things happen eventually the system collapses which is what we're seeing in the current market."

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Silence is consent.

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Wednesday, May 20, 2009 7:23 AM

SERGEANTX


Quote:

Originally posted by SignyM:
The end result of unconscious economic forces: economies of scale, the big eating the smaller and less profitable, combined with the conscious desire to GET RID OF THE COMPETITION - virtually ensures that with or WITHOUT government assistance, the trend is from small to larger to monopoly.

If you truly had studied economics you would know this, and your blind faith in competition is puzzling.



Sometimes I think you only read the first paragraph of my posts. I re-iterate:

Quote:

if government intervention was constrained to breaking up the monopolies you believe to be inevitable, I'd have no complaints. But the vast bulk of state policy does exactly the opposite. It stifles competition, punishes innovation, and works to maintain the status quo. The amount of effort spent combating monopolies is minuscule in comparison.



SergeantX

"It's cold and it's a broken hallelujah"

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Wednesday, May 20, 2009 7:50 AM

SIGNYM

I believe in solving problems, not sharing them.


So if you agree that monopolization is an inherent economic force, and you don't like government control... how do you propose creating and maintaining real competition?

----------------------
We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy

Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy

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