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My Last Economic Thread

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Killer300
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Post: #1
My Last Economic Thread

This is my last economic thread, for awhile at least. Okay, I pose this. The reasons I believe we have a business cycle, and how a normal state society should act accordingly.
Reasons Why:
1. Market hides too much information from itself, like with companies denying each other information and the recent recession being caused by some mortage stuff.
2. It's a natural part of capitalism. If a massive natural disaster occured, you bet there would probably be some sort of recession following it.
3. Business must take huge risks to expand when they get too big. To achieve a growth in profit after a certain stage, you must take MASSIVE risks to ensure more profit.

With this in mind, I present three solutions to at least alleviate the damage.
1. Require markets to be as transparent as possible. Free flow of information not only prevents tryanny, it also prevents market collapse.
2. We should set up government jobs to fight unemployment in a sort of ,"counter cycle," way. So, when the economy gets bad, we expand it massively, and when it's good, make fewer and target them towards the hard to employ part of the populace.
3. Put big business in its place. Introduce the 28th amendment that takes away their so called, "Civil Rights," and introduce anti-lobbying laws. Paired with that, introduce back the Glass-Steagall Act, and the Fairness Doctrine for the radio. The latter will prevent not only political bias, it will also make sure businesses don't do screwy stuff with the news at least partially, allowing for the free flow of information required in the first.

Again, will try not to intervene here and hope this helps generate discussion. Who knows, maybe I'll be able to prevent a recession. Probably not though, knowing my political luck these days.

11.12.2010 00:05
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RichardAWilson
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Post: #2
RE: My Last Economic Thread

Recessions are natural. Every boom has to be followed by a crash, just as long-periods of growth must, by nature, be followed by a contraction. As a flexible, adaptive, evolving, efficient and innovative system, free-markets must undergo expansions and contractions. Why? Recessions purge the system of the inefficiencies, bureaucracies and waste that were allowed to emerge during the preceding expansion. Most recessions are, by nature, quick, short and almost painless. This doesn’t mean all recessions are almost painless. However, when they are painful, it’s often due to misguided policies and directives from the State.

As I’ve shown, the Great-Depression started as a normal recession and was made worse by Smooth-Hawley, the Gold-Standard, higher interest-rates and the Revenue Act of 1932. The recession of 1937 was caused by the Revenue Act of 1936, which taxed the economy to death. The Post-War recession was caused by the downsizing of the public-sector following the Second World War. The “Great-Recession” of 1982 and 1983 was an effect of Paul-Volker’s “war on inflation.” Paul-Volker pushed interest-rates into the double-digits, causing the worst Post-War recession. Even the seriousness of our ongoing financial crisis can, to a degree, be attributed to Fannie-Mae and Freddie-Mac, which remain state-chartered enterprises, as the twin-sisters injected loads of capital into our commercial-banking system, thus encouraging those banks to approve riskier and riskier loans and mortgages.

11.12.2010 06:48
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Helsworth
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Post: #3
RE: My Last Economic Thread

Killer300 Wrote:
This is my last economic thread, for awhile at least. Okay, I pose this. The reasons I believe we have a business cycle, and how a normal state society should act accordingly.
Reasons Why:
1. Market hides too much information from itself, like with companies denying each other information and the recent recession being caused by some mortage stuff.
2. It's a natural part of capitalism. If a massive natural disaster occured, you bet there would probably be some sort of recession following it.
3. Business must take huge risks to expand when they get too big. To achieve a growth in profit after a certain stage, you must take MASSIVE risks to ensure more profit.

With this in mind, I present three solutions to at least alleviate the damage.
1. Require markets to be as transparent as possible. Free flow of information not only prevents tryanny, it also prevents market collapse.
2. We should set up government jobs to fight unemployment in a sort of ,"counter cycle," way. So, when the economy gets bad, we expand it massively, and when it's good, make fewer and target them towards the hard to employ part of the populace.
3. Put big business in its place. Introduce the 28th amendment that takes away their so called, "Civil Rights," and introduce anti-lobbying laws. Paired with that, introduce back the Glass-Steagall Act, and the Fairness Doctrine for the radio. The latter will prevent not only political bias, it will also make sure businesses don't do screwy stuff with the news at least partially, allowing for the free flow of information required in the first.

Again, will try not to intervene here and hope this helps generate discussion. Who knows, maybe I'll be able to prevent a recession. Probably not though, knowing my political luck these days.

I agree Wink We can't have people doing what they want, without them taking responsability, that's where regulation (the law) comes in.


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11.12.2010 10:34
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Killer300
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Post: #4
RE: My Last Economic Thread

Okay, Richard, you don't talk about the economic crashes of the late 1800s. The economy went through six crashes and booms within the space of about 20 years. Okay, that was also in the most laize-fair time in America so you can't really blame it on the state.
Speaking of which, if recessions are a natural part of the economy, shouldn't the government prepare jobs the inevitable? After all, we do the same for normal natural disasters, why not economic disasters? The Great Depression happened because of a mix of stock spending and a economy getting grossly too competitive. The latter caused prices to get too cheap, wages too low, and the entire economy to deflate.
To quote FDR, "Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off." That is still true today, along with a lot of his other quotes.

Read more: http://www.brainyquote.com/quotes/author...z17oftfZrj

11.12.2010 16:13
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Helsworth
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Post: #5
RE: My Last Economic Thread

Killer300 Wrote:
To quote FDR, "Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off." That is still true today, along with a lot of his other quotes.

Read more: http://www.brainyquote.com/quotes/author...z17oftfZrj

Exactly, nations have to cooperate to promote their own general welfare and security, thus ensuring the general welfare of all peoples.
The problem is that a lot of the statisticians, policy makers and business men forget that human beings aren't just consumers/producers.
A farmer works differently with his neibourghs, if he knows those neibourghs aren't looking to stab him in the back and take his farm away from him.


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11.12.2010 16:24
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Killer300
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Post: #6
RE: My Last Economic Thread

Good. But anyway, okay, yes the state can economic issues, however that's usually when it intervenes FOR CORPORATIONS rather than the people. Also, just because the state sets up a business, doesn't mean it controls it. Do you REALLY think the U.S. government controlled the railroad industry during the 19th century? I really hope not because they defintely weren't. All the crap they did, they did on their own without the government telling them to. Same goes for the East India Trading Company. Bailouts do hurt the economy, but that's for business, not for the people.
On the other hand, when the state intervenes for the people, it usually helps the economy. Mininum wage and similar methods encourage corporations to improve technology and improve their products to compete rather than cutting wages or doing under table screwy stuff. Same goes for regulations. Capitalism can work great, with regulations. Neo-capitalism is fine in my book, I personally think it will get issues of its own over time however that's for another time that isn't coming anytime soon, but not laize-fair.

12.12.2010 00:06
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RichardAWilson
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Post: #7
RE: My Last Economic Thread

How can you consider an economy getting too competitive a bad thing? A competitive economy, after all, means more Purchasing-Power. Would you have us have the productivity-levels of, say, Mexico? If you would, you would condemn us to the living-standards of the Mexicans. An economy can never be “too competitive.” As for deflation, that was due to the infamous Gold-Standard. Had our money-supply corresponded with the underlying growth in our economy, consumer-price deflation would have been avoided and our economy and our financial-system would have grown even stronger and been much more stable.

The financial crises and downturns of the Industrial-Revolution were often corrective and weren’t long-lasting. Long-term and structural joblessness, to a large degree, was avoided during those downturns. As I said, free-market recessions are, by nature, short-lived and almost painless. State-intervention has often made them much more painful and long-lasting than would have otherwise been the case. The “Panic of 1907,” which was just as serious as the Crash of 1929, lasted around 13-months. Industrial-production declined by around 31%. However, the economy bounced back to life and those losses were erased.

* The Civil-War Boom, which was reinforced by defense-spending and printing money to finance the war, led to a serious recession after the Civil-War was concluded.
* The Coinage Act of 1873 magnified the recession of 1873.
* Returning to the Gold-Standard in 1879 led to another recession.

As for a National Jobs Program, I’m not arguing with you on that one. I think you’re right, for once. We should have a National Jobs Program (Public-Works and Civil Service Program) to create jobs and demand during cyclical-downturns. We could even retain such a program during periods of relative economic-growth, as it could eradicate joblessness among those that are harder for the private-sector to employ.

12.12.2010 06:31
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Helsworth
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Post: #8
RE: My Last Economic Thread

With the syntagm "too competitive" I think Killer was referring to unlawful competition, in a sense like the Fallout's Wastelands Hehe
"Howdy partner I run the greatest trade caravan here see, I want you to go to my competitors and sabotage their businesses, then force them to sign their trading rights papers over to me, there's a hefty rewards of 2000 bottle caps for ya if you do it, yess eerryy."


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12.12.2010 07:50
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Killer300
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Post: #9
RE: My Last Economic Thread

Exactly. Also, Vincent has stated we have too much competition too. Whether he will back it up is for another thread perhaps. But anyway, now, we find that most industries are heading towards oligoblies. Not just soda, food too. Also hundreds of others that are over time having the profits of the entire industry heading towards the top 5 or less companies.

12.12.2010 15:36
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RichardAWilson
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Post: #10
RE: My Last Economic Thread

Rubbish. Coke shouldn’t be punished just because consumers drink Coca-Cola instead of the store-brands, just as Red-Bull shouldn’t be punished because consumers choose it over Pepsi’s Monster-brand. There’s never too much competition. Competition is the engine of innovation.

12.12.2010 22:02
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