The Myth of Market Manipulation

[Red Steele]

Good point about the old people voting for unsustainable ponzi Medicare/social security schemes. Maybe the payroll tax financed benefits should be set by politcians elected by current workers to get back to the original balance of taxation and representation. Maybe seniors should not vote for the house representatives , and should recuse themselves.

Just as farmers should not be voting for the polticians that promise them higher government subsidies. Maybe anyone getting a government subsidy should not vote. Maybe we need to get rid of government subsidies all over the board.

Thomas Jefferson wrote about this...how the failure of demoracies come when the populace realizes they can vote themselves benefits from the public feeding trough.

[aginvestorr]

Thanks for sharing the truth Palouser!

Although I wouldn't give credit to big government, and central planning only.  There are other big factors that allowed China to get as wealthy as they are.  Personnally, I am happy for them.  They have adopted some true economic reforms to allow all this to happen.  The main one being, property rights.

[SD Wild/OBG]

China as wealthy as they are? Hmmm...

1st world country burns over 12 barrels oil/capita/year.

The cuttoff for making 2nd world status is 8 b/capita/yr.

Mexico = 6 barrel/capita/year.

China = 3 b/c/yr.

They are an economic basketcase, they just aren't eating tree bark anymore because they have a little more freedom now than they did.

If/when they become wealthy... (by adapting real free market values) things will become plumb nuts!

[r3020]

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@SD Wild/OBG wrote:
China as wealthy as they are? Hmmm...

1st world country burns over 12 barrels oil/capita/year.

The cuttoff for making 2nd world status is 8 b/capita/yr.

Mexico = 6 barrel/capita/year.

China = 3 b/c/yr.

They are an economic basketcase, they just aren't eating tree bark anymore because they have a little more freedom now than they did.

If/when they become wealthy... (by adapting real free market values) things will become plumb nuts!

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Have a great day buddy. You are always fun to argue with. Humiliating, but fun!

[SD Wild/OBG]

LOL! I will try to have a fun day! I hope you do as well! I decided after years of contemplation to become a Packers fan today.... good to have all that deliberation behind me! (Now im walking around Green Bay in green/yello its bizzarre to like a place in central time zone haha!)

Hope you have a great one!

[jec22]

After reading that Google paid 2.9% tax on income in the billions, it is obvious this tax code is not working.  With the new tax changes that will require employees to pay tax on their health care benefits..there is going to be real sticker shock out there.  Will medicare benefits be likewise taxed?  Or do we continually hit up the the smaller and smaller group earning a paycheck?  All those running their ponzi schemes are soon going to finder fewer and fewer left to play their game.

Unless gold crashes, why should corn?  When gold was $300 corn was $2.  So with gold at $1350 corn could go to $9 and still be in balance.  Not saying I am wanting or expecting nine dollar corn, but in todays screwed up economy how do you set a value?

[Palouser]

I believe your list is ideological in origin and not backed by historical fact or economic expertise. And is counter to our recent experiences. The idea that bank runs, and panics on a regular basis, are an innoculation against greed and fraud are laughable. Back in the day, when we had the simple life, panics caused by bank failures were quite cyclical and frequent and affected the country at large.   Citizens lost all their money. So, in addition, any rumor could start a run that could break almost any bank if it was severe enough. The idea that a bank only loan out the capital it had in hand negates the idea of banking altogether, except in the most primitive form. Believe me, as vibrant as capitalism is it is based on very sophisticated forms of credit. And account holders are no more in a position to understand the finances of most banks today, than they were in the past. Regulation makes known that at least minimum standards recognized as good banking practices are in place, making it easier to put money in an account that will aid the development of any given economy.

What was the Great Depression? It occurred under minimal regulation - and it was horrific (by the way, what was the cure?). This was in a time before you could blame the government by your standards - even though I think your view is in error.

And what was Greenspan's lesson? He warded off regulation of Wall St, which had little regulation to begin with. Regulation all but died during the last administration. Greenspan's lament? He did not believe that private enterprise would promote practices (like fraudulent MBS and credit swaps) that would directly threaten their future. He had to admit he'd been wrong. Unregulated capitalism has no over riding reason to be concerned with the welfare of society at large, much less their own operations - not if making money is at stake.

As for FDIC. They liquidate banks in trouble and investors lose everything as we saw in the Savings and Loan debacle. Yes the depositers were made whole.

As for the idea that regulators are ignorant. In many of these industries the employment situation is a revolving door. The regulators know exactly what is going on. Quite often it is the influence of private interests that muzzle and threaten regulation using political allies. The argument is therefore on the side of more independent and aggressive enforcement of reasonable standards.

As for Brazilianization of currency. The biggest problem of farmers in Brazil lately is prudent financial management by socialist parties (?????) that have strengthened their currency against the $, resulting in low prices for farmers.

[SD Wild/OBG]

Well Palouser, because you don't understand the scam that is fractional reserve lending, and because you swallowed the false view a lack of regulation caused the Great Depression, you are of course dead wrong on all of the views you wrote here.

Here is a nice quick read that explains that banks need runs to keep them from making silly risks. If you ddon't read this entire article, you might remain lost forever;

http://www.lewrockwell.com/orig8/grant3.html

Its a fact that Hoover's New-Deal-Like policies made the 1930's into a depression. FDR's expansion of those bad ideas (govt expansion) did the obvious, it sent unemployment rising every year of his failed presidency. To understand how Keynesianism made that depression" Great", just read the quick article below,

http://www.lewrockwell.com/murphy/murphy155.html

Anybody who understands economics and history know that the biggest deflation/market crash of the 20th century happened in 1920 and it was handled perfectly, avoiding a depression. Harding prevented misery by adhering to the free market, the only correct answer. For proof of this irrifutable fact, click this link below,

http://www.lewrockwell.com/woods/woods125.html

II apologize if my grammer/spelling is bad. Im drunk, my thumbs are numb, I'm typing this on a cell phone, and Im surrounded by mobs of people.

[SD Wild/OBG]

I din't say the" Brazillification of our currency", I mean the Brazillification of all of America. We will simply ignore the obvious lessons of the Great Depression, adhere to more collectivism, and continue propagating lies. There will never be prosperity again, because too many school kids were fed lies about our past.

[hardnox604008]

I just don't think you can sustain an argument that command/capitalist countries are less prone to economic bubbles and the subsequent malinvestment than are democratic crony capitalist countries.

The major difference seems to be that in China the Communist Party is the key constituency and the good thing, I guess, is that they can take individuals out and shoot them summarily if they get out of line. We weren't able to do that with Greenspan as regrettable as that is.

The incentive is the same- sharply rising asset values are a drug that makes people happy in the short term and buys political support. But the long period of withdrawal always arrives.

We've experienced the difference between security bubbles and property bubbles in real time- securities can crash violently in correction, the recognition of property bubbles is a very slow process. In fact we're only a tiny bit into the unwinding of ours- we've only really experienced the implosion of the securities (MBS etc.) bubble that was linked to the property bubble.

I'm guessing that someday we'll laugh ruefully at all the things we thought we "knew" about China- and some day much later we'll also laugh at the laughing.

But it is a nice ride while it lasts- particularly for commodity producers.

Best, h