Economic Debate… Without Politicians

I found this article out there and it makes sense to me. The article was by a writer named Marc Rotterman and was called “Let’s Come Together to Save Our Country’s Economy”. It was an interesting idea that he was espousing, that the Republicans in Congress get together with Democrats that think President Obama and Nancy Pelosi are going too far with their liberal agenda spending. I thought “hmm, interesting, a summit to come up with a better economic plan”. In the end I think I have a better idea…

The bottom line these days is that America no longer trusts that the politicians in Washington are interested in taking care of them. All we see is partisan games and childish behavior from both parties. Democrats are not even willing to listen to Republican ideas to fix the economy. They tell America that this is because the Republicans have already had their chance and blew it so there is nothing to listen to. The reality is that the Democrats like Obama and Pelosi are not interested in fixing the economy. They are interested in furthering their agenda, and fixing the economy is the perfect ruse to hide their actions. 

America accepts this logic, that the Republicans have already shown that their tax cuts don’t work. In reality, the opposite is true, tax cuts that put more money in the people’s hands instead of the government’s hands have pretty much always worked in the past. Chalk one up for the Democratic spin media that they have fooled the public with this rhetoric. So when Republicans raise the alarm against Democratic spending, America just figures this is more partisan games and doesn’t pay attention. And the Democrats have their excuse to ignore the Republicans through the claims of failed past and further claims that this is partisan bickering. 

And that means that no matter what a group of Congressional members comes up with in terms of a plan, or even a rebuke of Obama’s current plan, will fall on deaf ears of Democrats who the American public lets get away with it because of the rhetoric mentioned above. So I have a different idea. Let’s take the members of Congress out of the equation. 

I propose that an economic summit be organized outside of Congressional approval or links. We don’t invite Congress to participate and we don’t let any of the government cronies from “the agencies” participate either. That means no tax dodging Timothy Geithner. No Bernard Nernanke. No Allan Greenspan. None of the lackeys we have seen in the political games of the past. 

No I propose that we have a summit of the best civilian minds that economics has to offer. An all-star panel of economists and business people who aren’t interested in the political games and who simply know economics. I don’t know all the names of those who need to be involved, but here are a few that I can think of:

  • Ross Perot – I know he drove us a little crazy when he ran for President, but he did get 19% of the popular vote as an Independent candidate. And he knows economics and business well. 
  • Robert Shiller (Yale). 
  • Peter Phillips (Yale)
  • Martin Feldstein (Harvard)
  • Jonathan Gruber (MIT)
  • James Heckman (Harvard)
  • Jean Tirole (Toulouse)
  • Timothy Beasley (London School of Economics)
  • William Gale (Brookings Institute)
  • Assar Lindbeck (University of Stockholm)
  • Steve Forbes
  • Steve Moore
  • Larry Kudlow
  • Art Laffer
  • Dave Smick
  • Larry Lindsey

I am sure some of you can think of some others as well. The point is that these are economists and some of the great minds of the free market. This list is not meant to be all inclusive. There are a lot of smart economists out there that know numbers and facts and don’t adhere to one political agenda or another. They adhere to the facts of economics. 

Take some of these great minds and put them into a room to discuss options to fix the struggling economy. Let them debate the issues and talk about the consequences of Obama’s runaway spending. Let them come up with a plan of what they think we should do. Put this on C-Span, the Internet, Fox News, CNN, everywhere. Let Americans see the debate and hear what the brilliant minds of money have to say without the influence of politicians who obviously have an agenda on either side. 

And then let them submit a plan to Washington as to how we move forward. It seems insane to me that we are letting a group of lawyers, doctors and lifetime politicians determine our economic fate instead of utilizing the vast resources that America has to offer. We have some of the best economists in the world. We can include some Austrian economists so that Black Flag’s head doesn’t explode. These economists are the brightest minds in the world when it comes to an economy. Why aren’t they who we call on to fix an economic crisis?

And here is the thing, whatever plan that these guys come up with has instant credibility the second that they issue it. Because they are experts in the field and don’t really care about advancing an agenda. Democrats can easily brush aside Republicans as partisan opponents. Let’s see them discount the best economists in the world and explain to America why Obama’s “plan” is better than what these men come up with. 

We have to do something. There must be a way formulated to battle the Obama agenda of tax increases, more Wall Street bailouts, socialized medicine, “cap and trade” energy policies, and, thousands and thousands of new earmarks. The move to socialism in this country is a recipe for disaster. An economic summit of the type I propose will eliminate the ability to hide behind political tactics that Obama uses to further what appears more each day to be a socialist agenda. 

I look forward to your thoughts. 

As a P.S. to this article, many of America’s top economists got together and discussed the stimulus bill that was being proposed last September. After doing so they decided to write a letter to the House of Representatives and Senate questioning the wisdom of the bill. It was ignored. And it was buried in the news and never brought to the public’s attention. Note the long list of America’s brightest economists who signed it. The letter sent read:

To the Speaker of the House of Representatives and the President pro tempore of the Senate:
 
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
 
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses.  Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
 
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If  taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
 
3) Its long-term effects.  If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, Americas dynamic and innovative private capital markets have brought the nation unparalleled prosperity.  Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted. 
 
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.  
 
Signed

Acemoglu Daron (Massachussets Institute of Technology)
Adler Michael (Columbia University)
Admati Anat R. (Stanford University)
Alvarez Fernando (University of Chicago)
Andersen Torben (Northwestern University)
Beim David (Columbia University)
Berk Jonathan (Stanford University)
Bisin Alberto (New York University)
Boldrin Michele (Washington University)
Buera Francisco J.(UCLA)
Cassar Gavin (University of Pennsylvania)
Chaney Thomas (University of Chicago)
Chauvin Keith W. (University of Kansas)
Chintagunta Pradeep K. (University of Chicago)
Christiano Lawrence J. (Northwestern University)
Cochrane John (University of Chicago)
Coleman John (Duke University)
Constantinides George M. (University of Chicago)
Crain Robert (UC Berkeley)
De Marzo Peter (Stanford University)
Dubé Jean-Pierre H. (University of Chicago)
Edlin Aaron (UC Berkeley)
Ely Jeffrey (Northwestern University)
Faulhaber Gerald (University of Pennsylvania)
Fox Jeremy T. (University of Chicago)
Fuchs William (University of Chicago)
Gao Paul (Notre Dame University)
Garicano Luis (University of Chicago)
Gerakos Joseph J. (University of Chicago)
Gibbs Michael (University of Chicago)
Goettler Ron (University of Chicago)
Goldin Claudia (Harvard University)
Guadalupe Maria (Columbia University)
Hansen Lars (University of Chicago)
Harris Milton (University of Chicago)
Hart Oliver (Harvard University)
Hazlett Thomas W. (George Mason University)
Heaton John (University of Chicago)
Heckman James (University of Chicago – Nobel Laureate)
Henisz, Witold (University of Pennsylvania)
Hertzberg Andrew (Columbia University)
Hite Gailen (Columbia University)
Hitsch Günter J. (University of Chicago)
Hodrick Robert J. (Columbia University)
Hopenhayn Hugo (UCLA)
Hurst Erik (University of Chicago)
Israel Ronen (London Business School)
Jaffee Dwight M. (UC Berkeley)
Jagannathan Ravi (Northwestern University)
Jenter Dirk (Stanford University)
Jones Charles M. (Columbia Business School)
Kaboski Joseph P. (Ohio State University)
Kaplan Ethan (Stockholm University)
Karolyi, Andrew (Ohio State University)
Kashyap Anil (University of Chicago)
Ketkar Suhas L (Vanderbilt University)
Kiesling Lynne (Northwestern University)
Koch Paul (University of Kansas)
Kocherlakota Narayana (University of Minnesota)
Koijen Ralph S.J. (University of Chicago)
Kondo Jiro (Northwestern University)
Korteweg Arthur (Stanford University)
Kortum Samuel (University of Chicago)
Krueger Dirk (University of Pennsylvania)
Lee Lung-fei (Ohio State University)
Leuz Christian (University of Chicago)
Levine David I.(UC Berkeley)
Levine David K.(Washington University)
Linnainmaa Juhani (University of Chicago)
Manski Charles F. (Northwestern University)
Martin Ian (Stanford University)
Mayer Christopher (Columbia University)
McDonald Robert (Northwestern University)
Meadow Scott F. (University of Chicago)
Mian Atif (University of Chicago)
Middlebrook Art (University of Chicago)
Miguel Edward (UC Berkeley)
Miravete Eugenio J. (University of Texas at Austin)
Miron Jeffrey (Harvard University)
Moro Andrea (Vanderbilt University)
Morse Adair (University of Chicago)
Mortimer Julie Holland (Harvard University)
Nevo Aviv (Northwestern University)
Ohanian Lee (UCLA) 
Pagliari Joseph (University of Chicago)
Papanikolaou Dimitris (Northwestern University)
Peltzman Sam (University of Chicago)
Perri Fabrizio (University of Minnesota)
Phelan Christopher (University of Minnesota)
Piazzesi Monika (Stanford University)
Piskorski Tomasz (Columbia University)
Reagan Patricia (Ohio State University)
Reich Michael (UC Berkeley)
Reuben Ernesto (Northwestern University)
Roberts Michael (University of Pennsylvania)
Rogers Michele (Northwestern University)
Ruud Paul (Vassar College)
Safford Sean (University of Chicago)
Sandbu Martin E. (University of Pennsylvania)
Sapienza Paola (Northwestern University) 
Scharfstein David (Harvard University)
Shang-Jin Wei (Columbia University)
Shimer Robert (University of Chicago)
Siegel Ron (Northwestern University)
Sorensen Morten (Columbia University)
Spiegel Matthew (Yale University)
Stevenson Betsey (University of Pennsylvania)
Stokey Nancy (University of Chicago)
Strahan Philip (Boston College)
Strebulaev Ilya (Stanford University)
Sufi Amir (University of Chicago)
Thompson Tim (Northwestern University)
Tschoegl Adrian E. (University of Pennsylvania)
Uhlig Harald (University of Chicago)
Ulrich, Maxim (Columbia University)
Van Buskirk Andrew (University of Chicago)
Veronesi Pietro (University of Chicago)
Vissing-Jorgensen Annette (Northwestern University)
Weill Pierre-Olivier (UCLA)
Witte Mark (Northwestern University)
Wolfers Justin (University of Pennsylvania)
Zingales Luigi (University of Chicago)

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Comments

  1. Tom Awtry says:

    Very well authored and understood!

    I favor President Obama’s Stimulus plan, as you can see by my recent posting:

    http://ourcountryspresident.wordpress.com/2009/03/04/the-voice-of-wall-street-speaks/

    And sure hope it works for all Americans, everywhere!

  2. It figures that Congress would ignore more informed minds than their own. I truly believe that furthering their agenda is much more important, or most foremost in their minds than doing the right thing. If only they could understand that if they did the right thing, it would most likely further their agenda, and they could kill two birds with one stone.

    I also read that article concerning a “summit” meeting to determine the best course of action to include the most informed individuals. I tend to agree with you that it should not include politicians who all have their own agenda in mind that does not always align itself with what is best for the country. It would be interesting to have that summit widely televised and publicised to reduce wiggle room for the politicians and let public opinion drive their next moves. If it even would.

    I will be extremely interested to read BF’s comments on this. His arguments are very intellectual (which means most of the time are above my head)and thought provoking. There are many of his points I agree with, and some I do not…I hesitate to argue with him due to the fact that I would rather have people think that perhaps I am ignorant, rather than speak up and remove all doubt.

  3. Tom, we can hope that his plan works, but all indications are that it might show some short term improvement, but the entire premise is doomed to failure. His logic is flawed and he is either too proud or too determined to push the country to socialism to do the right thing. Please stand back from the picture for a moment and try to look at the situation logically. His plans doom Americans for generations to come to pay for this “plan”.

  4. Karl from Esom Hill says:

    The problem with Obama is that that the we have become The United States of Entertainment. Mr. Obama is a very Smooth talker and speechmaker. He is “cool”. He is a fine figure of a man. And apparently he can talk the stripes off of a Zebra! This is a man who told the American people exactly what he was going to do if got in office. The problem is the people weren’t Listening. Oh, they heard him, but hearing is not the same as listening. All folks heard during the election was “change”. What kind of change apparently didn’t matter to most. The fact that Obama wants to “change” us from capitalist to socialist was missed by a lot of Americans. For that matter, That distinction is still being missed. I have heard a lot about how “the Republicans had their chance and now it’s our (liberal Wackos) turn! Yes we Can! The Voice of Change! Well I’ll agree with some of that. The Republicans did have their chance and blew it. But like my daddy said, two wrongs don’t make a right. In other words Mr. Obama (and associated wackos), just because Mr. Bush and his Republican cronies helped make the mess we’re in, doesn’t give you the mandate to hop in a and make it worse! Taxing the rich to give to the poor will not work! Raising taxes on the folks who create most of the jobs in this country and taking away their deductions is a sure recipe for disaster. Nationalizing the banks is just stupid! Taking away the peoples basic rights, and don’t think for a moment that that’s not coming, will be the biggest tradgedy ever to befall the people of this nation. What disgusts and appalls me beyond words, is that most folks can’t even see it!

  5. Amen Karl!

  6. Relocated Alaskan says:

    Our economy has become so regulated by the federal and state governments that it can no longer be called a capitalist economy. When risk takers lose, they should fail, not get bailed out. There is always someone there that will fill in the gap created. There should be an Economic Council that should let the Congress know the effects of their actions before any legislation regarding spending or taxes they are trying to pass. Since when can lawyers manage an econmy much less a government when they are trying to become millionaires and work on their next election.

  7. I believe a conference is a good idea if we give participants a task(s) to complete in order to keep them focused.

    I do not need a group of high forheads to tell me what the right economic system should be. The only moral system is laissez-faire capitalism, if we want to live in a society that reveres and protects the rights of the individual. The “if” is the key question we citizens must address.

    If we start here then real questions can be addressed by these esteemed scholors regarding the best way to get from here to there. In doing this we need to address some real modern day issues in a manner that our fellow citizens can see as feasible. A few examples of issues they could address are:

    1. The monetary system that matches the principle of liberty and capitalism. I have proposed that a Fiat system could work but only with strict controls on “currency” supply. This money based system would replace the current debt based system, that makes bankers rich at our expense (interest on the debt). Others have proposed the same but with a gold standard. I think Black Flag has proposed a free private banking system running on a fixed volume of currency, but I am not sure if he wants it backed by gold or something else of value (I expect he will clarify in response).

    2. Identify the procedure and timeline for conversion to the new system. This should clearly show how existing Federal Reserve Notes and Federal debt will be handled.

    3. How do we protect capitalism from the immoral. For example, how do we keep coersive monopolies from forming. Some have argued that such monopolies are impossible in a free market system. This may be true at large scales, but I have seen how monopolies were used to prevent the free market from working at a local or regional scale. Anti trust laws must be abolished and replaced with laws dealing with actual use of coersion in dealings (liers, cheats and thieves)not mere speculation about dealings that create advantage. Should we, or can we prevent the invention of investment mechanisms like those that helped bring our current system to a halt?

    4. How do we protect the citizenry from immoral individuals who would use unrestricted capitalism to harm others. One example is the dumping of toxins in our water systems because it is cheaper than treatment. We need a small handful of laws that would deal with these types of issues in a manner consistent with the underlying principles of liberty and capitalism. If there are in fact overriding public interests, such as water or air pollution that harms innocent people, how do we set standards and how do we deal with compliance? I suggest Liability litigation is prefered over continued govt regulation and monitoring. Damages would then go to those actually affected, not some govt agency.

    5. Develop a tax system that raises revenue for appropriate federal govt activities that is consistent with key principles. Appropriate activites are limited to those required to protect citizens from coersive force by others (foreign and domestic), in other words to protect our liberty.

    Black Flag: We have had some fun to date but I am afraid I may have finally let the cat out of the bag. Your assessments of my position have been only partly correct to date. I do wish to create an organizaton, ie govt, but one that “maintains” peaceful order and does not create it. As best I can tell our differences lie primarily in that you are an anarchist and I am an objectivist. I see an inherant need for govt, albeit limited under strict rules of conduct, and you do not. I see some need to punish bad behavior done in the name of capitalism to address serious modern day issues. I recognize some real threats to our sovereignty and safety from foreign forces, that requires a standing army. You apparently do not.

    I continue to test the assumptions and conclusions of my philosophy and have thus backed away from some of the conclusions reached by Ms. Rand and her friends. For example, I no longer believe we need to return to the gold standard. I understand your belief that the supply of fiat can not be controlled, thus rotting future value. I believe it can be controlled. But this goes back to our different view regarding the possibility of constructing a limited and appropriate govt. I believe your fixed supply of money would create shortages, thus hampering efficient trade. I would like to see you address this point at some time.

    I do not buy into Ms. Rands strict adherance to atheism in order to be considered an objective rational human being. We can chase this one around some other day.

    USW, et. al.. The Libertarian platform looks good on the surface, but the devil is in the details. For that reason I can not support the Libertarian party as it seems indistinquishable from anarchism. Unfortunately the platforms of the other two major parties are equally obnoxious to me. I am currently a Republican because many folks in that party are closer to my views and seem to be open to the idea of moving their positions, towards mine. From a practical matter those of us who want Liberty restored have the greatest chance of making short term changes by using one of the nationaly established political parties. If someone could show me how we could get this done without a party I would jump on the bandwagon immediately. So far the only alternative I can come up with is a new “coalition” or “caucus” of Americans who want govt to be constrained by our original Constitution and to return to our original American values. We could organize and create PAC’s to support anyone who signs onto our values and agrees to stick with them if elected. We need to educate folks as to what these values are, but most importantly how following them would improve their lives.

    I am starting to ramble so will take a break here. As for the primary question raised in US post of the day- a citizen driven conference would be great and I am willing to work to help it happen. I do beleive it should be focused, however, and not open ended.

    Best Wishes to All
    JAC

  8. USWeapon says:

    Tom,

    Thanks for the comments. I think the key here is understanding that the economic plans of Obama seem to be more aimed at furthering an agenda with the slight possibility of stimulating the economy. If we remove the agenda part of it we take a big filter off possible solutions.

  9. USWeapon says:

    JAC,

    I understand your apprehension around the Libertarian platform. I certainly don’t see it as the perfect fix. I did spend quite a bit of time discussing and debating it. It was a helpful exercise to see where they stand and help clarify for some whether it is an agenda we can support.

    At this point, I am with you in a lot of ways. I currently lean towards my decision being to stick with the Republican party, albeit in a limited fashion. I will maintain my beliefs rather than sticking to their agenda and platform. Their platform is more in line with what I believe although I will certainly not support all of it. The drug thing on the Libertarian platform is a difficult one for me.

    I am certainly with you on the belief that some form of government is inherently necessary. Perhaps an unfortunate side effect of societies, but I just don’t see things working without government. I do favor a significantly smaller government with much more power dedicated to the state and local level. I am thinking about going through platform issues one at a time over the next couple of weeks as I ferret out what I would make my platform be. I am hoping that I will get significant feedback on each area from everyone here. I don’t claim to know it all and I want to determine whether what I would adopt is the best way forward. I am also considering a series of articles that will discuss what we can do to get things rolling. Revolution has a brilliant idea for precinct captains that I think would be a start. The key is finding a way to do more with less and grow our numbers.

  10. USWeapon says:

    Karl,

    Which is why we have to get started on educating people NOW. They need to understand the realities versus the BS that the messiah is peddling. The idea is that we must force them away from the world of soundbite politics and engage them more deeply. Some will never change. Others will rally to the cause.

  11. Black Flag says:

    As USWep has already pointed out, it matters not one wit what anyone, economist or not, says or adivses – the government will ignore any attempts to shift its irrational approach to anything it does.

    Attempting to reason with government will accomplish the exact same result as attempting to reason with a grizzly bear (or alligator). Thus, it is pointless to do so.

    Therefore, the optimum strategy is not to engage the government at all – but to prepare for the consequences of the government’s action.

    You may not be able to reason with a grizzly, but you can certainly prepare yourself to resist or avoid its attack.

    Tom Awtry said

    Following the journey of a five-dollar bill through many transactions, the film shows how money functions as a standard of value and future payment, a storehouse of value and a convenient medium of exchange.

    The very reason why the stimulus program will not work is exposed by this snip-it from your site – the “School Room” youtube video – and the serious conceptual mistake it makes!

    Not to rehash another post, but I do believe it is very important to understand money and the mistake the video reinforces.

    Let me drawn on Mises The Theory of Money and Credit and Human Action

    “The function of money is to facilitate the business of the market by acting as a common medium of exchange”

    Put it in another way,

    First purpose is to transmit value over space.

    I can sell something here, go across the world, and buy something there.

    Second purpose is to transmit value over time.

    I wish to buy something in the future with the value I have today.

    Thus, the economy naturally evolves to use a commodity within the economy that is most easily exchanged – which will be the commodity most people want.

    With this high desire, it becomes easy to trade for it, and the trade with it to get what you really want.

    “It is the most marketable good which people accept because they want to offer it in later acts of impersonal exchange”

    Thus money servers two, very distinct purposes – exchange of wealth and store of wealth.

    Fiat money separates the two purposes of money – fiat money is used for exchange. As long as the underlying issuer of the fiat money accepts back the paper in trade for a real good, it works fine.

    The problem is when the underlying issuer continues to manufacturer the money beyond his ability to accept it back in trade of a real good.

    Fiat money, therefore, is not a store of wealth – inflation ‘rots’ the value over time – contradicting one the needs of money – it is a poor tool to transport value into the future.

    Thus in our economy of fiat money, saving ‘money’ in its fiat form is a serious mistake.

    When the issuer of fiat money continues to expand the amount of fiat in an economy, without the ability to trade real wealth for the increase, inflation occurs.

    As per the discussion previously, it is possible to inflate with gold, too (that is, dump gold into the market place, causing prices in the terms of gold to go up).

    However, there is a finite limit to this – there is only some much gold in the world. Thus, only so much inflation can occur – then it stops when there is no more gold to be dumped into the economy.

    It is important to understand that with fiat money, there is no limit and more so today.

    In pre-WW2 Germany, their fiat currency went into hyper-inflation, where the government was printing money so fast, they only printed one side of the note (I have a stack of these notes in my collection).

    Even the Germans of that day were somewhat constrained by the inability to print the money fast enough – but today with electronic money even that slight constraint has been removed.

    Another point the video is mistaken in presenting is that money determines the value of a good. It does not.

    Humans determine the value of any good – money only supplies a representation of that value.

    Since the stimulus package will flood the economy with fiat money – massive inflation will be the direct consequence.

    If this is the policy of the administration – that is, purposely to create inflation – then they will be successful.

    If it is not, then the intent of this bailout package is a failure (or, the policy of the administration – though articulated one way, has another – hidden – goal that is different from their articulation).

    Karl from Esom Hill said

    The fact that Obama wants to “change” us from capitalist to socialist was missed by a lot of Americans.

    I do not believe Obama wants to change US at all – the US is and has been a fascist economy for decades. (Government- run capitalism).

    Remember the seeds of this disaster started long before Obama – We must be equally aware of the planting of the seeds as much as we are aware of the fruit they bear.

  12. US: I’ll try to get some ideas together for your consideration in a platform. I would like to see our discussion at that point focus on reaching agreement on a draft we could circulate to a broader audience.

    Rev and I have also been discussing the precinct idea and it is the grassroots option. Face to face contact with your neighbors. It has also been proven the most effective way to win local political races. Good precinct captains used to become the best political candidates, because they knew what their neighbors wanted and could represent them. If they disagreed the neighbors would respect them enough to discuss the difference from a point of respect. It can be a powerful tool if done properly.

    By the way, I would still like to know what you told that group of black leaders in you town that changed their view on you and Repubs.

    See you soon
    JAC

  13. Black Flag says:

    Just A Citizen said
    March 4, 2009 at 12:59 pm

    The monetary system that matches the principle of liberty and capitalism. I have proposed that a Fiat system could work but only with strict controls on “currency” supply.

    I completely agree with the goal – so the debate is on the process.

    If we truly believe in liberty and capitalism, then there is no need to overtly invent a monetary system.

    The free market place will naturally create its own money, as described by Mises – it will select the commodity that is most desired.

    A rough example is prison – where the inmates use cigarettes as a medium of exchange. The prison guards did not declare cigarettes money – nor did any inmate. It happens ‘naturally’.

    Therefore, to answer your specific point, I am for ‘free’ choice in creating money – let the market place decide for itself, all by itself.

    No stirring necessary to make this brew work.

    2. Identify the procedure and timeline for conversion to the new system. This should clearly show how existing Federal Reserve Notes and Federal debt will be handled.

    Close the Fed. The market place will decide how to convert the Fed Reserve Notes, and repay, discount, or write off the debt.

    For example, how do we keep coersive monopolies from forming. Some have argued that such monopolies are impossible in a free market system. This may be true at large scales, but I have seen how monopolies were used to prevent the free market from working at a local or regional scale.

    I would like to hear how this can be possible. Frankly, every story always comes up with some government involvement, law, bylaw or rule that prevented free access to that part of the economy.

    In a free market – where no can be forced to participate or be excluded – a monopoly cannot exist in reality. I specify “in reality” since in theory, it might.

    In theory, there may exist a perfect company – whose efficiency equals its capability, and thus by specialization of labor, can produce a good significantly cheaper than any consumer could possibly make on his own.

    This perfect company selects a price which is so low, that it makes no economical sense for any other company to compete in that market – but high enough to make a profit for the company so to survive any economic upheaval that may occur in the future.

    It must make perfect decisions on purchases of its own supplies – selecting the exact price for quality from exactly the right supplier – in other words, it would need to be supplied by another perfect monopoly!

    Thus in reality this cannot happen.

    There always exists some deficiency in the operation of all companies – mismanagement, waste, over pricing, under pricing, poor suppliers, lack of capital, poor market choice, misunderstanding customer needs,…so on and so on, that another company can exploit it – as long as they are free to do so.

    The example of toxic dumping is not a capitalist problem – but a act of violence against the people – which is handled no differently then if you tried to poison me directly.

    It does not matter if it was poisoning of one person, or many, or if it was by water or by air or whether it is called poison or pollution – it is violence on innocent people, and not a right.

    As far as taxation – the moment a tax is created, it is no longer a free market.

    Therefore, I point to (1), your desired goal. Point (5) contradicts Point (1). Which one do you want?

    I see some need to punish bad behavior

    Interesting. If I may ask questions:

    Why do you want to punish behavior?
    Why do you want to punish?
    What non-violent behavior revolts you that you wish to punish?

    I no longer believe we need to return to the gold standard.

    I think the gold standard argument is very irrelevant.

    Gold has traditionally (talking thousands of years, across the global, empires and civilizations) been money.

    But that does not mean gold is the only money.

    It does not mean gold will be money.

    I stick to Mises’ definition of money, and let the money discover itself.

  14. A lot to think about here. I think Karl nailed a big point, that Obama’s media image will let him dodge the consequences of this soon to fail spending spree. He has appointed Biden to oversee it, so its just a matter of time until he gets thrown under the bus. Pelosi has as strong an agenda, and hopefully will not escape putting that ahead of America’s needs.
    Just A Citizen & Flag, great discussion! I agree with JAC on a need to punish businesses with immoral practices that could never have been envisioned when the Constitution was written. AT&T makes a good example of a before and after monopoly. Wal Mart has been caught selling drugs below their cost in local markets to put small drug stores out of business.
    Head starting to hurt, time to bail.

  15. Black Flag says:

    AT&T makes a good example of a before and after monopoly.

    But AT&T monopoly was created by government

    By government writ, nobody was allowed be a telephone company for 60 years after Bell’s patent. Until Bell’s patent expired in 1894, only Bell Telephone and its licensees could legally operate telephone systems in the United States.

    Between 1894 and 1904, over six thousand independent telephone companies went into business in the United States, and the number of telephones boomed from 285,000 to 3,317,000.

    This almost destroyed AT&T –

    AT&T president Theodore Vail began petitioning the government, claiming a monopoly would be good for the USA.

    The United States government accepted this principle, initially in a 1913 agreement known as the Kingsbury Commitment.

    As part of this agreement, AT&T agreed to connect non-competing independent telephone companies to its network and divest its controlling interest in Western Union telegraph.

    However, it created a price mechanism – forced on to competing companies, that essentially destroyed the competition – by making long distance pay for the “free” local calls – local telephone companies got no revenue.

    By 1915, there were 5 telephone companies left….

  16. Black Flag says:

    Wal Mart has been caught selling drugs below their cost

    Gee, can’t do that!

    The people will not stand for corporate subsidization of their medicine!

    8)

  17. Black Flag says:

    So, if inflation is coming, why are prices falling?

    http://www.msnbc.msn.com/id/29495753/

    The article highlights oil – but this is pretty much occurring across a lot of commodities and goods – huge inventories that are slowly being sold at discounts so to get rid of the stuff.

    It will take time to sell these inventories – especially into an economy that has job losses, and poor economic health…. who has the money to buy?

  18. Karl from Esom Hill says:

    US,
    Educating the public about Obama and Co. is becoming a big focus in my life and that of my friends. The problem is, Ain’t too many of the Obamafreaks listening! Messiah is starting to be too mild a term. Maybe AntiChrist? All kidding aside, it’s amazing to me the power this bastard has over the minds of America. It seems like no matter what he says or does, no blame is being laid at his feet. There was a time not too far back when he would have been crucified for the spending practices he has used so far in his almost 2 mo. of office. But for some reason, even if MSM complains, it’s about CONGRESS spending all that money. Like he’s had nothing to do with it! Yes, he doesn’t control the purse! But if anyone (besides us) is listening, He actually is controlling the Congress like a puppet on strings. FINALLY had a few Democrats stand up to try to stop the latest spending bill. My only question is, where were they when This TRILLION dollar disaster was driven down Americas collective throats?

  19. Crimsonjihad says:

    The “problem” with this economic summit would be, it would actually FIX the problem. And of course the Democrats can’t have that, because then they couldn’t push through whatever they feel like because people might actually catch on to what they are doing. Bills are so vaguely written that unless you are a lawyer, you can’t understand them. I will again quote Lewis Black and modify it a little bit to fit government instead of big companies. Mr. Black states that if a company can’t explain what it does in one sentence, it should be illegal. If you can’t explain, or word your bill, in one normal sentence, it shouldn’t pass.

    “Why do you want to punish behavior?”
    “Why do you want to punish?”
    “What non-violent behavior revolts you that you wish to punish?”

    I feel it necessary to point out that Black Flag left out “bad”. Whether this was purposely or accidentally, and whether it means anything, but I think it does. Why else do you punish bad behavior? So that the offending party doesn’t do it again. And just because it’s a non-violent act doesn’t mean you have to respond with a violent act to punish. If a CEO steals from his company, take the money back. Take his house, sell it, get the money back. I see that as fair.

    I do agree with Black Flag on the money idea. Although it almost sounds like it will go back to a bartering system. Need some cable installed? Sure I’ll come do that for you, if you build me a patio. Not always a bad idea, but not everyone always needs a patio. I know this isn’t exactly what Black Flag is talking about, but even with some other standard of money, as defined by Mises, if the standard becomes flat screen TVs, I don’t need 10 flat screens. This leads to a shifting standard. Which isn’t much of a standard. But I think it would actually be better than the current system.

  20. Black Flag says:

    Crimsonjihad

    I feel it necessary to point out that Black Flag left out “bad”. Whether this was purposely or accidentally, and whether it means anything, but I think it does.

    🙂 I’m honored that you actually read all my words – that is rare…

    …and yes, I left it out purposely.

    How could I possibly define “bad” non-violent behavior?

    What claim do I have to be able to discern that for anyone else?

    Since the behavior is non-violent – I’m not forced to participate – so why should I care, anyway?

    Bet you can tell what my next question for you will be….. 🙂

    So that the offending party doesn’t do it again.

    And if they do, why does it matter to you?

    So what if my neighbor decides to hack his furniture to pieces in a rage because his hockey team lost? That’s bad behavior! But why do I care? It’s not my furniture.

    And just because it’s a non-violent act doesn’t mean you have to respond with a violent act to punish.

    True – you can refuse to deal with anyone you believe is repugnant to you.

    If a CEO steals from his company, take the money back. Take his house, sell it, get the money back. I see that as fair.

    Why?

    Was somebody forced to give this guy money?

    If they weren’t, and they were foolish, isn’t that the lesson to be learned?

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