To me, it seems that the addiction to exponential growth stems directly from capitalism. If one company is growing exponentially and another isn't, the former will drive the latter out of business. And so it goes.
We can get out of this economic/environmental mess, but not with capitalism intact. If I were a betting man, I'd wager there'll be several "May '68"'s throughout Europe over the next five-six years.
Unfortunately, capitalism can no longer afford to be reformed in the way you suggest (taxation & social spending).
Capitalists need a given rate of expansion, and given the tendency for the rate of profit to fall over time, there is only a finite period during which social democratic reforms are possible.
That period came to an end around 1973, after which point workers in the first world have seen nothing in the way of standard of living increases.
agentofprogress: maybe we should try to get rid of this addiction to exponential growth, after all, all environments/markets/resources on our planet are limited, and exponential growth that relies on anything that cannot be infinite will always come to an end.
but just like one university can improve and adapt over time while staying the same size, economy can improve without growth, by constantly replacing old ways to do things as better ideas come along.
societies can improve while the population size stays the same... there are so many examples. how did we get hooked on those ideas based on the premise that only growth is improvement? GDP needs to grow, cities need to grow, companies need to grow, your bank account needs to grow, production and consumption need to grow. so somehow the people accepted exponentially growing debt for much too long. you are right, the system is broken, there is no obvious way out.
I'd bet in Europe it is hard to get U.S. right wing Libertarian views- The right is blaming regulation and socialism for the financial crisis because the toxic mortgage securities were backed by government policy insuring them in the first place. As for the financial sector, real growth IS speculation. The big money they are sugguesting is to curve the shrink to a grow, and slow growth is all that matters for them. They see a guarantee to a way of life for all people as impeding societal gains.
metalorg: here in germany, we do have a political party that represents those policies, called the FDP, or the liberals. they manage to get into power in a coalition with the much bigger CSU every now and then, but most times they only get around 6-10% of the votes, so they are competing with the other smaller parties. normal people dont seem to fall for it, its an open secret that they will only behave in the interest of rich people and corporations.
brocktree: this kind of libertarianism seems to be just a little ideology, people in europe dont really believe it but it seems to be quite popular in the USA.
all this little ideology does is to cause people to NOT vote in their own interest. or to be more specific, in germany this ideology, which the FDP often tries to promote, would cause people that are not rich to vote for the FDP. as a philosophy, i think it failed, its an ideology.
Sure it's an ideology as all beliefs are. But what is wrong and bad about people deciding what is right for themselves.
What benefit do you get dictating policy to someone who is of no physical threat to your well being. Look I am no anarch-Capitolist. I believe government indeed has a role. But I would certainly not tell you how to spend your money if you wanted no part of my idea. How can you reason to me that it's fair to dictate to someone else what they should do.
now i dont think i can follow you anymore. what do you mean?
do you want to say that independent from the question wether a government should exist or not, and independent from the question wether a state has responsibilities are not, rich people should not be forced to pay taxes?
no taxes, no government. and if the rich people dont pay taxes, then, well, thats already a fact in the united states, just look how wonderful this works. yeah, right.
I have to ask where you are getting your tax information. I think there are serious flaws to the U.S. tax code.
But I have to say your comment comes off as an ad hominem.
The U.S. government spends more money per capita then any other country. Now sure we also have one hell of a deficit, but taking that out of account where does the majority of that money come from. Certainly not the poor or middles class. But, this really isn't my argument. My argument is on who is making the rules.
American Libertarian belifiefs are sturctured in a pretty strong line with our constitution. Where as level of reponsibilites are tiered. I magine a bunch of fountains. eventually leading into one big pool. If one fountain goes bad the pool remains virtually undisturbed. Now imagine one pool with one fountain. If the one fountain goes bad the whole thing is screwed. That's American libertarianism.
brocktree: about the thing with the pool and the fountains, who would those many small fountains be?
libertarians want all the power to be only and exclusively with the big corporations, they always want to cut governemnt spending when it comes to education and things like this, the government should do nothing and the corporations everything.
libertarians are so deluded that they think that this would be something positive, thats the problem.
Libertarianism has nothing to do with corporate interests. In my opinion it would make things tougher for corporate interests. Because corporations would have to try and convince communities everywhere that what they were doing should be accepted by that community rather than going to one centralized government and only having to convince one entity. I cannot completely denounce a central government, but what powers should a central government really have. This is what I am interested in.
i dont see how this idea with the little communities should work. if i would be a company, i would just hire 100 soldiers, and take over & keep defending one of those communities. and then what?
to restrict the powers of a government, you need a constitution. usually im not really patriotic, but maybe you should check out the german "grundgesetz", established after the second world war, quite modern. the new bolivian constitution might be even better. the american one sucks.
and as soon as you have a constitution, then if and how this constitution can be changed will be in the constitution.
the main problem with the american constitution would be that the election-system described there will always lead to a two-party dictatorship, and never to a truly representative democracy, because all the votes that didnt win one of the states dont count for the final result. third parties are eliminated by this process.
The vote process is certainly antiquated. Like I said I do see a reason for a central government. I just believe the powers should be very limited. Metalorg made a comment previously on military. And how strange it is that they get support from libertarians. Well obviously we do know that you need a strong arm to enforce policy when needed. However, our idea of military force is limited to defense only. Plus 100? I get the point but you'd need about 10,000. Most of us have guns.
brocktree: yes, an update of the election system would be really nice.
i think the government should be limited by concepts like the universal declaration of human rights and international law.
about the 100 soldiers: white phosphorus and tear gas smokescreen, and then the question is: which side has more infrared-vision capabilities and more gas masks? having guns at home doesnt help against an organized attack at all. your 10.000 rifles wouldnt see a single target.
I'm glad for you they are appropriately marginalized. Unfortunately it's not nessesarily a partisan line which seperate people who behave in the interest of the rich and corporations. I bet the FDP in Germany is a lot more honest than the conservatives in the U.S.A. because they are under the boot of someone else.
i think the main difference is that in germany, people that are not rich dont believe that libertarian politics are in their interest. in the united states, many people believe this, and so they vote for people that only care about the richest people and biggest corporations. to those libertarians out there: if you want to be a libertarian, be a millionaire FIRST, then its at least understandable when you promote trickle-down economics (which doesnt work).
The thing with libertarians is that they are scared of the big bad government being too obtrusive in their daily lives. Afraid it'd turn out like the movie 'Brazil'. This kind of thing really speaks to the hearts of rural Americans. I don't think anyone believes in 'trickle-down' anymore.
I think it's a lack of trust with respect to the government to function in their interest- weirdly enough this doesn't apply to the military.
I'd bet the U.S. left is just as big with corporate collusion too.
The right and the left are both up the corporations butts. Its one of the reasons libertarians are gaining support. People realize we have to get control away from the American two party system. And it's the only group (in america) with a suggestion that has had a living model on how that is done. And that is to give people more responsibilities and to limit governments areas of control, especially at a centralized level.
You're very right that regulating the government is very important for maintaining liberty but you can get tyranny from the private sector also. You need to regulate the private sector - and the most powerful way we can do it is using government and laws.
the solution: you need a highly educated population, and more democracy. unfortunately the election-system in the united states kills third parties. in germany, we have 5 parties in parliament: christian conservative, socialist democratic, libertarian, the greens, and some leftwing populists. at the moment, we have a conservative/socialist coalition in power, other frequent coalitions would be socialist/green or conservative/libertarian.
because of the strong competition between those parties, and the quite independent media, even our christian conservatives are less ideological than any of the two parties in the united states. only small parties can afford ideologies in such a system.
the consequence of freedom is that greedy idiots will ruin the economy
personally i think it is better to have freedom and that this can ruin us than some social-democrate, socialist or fascist state controlling all economy.
but the state could make it harder for the greedy people to do such things that lead to the current crisis
I want to present a quick argument against your socialist beliefs. While at current our system in America is failing it is failing due to socialism. Or at least the wrong type of socialism (i.e. Soviet Union). But of all the governments standing ours has existed the longest. Which stability is very necissary for prosperity and success. It needs a clean slate. Not socialism. The original idea does work and history proves it.
brocktree: ill just ask you to please define socialism.
i guess your definition will be different from my definition. oh, by the way: soviet union has nothing to do with socialism. thats commonism, something very different. communism is nonsense, socialism is not.
Communism isn't nonsense. It just doesn't seem to work on a large scale (which is not to say that it couldn't, just that nobody's ever made it work) Communism based on a "workers revolution" or that is imposed on the many by the few is nonsense. I think the most important feature in distinguishing "good" communism from "bad" is it's emmigration/immigration policies. Good communism is hard to get into. Bad Communism is hard to get out of.
A personal description of how I percieve socialism, would simply be. A centralized government that decides and regulates what is best for the people on all levels.
Book definition is: Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.
I'd think you lean to the collective idea. I'd label it more with the centralized idea.
well, if this really is the definition, then im clearly not a socialist. i mean, thats communism, communism is bullshit. if the definition for socialism describes communism, then there is something wrong with the definition.
i have to ask you, where did you get that definition?
That definition was from answers website. My Webster dictionary is similar but it makes no mention of centralized government.
I am curious what your definition is. We may be closer in ideology then we percieve at the moment. An old friend of mine is very liberal and we do see close on many issues. We just differ that he thinks government can work, and I don't. When you see your government spend more per capita then any other country and you get what we have here. ?
i think that democratic governments can work, but the democracy in the united states seems to be quite dysfunctional. if you take the united states as an example for a working government, its easy to see how you could arrive at the conclusion that it doesnt work, but there are other nations where it works much better.
if the government only behaves in the interest of corporations, not of citizens, then its dysfunctional an anarcho-capitalism really isnt much worse.
At least I'm making some sense. For instance the American Government spent roughly 600 billion dollars last year on health care and human services. I want someone to explain to me why we don't have national healthcare rather than why we need it.
Plus military bases in over 130 countries. Trust me Kurt I practice my German daily, I really don't want to be here anymore. I just have to wait for it to get bad enough that my wife agrees.
brocktree: yes, single-payer healthcare would not only be much better for the people and increase life expectancy for the people, it also would be much cheaper. but the companies would lose in two ways: less money, and less disease (= less reasons to spend more money). the size of this sector would be permanently decreased, of course thats not bad, substitute it with additional programs for old people. it always seems to come down to corporate interest versus common interest.
You make good points, and some others are just far off... I just can't understand how you can go from saying that the government maid mistakes by lending money/bailing out corporations, and then turn around and saying that America is anarcho-capitalist. Although it's not as centralized as European countries, to call the US market anarchism is simply nonsensical. The US has many regulations, including several that contributed to this crisis.
maybe i should have clarified this, of course markets in america are more free than they are otherwise, your rich people pay far less taxes than they would elsewhere, and your big corporations pay no taxes at all. no taxes for big corporations, from my perspective this is as close as it gets to anarcho capitalism. and then some important regulations got deregulated/destroyed/undermined/forgotten about, and you got the bubble, and now the bubble popped, and you have a crisis.
I question the accuracy of the claim that "big corporations pay no taxes at all" (Although I suppose some do cheat the system with offshore banks, which you may be referring to), but more importantly any system with taxes can't be considered anarcho-capitalist. Although the Bush tax cuts, for example, grossly benefitted the wealthy over the not, there were still taxes, including taxes on the lower and middle classes.
If a system like this (in this case, the tax structure) supports the wealthy over the rich, it's not anarchist and it's not capitalist either. It's basically a corrupt, idiotic form of government intervention. You are also ignoring the role of government interventions like the Fed's unsustainable measures to keep interest rates down, and out-of-control government spending. To attribute this crisis as much as you did to the free market is just wrong.
what nation you from? my mom s from jamica but native to africa. I think europeans have wreaked the world money is justs key to get things we really need food, clean water, medicene
Nope it isn't. You are most certainly a muslim in disguise trying to advocate full reserve banking (= sharia finance) a concept that was NEVER enforced anywhere so far, including sharia countries, since it is fallacious anyway. Existing sharia products are just a clever way to obfuscate an underlying interest model, and circumvention by smart wordplay calling interest "profit" instead.
I know the CRA under Carter and strengthened and used as a threat under Janet Reno in Clinton's admin caused all of the toxic assets, these sub prime loans,mortgages to poorer people who couldn't pass the scrutiny of tougher credit rules in days past is the main reason for the crisis. Barney Frank and Chris Dodd should be a cell together for dismissing the integrity of Fannie Mae and Freddie Mac. Milton Friedman wrote a great book called Free to Choose which is why I'm a libertarian fiscally.
I disagree with the free market point, I don't think that you can say it's been disproven for one key reason:
look at the people who are saying it is dead. These are all people who benefit from an increase in government control over the economy. They are also the supposed "experts" who did not see this coming. I'm not saying that it's viable or it's what we need right now, I just think it's invalid to say that it's what caused the current crisis based on the opinions of the "experts".
TO a degree. I do agree with some statements. Not on the regulation part. I think it's a great misconception about what really goes on over here and in our banking system.
One solution to the selfish CEOs and high up officials is to have 2/3 of their salaries put in a trust fund that is unavailable for 5 years and revoked when they really mess up. Same goes for politicians.
Our society is completely against socialism in any form. It is a dirty word in American politics. It is so often confused with communism that it would be nearly impossible for the American public to accept it, not to mention the conservatives who ultimatly believe with faith that far left democrats somehow destroyed the economy.
well, thats strange. i guess this is because of the cold war: the republicans tied socialism and communism to give socialism a bad name and make their own rightwing policies look more plausible. but actually this is similar to someone that is opposed to evolution linking evolutionary theory and social darwinism / the nazi ideology. the connection has to be rejected. maybe i should make a video about what socialism really is and isnt.
Good video, however when refer to socialism you could've been a little bit more clear. I assume you're talking about social democratic policies which is more in line with mixed economic policy making. That is to say, market economy coupled regulations and transparancy AND free health care, education etc.
In America, socialism has very negative connotations, as they immediately think of communism when they hear the word.
yes, i didnt think about it when i recorded the video.
for me, the relationship between socialism and communism is similar to the relationship between evolutionary theory and social darwinism: one is an evil caricature of the other, one is rational while the other went too far and turned into a dogmatic ideology. but if you want to damage both, you connect them, which is what happened excessively in the cold war.
actually, a good mix of socialism and capitalism is called socialism.
socialism without capitalism isnt called socialism, thats communism, that doesnt work, that would be ddr and ussr.
socialism basically is the idea to tax the rich, not to the point that they are poor, theyll still be rich, but then you have money to pay for healthcare, education, and so on. the government does those things that need to be done and that the markets wont do, markets do the rest, thats socialism.
you are wrong when you say that the DDR and USSR are socialist nations. they were communists. socialism is what obama is doing right now. germany is a socialist nation, actually, most of europe is. dont get that confused.
You've got a lot of things right, but you've got a lot of things wrong, too. Please don't tell me the market is disproven . . . this whole thing was mired in regulation--it's socialism that causes this kind of thing to happen. Look up the Community Reinvestment Act and its terms, for a start. This collapse is any fault but that of the market. America does NOT have a free market--it's not disproven. Look up Peter Schiff, get his take on what got us here.
robshred: if socialism caused this, then why didnt the crisis start in a country that has more socialist policies, why did it start in the united states where people dont even have free healthcare and free university education? or do you want to imply that the crisis started because the united states was too socialist?
your banks did have the liberty to fuck around with your currency and create money out of nothing, thats the problem. deregulation. too free markets.
When I said socialism causes this kind of thing to happen, I mean big government. The government holds a monopoly on policy, which includes regulatory agencies and the plans they implement. It was regulations on our banks that forced them to give out loans they otherwise normally wouldn't have given, and to invest in areas they otherwise would not have, with "money" they wouldn't've invested. Shit, more than half of our representatives profited off of it. When you have a government (cont.)..
who is in charge of regulations and shit, you have to be aware that these are the same greedy entities (humans, especially those seeking power) who give themselves exorbitant raises and jets who are running our corporations (sums that without the aid of government lobbying would probably not be the size they are). You can't expect to increase the size of the gvnt and expect regulation to work in a utilitarian way. It was the gvnt that artificially lowered interest rates and fucked everything
The root cause of this mess was lending to insolvent people in the first place. Nothing to do with capitalism itself, rather a total abuse of basic principles of banking.
Whatever it is, NEVER believe those who criticise the Fractional Reserve Banking System. Those who say this are most probably muslims or their apoligists trying to push the fallacious Sharia Banking system. FRB is not the reason of the crisis, excessive derivation of financial products is, in addition to loose controls over what financial products were created, biased rating bureaus being paid by the very companies they were rating etc... There isn't a single reason alone.
I am not a Muslim nor an apologist for Sharia Banking. But if you look at how FRB works, it is inherently inflationary and creates a state of permanent and ever increasing debt both on the part of government and of the citizenry. New debt must be created in order for old debt to be serviced. This is not a conspiracy of evil banking overlords, it is simply the end result of a system that creates debt principle without correspondingly creating money to service the interest on the principle.
isreasontaboo: i agree with you, excessive derivation, excessive leverage, lack of transparency, lack of oversight, and the fact that noone cared while important rules were being violated. those are the problems.
but fractional reserve banking still isnt the optimal system... its one of many ways to create money. there would be different options, like, creating money directly without using debt to do it.
Excessive derivation and excessive leverage are symptoms of the larger problem. Why was there excessive leverage? Because the Fed encouraged policies that would increase the lending power of the banks to weaker borrowers. Why did they do this? So that they could get more people to borrow. It was a stopgap to encourage lending without having to rely as heavily on the discount rate to do so. They needed people to borrow to keep the economy afloat as old debt was repaid.
sammcalpine: yeah, but this has now turned into a problem.
by doing this, they sold the future in order to pay for past mistakes. and by expanding it into the credit card market and the inter-banking market and the private investment market, they just made it worse and worse. now there is just too much debt everywhere in the united states, on all levels.
"Whatever it is, NEVER believe those who criticise the Fractional Reserve Banking System."
What? The Fed has no oversight. They print money out of thin air. They control interest rates which should be controlled by markets. And you're going to make you blanket statement? Based on problems that arise from this fractional bank nonsense we have going on in America. To have power. One must first be empowered.
The alternaive to fractional reserve banking is... FULL reserve banking. If a bank has to keep your deposit as a FULL reserve what it boils down to is this: It cannot make loans. The whole concept of the loan industry would disappear. That is very bad. Credit, when used appropriately is a very useful financial instrument. I'd hate to see it disappear. Creation of money out of thin air isn't necessarily a bad thing as long as it follows the growth of the GDP plus some mild inflation.
The "alternative" to FRB is not ONLY full reserve. This is a false dichotomy. The real problem is not credit. It is the FACT that there is not corresponding creation of interest along with the debt principle. When loans are repaid the amount of money in the economy shrinks. But since the interest is not created as new money, the interest to pay YOUR loan comes out of the borrowed principle of somebody else's loan.
In order just to keep money in the system new larger loans have to constantly be created to pay for existing ones. A stable system needs to have a mechanism for creating new non-debt based money to replace what is being removed and held aside as reserves by banks. In this way there would always be money available in the system for people to be able to repay their debts. As it is now the sum total debt is and will always be greater than the total money supply.
sammcalpine: this is correct, there is more debt that has to be paid in dollars than there are dollars.
for the euro, this is different, there seems to be a positive amount of euros in circulation, there would be something left if all debt is paid back. but somehow, the european banks look just as terrible as the american ones. we are in the same situation, lack of transparency, we dont know if our banks are insolvent or not. but it doesnt look very good.
I like the use of the word credit. Because it is not credit. It is debt. While I see the benefits of a fractional reserve banking their are some serious issues. The creation of debt occurs before the creation of cash. Speculation can be good it can be bad. And when it leads to government bailouts the whole system has failed. Americans were spending $1.25 for every dollar they earned. If people didn't see this coming they were flat out dumb and a combination of the FRB setting rates, cont
and fractional banking is why we are in this mess. Like I said to have power you must be empowered. People are not responsible enough to be allowed to gamble with money they don't have. It has to mean something when you have money or the whole point of the market is invalid. We've had easy money for far to long and sooner or later reality will make it self appear. We can either recognize that or literally wait forwhat will be hell on earth.
Parsing the terms credit and debt is not useful here. The problem isn't whether the borrowed money is invested or spent. The problem is interest. There must be a mechanism for
1. creation of non debt based currency to cover the interest that is removed from the economy and held as reserves by the banks.
2. a way to limit to the ratio of debt to non-debt currency within the total economy
Without these mechanisms debt will ALWAYS grow to eventually be larger than the total available currency
"But since the interest is not created as new money, the interest to pay YOUR loan comes out of the borrowed principle of somebody else's loan."
That is the "debt virus" myth. That was already debunked. Perhaps it would be true if money was really tied to a fixed asset like gold but since that is not the case new money gets created all the time. There is no conspiracy behind this. GDP grows too. Mild inflation is desirable because it is an incentive to spend/invest NOW rather than later.
"That is the "debt virus" myth. That was already debunked. Perhaps it would be true if money was really tied to a fixed asset like gold but since that is not the case new money gets created all the time."
you are wrong, the savings rate proves it. right now, there is a negative amount of dollars in existence, the debt cannot be possibly paid back. the average american is in the negative when it comes to dollars. its a fact. its uncomfortable, but true.
HOW is new money created though? Through new debt. Just because the number of tokens to represent money is theoretically infinite under this system doesn't mean that debt cannot grow to be larger than available currency.
So you are all saying: suppress debt as a financing tool? That would mean the end of gearing (aka leverage) and the return to a primitive financial system.
How will you purchase a house or start up a business? Save 30 years and THEN purchase it?
I am saying that debt as a financing tool needs to be controlled. First there needs to be a mechanism for introducing non debt based money into the economy. Right now, all new money is created as debt. Second, there needs to be a limit to the ratio of total debt in the economy compared to total non debt based currency. When debt load gets larger than the currency base you are pretty much fucked.
The Fannie Mae and Freddie Mac policies are only symptoms of the FRB system. These policies served as a channel to inject new loans into the economy. If they hadn't been passed some other vehicle would have been created that would have served the same purpose and you would now be blaming the current crisis on whatever policy took the place of Fannie and Freddie.
This is a real problem that is faced by every country with a private central bank. You spoke of the American economy being one big ponzi scheme. This is true. But the base of the ponzi scheme rests on the fractional reserve lending system, and it is a scheme that is playing itself out in every country in the world that has a central bank with fractional reserve lending.
The problem that lead to the current economic crisis is not caused by rampant Capitalism. It is not solved by socialism. The problem, and it is one which we share with most of the developed world is the fractional reserve lending policies of the central bank. Please, I know you don't like Zeitgeist but watch the section about the fractional reserve lending system. It is the most lucid and real of Peter Joseph's ideas.
sammcalpine: peter joseph is a delusional uneducated moron, his zeitgeist-movies prove that he does not have lucid ideas. well, maybe if he would be an author of fiction. but he considers his delusions to be real, thats the problem, and he doesnt question his own belief, and he uses quotemined quotes.
fractional reserve banking is a problem, but this crisis was caused by deregulation.
Yes, I agree that Peter Joseph is delusional, though I wouldn't go so far as to call him uneducated. I understand that the well is poisoned because much of what he claims to know is garbage. But you must know that even a broken clock is correct twice a day. Just because he is a 911 conspiracy loon doesn't mean that he is wrong on everything. On the subject of the Fractional Reserve Banking I think that he gets pretty much everything right.
sammcalpine: maybe this is because of my close affinity to the scientific world.
one counter-example is enough to kill a theory, even if it is an important theory like the theory of evolution or the theory of general relativity, or plate tectonics.
i read books that are more or less free of mistakes, i watch documentaries that are more or less free of mistakes, this can be accomplished using peer-review and skepticism while producing the stuff. its also called intellectual honesty.
Let me just say that I am also a very scientific minded person. I view everything that I read or watch through the lens of a skeptic. You say that you read books that are more or less free of mistakes. But surely you know that even the most vetted scientific textbooks are full of mistakes large and small. We simply dont know yet what the mistakes are so we accept the current view as the best information available at this time. That is the scientific viewpoint.
sammcalpine: research the book: "bill bryson - a short history of nearly everything", its almost completely free of mistakes. 50-100 pages, 1 mistake. or the new editions of the feynman lectures, they went through extensive review.
and then there are people that are speaking the truth about 99% of the time, like noam chomsky or howard zinn.
however, zeitgeist is low quality, by any standarts. random documentaries tend to be better than this, with less mistakes.
Not that we KNOW that our theories are 100% correct but that we ACCEPT that they represent the best information currently available.
Now, concerning the idea that one counter-example is enough to kill a theory. While I dont disagree with this statement, I dont think that it appropriate in the current context. The fact that Peter Joseph is way off in left field concerning many things, doesnt invalidate everything he has to say. Each topic should be taken on its own merits.
If you disagree then you must disassociate yourself from Newtonian Mechanics on the grounds that Newton was an Alchemist.
My assertion is that Peter Joseph is mostly right concerning FRB. I reference him not because I buy into all his Zeitgeist theories, but because he presents the best case I have seen to date for the inherent problems of FRB. His film Zeitgeist Addendum is actually much better and more comprehensive than the original on this subject.
My goal by the way is not to convince you that I am right and you are wrong and you should just believe me that FRB is the root of the problem. Rather I am trying to engage you in a discussion about the topic and I think that Zeitgeist Addendum is good starting ground from which we can discuss the issue. It saves a lot of time since I mostly agree with Peter Joseph you can simply tell me what is wrong with his presentation of the issue and I don't have to spell out my entire position first.
Deregulation is not the problem. No amount of regulation can keep the Fractional Reserve Banking system afloat indefinitely. It is a government endorsed ponzi scheme that is built to amass larger and larger debt loads until it eventually crashes. If you disagree, tell me specifically how a crash is to be avoided. Tell me how the current debt can be serviced without creating an even larger debt load to replace it ad infinitum.
you are more or less right about fractional reserve banking, but it REALLY turned into a ponzi-sceme just a few years ago. fractional reserve banking can be more or less tamed if you restrict the amount of money creation and instead start with a preexisting positive amount of money. then it could theoretically work for centuries. but it still sucks, i agree, there are better alternatives. however, in this crisis, the fact that the whole system slipped into debt is the problem.
The only major disagreement I have with Peter on this point is that he is constantly referring to "they" as if there is some secret cartel of Bankers who are pulling strings to cause crashes to happen. While I think that there are individuals who will play the system to their advantage as there are in any system, it is not a conspiracy but simply an evolved self perpetuating system. Nobody is "running" it. People simply do what is to their advantage within the system that exists.
the flaw in the system is the following: when people start acting in their own self-interest more or less recklessly, maybe even without really breaking any rules but by continuously bending them, they can actually fulfill their self-interest at the cost of others. and then it just happens, you dont need to organize it, the knowledge just spreads more or less secretly, maybe like the knowledge about how to hack a blu-ray disc.
part of the problem started with a bill that congress pushed through that made it illegal for certain housing companies to deny people from buying a house based on their credit score. This inturn caused many people to go into debt and the dominoes to start to fall
The Fannie Mae and Freddie Mac policies are only symptoms of the FRB system. These policies served as a channel to inject new loans into the economy. If they hadn't been passed some other vehicle would have been created that would have served the same purpose and you would now be blaming the current crisis on whatever policy took the place of Fannie and Freddie.
To me, it seems that the addiction to exponential growth stems directly from capitalism. If one company is growing exponentially and another isn't, the former will drive the latter out of business. And so it goes.
We can get out of this economic/environmental mess, but not with capitalism intact. If I were a betting man, I'd wager there'll be several "May '68"'s throughout Europe over the next five-six years.
AgentOfProgress 3 years ago
Unfortunately, capitalism can no longer afford to be reformed in the way you suggest (taxation & social spending).
Capitalists need a given rate of expansion, and given the tendency for the rate of profit to fall over time, there is only a finite period during which social democratic reforms are possible.
That period came to an end around 1973, after which point workers in the first world have seen nothing in the way of standard of living increases.
There's only one solution: revolution
AgentOfProgress 3 years ago
agentofprogress: maybe we should try to get rid of this addiction to exponential growth, after all, all environments/markets/resources on our planet are limited, and exponential growth that relies on anything that cannot be infinite will always come to an end.
but just like one university can improve and adapt over time while staying the same size, economy can improve without growth, by constantly replacing old ways to do things as better ideas come along.
kurtilein3 3 years ago
i mean, for me its so obvious.
societies can improve while the population size stays the same... there are so many examples. how did we get hooked on those ideas based on the premise that only growth is improvement? GDP needs to grow, cities need to grow, companies need to grow, your bank account needs to grow, production and consumption need to grow. so somehow the people accepted exponentially growing debt for much too long. you are right, the system is broken, there is no obvious way out.
kurtilein3 3 years ago
Taking shits in public fountains may have the capacity to financially liberate any financial crisis.
krylonshoe 3 years ago
I'd bet in Europe it is hard to get U.S. right wing Libertarian views- The right is blaming regulation and socialism for the financial crisis because the toxic mortgage securities were backed by government policy insuring them in the first place. As for the financial sector, real growth IS speculation. The big money they are sugguesting is to curve the shrink to a grow, and slow growth is all that matters for them. They see a guarantee to a way of life for all people as impeding societal gains.
metalorg 3 years ago
metalorg: here in germany, we do have a political party that represents those policies, called the FDP, or the liberals. they manage to get into power in a coalition with the much bigger CSU every now and then, but most times they only get around 6-10% of the votes, so they are competing with the other smaller parties. normal people dont seem to fall for it, its an open secret that they will only behave in the interest of rich people and corporations.
kurtilein3 3 years ago
"its an open secret that they will only behave in the interest of rich people and corporations. "
That description in no way reflects the libertarian views in America.
There's a youtube video enitled "The philosophy of liberty".
It is the most accurate description of American Libertarians.
BrockTee 3 years ago
brocktree: this kind of libertarianism seems to be just a little ideology, people in europe dont really believe it but it seems to be quite popular in the USA.
all this little ideology does is to cause people to NOT vote in their own interest. or to be more specific, in germany this ideology, which the FDP often tries to promote, would cause people that are not rich to vote for the FDP. as a philosophy, i think it failed, its an ideology.
kurtilein3 3 years ago
Sure it's an ideology as all beliefs are. But what is wrong and bad about people deciding what is right for themselves.
What benefit do you get dictating policy to someone who is of no physical threat to your well being. Look I am no anarch-Capitolist. I believe government indeed has a role. But I would certainly not tell you how to spend your money if you wanted no part of my idea. How can you reason to me that it's fair to dictate to someone else what they should do.
BrockTee 3 years ago
brocktree:
now i dont think i can follow you anymore. what do you mean?
do you want to say that independent from the question wether a government should exist or not, and independent from the question wether a state has responsibilities are not, rich people should not be forced to pay taxes?
no taxes, no government. and if the rich people dont pay taxes, then, well, thats already a fact in the united states, just look how wonderful this works. yeah, right.
kurtilein3 3 years ago
I have to ask where you are getting your tax information. I think there are serious flaws to the U.S. tax code.
But I have to say your comment comes off as an ad hominem.
The U.S. government spends more money per capita then any other country. Now sure we also have one hell of a deficit, but taking that out of account where does the majority of that money come from. Certainly not the poor or middles class. But, this really isn't my argument. My argument is on who is making the rules.
BrockTee 3 years ago
American Libertarian belifiefs are sturctured in a pretty strong line with our constitution. Where as level of reponsibilites are tiered. I magine a bunch of fountains. eventually leading into one big pool. If one fountain goes bad the pool remains virtually undisturbed. Now imagine one pool with one fountain. If the one fountain goes bad the whole thing is screwed. That's American libertarianism.
BrockTee 3 years ago
lol let me rephrase that. American libertarianism is a desire to make sure there is not one fountain putting all the water into the pool.
BrockTee 3 years ago
brocktree: about the thing with the pool and the fountains, who would those many small fountains be?
libertarians want all the power to be only and exclusively with the big corporations, they always want to cut governemnt spending when it comes to education and things like this, the government should do nothing and the corporations everything.
libertarians are so deluded that they think that this would be something positive, thats the problem.
kurtilein3 3 years ago
Libertarianism has nothing to do with corporate interests. In my opinion it would make things tougher for corporate interests. Because corporations would have to try and convince communities everywhere that what they were doing should be accepted by that community rather than going to one centralized government and only having to convince one entity. I cannot completely denounce a central government, but what powers should a central government really have. This is what I am interested in.
BrockTee 3 years ago
brocktree:
i dont see how this idea with the little communities should work. if i would be a company, i would just hire 100 soldiers, and take over & keep defending one of those communities. and then what?
to restrict the powers of a government, you need a constitution. usually im not really patriotic, but maybe you should check out the german "grundgesetz", established after the second world war, quite modern. the new bolivian constitution might be even better. the american one sucks.
kurtilein3 3 years ago
... continued
and as soon as you have a constitution, then if and how this constitution can be changed will be in the constitution.
the main problem with the american constitution would be that the election-system described there will always lead to a two-party dictatorship, and never to a truly representative democracy, because all the votes that didnt win one of the states dont count for the final result. third parties are eliminated by this process.
kurtilein3 3 years ago
The vote process is certainly antiquated. Like I said I do see a reason for a central government. I just believe the powers should be very limited. Metalorg made a comment previously on military. And how strange it is that they get support from libertarians. Well obviously we do know that you need a strong arm to enforce policy when needed. However, our idea of military force is limited to defense only. Plus 100? I get the point but you'd need about 10,000. Most of us have guns.
BrockTee 3 years ago
brocktree: yes, an update of the election system would be really nice.
i think the government should be limited by concepts like the universal declaration of human rights and international law.
about the 100 soldiers: white phosphorus and tear gas smokescreen, and then the question is: which side has more infrared-vision capabilities and more gas masks? having guns at home doesnt help against an organized attack at all. your 10.000 rifles wouldnt see a single target.
kurtilein3 3 years ago
I'm glad for you they are appropriately marginalized. Unfortunately it's not nessesarily a partisan line which seperate people who behave in the interest of the rich and corporations. I bet the FDP in Germany is a lot more honest than the conservatives in the U.S.A. because they are under the boot of someone else.
metalorg 3 years ago
metalorg:
i think the main difference is that in germany, people that are not rich dont believe that libertarian politics are in their interest. in the united states, many people believe this, and so they vote for people that only care about the richest people and biggest corporations. to those libertarians out there: if you want to be a libertarian, be a millionaire FIRST, then its at least understandable when you promote trickle-down economics (which doesnt work).
kurtilein3 3 years ago
The thing with libertarians is that they are scared of the big bad government being too obtrusive in their daily lives. Afraid it'd turn out like the movie 'Brazil'. This kind of thing really speaks to the hearts of rural Americans. I don't think anyone believes in 'trickle-down' anymore.
I think it's a lack of trust with respect to the government to function in their interest- weirdly enough this doesn't apply to the military.
I'd bet the U.S. left is just as big with corporate collusion too.
metalorg 3 years ago
metalorg:
The right and the left are both up the corporations butts. Its one of the reasons libertarians are gaining support. People realize we have to get control away from the American two party system. And it's the only group (in america) with a suggestion that has had a living model on how that is done. And that is to give people more responsibilities and to limit governments areas of control, especially at a centralized level.
BrockTee 3 years ago
Brocktee:
You're very right that regulating the government is very important for maintaining liberty but you can get tyranny from the private sector also. You need to regulate the private sector - and the most powerful way we can do it is using government and laws.
metalorg 3 years ago
metalorg and brocktree:
the solution: you need a highly educated population, and more democracy. unfortunately the election-system in the united states kills third parties. in germany, we have 5 parties in parliament: christian conservative, socialist democratic, libertarian, the greens, and some leftwing populists. at the moment, we have a conservative/socialist coalition in power, other frequent coalitions would be socialist/green or conservative/libertarian.
kurtilein3 3 years ago
... but i would have to add:
because of the strong competition between those parties, and the quite independent media, even our christian conservatives are less ideological than any of the two parties in the united states. only small parties can afford ideologies in such a system.
kurtilein3 3 years ago
the consequence of freedom is that greedy idiots will ruin the economy
personally i think it is better to have freedom and that this can ruin us than some social-democrate, socialist or fascist state controlling all economy.
but the state could make it harder for the greedy people to do such things that lead to the current crisis
hassejensen35 3 years ago
I want to present a quick argument against your socialist beliefs. While at current our system in America is failing it is failing due to socialism. Or at least the wrong type of socialism (i.e. Soviet Union). But of all the governments standing ours has existed the longest. Which stability is very necissary for prosperity and success. It needs a clean slate. Not socialism. The original idea does work and history proves it.
BrockTee 3 years ago
brocktree: ill just ask you to please define socialism.
i guess your definition will be different from my definition. oh, by the way: soviet union has nothing to do with socialism. thats commonism, something very different. communism is nonsense, socialism is not.
so, please just define: what is socialism?
kurtilein3 3 years ago
Communism isn't nonsense. It just doesn't seem to work on a large scale (which is not to say that it couldn't, just that nobody's ever made it work) Communism based on a "workers revolution" or that is imposed on the many by the few is nonsense. I think the most important feature in distinguishing "good" communism from "bad" is it's emmigration/immigration policies. Good communism is hard to get into. Bad Communism is hard to get out of.
sammcalpine 3 years ago
A personal description of how I percieve socialism, would simply be. A centralized government that decides and regulates what is best for the people on all levels.
Book definition is: Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.
I'd think you lean to the collective idea. I'd label it more with the centralized idea.
BrockTee 3 years ago
brocktree:
well, if this really is the definition, then im clearly not a socialist. i mean, thats communism, communism is bullshit. if the definition for socialism describes communism, then there is something wrong with the definition.
i have to ask you, where did you get that definition?
kurtilein3 3 years ago
That definition was from answers website. My Webster dictionary is similar but it makes no mention of centralized government.
I am curious what your definition is. We may be closer in ideology then we percieve at the moment. An old friend of mine is very liberal and we do see close on many issues. We just differ that he thinks government can work, and I don't. When you see your government spend more per capita then any other country and you get what we have here. ?
BrockTee 3 years ago
brocktree:
i think that democratic governments can work, but the democracy in the united states seems to be quite dysfunctional. if you take the united states as an example for a working government, its easy to see how you could arrive at the conclusion that it doesnt work, but there are other nations where it works much better.
if the government only behaves in the interest of corporations, not of citizens, then its dysfunctional an anarcho-capitalism really isnt much worse.
kurtilein3 3 years ago
At least I'm making some sense. For instance the American Government spent roughly 600 billion dollars last year on health care and human services. I want someone to explain to me why we don't have national healthcare rather than why we need it.
Plus military bases in over 130 countries. Trust me Kurt I practice my German daily, I really don't want to be here anymore. I just have to wait for it to get bad enough that my wife agrees.
BrockTee 3 years ago
brocktree: yes, single-payer healthcare would not only be much better for the people and increase life expectancy for the people, it also would be much cheaper. but the companies would lose in two ways: less money, and less disease (= less reasons to spend more money). the size of this sector would be permanently decreased, of course thats not bad, substitute it with additional programs for old people. it always seems to come down to corporate interest versus common interest.
kurtilein3 3 years ago
"factional reserve lending IS bullshit!
i haven't kept my money in a bank in over a decade!
"
Well too bad for you if inflation ate it away, dumbo.
isreasontaboo 3 years ago
You make good points, and some others are just far off... I just can't understand how you can go from saying that the government maid mistakes by lending money/bailing out corporations, and then turn around and saying that America is anarcho-capitalist. Although it's not as centralized as European countries, to call the US market anarchism is simply nonsensical. The US has many regulations, including several that contributed to this crisis.
pyromania152 3 years ago
pyromania152:
maybe i should have clarified this, of course markets in america are more free than they are otherwise, your rich people pay far less taxes than they would elsewhere, and your big corporations pay no taxes at all. no taxes for big corporations, from my perspective this is as close as it gets to anarcho capitalism. and then some important regulations got deregulated/destroyed/undermined/forgotten about, and you got the bubble, and now the bubble popped, and you have a crisis.
kurtilein3 3 years ago
I question the accuracy of the claim that "big corporations pay no taxes at all" (Although I suppose some do cheat the system with offshore banks, which you may be referring to), but more importantly any system with taxes can't be considered anarcho-capitalist. Although the Bush tax cuts, for example, grossly benefitted the wealthy over the not, there were still taxes, including taxes on the lower and middle classes.
pyromania152 3 years ago
Continued:
If a system like this (in this case, the tax structure) supports the wealthy over the rich, it's not anarchist and it's not capitalist either. It's basically a corrupt, idiotic form of government intervention. You are also ignoring the role of government interventions like the Fed's unsustainable measures to keep interest rates down, and out-of-control government spending. To attribute this crisis as much as you did to the free market is just wrong.
pyromania152 3 years ago
You tell it like it is Mr. German man :D
metalplace567 3 years ago
lol ^^
kurtilein3 3 years ago
what nation you from? my mom s from jamica but native to africa. I think europeans have wreaked the world money is justs key to get things we really need food, clean water, medicene
ionrocket 3 years ago
Kurtilein,
Did you get my PM?
sammcalpine 3 years ago
"fractional reserve lending is BULLSHIT!
it's a scam!
it's FRAUD pure and simple!"
Nope it isn't. You are most certainly a muslim in disguise trying to advocate full reserve banking (= sharia finance) a concept that was NEVER enforced anywhere so far, including sharia countries, since it is fallacious anyway. Existing sharia products are just a clever way to obfuscate an underlying interest model, and circumvention by smart wordplay calling interest "profit" instead.
isreasontaboo 3 years ago
I know the CRA under Carter and strengthened and used as a threat under Janet Reno in Clinton's admin caused all of the toxic assets, these sub prime loans,mortgages to poorer people who couldn't pass the scrutiny of tougher credit rules in days past is the main reason for the crisis. Barney Frank and Chris Dodd should be a cell together for dismissing the integrity of Fannie Mae and Freddie Mac. Milton Friedman wrote a great book called Free to Choose which is why I'm a libertarian fiscally.
dingorex 3 years ago
I disagree with the free market point, I don't think that you can say it's been disproven for one key reason:
look at the people who are saying it is dead. These are all people who benefit from an increase in government control over the economy. They are also the supposed "experts" who did not see this coming. I'm not saying that it's viable or it's what we need right now, I just think it's invalid to say that it's what caused the current crisis based on the opinions of the "experts".
GodofVengence 3 years ago
TO a degree. I do agree with some statements. Not on the regulation part. I think it's a great misconception about what really goes on over here and in our banking system.
BrockTee 3 years ago
Kurt. I disagree. If you could. Please watch this video and tell what you find incorrect about any of these statements.
watch?v=LxlKFFSuwCM
Thanks.
BrockTee 3 years ago
Not a bad analysis Kurt..
PScottrwp 3 years ago
One solution to the selfish CEOs and high up officials is to have 2/3 of their salaries put in a trust fund that is unavailable for 5 years and revoked when they really mess up. Same goes for politicians.
InReasonWeTrust 3 years ago
inreasonwetrust: that might be a good idea.
kurtilein3 3 years ago
Our society is completely against socialism in any form. It is a dirty word in American politics. It is so often confused with communism that it would be nearly impossible for the American public to accept it, not to mention the conservatives who ultimatly believe with faith that far left democrats somehow destroyed the economy.
windyshrimp 3 years ago
windyshrimp:
well, thats strange. i guess this is because of the cold war: the republicans tied socialism and communism to give socialism a bad name and make their own rightwing policies look more plausible. but actually this is similar to someone that is opposed to evolution linking evolutionary theory and social darwinism / the nazi ideology. the connection has to be rejected. maybe i should make a video about what socialism really is and isnt.
kurtilein3 3 years ago
Good video, however when refer to socialism you could've been a little bit more clear. I assume you're talking about social democratic policies which is more in line with mixed economic policy making. That is to say, market economy coupled regulations and transparancy AND free health care, education etc.
In America, socialism has very negative connotations, as they immediately think of communism when they hear the word.
ardamels01 3 years ago
ardamels01:
yes, i didnt think about it when i recorded the video.
for me, the relationship between socialism and communism is similar to the relationship between evolutionary theory and social darwinism: one is an evil caricature of the other, one is rational while the other went too far and turned into a dogmatic ideology. but if you want to damage both, you connect them, which is what happened excessively in the cold war.
kurtilein3 3 years ago
I absolutely agree with you, keep up the good work, I really enjoy your videos!
ardamels01 3 years ago
what has happended to USA and the world is the logical end of total freedom.
when you have total freedom greedy people will destroy the system
but socialism and communism dosent work either - actually it is far worse. Just look at USSR and DDR.
A good blend of socialist ideas and capitalism would be great.
ludersatan 3 years ago
ludersatan:
actually, a good mix of socialism and capitalism is called socialism.
socialism without capitalism isnt called socialism, thats communism, that doesnt work, that would be ddr and ussr.
socialism basically is the idea to tax the rich, not to the point that they are poor, theyll still be rich, but then you have money to pay for healthcare, education, and so on. the government does those things that need to be done and that the markets wont do, markets do the rest, thats socialism.
kurtilein3 3 years ago
what has happended to USA and the world is the logical end of total freedom.
when you have total freedom greedy people will destroy the system
but socialism and communism dosent work either - actually it is far worse. Just look at USSR and DDR.
A good blend of socialist ideas and capitalism would be great.
ludersatan 3 years ago
ludersatan:
you are wrong when you say that the DDR and USSR are socialist nations. they were communists. socialism is what obama is doing right now. germany is a socialist nation, actually, most of europe is. dont get that confused.
kurtilein3 3 years ago
You've got a lot of things right, but you've got a lot of things wrong, too. Please don't tell me the market is disproven . . . this whole thing was mired in regulation--it's socialism that causes this kind of thing to happen. Look up the Community Reinvestment Act and its terms, for a start. This collapse is any fault but that of the market. America does NOT have a free market--it's not disproven. Look up Peter Schiff, get his take on what got us here.
robshred66 3 years ago
robshred: if socialism caused this, then why didnt the crisis start in a country that has more socialist policies, why did it start in the united states where people dont even have free healthcare and free university education? or do you want to imply that the crisis started because the united states was too socialist?
your banks did have the liberty to fuck around with your currency and create money out of nothing, thats the problem. deregulation. too free markets.
kurtilein3 3 years ago
When I said socialism causes this kind of thing to happen, I mean big government. The government holds a monopoly on policy, which includes regulatory agencies and the plans they implement. It was regulations on our banks that forced them to give out loans they otherwise normally wouldn't have given, and to invest in areas they otherwise would not have, with "money" they wouldn't've invested. Shit, more than half of our representatives profited off of it. When you have a government (cont.)..
robshred66 3 years ago
who is in charge of regulations and shit, you have to be aware that these are the same greedy entities (humans, especially those seeking power) who give themselves exorbitant raises and jets who are running our corporations (sums that without the aid of government lobbying would probably not be the size they are). You can't expect to increase the size of the gvnt and expect regulation to work in a utilitarian way. It was the gvnt that artificially lowered interest rates and fucked everything
robshred66 3 years ago
The root cause of this mess was lending to insolvent people in the first place. Nothing to do with capitalism itself, rather a total abuse of basic principles of banking.
isreasontaboo 3 years ago
Whatever it is, NEVER believe those who criticise the Fractional Reserve Banking System. Those who say this are most probably muslims or their apoligists trying to push the fallacious Sharia Banking system. FRB is not the reason of the crisis, excessive derivation of financial products is, in addition to loose controls over what financial products were created, biased rating bureaus being paid by the very companies they were rating etc... There isn't a single reason alone.
isreasontaboo 3 years ago
I am not a Muslim nor an apologist for Sharia Banking. But if you look at how FRB works, it is inherently inflationary and creates a state of permanent and ever increasing debt both on the part of government and of the citizenry. New debt must be created in order for old debt to be serviced. This is not a conspiracy of evil banking overlords, it is simply the end result of a system that creates debt principle without correspondingly creating money to service the interest on the principle.
sammcalpine 3 years ago
isreasontaboo: i agree with you, excessive derivation, excessive leverage, lack of transparency, lack of oversight, and the fact that noone cared while important rules were being violated. those are the problems.
but fractional reserve banking still isnt the optimal system... its one of many ways to create money. there would be different options, like, creating money directly without using debt to do it.
kurtilein3 3 years ago
Excessive derivation and excessive leverage are symptoms of the larger problem. Why was there excessive leverage? Because the Fed encouraged policies that would increase the lending power of the banks to weaker borrowers. Why did they do this? So that they could get more people to borrow. It was a stopgap to encourage lending without having to rely as heavily on the discount rate to do so. They needed people to borrow to keep the economy afloat as old debt was repaid.
sammcalpine 3 years ago
sammcalpine: yeah, but this has now turned into a problem.
by doing this, they sold the future in order to pay for past mistakes. and by expanding it into the credit card market and the inter-banking market and the private investment market, they just made it worse and worse. now there is just too much debt everywhere in the united states, on all levels.
kurtilein3 3 years ago
"Whatever it is, NEVER believe those who criticise the Fractional Reserve Banking System."
What? The Fed has no oversight. They print money out of thin air. They control interest rates which should be controlled by markets. And you're going to make you blanket statement? Based on problems that arise from this fractional bank nonsense we have going on in America. To have power. One must first be empowered.
BrockTee 3 years ago
The alternaive to fractional reserve banking is... FULL reserve banking. If a bank has to keep your deposit as a FULL reserve what it boils down to is this: It cannot make loans. The whole concept of the loan industry would disappear. That is very bad. Credit, when used appropriately is a very useful financial instrument. I'd hate to see it disappear. Creation of money out of thin air isn't necessarily a bad thing as long as it follows the growth of the GDP plus some mild inflation.
isreasontaboo 3 years ago
The "alternative" to FRB is not ONLY full reserve. This is a false dichotomy. The real problem is not credit. It is the FACT that there is not corresponding creation of interest along with the debt principle. When loans are repaid the amount of money in the economy shrinks. But since the interest is not created as new money, the interest to pay YOUR loan comes out of the borrowed principle of somebody else's loan.
sammcalpine 3 years ago
In order just to keep money in the system new larger loans have to constantly be created to pay for existing ones. A stable system needs to have a mechanism for creating new non-debt based money to replace what is being removed and held aside as reserves by banks. In this way there would always be money available in the system for people to be able to repay their debts. As it is now the sum total debt is and will always be greater than the total money supply.
sammcalpine 3 years ago
sammcalpine: this is correct, there is more debt that has to be paid in dollars than there are dollars.
for the euro, this is different, there seems to be a positive amount of euros in circulation, there would be something left if all debt is paid back. but somehow, the european banks look just as terrible as the american ones. we are in the same situation, lack of transparency, we dont know if our banks are insolvent or not. but it doesnt look very good.
kurtilein3 3 years ago
I like the use of the word credit. Because it is not credit. It is debt. While I see the benefits of a fractional reserve banking their are some serious issues. The creation of debt occurs before the creation of cash. Speculation can be good it can be bad. And when it leads to government bailouts the whole system has failed. Americans were spending $1.25 for every dollar they earned. If people didn't see this coming they were flat out dumb and a combination of the FRB setting rates, cont
BrockTee 3 years ago
and fractional banking is why we are in this mess. Like I said to have power you must be empowered. People are not responsible enough to be allowed to gamble with money they don't have. It has to mean something when you have money or the whole point of the market is invalid. We've had easy money for far to long and sooner or later reality will make it self appear. We can either recognize that or literally wait forwhat will be hell on earth.
BrockTee 3 years ago
Parsing the terms credit and debt is not useful here. The problem isn't whether the borrowed money is invested or spent. The problem is interest. There must be a mechanism for
1. creation of non debt based currency to cover the interest that is removed from the economy and held as reserves by the banks.
2. a way to limit to the ratio of debt to non-debt currency within the total economy
Without these mechanisms debt will ALWAYS grow to eventually be larger than the total available currency
sammcalpine 3 years ago
"But since the interest is not created as new money, the interest to pay YOUR loan comes out of the borrowed principle of somebody else's loan."
That is the "debt virus" myth. That was already debunked. Perhaps it would be true if money was really tied to a fixed asset like gold but since that is not the case new money gets created all the time. There is no conspiracy behind this. GDP grows too. Mild inflation is desirable because it is an incentive to spend/invest NOW rather than later.
isreasontaboo 3 years ago
isreasontaboo:
"That is the "debt virus" myth. That was already debunked. Perhaps it would be true if money was really tied to a fixed asset like gold but since that is not the case new money gets created all the time."
you are wrong, the savings rate proves it. right now, there is a negative amount of dollars in existence, the debt cannot be possibly paid back. the average american is in the negative when it comes to dollars. its a fact. its uncomfortable, but true.
kurtilein3 3 years ago
HOW is new money created though? Through new debt. Just because the number of tokens to represent money is theoretically infinite under this system doesn't mean that debt cannot grow to be larger than available currency.
sammcalpine 3 years ago
So you are all saying: suppress debt as a financing tool? That would mean the end of gearing (aka leverage) and the return to a primitive financial system.
How will you purchase a house or start up a business? Save 30 years and THEN purchase it?
isreasontaboo 3 years ago
I am saying that debt as a financing tool needs to be controlled. First there needs to be a mechanism for introducing non debt based money into the economy. Right now, all new money is created as debt. Second, there needs to be a limit to the ratio of total debt in the economy compared to total non debt based currency. When debt load gets larger than the currency base you are pretty much fucked.
sammcalpine 3 years ago
Pandaguy,
The Fannie Mae and Freddie Mac policies are only symptoms of the FRB system. These policies served as a channel to inject new loans into the economy. If they hadn't been passed some other vehicle would have been created that would have served the same purpose and you would now be blaming the current crisis on whatever policy took the place of Fannie and Freddie.
sammcalpine 3 years ago
This is a real problem that is faced by every country with a private central bank. You spoke of the American economy being one big ponzi scheme. This is true. But the base of the ponzi scheme rests on the fractional reserve lending system, and it is a scheme that is playing itself out in every country in the world that has a central bank with fractional reserve lending.
sammcalpine 3 years ago
Kurtilein,
The problem that lead to the current economic crisis is not caused by rampant Capitalism. It is not solved by socialism. The problem, and it is one which we share with most of the developed world is the fractional reserve lending policies of the central bank. Please, I know you don't like Zeitgeist but watch the section about the fractional reserve lending system. It is the most lucid and real of Peter Joseph's ideas.
sammcalpine 3 years ago 3
sammcalpine: peter joseph is a delusional uneducated moron, his zeitgeist-movies prove that he does not have lucid ideas. well, maybe if he would be an author of fiction. but he considers his delusions to be real, thats the problem, and he doesnt question his own belief, and he uses quotemined quotes.
fractional reserve banking is a problem, but this crisis was caused by deregulation.
kurtilein3 3 years ago
Kurilein,
Yes, I agree that Peter Joseph is delusional, though I wouldn't go so far as to call him uneducated. I understand that the well is poisoned because much of what he claims to know is garbage. But you must know that even a broken clock is correct twice a day. Just because he is a 911 conspiracy loon doesn't mean that he is wrong on everything. On the subject of the Fractional Reserve Banking I think that he gets pretty much everything right.
sammcalpine 3 years ago
sammcalpine: maybe this is because of my close affinity to the scientific world.
one counter-example is enough to kill a theory, even if it is an important theory like the theory of evolution or the theory of general relativity, or plate tectonics.
i read books that are more or less free of mistakes, i watch documentaries that are more or less free of mistakes, this can be accomplished using peer-review and skepticism while producing the stuff. its also called intellectual honesty.
kurtilein3 3 years ago
Let me just say that I am also a very scientific minded person. I view everything that I read or watch through the lens of a skeptic. You say that you read books that are more or less free of mistakes. But surely you know that even the most vetted scientific textbooks are full of mistakes large and small. We simply dont know yet what the mistakes are so we accept the current view as the best information available at this time. That is the scientific viewpoint.
sammcalpine 3 years ago
sammcalpine: research the book: "bill bryson - a short history of nearly everything", its almost completely free of mistakes. 50-100 pages, 1 mistake. or the new editions of the feynman lectures, they went through extensive review.
and then there are people that are speaking the truth about 99% of the time, like noam chomsky or howard zinn.
however, zeitgeist is low quality, by any standarts. random documentaries tend to be better than this, with less mistakes.
kurtilein3 3 years ago
Not that we KNOW that our theories are 100% correct but that we ACCEPT that they represent the best information currently available.
Now, concerning the idea that one counter-example is enough to kill a theory. While I dont disagree with this statement, I dont think that it appropriate in the current context. The fact that Peter Joseph is way off in left field concerning many things, doesnt invalidate everything he has to say. Each topic should be taken on its own merits.
sammcalpine 3 years ago
If you disagree then you must disassociate yourself from Newtonian Mechanics on the grounds that Newton was an Alchemist.
My assertion is that Peter Joseph is mostly right concerning FRB. I reference him not because I buy into all his Zeitgeist theories, but because he presents the best case I have seen to date for the inherent problems of FRB. His film Zeitgeist Addendum is actually much better and more comprehensive than the original on this subject.
sammcalpine 3 years ago
My goal by the way is not to convince you that I am right and you are wrong and you should just believe me that FRB is the root of the problem. Rather I am trying to engage you in a discussion about the topic and I think that Zeitgeist Addendum is good starting ground from which we can discuss the issue. It saves a lot of time since I mostly agree with Peter Joseph you can simply tell me what is wrong with his presentation of the issue and I don't have to spell out my entire position first.
sammcalpine 3 years ago
Deregulation is not the problem. No amount of regulation can keep the Fractional Reserve Banking system afloat indefinitely. It is a government endorsed ponzi scheme that is built to amass larger and larger debt loads until it eventually crashes. If you disagree, tell me specifically how a crash is to be avoided. Tell me how the current debt can be serviced without creating an even larger debt load to replace it ad infinitum.
sammcalpine 3 years ago
sammcalpine:
you are more or less right about fractional reserve banking, but it REALLY turned into a ponzi-sceme just a few years ago. fractional reserve banking can be more or less tamed if you restrict the amount of money creation and instead start with a preexisting positive amount of money. then it could theoretically work for centuries. but it still sucks, i agree, there are better alternatives. however, in this crisis, the fact that the whole system slipped into debt is the problem.
kurtilein3 3 years ago
The only major disagreement I have with Peter on this point is that he is constantly referring to "they" as if there is some secret cartel of Bankers who are pulling strings to cause crashes to happen. While I think that there are individuals who will play the system to their advantage as there are in any system, it is not a conspiracy but simply an evolved self perpetuating system. Nobody is "running" it. People simply do what is to their advantage within the system that exists.
sammcalpine 3 years ago
sammcalpine: you are absolutely right.
the flaw in the system is the following: when people start acting in their own self-interest more or less recklessly, maybe even without really breaking any rules but by continuously bending them, they can actually fulfill their self-interest at the cost of others. and then it just happens, you dont need to organize it, the knowledge just spreads more or less secretly, maybe like the knowledge about how to hack a blu-ray disc.
kurtilein3 3 years ago
part of the problem started with a bill that congress pushed through that made it illegal for certain housing companies to deny people from buying a house based on their credit score. This inturn caused many people to go into debt and the dominoes to start to fall
pandaguy666 3 years ago
[Reposted to keep the thread coherent]
Pandaguy,
The Fannie Mae and Freddie Mac policies are only symptoms of the FRB system. These policies served as a channel to inject new loans into the economy. If they hadn't been passed some other vehicle would have been created that would have served the same purpose and you would now be blaming the current crisis on whatever policy took the place of Fannie and Freddie.
sammcalpine 3 years ago