Bailout Nation (Part II)

Investment, Speculation, Regulation
http://distributism.blogspot.com/2008/04/investment-speculation-and-regulatio...

Aristotle and the Subprime Mess
http://distributism.blogspot.com/2008/03/aristotle-and-subprime-mess.html


A continuation of my conversation with John Medaille concerning the so-called "bailout" and what it means for America.

John Medaille
http://distributism.blogspot.com

Category:

News & Politics

Tags:

• bailout
• Feds
• subprime
• economic
• crisis
• talk
• radio
• distributism
• John
• Medaille
• Jeremiah
• Bannister
• Paleocrat
• WOCR

[labulldog5]

Oh I certainly know your are totally against socialization of the banking sector - that was just a general statment. "Casino capitalism, haha!" I'll give you this, you certainly have a gift for how to shed negative light on this-or-that. Call it what you like, but exposing false prices is a function that must be executed. Unless you're a full-blown Keynesian (sticky prices,) SOMEONE must perform this task. Who do you suggest, if not investors? A new gov't agency?

[paleocrat]

I will reply at greater length later. Because this relates to remarks made by John Medaille, I asked him for his position regarding regulation.

I also linked up a few blog entries from The Distributist Review (of which he is the admin and I am a contributor) that I think may be applicable. While not outlining the nuts and bolts of how regulation would work, or who would regulate, they point out factors that must be taken into consideration when making such decisions.

[labulldog5]

Since I last saw you, i thought I'd let you know that free trade is basically irrelevant now. Remember I mentioned how I was mostly concerned with monetary and other financial structures? Thats it now. Monetary policy and other rules pertaining to finance are now THE problem facing the US economy for years, maybe decades to come. Weve made enormous banks into basically wards of the state. Compared to this, trade policy is like a speck of dust. Fight the socialization of Americas banks!

[paleocrat]

Free trade was never irrelevant. I acknowledged, as I had many times on my program before our conversation, that our monetary policy and fiscal structures suck. But I see a both/and where you see an either/or.

I am certainly opposed to the socialization of our banking system. You ought to know that very well.

[labulldog5]

Hello my friend. Good videos, except you should be aware that speculators DO play a vital role in the market real asset price correction. No, they are not actually manufacturing real goods, but yes, they are providing a vital service to an economy in which prices are not "sticky."

[paleocrat]

The speculation inherent in casino capitalism is ruinous. Then again, what else would you expect to hear coming from me?

Take issue with John Medaille. He was the guest.

[wainscottbl]

Summer is when things will be bad...if the bailouts fail.

[labulldog5]

Derivatives, which derive their value from some asset, (housing for instance,) CAN cause a big mess, if the assets themselves are reflecting false prices. How could this happen, you say? Try artificially low interest rates (Fed), which fueled overinvestment and eventually a crash (half-baked projects, as Austrians would say.)  When it was revealed that value placed in housing was false, MBS and other derivatives took a huge hit. Want one person to blame? How about the federal reserve board?

[cathaustralia]

Spot on the problem is the West USA ,Western Europe and UK, have no real economy,,they have lived in borrowed time for 30 years,,they produced nothing and what is produced is uncompetitive and subsidized. These economies had in decline and will be in poverty in 50-100 years.

[bookstar77]

Good, solid stuff from a fellow Distributist.