Quote of the Centurty

[GermanTrader]

Quote from IShopAtPublix:

I can't stand the guy (Milton Friedman) Blind faith in the private sector is what got us into this mess. I don't believe that anything managed by private sector is inherently superior to public sector. I think it is more dependent on a)People b) policies of those people

I disagree. Allowing the market to correct and take out businesses and industries that are not healthy the way they are right now is just common sense, and fits the economic cycle very well. The shedding of the weak makes room for the strong, and elimination of losers makes room for new winners; that is the function of the economic cycle. NOT allowing the market to correct, for whatever reason, by means of manipulation, favoritism and socialist tactics, is NOT healthy and is NOT sustainable.

A return to hard currency, elimination of the Fed and re-industrialization of this country is required, nothing less will do if it is to be sustainable. Anything less is just another bandaid, regardless of the ticket price.

No comment on Friedman.

 

[IShopAtPublix]

Quote from achilles28:

No, it was the FED that created this bubble with 2% interest rates for years.

Bubbles are made and popped via money supply. I suggest u study up.

The only "Failing" of the Private Sector is that it was engineered on a Moral Hazard (banks own the FED).

So there is no accountability when things go South if most Fed bank are caught on the wrong side.

Get rid of the FED, go back to hard money (don't care what), and you'll see a lot of banks and lenders become far more prudent and conservative overnight

When there's no risk to risk, people make stupid decisions.

The key is to make Banks financially accountable again. Remove the Moral Hazard.

I see there are some libertarians here. Fed kept interest rates low and it did create conditions fertile for speculation BUT the speculation itself was done by private entities. It was not the fed that designed crazy financial instruments or approved people for mortgages they had no business having. Freddie and Fannie were government sponsored entities but were still private before take over. Fact of the matter is, several prominent businesses failed, end of story. It just proves private entities are nowhere near infallible.

As further proof of the ridiculousness of assertion that private is always better than public I present the following hypothetical scenario:

On your desk there are 2 resumes: One is from U.C Berkley (needs no introduction) and one is from Univeristy of Phoenix Online.

Now surely an institution run by godless liberals, incompetent bureaucrats, and other "low lifes" would not hold a candle to a profit driven "american way" run institution. Yet, any reasonable person would feel otherwise. If you feel the example is extreme, try Southern Cal vs Berkley. Berkley is considered more prestigious and "better" (save for film school)

As this example illustrates, public vs private comparison needs to be made on the basis of people and policies.

 

[bwolinsky]

Quote from Cutten:

Blind faith? Lol. The very next sentence you say "I believe", rather than "evidence suggests", or "theory would imply".

Seriously, go out and read some economics books, you will learn *why* 99.9% of economists believe the opposite of you, and see the facts that back it up.

Right, like it's a political opinion.

 

[bwolinsky]

Quote from IShopAtPublix:

Since you are desperately trying to be an asshole here, in order for me to negate someone else's absolute belief I had to use the phrase "I don't believe" I myself did not specify an absolute but instead qualified it that it depends on who is running the show.

I could care less what 99.9% economists believe. I dispute that figure as well.

Laissez-faire did not work out too well in 1929 and as a result some new regulation was introduced. The fact that general margin levels for stocks are regulated by the federal reserve is not consistent with Laissez-faire principles.

It sounds like you could care less, or you could actually go read a book on economics. Milton Friedman is not in the habit of making political statements.

Do you have a point? Boom, bust, and market cycles are part of a standard economy. Sometimes, it doesn't boom. So what.

We're still quite hands off. The regulations are in place to stem systemic risk.

The depression was caused by two things 1)smoot hawley tarrifs, no debate 2) overleverage, a common them here even today. People were allowed to purchase $30,000 worth of stock with just $1,000. When they went against them and they couldn't pay it, the brokers who loaned the money lost it. This type of regulation was needed.

 

[bwolinsky]

Quote from IShopAtPublix:

Blind faith in the private sector is what got us into this mess.

Since you wanted to respond to this quote, consider that the U.S. congress passed bills pushing for sub-prime mortgages to be issued. I put blame more on government than on the private sector. No regulation. Issue a $400k loan and make $10 grand in commission and sell it to fannie and freddie as mandated by the Congress. Sure, I bet that sounds like private sector's fault.