The Politics Thread (PLAY NICELY!)

Standard oil, wasn't it?

He may even have owned 100% of all oil refinery's in the US at one point. It was certainly close.

you absolutely should.

although I think you're ignoring here what it is big corporations do to new kids on the block.

My anus is ready.

no it isn't.

Ok, apologies if i didn't really address your arguments. Was only trying to illustrate that free markets are self regulating. You don't need outside force to 'correct' them because economic power is very different from political power. The first can be lost by people finding ways of not doing business with you - you can't force people to buy your stuff. The second one however requires lots of laws, regulations and checks and balances (e.g. US constitution, division of branches, bill of rights) because political power has the unique power to coerce people with violent force.

The GFC is another good case study though a bit more complex. The popular narrative is that repeal of Glass Steagal via GLB allowed investment banking to be mixed with commercial banking so that banks were taking risky bets using every day deposit accounts. However, there are alot of problems with this. The topic deserves a lot more love than a layover, but the gist of it is that the GFC happened when it did as big as it did because of topical governmental interference at the time.

1. First, the financial sector is the most regulated industry by a long shot. Repeal of Glass steagal was not a big impact relatively speaking. The sector is still a fountainhead of cheap money though because of how fractional banking works and how the federal reserve is set up (another aberration to a free market).
   
2. Investment banking has been around for as long as there have been money instruments to invest in e.g. mortgages. It's a viable industry all on its own with well developed models of risk management. Basically, there isn't an inherent link between the activity of investment banking and financial crisis. Something else unique to this period of time was messing up the price signals.
3. Entities like lehman brothers, bear stearns which failed spectacularly did not operate as primary commercial banks at all - GLB played no role here. They were purely investment banking.
4. These investment banks actually got into trouble exactly because they didn't have a large base of capital to insure their bets as would be the case if they were also operating commercial shop. Merrill lynch for example survived because it was privately bought by Bank of America.

GFC was actually caused primarily because of failed governmental intervention on many different levels.

1. Strict state land development restrictions allowed an artificial bubble to form in the first place, mainly driven by price speculation. If you restrict supply, price goes up.
   
2. Purposefully/artificially low fed rates in conjunction with federal housing policy
3. Fannie and Freddie purchased something like 40% of the subprimes that performed the worst. Their activity artificially boosted the strength of that market, causing many unsustainable loans to be made out. As federal sponsored entities, they had little incentive to monitor the quality of their underwriting because losses would simply be passed to the taxpayer.
   
4. One of the bigger ones that allowed the problem to spread globally was SEC regulatory barriers preventing healthy competition within the ratings industry. Ironically, they were concerned that new entrants would try and sell favourable ratings so they essentially locked the market down. In order to play, you had to meet their NRSA requirements which were specifically exclusive of competition while grandfathering Moody's and S&P's. As with all well-intentioned regulation, they ended up creating the very thing they were trying to prevent. The market became stale, oligopolistic, and favourable ratings were sold to issuers of debt instead of buyers. European banks bought it all up without knowing what the true risk actually was, which is how you guys got screwed over.
5. Commercial bank deposits are guaranteed by government such that taxpayers become a bank's off balance sheet insurer. Risky bets that didn't pay off would again just be passed on to taxpayers. This wouldn't happen in a free market because people don't agree to insure risky bets placed by others without appropriate compensation. This is the one place where repeal of glass steagal does make an impact. But rather ironically, it's because of conflict with another government intervention - not because of true deregulated activity.

I'm curious as to how you can be so confident in that while I still have my trousers on.

About to go to bed, so this will have to be quick.

1. Standard oil was a monopoly (about 90-95%) but it wasn't exploitative. Prices consistently went down and quality went up.
   
2. Rockefeller knew he couldn't increase prices because it would stoke markets for alternatives. People might just go back to whaling for example.
3. Free market destroyed his monopoly with the invention of electricity. Regulation can never know what a market is going to do.
4. Rockefeller saved the whales.

Is it hot in here?

the humoristic tone wasn't obvious? drats.

because my pole is really that long and already tickling your bum unbeknownst

++ for such a detailed layout. I honestly have no means to verify in such detail how it all really happened. I somehow expected you to explain it somehow with "not enough free market". That does seem to be your solution to all problems

I wonder what your truly free market should look like? No regulation at all?
What about issues like climate change? What does your free market do about helping people who get screwed over? Do you truly believe that if you take away all social security people will suddenly give enough to charity to make up for it? "The market will fix itself" sounds like a very lazy explanation. Like you're not reading the same news I read since years.

I don't have that much faith in people. I however do have faith that the vast majority of people will try hard to be productive members of society, even if you ensure their basic well being.
People are greedy. They will strive to get even more even if given some basic protection. But they will also strive to get as rich as possible at the cost of others, so if you take away the protection you'll get ugly things.

that, sir, would be the explanation here.

you say that with bewilderment and I can say I relate as we both here in europe do not know what it is to not-have state-imposed news neutrality.

this is a bit of history we carry around as a resolution taken at the end of world war two to parry nazi-like arising of totalitarian regimes greatly aided by the media who could be created/used to convey a distorted view of the world.

(does germany have this too? I have doubts )

but in America this choice was not taken. this resulted in a quick quasi-extinction of the neutral news genre in the U.S.

watching U.S. news and watching european news is night and day.

yes. not having been watching news that tell the same or even similar story at all for years and years on end is more than a potent probability. it's a certainty.

Thing is Elodea is from Australia.

I thought we were all from reddit.

: /

well then. I'm curious to know how he got this way.

lest individuality and choice (not to mention bare minimum human decency) persist in this world, no. we're not. plus if we felt like it we'd make the claim ourselves.

He's done this many times before, I think he would know

Kappa

okay righ-wing guys try and tell me he doesn't speak for you and defend your interest as well now.

He's an airhead, tatsu. Why would I listen to an airhead comedian? Trumps behavior is a well planned strategy to take the white house with little to no resistance. Saying he doesn't make sense is like saying you dont understand the rules of chess and you can't figure out why you are losing.

http://projects.fivethirtyeight.com/2016-election-forecast/?ex_cid=rrpromo
You wut m8

Maybe the problem is that when i say free markets it means something different to you and that is where our misunderstanding is coming from.

For me a free market has only one fundamental 'regulation' - respect of property rights. That means you use a court of law instead of regulatory bodies. Government is limited to protecting private individuals from others seeking to infringe those rights.

For example if my factory creates air pollution, as long as the pollution stays on my property and only I bear the harmful effects of it then it's all good. If the pollution wanders off onto someone else's property and other people suffer without giving prior consent, that's an infringement of their property rights and I should be held liable for damages. Same if I fraudulently misrepresent my product to customers and cause them harm due to risks they did not agree to, or if my fracking business pollutes the water table of other people.

When I say i have faith in humanity, I mean only within that non-coercive space. And when i say free markets are a good solution, for me it's more a belief in the power of decentralised decision making being able to capture more information than a centralised one.

I'm curious what news you're referring to. If there are systematic problems with free market competition in the real world, I'm definitely interested in learning about where I might be wrong.

Regarding climate change I think free markets will fix this problem, and that they already have in two main ways.

• Private enterprises like tesla/solar city which have found innovative ways of making renewables financially viable.
• Nuclear fission, and perhaps eventually fusion

Unfortunately, strict regulation generally prevents the use of the second which is a real shame. Comparing cost/benefit, fuels like coal do a lot more damage and not just in terms of a carbon footprint. For scares about them blowing up, you guys should check out Molten salt reactors. Those things are amazing. They naturally self seal/shut down in the event of something bad going on, and there's no big explosion due to highly pressurised fluids. Prototyping was done with remarkable results a few decades back at Los Alamos, but the US biased towards water cooling because of military applications in ocean going vessel. https://en.wikipedia.org/wiki/Liquid_fluoride_thorium_reactor

I do believe private charity will be enough to take care of those who can't in the absence of social security for several reasons, but mainly because social security itself actively creates poverty.

1. "Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime". If you pay people more conditional on them being poor, you get more poor. If you pay schools more if they perform badly, you get more bad schools.
2. The US has spent a whopping $22 trillion on the war on poverty since the 60's, yet the poverty rate has stayed basically unchanged.
3. That recent riot in Milwaukee was primarily caused by welfare state policy creating a black underclass. The poorest 10 states in the US are run by democrats. If i was a white supremacist racist, i honestly could not think of a better way to keep black people down and also get them to vote for more of the same. This article sums up pretty well how political interest and wealth redistribution leads to poverty. Drive the rich out of the city in order to create a majority electorate. Then keep them poor with just enough handouts to keep them going but not too much.
   http://www.forbes.com/sites/markhen...ng-the-curley-effect-nationwide/#35ec2f0337a7
4. Welfare states end up killing societies due to a negative feedback loop. Ancient Rome fell not because it was conquered, but because it had already bankrupted itself with massive welfare financed by higher and higher taxes on productive people in order to pay for all of it. Farmers simply left the countryside for free bread/games in Rome, hyperinflation set in and the denarius was devalued so much Rome wouldn't even accept their own currency as payment of tax lol.
5. Social security is just a form of insurance. Removing it from the public sphere doesn't mean it wouldn't exist in the private sector. In older times, people would actually pool together into their own mutual insurance schemes against hard times.

Anyway, there are intellectuals like Thomas Sowell and Milton Friedman who discuss and debate government social security far better than I ever could. You might find this interesting - both sides of the debate for and against welfare are presented pretty fairly in their strongest form.

Right, because anyone not like you, is garbage. There is only you, and jizzrags, nothing in between, and nothing in parallel.