Nationalised banking sector vs. private banking sector

[Stark]

Man, I gotta say the lol of captain drive-by accusing people who DON'T post ignorant crap of being trolls is pretty neat. Claiming to 'not enjoy' trolling when you've done nothing but for months isn't nearly as good, unfortunately.

The sad thing is that your ignorant focus on EU and US markets makes sense for the people you mindlessly parrot because they're the largest markets, but they really give away your faux-ignorance of finance in general. I mean, maybe you expect your average SDN person to imagine you can effectively build software without understanding the issues you take such glee in misrepresenting?

Despite your attempts to equate two different markets (which I know you know are different), its hardly impossible for the political level to have a different aappraoch than 'pretend rich people are smart then burn money' or 'try to control markets in obviously stupid ways and then burn money'. The absolute best part about your posting is that you emphatically state the impossibility of things that are done in other markets all the time (more or less successfully, with more or less stupid government interference or corruption).

[Bakustra]

Well, no, Starglider, the reason people think you're trolling is that they like to think that you'd educate yourself before setting phalanges to keyboard. The idea that "tax and regulate" is socialism, let alone "of the worst sort", is a frankly ignorant position, as is the idea that the US is pursuing a Keynesian policy at the moment or for the last three years. The idea that the US and EU are converging on a nightmare of r-r-r-regulatory socialism is genuinely hilarious, though. But thank you for explaining clearly that you're simply an example of the Dunning-Kruger effect. Of course, I never thought that you were a libertarian troll, or that libertarians in general have the mental power to be able to troll at all.

[Stark]

Since Starglider isn't an idiot, my preferred conclusion is that he's so gleeful he's dropping shit just to enrage the SDN knee-jerk crowd. And hey, who doesn't do that?

[Bakustra]

Since Starglider isn't an idiot, my preferred conclusion is that he's so gleeful he's dropping shit just to enrage the SDN knee-jerk crowd. And hey, who doesn't do that?

Well, I think that it's a mixture of that and a genuine ignorance of the stuff he says. He calls it Keynesian so that he can annoy the Keynesians that the board is sympathetic to, but the use of "socialism" is so in line with how so many people use it that I can't help but suspect that it, at least, is genuine.

[Stark]

Well, I admit I laugh when he uses terms like 'regulatory capture' and 'dark pools', because he's either trolling or has never heard the term outside a power coffee meeting with his controllers.

It's like when J was in business school, and you could tell what semester she was in based on what type of stuff she was gleefully parroting. I remember her amusing growth of understanding of market efficiency.

[Simon_Jester]

Let me see if I understand you, Starglider.

Speaking for myself, I'd say that capitalism, as a model for laying out civilizations that can do well for themselves, has worked. It can provide decades of fairly continuous growth and industrialization, rapid rises in standards of living, and so forth. It's doesn't crash and burn the economy automatically, the way outright kleptocracy does.

To me, this suggests that whatever you don't like about the capitalist system, there are insights within capitalism, things which capitalism does right and which can be used to make things work.

What you seem to be saying is that those insights are no longer applied by the system- in particular, the rise of "too big to fail" is something that cannot be tolerated in a capitalist system, because it leads predictably to all the money getting shoveled into the pockets of the institutions which are too big to fail. Nothing is left over for anyone else- not for private citizens, not for the state, and not for businesses which engage in more responsible and constructive business practices.

And so we have a nominally capitalist system, which is in fact just an engine for shoveling wealth into the financial sector and keeping it there, whether that breaks the basic principles of "how capitalist societies can function" or not.

And if I understand you correctly, you're saying this, and also that you have a complaint about N&P people looking at that situation and instead saying "capitalism sucks, we should socialize X, Y, and Z!"

Did I get that right?

[Stark]

Someone's never taken a basic business unit. This is typical (and obvious) stuff; that's why it makes the stupid things governments do all the more stupid, because they employ hundreds of people who know all this.

The idea that the collapse of the financial system as it stands is somehow the 'end' of 'capitalism' is fucking stupid and anyone who even thinks shit like that should be ashamed. What do they think will emerge afterward? That's right - more capitalism.

[Simon_Jester]

Someone's never taken a basic business unit. This is typical (and obvious) stuff; that's why it makes the stupid things governments do all the more stupid, because they employ hundreds of people who know all this.

The idea that the collapse of the financial system as it stands is somehow the 'end' of 'capitalism' is fucking stupid and anyone who even thinks shit like that should be ashamed. What do they think will emerge afterward? That's right - more capitalism.

I agree with all this. Except "someone's never taken a basic business unit," since I'm not sure who that wisecrack is pointed at.

That sounds more like a problem for anyone who says that the answer to the financial system as it stands is to get rid of capitalism.

[Stark]

I think there's a fair debate to be had around the causes of the situation, but only the biggest morons would think that capitalisim is some kind of monster you can kill, rather than a pretty basic concept that can't be forgotten.

It's just a shame that by staging large-scale, really stupid interventions, various governments have poisoned the well for sensible regulation (especially among people who parrot bullet points).

[Bakustra]

EDIT: Pre-empted, but I'll offer my thoughts as a real-live socialist, the dysfunctional financial system in the US is not an endemic problem of capitalism and treating it as such is dumb.

[K. A. Pital]

Starglider's right on one thing, Europe has been ultra-Keynesian in their approach to this crisis and that brought them nowhere. The sudden revival of Keynesianism in the USA also seems to fail at solving the deeper issues in this crisis.

Starglider is a 'destroyer of the machines' - he finds ultra-large entities and mega-economies of scale, such as modern oligiopolies, expendable in the 'purification' of the system.

I disagree on many things with Starglider, but I am not sure I earnestly have a better solution right now. Planned economy is out of the question (political resistance is overwhelming), and to make it work you have to study the fucking thing, which really really few people do, and there are no practical places to explore the abilities of a modern planned economy. A capitalist economy with nationalization is just state-monopolistic capitalism and in the end it does not solve structural issues just like planned economy, as it is theoretically developed right now, absolutely doesn't.

'Destroying the machines' is preferrable when you have no clear idea what to do next and perpetuating the current situation is no longer acceptable. The solution of the contradictions is hideous, but so far I have not seen a better one.

So it is not as easy as "capitalism sucks", the problem is fundamentally on how to go. More centralization is impossible because planned economy is a word nobody dares to utter and no advanced nation really tried running one; theoretical studies in that area are completely inadequate and even if I were to demand one, that is politically impossible right now. Less centralization is a regress; but it is the only real possibility right now, else it is just a perpetuation of the current crisis and prolonging the agony.

A regress would be also beneficial for my position; it would renew interest in alternatives to capitalism. The current perpetuation of the status-quo does not renew interest in anything. Everything looks like a buffonade without a shred of a serious debate on theory.

[Stark]

I know that; but it's one of his caricatures of Stas. Y'know, how we're all meek socialists waiting for mean old capitalism to go away so we can all obey the government, or whatever he trolls about today?

And his (apparent) attitude that because peopel do dumb things, nobody shoudl ever do anything and let the 'rich elites' rule everyone is pretty dumb, I gotta say. I remember laughing at him when he talked about HFT and how nobody knew how to deal with the secret, and ASIC had a paper on it in 2002.

[Bakustra]

I know that; but it's one of his caricatures of Stas. Y'know, how we're all meek socialists waiting for mean old capitalism to go away so we can all obey the government, or whatever he trolls about today?

And his (apparent) attitude that because peopel do dumb things, nobody shoudl ever do anything and let the 'rich elites' rule everyone is pretty dumb, I gotta say. I remember laughing at him when he talked about HFT and how nobody knew how to deal with the secret, and ASIC had a paper on it in 2002.

I fondly remember all the times he's talked about the "loony left" and the hordes of communists everywhere in Europe. Then followed up with "at least the AMERICAN radical left is sane".

[Thanas]

I disagree on many things with Starglider, but I am not sure I earnestly have a better solution right now. Planned economy is out of the question (political resistance is overwhelming), and to make it work you have to study the fucking thing, which really really few people do, and there are no practical places to explore the abilities of a modern planned economy. A capitalist economy with nationalization is just state-monopolistic capitalism and in the end it does not solve structural issues just like planned economy, as it is theoretically developed right now, absolutely doesn't.

Let's get real here - the new economic data is promising (Germany had another record month in export/import in August), Europe is not collapsing, there are no bread lines or huge cutbacks on social programs. There is no structural problem per se in Europe, what happened is that some nations did not play by the rules and will now be under extra scrutiny for the future.

[K. A. Pital]

Let's get real here - the new economic data is promising (Germany had another record month in export/import in August), Europe is not collapsing, there are no bread lines or huge cutbacks on social programs. There is no structural problem per se in Europe, what happened is that some nations did not play by the rules and will now be under extra scrutiny for the future.

That's a view from the XIX century - countries are not really dependent on each other and the Eurozone periphery going bankrupt won't do a dint in the economic landscape. And no worries that European banks have been raking cash from periphery debt and thus have had no interest in the curtailing of the debt of these nation; in fact, the only reasonable way for them to be recompensated is from the German and French budgets, and if not, the bankrupt periphery will drag a lot of them down.

And you're saying that's not a problem? And Germany having "another recond export/import month" - well duh, none of the major German export partners experiences a major problem right now, aside from Italy:
http://www.destatis.de/jetspeed/portal/ ... =image.gif

[UnderAGreySky]

Starglider's right on one thing, Europe has been ultra-Keynesian in their approach to this crisis and that brought them nowhere. The sudden revival of Keynesianism in the USA also seems to fail at solving the deeper issues in this crisis.

Could you explain, please, how any of Europe's responses to the recession (austerity, raising interest rates, lack of fiscal programmes) is ultra-Keynesian? The only "European" country that had a Keynesian response (that I know of) to the crisis was Gordon Brown's Britain, which recovered faster than most western countries because of the prompt response. Germany did well, too, but that's because the Euro tanked with the crisis and they were able to reap the benefits of having a strong manufacturing base (and educated/trained populace) along with being perceived as a safe haven. But "Europe" as a whole has gone completely - pardon the pun - Austrian about the whole crisis, making it worse.

[UnderAGreySky]

Let's get real here - the new economic data is promising (Germany had another record month in export/import in August), Europe is not collapsing, there are no bread lines or huge cutbacks on social programs. There is no structural problem per se in Europe, what happened is that some nations did not play by the rules and will now be under extra scrutiny for the future.

"Europe" is not collapsing if you take into account the fact that a numeric majority of countries are not. The fun will start when Greece defaults and banks can't call in their loans. We'll see about the bread lines then.

[K. A. Pital]

"Austerity" is a direct consequence of ultrakeynesianism when they all from USA to Europe were throwing money at their banks like mad.

But "Europe" as a whole has gone completely - pardon the pun - Austrian about the whole crisis, making it worse.

Backswing from one idiotism (throw money at the banks! STIMULUS!) to another idiotism (let's cut spending, wait, that tanks demand, oooh, we're now promptly fucked!) doesn't make any of the two idiotisms right.

But I guess we'll just have to disagree here. I see that First World capitalism is simply hitting limits of its own growth - everywhere, from the US to Europe to Japan, that's why the crisis has been so global.

[Thanas]

Let's get real here - the new economic data is promising (Germany had another record month in export/import in August), Europe is not collapsing, there are no bread lines or huge cutbacks on social programs. There is no structural problem per se in Europe, what happened is that some nations did not play by the rules and will now be under extra scrutiny for the future.

That's a view from the XIX century - countries are not really dependent on each other and the Eurozone periphery going bankrupt won't do a dint in the economic landscape.

Nice strawman there. What I am saying is that they will have an effect but not so large an effect that a massive retooling of society is needed or even desirable.

[K. A. Pital]

I see the current system as fundamentally deficient, so even without a crisis it was bad enough for me to start thinking that it deserves massive retooling.

[J]

It's different in Europe...

[Thanas]

I see the current system as fundamentally deficient, so even without a crisis it was bad enough for me to start thinking that it deserves massive retooling.

I really don't think so. Pretty much all that is needed is better oversight on the banking sectors and some taxes levied upon them, together with state finances being tightened and some cutbacks to reduce deficits. That is not a massive retooling and does not necessitate a fundamental change in society especially seeing as how there is no viable alternative anyway.

[UnderAGreySky]

"Austerity" is a direct consequence of ultrakeynesianism when they all from USA to Europe were throwing money at their banks like mad.

Backswing from one idiotism (throw money at the banks! STIMULUS!) to another idiotism (let's cut spending, wait, that tanks demand, oooh, we're now promptly fucked!) doesn't make any of the two idiotisms right.

But I guess we'll just have to disagree here. I see that First World capitalism is simply hitting limits of its own growth - everywhere, from the US to Europe to Japan, that's why the crisis has been so global.

No, we don't have to disagree. We cannot, until you back up your previous allegation of "ultrakeynesianism", whatever the fuck that means. Throwing money at banks is not "Keynesianism". Stimulus is, and you need to explain your stance that it is "idiotism" (perhaps you meant 'idiocy'). Stimulus, or shoring up aggregate demand through government intervention in labour markets by providing employment to those affected by the recession, has been shown to work in recessions caused by loss of demand (oil shock recessions, not as much...).

So, I'd love to be convinced by you on the stuff you're spouting right now.

[K. A. Pital]

has been shown to work in recessions caused by loss of demand

Throwing money at banks is not "Keynesianism". Stimulus is

Yeah, I was going overboard here. TARP and bank rescues are not really a Keynesian mechanism - they're a Friedmanite one, so throw in Helicopter Ben to the idiots. However, ARRA is.

It is not like the unemployment has been terrifically reduced, and it is two years past the ARRA. Europe has been massively expanding government debt with the same:

It is rather easy to note how the expansion coincides with 2008. And that's why the entire Eurozone has been expanding debt - if the average figure is rising, that means the majority of nations are expanding debt.

And how did that help Eurozone? It might easily fall into a recession in 2012. Please, do explain to me how Neokeynesianism saved the day and restored economic growth and stability. And if it did not, the question is only why.

[UnderAGreySky]

So, we've now gone from "ultrakeynesianism" to "okay, two of the three responses were not keynesian but the ARRA was".

So, the ARRA.

Faced with a recession where the output gap is nearly one trillion dollars - 6.2% of 14 Trillion GDP - you got the ARRA which was...

1) Less than 800 billion in total
2) 37% Tax cuts
3) 18% State government aid
4) 45% actual spending.

So, less than half of the act went into Keynesian spending and the total amount was less than the output gap. The only thing the stimulus did was apply a band-aid on a knife wound.

The rest of your post, specifically:

It is rather easy to note how the expansion coincides with 2008. And that's why the entire Eurozone has been expanding debt - if the average figure is rising, that means the majority of nations are expanding debt.

And how did that help Eurozone? It might easily fall into a recession in 2012. Please, do explain to me how Neokeynesianism saved the day and restored economic growth and stability. And if it did not, the question is only why.

is downright silly; I said Europe DID NOT attempt ANY form of Keynesian economics, they went all Austrian about it demanding austerity and debt elimination in the periphery (Ireland, Greece, Spain, Portugal and now Italy). Now you explain to me how the fuck is that neo- or otherwise Keynesian?