Atlas Shrugged

KahBoom · 30-06-2014 3:23pm

Whatever Permabear - you're lawyering over definitions again (I didn't say anything about obfuscation being deliberate), and are pretending my argument was that the banks were obfuscating financial instruments - when it was that the financial instruments themselves were inherently obfuscatory, and how this contributed to risk miscalculation (which I did provide an article based on peer-reviewed studies for, as evidence...).

You're making a determined and obstinate effort to reinterpret what I'm saying, to try and deflect my arguments, and pretend I was arguing something else.

Permabear · 30-06-2014 3:28pm

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KahBoom · 30-06-2014 3:38pm

Jesus this is really nitpicking now...

"can lead or be used to miscalculate or hide the real amount of risk."
That doesn't say anything was deliberately done - it leaves both the possibility of unintentional miscalculation, and of deliberately hiding risk - it doesn't make any accusation one way or the other.

Permabear · 30-06-2014 3:43pm

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Valmont · 30-06-2014 3:44pm

The authors statE that the 'spillover effects' you referred to were speculative and could not be measured. What they did measure was that private R&D was significantly associated with economic growth whereas public R&D was not; they also interpreted this as evidence of public R&D crowding out private R&D. I have read the report, in its entirety. You pulled some info about the spillover effects without seeing that the authors were careful to say it was only a suggestion, one that they could not readily measure. Regardless, this doesn't do away with the fact, stated in the report, that in terms of the determinants economic growth, private R&D is better than public R&D.

Valmont · 30-06-2014 3:45pm

Robindch, a few efficient rockets doesn't amount to much when millions of people don't even have any food. I've no doubt that a Soviet Ireland could send a mission to Mars if they decided to stop feeding everyone in Leinster.

Permabear · 30-06-2014 3:49pm

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Permabear · 30-06-2014 3:55pm

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MrPudding · 30-06-2014 3:58pm

But what of the banks that sold mortgages to people that could not afford the repayments even before the interest rates rose?

Is it not the case that in the scramble to sell the CDOs, as they were extremely profitable, the banks needed more and more mortages...? Is it not the case that having, effectively exhausted the prime mortage market they had no choice but to sell mortages to people they would not normally have sold them to? This, in combination with the fact that they weren't really in the mortage business anymore, they were in the CDO business and didn't really care if people could make the payments or not, was not a mistake of people massively increased the risk the banks were expose to.

If we then add in the banks setting up alternative investment vehicles, soem of which they themselves owned, selling the CDOs to those vehicles, shifting the liabilties off the 'banks' books, allowing them to leverage themselves higher as this was a handy way around existing regulation to prevent them from over leveraging and, seriously, what do you think it going to happen?

I appreciate that innovation is an important aspect of many industries, unfortunately it seems that innovation within the banking and financial market frequently seems to be used as a method to bypass regulatory safeguards put in place to protect the wider economy and society form the stupidity and greed of many of our financial institutions.

Here is a nice little article comparing various historic financial crises:

http://nrs.harvard.edu/urn-3:HUL.InstRepos:11129156

It is very short and a relatively easy read, but i will quote this short section which I find interesting:

Now, presumably the authors are some rabid left wing anti-bank, business suffocating limp wristed liberals but do you not find it interesting that financial crises tend to follow relaxation of regulations that you argue should not be there in the first place...?

MrP

Karl Stein · 30-06-2014 3:59pm

Wrong. Aside from the glaringly obvious advances that came about via public R&D a child could point to like communications satellites let's revisit your erroneous claims.

No it did not. It said the benefits of Public R&D were measure in the short term and that this should not be overplayed which you went right ahead and deliberately did anyway because either you have poor reading comprehension or you want to push your agenda (perhaps both).

What you've written below is also wrong and a distortion of the information in the report:

I does not say that Public R&D crowds out private it says:

KahBoom · 30-06-2014 4:09pm

What is so hard to understand, that if you can miscalculate risk unintentionally, you can also do that deliberately in order to deliberately hide risk too?

It is actually possible to point that out, without accusing anyone of deliberately doing it as well...which I have been careful not to.

You're trying to dodge the whole point of my argument too: Whether or not that was done deliberately is not the issue here, the issue is that miscalculations like that is possible in the first place - and that when such miscalculations of risk are allowed to become widespread, they can tank entire industries or even whole economies.

robindch · 30-06-2014 4:19pm

There's a first time for everything - welcome to A+A

The apparent derivation of the Ukrainian term Голодомор - Holodomor - of 1932-1933 gives away the reason why - it was a man-made famine which resulted in the death of millions. And the Holodomor happened 10-30 years before the developments I mentioned.

Regardless of the timing or the existence of the holodomor, your argument has still been refuted entirely.

See reply above.

Valmont · 30-06-2014 4:29pm

Fair enough, but they must have redirected resources that could have been used elsewhere; I'm not familiar with the quality of life of the average Soviet citizen in the 1950s but I would make a tentative prediction that it wasn't as great as that of a British or American citizen.

As an aside, I've read that the Sputnik was largely based on the research of Robert 'Moonie' Goddard of Clark College, Massachusetts, whose research was financed by the Guggenheim.

Naz_st · 30-06-2014 4:43pm

I have (software business), and I wouldn't say general Irish government policies are conducive to supporting entrepreneurship and start-up businesses. The biggest issue I have for example is with the 33% CGT rate: why should a capital gain associated with someone setting up a business, taking all the consequent risks, finding and attracting capital investment, employing people and paying tax over many years, the sleepless nights and hard graft, etc be lumped in to the same tax as someone buying and then selling a house (the gain on which is more a function of the vagaries of the property market)?

Plus, from a purely economic standpoint, you really want the sort of people who have started indigenous businesses and made them successful to retain more of their own hard-earned capital since they are the people more likely to do the same thing again. Serial entrepreneurs are immensely valuable to an economy - leaving them with more of their hard earned capital can only be a good thing in the long run.

Brian Shanahan · 30-06-2014 4:45pm

I honestly think that most libertarians are conditionally incapable of actually seeing the world outside their "companies good, government bad" prism, and this stems from the economic fantasies which underpin their whole ideology (I've outlined two major problems with one of the main "free market hypotheses", Efficient Market Hypothesis, which make it untenable as a valuable tool for real life situations, and these kinds of problems run right through the Austrian/Chicago schools unpon which all sorts of capitalist ideologies, including libertarianism, are based).

The fact of the matter is that the current economic orthodoxy (of which libertarianism is simply a sub-set), is based off work which instead of trying to fit their ideas so that they replicate reality, they chop, stretch, distort, and invent realities in order that they fit their models and ideas. That is why so many proper scientists are indignant at economists trying to group themselves as scientists too, because much of economic theory is little more than magical thinking*. And because libertarians are so used to seeing the world so distorted in their economic treatises and publications, they are unfortunately unable to distinguish reality from the construct that was created in order to make it look like the theories upon which their system was founded were actually working theories.

*Up to and including distorting the ideas of their "sacred" founding fathers, for example Adam Smith would be spinning in his grave if he knew any of the ideas attributed to him by the Adam Smith "Institute", a home for fifth rate intellectuals. Despite what they, and other free-marketeers he was in favour of , e.g. rent controls on private landlords (to stop the abuse of rent-seeking, which is making an income off something you've never put any work into), or the role of government in providing infrastructure such as roads, ports, and many other things that modern free-marketeers decry as the government "dead hand destroying the market".

Permabear · 30-06-2014 5:59pm

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Permabear · 30-06-2014 6:04pm

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robindch · 30-06-2014 9:23pm

Any sign of that peer-reviewed paper by Rand that appeared in a high impact factor economic journal?

MrPudding · 01-07-2014 11:44am

A random tangent? Hardly, the elements I mentioned each contributed to the problem both in terms of cause and severity. I don't necessarily disagree that mortage securitisation is, necessarily, a bad thing, but how it was used, in conjuction with the other elements I mentioned, seem to be a leading factor in the crisis.

Ultimately who gave the credit to the poor? Whos signature is right ther eon the mortage form beside the borrower?

What do you mean by 'provided an incentive'? That can be taken two ways, the first would be the standard way, banks were actively rewarded for using this model. The second is there was no active incentive, it was simply more profitable, given the regulatorty framework in place to pursue this model, the purpose of the regulation was not to promote the model. Which is it?

I do think there are issues with the originate and distribute model, and I think history has shown this to be the case.

Meh, the harvard paper seems to claim that we can legitimately claim a relaxation of regulation caused, or a least preceeded earlier crises. Do you have a rebuttal for the Harvard paper?

There are many bad things in life that, when you analyse the individual parts, you find are comprises of some things are aren't too bad. For example, having a beer. Having a beer is great, but it is not always great. It depends on how much beer, where you are having it, who you are having it with and the reasons for having it. having a beer can be very, very bad indeed.

What you seem to be trying to do is take one part of the overall 'problem', hold it up and say 'hey, this isn't so bad, it is actually kind of awesome' whilst ignoring the whole picture.

MrP

Wibbs · 01-07-2014 1:57pm

I read it and The Fountainhead years ago now, then more recently, though still a few years back. I dunno, outside the whole economic/social debate we're having now I found it heavy going, stilted, simplistic and forced in the building of its internal world. Then again I tend to get edgy when there are no pictures of Japanese infantrymen screaming Banzai! every few pages, so your milage may vary...

I saw early in the thread someone quoted a comparison to Lord of the Rings. My take on it? I would have put it much more with Catcher in the Rye(which I really didn't get, though the writing was far superior IMH). Another book that finds an audience with adolescent minds, particularly those who find themselves a little(or a lot) outside of their peers world, or what they see that world to be. The outliers, the "nerds" in the classroom as it were. A rite of passage book for them. Catcher in the Rye would appeal more to the emotional within that demographic, while Atlas Shrugged would appeal more to the intellectual among their number. The Galt character would appeal. He's the intellectual who pulls down society. The "nerd" who overthrows the "jocks"*. I'll show them kinda thing. Caulfield in Catcher "shows them" by angst and rebellion. LOTR is a more generalised book for this demographic and wider in its appeal anyway. Funny enough though I was a geek in school none of the above appealed to me. I'd rather have torn my eyes out than read LOTR(same now TBH). Maybe I wasn't brainy enough to be a nerd, yet not physical enough to be a jock. Jayzuz how da fuq did i survive thus far?

As for the "philosophy" behind the words? Sure self interest is natural, can be good and is part and parcel of humanity. It has brought many innovations to humanity, but it's not as if we're running out of it anytime soon(if anything we're in oversupply) and I'd not use it as the basis of a society.

My take anyway.

*actually of the Libertarians I know and have known they would fall roughly into two groups, the quiet intellectual geeky kid that didn't fit well in school who goes on to greater things afterwards because of his or her brains, the other group being the "sweat of my brow I pulled myself up by the bootstraps" types. Both groups tend to be smart cookies though. Some of the smarter folks I've known. Which I find odd when they can't see the many holes in the construct(like any other). Then again among the cleverest people I've known have also been theists of various hues, so an even larger disconnect there.

magicbastarder · 01-07-2014 2:24pm

some of whom end up espousing an 'if it was good enough for me, it's good enough for you' attitude, which i find odious.

not that i'm trying to tar the entire group with this, mind.

Permabear · 01-07-2014 3:22pm

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Permabear · 01-07-2014 3:31pm

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robindch · 01-07-2014 3:49pm

I'd imagine even Kim Jong-un believes those.

In order to make a convincing argument for libertarianism, you need to explain how a libertarian might take these fine-sounding words and turn them into policy.

magicbastarder · 01-07-2014 4:12pm

personal experience of meeting them. the 'if i was able to start my own business and i started from nothing, you're being a lazy idiot if you don't do the same' attitude is what i was referring to.

Permabear · 01-07-2014 4:17pm

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Permabear · 01-07-2014 4:21pm

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magicbastarder · 01-07-2014 4:26pm

i had a stated top-down policy, but i still got dirty looks from the other luas passengers.

robindch · 01-07-2014 4:40pm

Uh, I don't quite follow you. Are you saying that nobody has to do anything at all in order to implement libertarianism?

No personal policies to follow, no group policies, no corporate policies, no state policies, nothing at all?

Permabear · 01-07-2014 5:16pm

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Atlas Shrugged

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