Ron Paul's Texas Straight Talk

[GnRguitarist]

Stimulating Our Way to Rock Bottom

With attention turning to the next big economic stimulus package, questions are still swirling about our economic troubles. How did we get here? How do we get out? As usual, Washington has all the wrong answers. According to many politicians, we got here by not spending enough, not consuming enough, and not regulating enough. Now government, like some mythical white knight, is going to ride in to save the day by blanketing the economy with dollars, hiring an army of new bureaucrats, creating make-work jobs, and sending everyone some form of a bailout check. The debate seems to focus on whether this will cost enough to save the economy, or if this is just a “down payment” with much more government spending to come. Talk like that would be comical, if the results weren’t going to be so tragic.

The results will be worsening economic woes until we learn our lesson. But instead Congress is behaving like drug addicts who must hit rock bottom before they are ready to face reality. They are playing foolish games with the economy now because they are thinking only of political expedience. This talk of job creation is a perfect example.

Contrary to the belief of many, the goal of the economy is not job creation. Jobs can be a sign of a healthy economy, as a high energy level can be a sign of a healthy body. But just as unhealthy substances can artificially give the addict that burst of energy that has nothing to do with health, artificially created jobs just exacerbate our problems. The goal of a healthy economy is productivity. Jobs are a positive outcome of that. A “job” could be to dig a hole one day, and fill it back up the next, or perhaps the equivalent at a desk. This does no one any good. But the value in that paycheck ultimately has to come from taxing someone productive. Some think this round-robin type of economic model is supposed to get us somewhere.

Politicians and bureaucrats have already done their fair share to ensure that jobs in the private sector are prohibitively complicated and expensive to create. They are now shocked that the economy is shedding jobs, and want to simply create hundreds of thousands of jobs to make up for the job losses, through another so-called economic stimulus package. The private sector must be permitted to do that, but instead they are massively burdened with taxes and webs of red tape and regulation. Washington’s bandaids will only prolong this agony. The Austrian school of economics teaches that only a free market economy, unencumbered by onerous government controls, creates long-term prosperity. Politicians, however, tend to be notoriously short-sighted.

I am left with these questions – who is going to be left standing, to tax in the private sector, to pay for all these public sector make-work jobs? Is Washington really to be considered some sort of savior for creating unproductive jobs in place of the productive jobs they eliminated?

We are at an economic dead-end and those in power are in denial. The truth is our economic problems are due to loose monetary policy, central economic planning, and the parasitic expenses of government. Unless we assess these problems honestly, we unfortunately have a long way to go until, like the junkie, we hit rock bottom.


Posted by Ron Paul (01-12-2009, 11:47 AM) filed under Monetary Policy


http://www.house.gov/htbin/blog_inc?BLOG,tx14_paul,blog,999,All,Item%20not%20 found,ID=090112_2598,TEMPLATE=postingdetail.shtml

Do you agree with him?

[Already_Taken]

mostly, yeah.

[TheDarkHorse]

Tl; Dr

i dunno maybe Siva agrees with him

[The Stig]

Yes.

[italic zero]

hey what do you know he doesn't take any facts into account

[McP3000]

umm im pretty sure he's right

[Already_Taken]

i think he exaggerates the uselessness of created jobs.

[McP3000]

yeah but the general point of it is still sound

[beso negro]

A “job” could be to dig a hole one day, and fill it back up the next, or perhaps the equivalent at a desk. This does no one any good. But the value in that paycheck ultimately has to come from taxing someone productive.

it's like he took the words right out of my mouth

[jaredong]

First, creating jobs in the public sector are not necessarily useless. Governments are especially useful in providing services to the general public on the grand scale that private business might find unprofitable (yet are essential). Of the top of my head, say we want to rapidly cut down oil consumption. One way could be to replace the suburban sprawl by replacing it with a better public transportation system. This job is 1) Public 2) important. Not "useless"

In terms of productivity, I'd propose that what the free market produces most is alot of junk. Especially during Christmas season, you realize how much nonsense is manufactured. (I saw a ad about Marvel... transformers! spiderman transformed into a car. What were they thinking!) I'd say, working to rebuild American infrastructure is way more productive than making junk.

I think its quite the assumption that the market would magically fix itself. Perhaps in ordinary day to day circumstances. However, times of crisis call for nation wide coordination and organization that governments provide so well. Actors in the free market look out for personal self interest. Governments (ideally) look out for the interests of the entire nation.

Hmmmm...I might be wrong be wrong (i dont know too much bout economics), but Ron Paul's points are certainly debatable.

[beso negro]

First, creating jobs in the public sector are not necessarily useless. Governments are especially useful in providing services to the general public on the grand scale that private business might find unprofitable (yet are essential). Of the top of my head, say we want to rapidly cut down oil consumption. One way could be to replace the suburban sprawl by replacing it with a better public transportation system. This job is 1) Public 2) important. Not "useless"

not all jobs in the public sector are useless. he's referring to artificial jobs.

In terms of productivity, I'd propose that what the free market produces most is a lot of junk. Especially during Christmas season, you realize how much nonsense is manufactured. (I saw a ad about Marvel... transformers! spiderman transformed into a car. What were they thinking!) I'd say, working to rebuild American infrastructure is way more productive than making junk.

what the hell are you talking about

[jaredong]

To clarify:

He might be referring to artificial jobs, maybe what Congress is proposing is to create useful public sector jobs.

On the second point, Ron Paul said "the goal of the economy is productivity". I was just suggesting that the free market (in its pursuit of making profit) might result in the production of products which arent extactly "productive" or useful. Like, who in the right mind would buy this
http://www.seibertron.com/transformers/toys/series/marvel/47/
I'd say manpower used to produce that could much better be used to say, rebuild public infrastructure.

[Dave de Sylvia]

You don't understand what he means by "productive." The above product is useful because there is demand for it and people are willing to pay for it. A useless product would be one that nobody wants, the production of which would create no extra value.

[Aaron]

Yep. It all comes down to supply and demand. If noone wants a good being produced, the production of the good is stupid.

[Det_Nosnip]

Why does Paul treat the market like some sort of entity with intrinsic value? A functioning economy is one in which people are able to put food on the table. People without jobs are not able to do this. Ergo, even if these jobs are truly useless (a questionable assumption if ever I've heard one), they are still providing for what is truly important.

I've noticed that "healthy" economies according to free market masturbationists are generally those in which a tiny portion of the population controls a vast majority of the wealth while the rest starve.

[Already_Taken]

because in reality, for everything that is essential to life there are too many people and not enough work to go around. especially if everyone is competing with a strong work ethic (thus being more productive) to get paid.

[Dave de Sylvia]

Why does Paul treat the market like some sort of entity with intrinsic value? A functioning economy is one in which people are able to put food on the table. People without jobs are not able to do this. Ergo, even if these jobs are truly useless (a questionable assumption if ever I've heard one), they are still providing for what is truly important.

I've noticed that "healthy" economies according to free market masturbationists are generally those in which a tiny portion of the population controls a vast majority of the wealth while the rest starve.
Well digging a hole and then filling it up with no real purpose is a useless job. His point is that in order for this purposeless job to be created, the government needs to raise taxes, money that people could otherwise spend on useful things which in turn create useful jobs. It's theoretical, and it doesn't really take into account short-term deprivation, but it's a basically valid point.

[JohnXDoe3]

Ron Paul;dr

[siva_chair]

First, creating jobs in the public sector are not necessarily useless. Governments are especially useful in providing services to the general public on the grand scale that private business might find unprofitable (yet are essential). Of the top of my head, say we want to rapidly cut down oil consumption. One way could be to replace the suburban sprawl by replacing it with a better public transportation system. This job is 1) Public 2) important. Not "useless"

Actually the thing the government is good at is providing horribly inefficient services to the general public that are both far more expensive and far less quality than the free market could provide.

In terms of productivity, I'd propose that what the free market produces most is alot of junk. Especially during Christmas season, you realize how much nonsense is manufactured. (I saw a ad about Marvel... transformers! spiderman transformed into a car. What were they thinking!) I'd say, working to rebuild American infrastructure is way more productive than making junk.

Don't be ridiculous. What you might think is nonsense or junk may bring immeasurable joy to a child's heart.

Plus, you notice the free market simply isn't allowed to function in many areas. The government has a coercive monopoly on these sectors.

You are also forgetting why American infrastructure disappeared in the first place. Namely, it was high taxes on companies, senseless regulation, etc that gave companies the incentive to outsource.

I think its quite the assumption that the market would magically fix itself. Perhaps in ordinary day to day circumstances. However, times of crisis call for nation wide coordination and organization that governments provide so well. Actors in the free market look out for personal self interest. Governments (ideally) look out for the interests of the entire nation.

Ha! The government looks out for the interest of the nation! That was a good one.

It is true that individuals look out for their own self interests, but guess what, the government is composed of individuals. There is absolutely nothing wrong with people looking to maximize their own satisfaction. That is the basis for all human action.

Hmmmm...I might be wrong be wrong (i dont know too much bout economics), but Ron Paul's points are certainly debatable.

I'd say he is pretty much correct in what he says.

Why does Paul treat the market like some sort of entity with intrinsic value? A functioning economy is one in which people are able to put food on the table. People without jobs are not able to do this. Ergo, even if these jobs are truly useless (a questionable assumption if ever I've heard one), they are still providing for what is truly important.

Why are you treating labor like it has some sort of intrinsic value?

A functioning economy is one that has a rational allocation of resources. A free market is the only model that can actually provide that, all others are doomed to problems of calculation.

I've noticed that "healthy" economies according to free market masturbationists are generally those in which a tiny portion of the population controls a vast majority of the wealth while the rest starve.

Except you are obfuscating the fact using nothing but silly buzzwords and appeals to emotion. The standard of living for everyone goes up in a free market system. Notice it is much more common for people living under socialist economic models to be starving, whereas it is a far less occuring phenomenon under freer markets.

[TheDarkHorse]

Ron Paul;dr

:lol: ROFL

post of the month, if not year

[Sk0rpi0n]

Actually the thing the government is good at is providing horribly inefficient services to the general public that are both far more expensive and far less quality than the free market could provide.

Plus, you notice the free market simply isn't allowed to function in many areas. The government has a coercive monopoly on these sectors.

You are also forgetting why American infrastructure disappeared in the first place. Namely, it was high taxes on companies, senseless regulation, etc that gave companies the incentive to outsource.

Do you actually believe all of this nonsense? Even the greatest defenders of the "free market" (TNC and their various lobby groups) have argued for and coerced governments/courts to provide anti-free market measures Ie. patent and intellectual property protection which allows companies to sell important goods at horrific mark ups with no real competition (think prescription drugs).

Don't kid yourself: the idea of a competition is to win, to be the only man left standing at the end of the day, thereby reaping the rewards of crushing your competitors. That is why companies and individuals are inherently monopolistic, externalising machines designed to cut all costs. Conversely, that is why some degree of regulation must always exist to maintain competition.

Thus regulations must always exist to control inherently tyrannical companies that seek to limit competition, build monopolies, and pass as much expense onto regular Joes as possible through externalities (ie. roads and pollution). As a consequence of this self interested, tyrannical behavior, true free markets will never exist.

It is true that individuals look out for their own self interests, but guess what, the government is composed of individuals. There is absolutely nothing wrong with people looking to maximize their own satisfaction. That is the basis for all human action.

This is a very flawed assumption. Self interest is just one excuse to satisfy yourself. It fails to explain why free humans do so many things that are contrary to their own interests. Jobs they hate, familial obligations they don't want -- whatever -- not all humans are utility maximizers. Myself for example.

Why are you treating labor like it has some sort of intrinsic value?

Without labor their is no economy, no value, and this entire discussion is pointless.

A functioning economy is one that has a rational allocation of resources. A free market is the only model that can actually provide that, all others are doomed to problems of calculation.

But even by your thinking -- and that of Ron Paul -- this is far from a true free market (monopolies, regulations etc.). Yet you argue that resources are distributed "rationally" by virtue of the free market? This is the definition of a flawed premise.

In any event, 5% of the population is controlling 90% of the resources. Hardly seems rational to me.

Except you are obfuscating the fact using nothing but silly buzzwords and appeals to emotion. The standard of living for everyone goes up in a free market system. Notice it is much more common for people living under socialist economic models to be starving, whereas it is a far less occuring phenomenon under freer markets.

This is a distortion in itself. Case in point: Scandinavia (Norway, Denmark, Finland and Sweden). All these countries have socialist models and still enjoy far less poverty than most pure capitalist nations.

[Iskandar]

Those are social democracies, a very different arrangement from the state socialism which I suspect is really what our friend Siva has a problem with.

[siva_chair]

Do you actually believe all of this nonsense? Even the greatest defenders of the "free market" (TNC and their various lobby groups) have argued for and coerced governments/courts to provide anti-free market measures Ie. patent and intellectual property protection which allows companies to sell important goods at horrific mark ups with no real competition (think prescription drugs).

Then they aren't for a free market, obviously. It is no secret that big business wouldn't want free markets. They'd lose lots of their protections and favoritism.

Don't kid yourself: the idea of a competition is to win, to be the only man left standing at the end of the day, thereby reaping the rewards of crushing your competitors. That is why companies and individuals are inherently monopolistic, externalising machines designed to cut all costs. Conversely, that is why some degree of regulation must always exist to maintain competition.

Horsepoop. Monopolies only exist through government protection and favoritism (IP, tariffs, regulation, etc.)

Thus regulations must always exist to control inherently tyrannical companies that seek to limit competition, build monopolies, and pass as much expense onto regular Joes as possible through externalities (ie. roads and pollution). As a consequence of this self interested, tyrannical behavior, true free markets will never exist.

Umm the only manner in which a company can limit competition is through the coercive apparatus of the state. It usually does this through regulation.

This is a very flawed assumption. Self interest is just one excuse to satisfy yourself. It fails to explain why free humans do so many things that are contrary to their own interests. Jobs they hate, familial obligations they don't want -- whatever -- not all humans are utility maximizers. Myself for example.

Every action you partake in is to increase your own satisfaction. If you get satisfaction by voluntarily helping others, then you will act accordingly.

People work jobs they hate as a means to increase their own end satisfaction.

Without labor their is no economy, no value, and this entire discussion is pointless.

No one said without labor there would be an economy.

But even by your thinking -- and that of Ron Paul -- this is far from a true free market (monopolies, regulations etc.). Yet you argue that resources are distributed "rationally" by virtue of the free market? This is the definition of a flawed premise.

No one said we currently have a free market. Why are you building strawmen?

In any event, 5% of the population is controlling 90% of the resources. Hardly seems rational to me.

Good thing I never said we actually have a free market. In any event, there is nothing inherently wrong with 5% of the population controlling 90% of the resources if they did it through ethical means. They didn't, so you are creating a strawman.

This is a distortion in itself. Case in point: Scandinavia (Norway, Denmark, Finland and Sweden). All these countries have socialist models and still enjoy far less poverty than most pure capitalist nations.

What "pure capitalist" nations?

Also, in many ways the economies of those countries are freer than the US's, so your point falls flat on it's face.

[siva_chair]

Those are social democracies, a very different arrangement from the state socialism which I suspect is really what our friend Siva has a problem with.

Well, I have a problem with social democracies as well, but those countries listed (in terms of economics) are pretty business friendly and relatively free.

[Iskandar]

Shows how you can retain most of your economic freedom with extensive state intervention, intended to help the market, not hurt it.

Of course you're not going to agree with that but I tried.

[siva_chair]

Well they are still ultimately unsustainable.

[Iskandar]

I think it's laissez-faire that's unsustainable.

[siva_chair]

I think it's laissez-faire that's unsustainable.

That's completely silly, tbh.

[Sk0rpi0n]

That's completely silly, tbh.

Care to explain yourself on this one?

[Sk0rpi0n]

Then they aren't for a free market, obviously. It is no secret that big business wouldn't want free markets. They'd lose lots of their protections and favoritism.

Read any business journal or magazine. Big business is always arguing in favor of "free-markets" as a means to gain access to markets where they can dominate (ie. either through product sales or as a source of cheap labor).

Horsepoop. Monopolies only exist through government protection and favoritism (IP, tariffs, regulation, etc.)

Like I said, look up US standard oil and Debeers. Both were/are monopolies without state favoritism or sponsorship. One of the key reasons anti-monopoly laws and anti-trust laws exist in the United States was to have limit US Standard Oil's monopolistic tendencies.

Umm the only manner in which a company can limit competition is through the coercive apparatus of the state. It usually does this through regulation.

Regulation can also be used to limit the powers of business to enhance competition. See any number of cases brought against Microsoft in both the EU and the United States.

Furthermore, companies are quite capable of limiting competition through monopolistic and oligopolistic behavior. Here is the classic scenario economists use: Company A becomes very large and drops prices far below market value in a given area to squeeze out competitors. Competitors go bankrupt. Company A readjusts prices to what they deem is market value. This is how a monopoly works -- case in point -- US Standard Oil, Debeers and to a lesser extent, Microsoft.

Every action you partake in is to increase your own satisfaction. If you get satisfaction by voluntarily helping others, then you will act accordingly.

If everybody received satisfaction from every thing they did, than action in itself would virtually guarantee happiness.

Good thing I never said we actually have a free market. In any event, there is nothing inherently wrong with 5% of the population controlling 90% of the resources if they did it through ethical means. They didn't, so you are creating a strawman.

A strawman? I think this merely means you have provided some clarification. We agree on this point.


What "pure capitalist" nations?

Heh. Good point.

Also, in many ways the economies of those countries are freer than the US's, so your point falls flat on it's face.

According to which source?

My point doesn't fall flat on its face unless you provide evidence to back up your empty rhetoric.

[siva_chair]

Care to explain yourself on this one?

No, not really.

This does it much better than I could.

http://www.fee.org/pdf/books/Economics_in_one_lesson.pdf

[Dave de Sylvia]

Read any business journal or magazine. Big business is always arguing in favor of "free-markets" as a means to gain access to markets where they can dominate (ie. either through product sales or as a source of cheap labor).
You're confusing free markets with free trade (between countries). Big businesses tend to benefit more from (or, rather, suffer less from) regulation, and are in a better position to influence legislators, so they are generally in favour of restricted markets. It's not an altruism, but regulation is generally the best way for industry leaders to prevent smaller competitors from challenging them.

[siva_chair]

Read any business journal or magazine. Big business is always arguing in favor of "free-markets" as a means to gain access to markets where they can dominate (ie. either through product sales or as a source of cheap labor).

Quite the contrary. Big business are usually one of the biggest lobbyists for "protective" government measures. Look at the rampant support for FDR's New Deal amongst big business at the time.

Like I said, look up US standard oil and Debeers. Both were/are monopolies without state favoritism or sponsorship. One of the key reasons anti-monopoly laws and anti-trust laws exist in the United States was to have limit US Standard Oil's monopolistic tendencies.

Standard Oil did not charge monopolistic prices, and it did not coercively limit competition (in fact, competition vastly increased in the years leading up to the Sherman Antitrust Act, where Standards market share dropped from around 84% to about 64%). Petroleum outputs expanded and prices declined throughout the nineteenth century. To make the mistake of confusing a highly efficient and innovative company with one that is an actual monopoly is quite silly.

And DeBeers gets help from various governments in the form of mining licenses.

Regulation can also be used to limit the powers of business to enhance competition. See any number of cases brought against Microsoft in both the EU and the United States.

It artificially distorts the market and indirectly subsidizes lower efficient firms.

Microsoft gained it's virtual monopoly through government granted monopolistic privilidges in the form of copyrights and patents.

Furthermore, companies are quite capable of limiting competition through monopolistic and oligopolistic behavior.

That behavior is only possible through government protections.

Here is the classic scenario economists use: Company A becomes very large and drops prices far below market value in a given area to squeeze out competitors. Competitors go bankrupt. Company A readjusts prices to what they deem is market value. This is how a monopoly works -- case in point -- US Standard Oil, Debeers and to a lesser extent, Microsoft.

As soon as Company A readjusts prices, more competitors will enter the market to combat the raising prices and take market share from Company A.

Monopoly status is completely unsustainable unless the government protects it.

In a free market, their is always free entry into the market.

If everybody received satisfaction from every thing they did, than action in itself would virtually guarantee happiness.

You are confusing ends and means.

Name one conscious action undertaken by a person that doesn't have the aim of more satisfaction (or increase their satisfaction by removing sources of dissatisfaction).

A strawman? I think this merely means you have provided some clarification. We agree on this point.

It means you started building an counterargument to an argument I never made.

According to which source?

My point doesn't fall flat on its face unless you provide evidence to back up your empty rhetoric.

According to the Heritage Index of Economic Freedom.

While the US scores overall higher than your Scandinavian countries, Scandinavian nations are more free in several decisive areas. Denmark has greater business freedom, monetary freedom, investment freedom, financial freedom, freedom from corruption, and labor freedom while having comparable property rights and trade freedom scores to the U.S. Sweden has greater business freedom and freedom from corruption, while having comparable trade freedom, monetary freedom, property rights enforcement, investment freedom, and financial freedom to the United States. Finland has greater business freedom, monetary freedom, and freedom from corruption than the United States, while having comparable property right enforcement, financial freedom, and trade freedom. Norway (the least successful Scandinavian nation) has greater freedom from corruption than the United States while having comparable business freedom, trade freedom, and property right enforcement. Iceland has greater business freedom, fiscal freedom, and freedom from corruption, while having comparable trade freedom and property right enforcement. In many ways, Scandinavian countries are more "laissez faire" than the United States.

[Iskandar]

I wouldn't say Norway isn't successful. They've done pretty damned well for an economy of five million people. They have an enviable standard of living and GDP per capita is high.

[siva_chair]

I wouldn't say Norway isn't successful. They've done pretty damned well for an economy of five million people. They have an enviable standard of living and GDP per capita is high.

No one said they aren't successful.

[Sk0rpi0n]

You're confusing free markets with free trade (between countries). Big businesses tend to benefit more from (or, rather, suffer less from) regulation, and are in a better position to influence legislators, so they are generally in favour of restricted markets. It's not an altruism, but regulation is generally the best way for industry leaders to prevent smaller competitors from challenging them.

Free trade is an extension of free market economics across national boundaries.

[siva_chair]

Free trade is an extension of free market economics across national boundaries.

Yeah but the free market isn't confined to the issue of free trade across borders.

[Sk0rpi0n]

Quite the contrary. Big business are usually one of the biggest lobbyists for "protective" government measures. Look at the rampant support for FDR's New Deal amongst big business at the time.

Yet many of these companies still argue in favor of free markets, free trade (an extension of free market economics) and less government involvment in the economy. This point could be argued/interpreted either way.

Standard Oil did not charge monopolistic prices, and it did not coercively limit competition (in fact, competition vastly increased in the years leading up to the Sherman Antitrust Act, where Standards market share dropped from around 84% to about 64%). Petroleum outputs expanded and prices declined throughout the nineteenth century. To make the mistake of confusing a highly efficient and innovative company with one that is an actual monopoly is quite silly.

And DeBeers gets help from various governments in the form of mining licenses.

US Standard Oil did limit competition by using the scenario I already mentioned, and by assembling oil companies into trusts. http://news.bbc.co.uk/1/hi/in_depth/business/2000/microsoft/635257.stm
(not the best source I know, but still valid points)


It artificially distorts the market and indirectly subsidizes lower efficient firms.

Microsoft gained it's virtual monopoly through government granted monopolistic privilidges in the form of copyrights and patents.

No it gained its monopoly by being the first major player and workplace with most of the industries talent. Its monopoly is/was maintained by government intervention.

http://www.zaimoni.com/George/MicrosoftMonopoly.htm

As soon as Company A readjusts prices, more competitors will enter the market to combat the raising prices and take market share from Company A.

Monopoly status is completely unsustainable unless the government protects it.

Natural monopolies can and will sustain themselves when they have singular access to a resource (ie. salt or labor).

http://en.wikipedia.org/wiki/Monopoly

In a free market, their is always free entry into the market.

Yet free markets and the perfect competition model they are based on don't seem to exist naturally (even without governments). In any event, even in a truly free market, there is a large economic incentive for businesses to limit -- without government support or control -- the entry of competing firms into the market, either through trusts, buyouts or other means.

You are confusing ends and means.

Name one conscious action undertaken by a person that doesn't have the aim of more satisfaction (or increase their satisfaction by removing sources of dissatisfaction).

Any altruistic act. People can and do act counter to their interests all the time (generating dissatisfaction) whether consciously or unconsciously. Ie. Having unprotected sex, driving drunk,fighting battles they know to be unwinable, sacrificing their life etc.

Either way, I don't think we could ever agree on this point. You seem to view people purely as utility maximizers. I do not. This view would make true sacrifice, altruism, and true selflessness implausible, which they are not, are not.

This once again comes back to logic: if every individual act were guaranteed to generate satisfaction (or decrease dissatisfacton as you say), then action would = satisfaction. As we know, this is not a universal truth.

According to the Heritage Index of Economic Freedom.

While the US scores overall higher than your Scandinavian countries, Scandinavian nations are more free in several decisive areas. Denmark has greater business freedom, monetary freedom, investment freedom, financial freedom, freedom from corruption, and labor freedom while having comparable property rights and trade freedom scores to the U.S. Sweden has greater business freedom and freedom from corruption, while having comparable trade freedom, monetary freedom, property rights enforcement, investment freedom, and financial freedom to the United States. Finland has greater business freedom, monetary freedom, and freedom from corruption than the United States, while having comparable property right enforcement, financial freedom, and trade freedom. Norway (the least successful Scandinavian nation) has greater freedom from corruption than the United States while having comparable business freedom, trade freedom, and property right enforcement. Iceland has greater business freedom, fiscal freedom, and freedom from corruption, while having comparable trade freedom and property right enforcement. In many ways, Scandinavian countries are more "laissez faire" than the United States.

In the Heritage index's overall rankings the United States ranks 6th. All the Scandinavian countires rank below it (Denmark is very close though).

I am unconvinced.

[siva_chair]

Yet many of these companies still argue in favor of free markets, free trade (an extension of free market economics) and less government involvment in the economy. This point could be argued/interpreted either way.

Of course they want free international trade. That doesn't mean they don't argue for more regulation domestically to prohibit competition.

US Standard Oil did limit competition by using the scenario I already mentioned, and by assembling oil companies into trusts. http://news.bbc.co.uk/1/hi/in_depth/business/2000/microsoft/635257.stm
(not the best source I know, but still valid points)

Umm but they didn't charge monopolistic prices so they didn't do anything wrong. They were a highly efficient and innovative company. They didn't coercively limit competition in any way, and there is nothing wrong with being more efficient than your competition.

It wasn't even a real monopoly. I think it is important to properly define the word "monopoly."

No it gained its monopoly by being the first major player and workplace with most of the industries talent. Its monopoly is/was maintained by government intervention.

http://www.zaimoni.com/George/MicrosoftMonopoly.htm

And through IP, which is a government granted monopolistic privilege.

Natural monopolies can and will sustain themselves when they have singular access to a resource (ie. salt or labor).

http://en.wikipedia.org/wiki/Monopoly

http://mises.org/journals/rae/pdf/RAE9_2_3.pdf

Yet free markets and the perfect competition model they are based on don't seem to exist naturally (even without governments). In any event, even in a truly free market, there is a large economic incentive for businesses to limit -- without government support or control -- the entry of competing firms into the market, either through trusts, buyouts or other means.

Who said anything about a perfect competition model?

And so what? Those are all legitimate and non-coercive measures. What is the problem?

Any altruistic act.

The act of acting "selflessly" itself can be a source of satisfaction. You are still confusing acting in your own self interest with acting to improve satisfaction.

People can and do act counter to their interests all the time (generating dissatisfaction) whether consciously or unconsciously. Ie. Having unprotected sex, driving drunk,fighting battles they know to be unwinable, sacrificing their life etc.

Acting against your own interests (in these instances, your own well being) /= lack of acting towards a sense of satisfaction.

Either way, I don't think we could ever agree on this point. You seem to view people purely as utility maximizers. I do not. This view would make true sacrifice, altruism, and true selflessness implausible, which they are not, are not.

No matter what action one engages in, it involves their selves and some kind of motivation on their part. So long as the individual in question could be said to have a motivation for acting (even if this motivation is a benevolent one) it cannot be said that they are acting in a truly selfless manner.

This once again comes back to logic: if every individual act were guaranteed to generate satisfaction (or decrease dissatisfacton as you say), then action would = satisfaction. As we know, this is not a universal truth.

Except I never said every action is guaranteed to generate satisfaction. You are creating another strawman here.

I said that every conscious action is intended to improve a person's satisfaction (remove sources of dissatisfaction).

This is not concerned with the individual's definition of end satisfaction, just the way he sought that satisfaction. Human action.

In the Heritage index's overall rankings the United States ranks 6th. All the Scandinavian countires rank below it (Denmark is very close though).

I am unconvinced.

Perhaps you missed the part where I specifically said "While the US scores overall higher than your Scandinavian countries, Scandinavian nations are more free in several decisive areas."

[jaredong]

Heres a hypothetical question i have Siva. Im interested to hear what you have to say; you seem knowledgeable in these things.

I understand that free trade would have its benefits. Goods should be produced and services provided out more efficiently. But does it make sense to want to go towards free trade if it might not be possible to guarantee it internationally?

First,
Lets say Canada and US are trading. Free trade on both ends would benefit each country. However, if the US puts tariffs on Canadian exports while Canada has free trade on US imports, then US benefits much more. Knowing this, Canada would also want to put tariffs on US exports as well.

Free trade might be great, but protectionism benefits your country more. Hence, if each country looks out for itself, wouldnt more countries move towards protectionism than free trade if they cannot know for sure foreign countries would use protectionism?

Second,
Lets say the American government stays out of the economy and free trade benefits everyone in a country. However, by trading freely with China/Russia, it benefits foreign enemies as well. Maybe its in everyone in the America's best interest for the government to intervene and stop trade/put tariffs so that China/Russia do not benefit so that America maintains relative advantage to them. And vice versa. Although free trade might be great, trade is a useful tool by governments to punish other enemy countries; hence the government should have a role in the economy.

Perhaps free trade might be great, but in a practical realist world where countries cant trust or like each other, maybe it cant be done.

I dont make any assumptions on what you said/havent said. Im just interested to know what you think about this. :)

[siva_chair]

Heres a hypothetical question i have Siva. Im interested to hear what you have to say; you seem knowledgeable in these things.

I understand that free trade would have its benefits. Goods should be produced and services provided out more efficiently. But does it make sense to want to go towards free trade if it might not be possible to guarantee it internationally?

First,
Lets say Canada and US are trading. Free trade on both ends would benefit each country. However, if the US puts tariffs on Canadian exports while Canada has free trade on US imports, then US benefits much more. Knowing this, Canada would also want to put tariffs on US exports as well.

Free trade might be great, but protectionism benefits your country more. Hence, if each country looks out for itself, wouldnt more countries move towards protectionism than free trade if they cannot know for sure foreign countries would use protectionism?

Well, protectionism usually doesn't benefit your country more (for just the reason you just described: it tends to drive the prices of imports up. It can benefit certain firms or industries, but not the economy as a whole). Moreover, this isn't really free trade if there are in fact tariffs. In absence of tariffs, goods can move much freely towards willing markets.

But in the scenario you described above (US putting tariffs on things it imports from Canada, Canada having free trade on imports from the US), Canada benefits in the fact that it's citizens are provided with cheaper imports. If the tariffs to sell goods to the US becomes too high, they will simply sell their goods elsewhere.

Second,
Lets say the American government stays out of the economy and free trade benefits everyone in a country. However, by trading freely with China/Russia, it benefits foreign enemies as well. Maybe its in everyone in the America's best interest for the government to intervene and stop trade/put tariffs so that China/Russia do not benefit so that America maintains relative advantage to them. And vice versa. Although free trade might be great, trade is a useful tool by governments to punish other enemy countries; hence the government should have a role in the economy.

Well, who decides it is in "America's best interest" to restrict trade with those nations? I think by "in America's best interest," you mean "in the US government's best interest." It is in the best interest of the American people to have consumer markets open to them. If these nations are providing goods or services that American's have a demand for, it is in their best interest to be able to have them available for purchase. Sure, foreign governments might indirectly benefit, but it also means that they become somewhat accountable to consumer demand. If they start doing things that blatantly offend or disenfranchise their consumers, they will soon see boycotts and the like and start loosing their profit margins.

A good example is indeed China. Once the US started freeing up trade with them, their economy has boomed. Sure, there is still lots of bad political oppression there, but the freeing up of the economy has improved the general living standards of many Chinese people. Personal savings levels have increased dramatically in China.

The quickest way to liberate people is through strong property rights.

Perhaps free trade might be great, but in a practical realist world where countries cant trust or like each other, maybe it cant be done.

I dont make any assumptions on what you said/havent said. Im just interested to know what you think about this. :)

Well I hope I somewhat answered what you were looking for. Obviously one could go into great detail about each of those hypotheticals, so I hope I answered it to your satisfaction.

[Dave de Sylvia]

Free trade is an extension of free market economics across national boundaries.
Now who's the demagogue? There are lots of companies who would (and do) benefit from regulation at home and freer trade across nations and vice versa.

[GnRguitarist]

Strengthening or Weakening the Economy?

The economic situation continues to deteriorate this week as past and future bailouts were discussed on Capitol Hill. The debate was over the accountability of already disbursed TARP money, and on whether or not to release remaining funds. Banks that had already been bailed out before are looking for more money to fill the black holes that are their balance sheets, warning that they are simply too big to fail. However, whatever ‘devastating’ consequences these banks are dreaming up and pushing on Capitol Hill regarding their own collapse will be nothing compared to the collapse of our currency if we keep debasing it through these foolish bailouts. It should be that they are too big to bailout. The world will not come to an end without this or that bank. The most troubling thing to me is this rhetoric that only government can save the economy, and must act. This is so counter-productive.

We must ask ourselves what strengthens this country, and what weakens it.

Government is a monumental drag on this economy. Government at all levels currently absorbs about 35-40 percent of GDP, which is still not enough for its voracious appetite. While productivity is already overtaxed, the government routinely spends more than it takes in and makes up for the shortfall by constantly borrowing or debasing our dollars through inflation. It pains me to think of all the opportunities for productive economic growth we have given up simply because our government is super-sized instead of Constitution-sized. There are just a few constitutionally sanctioned activities for government to engage in, but it is so overstretched with unconstitutional encroachments that what it is legitimately supposed to do, it does very badly. And yet we are to believe the solution to our problems is to make government bigger. On the contrary, government makes our problems bigger. The central bank’s meddling with monetary policy led to overheated lending, and now massive defaults. The government used manipulative tax policy to distort the housing market which has had many unintended consequences, and here we are. Government is quick to enact and slow to correct bad policy. Yet in spite of government’s failures, it flourishes and grows, thanks to the continual bailouts from the unwitting taxpayer.

Big government has been tried and has failed miserably. What we need now is small government, and freedom. We need the freedom to pull ourselves up by our own bootstraps again, as we traditionally do in this country. But try to start a business or charity today, and you will understand how little economic freedom we really have left. Freedom, not government, made this the land of opportunity. Freedom laid the foundation that catapulted us to becoming the strongest economic power in the world. The American people are strong and capable. We can pull ourselves out of this mess. All we need is for the nanny-state to get out of the way and allow us to do it. Freedom is our strength, government is our weakness. Only by recognizing this and unleashing our strengths will we solve the problems we face today.


Posted by Ron Paul (01-19-2009, 12:28 PM) filed under Monetary Policy

http://www.house.gov/htbin/blog_inc?BLOG,tx14_paul,blog,999,All,Item%20not%20 found,ID=090119_2616,TEMPLATE=postingdetail.shtml

[wartomods]

it is interesting in how ron paul is always keen on "substances"