sick realization: you have negative dollars

For the serious discussion of weighty matters and worldly issues. No off-topic posts allowed.

Moderators: Azrael, Moderators General, Prelates

User avatar
bantler
Posts: 238
Joined: Thu Apr 08, 2010 11:23 pm UTC

Re: sick realization: you have negative dollars

Postby bantler » Fri Mar 09, 2018 6:13 pm UTC

cphite wrote:That last part always seems to get left out of discussions about the housing crash... people act like the banks did all of this on their own and - of course - use that as a reason to call for government to step in and control them... the reality is, a lot of their bad lending behavior was practically mandated by the government. There were plenty of people in the industry that were predicting the crash before it happened. But nobody wanted to listen.


Nobody wants to listen to someone telling them to stop getting rich.

Tyndmyr
Posts: 11443
Joined: Wed Jul 25, 2012 8:38 pm UTC

Re: sick realization: you have negative dollars

Postby Tyndmyr » Sat Mar 10, 2018 5:22 am UTC

cphite wrote:
Yablo wrote:I was a loan auditor for a credit union prior to the crash, and I remember being shocked and a little terrified that people with terrible credit were not only getting mortgages to buy property they couldn't afford, but then getting second mortgages at much higher rates which would raise the total amount borrowed against the property to as high as 125% of the assessed value. Our VP of Lending agreed that it was the worst lending policy he'd ever seen, but he said the credit union's hands were tied in the matter. The federal government was not only encouraging the practice, it was all but requiring it.


That last part always seems to get left out of discussions about the housing crash... people act like the banks did all of this on their own and - of course - use that as a reason to call for government to step in and control them... the reality is, a lot of their bad lending behavior was practically mandated by the government. There were plenty of people in the industry that were predicting the crash before it happened. But nobody wanted to listen.


Yeah. Unfortunately, the nature of a bubble is that when people realize it's a problem, it busts. So, by it's very nature, people are mostly thinking things are okay on the way up, and all reassuring each other, and making poor decisions. The government was not a farsighted agency, staving off the bubble in advance. Far, far from it. It was using the same bad decision making, and in making policies based on that, made the trouble worse.

Nobody's really figured out how to never have bubbles. There'd have probably been some bubble even without any government intervention at all. But they certainly didn't prevent any degree of it, and definitely worsened it to some degree. (reactions AFTER the bust are a rather separate category....though one could argue that some of those reactions were also unfair)

User avatar
Quizatzhaderac
Posts: 1601
Joined: Sun Oct 19, 2008 5:28 pm UTC
Location: Space Florida

Re: sick realization: you have negative dollars

Postby Quizatzhaderac » Thu Oct 18, 2018 9:13 pm UTC

I won't provide my own comments, just drop some wikipedia links.

Islamic (non-interest based) finance.

Adverse possession: a common law principle that limits landlord's rights.

Links defining what money actually is (in the modern sense) have already been provided early in the thread.
The thing about recursion problems is that they tend to contain other recursion problems.

ryanbryandyin
Posts: 9
Joined: Fri Nov 16, 2018 5:13 pm UTC

Re: sick realization: you have negative dollars

Postby ryanbryandyin » Fri Nov 23, 2018 8:04 am UTC

Thesh wrote:I would suggest that capitalism itself is not known to work, and without all the government intervention in our markets, our entire society would have collapsed long ago. The incentives that capitalism is based on leads towards greater centralization of wealth, less equal opportunity, and a more authoritarian state over time. Without the imperialism of Western nations, it's not even clear that we would be as well-off as we are. I'd suggest that the direction we are heading will probably lead us to a collapse.

Plus, co-ops have been shown to have higher productivity than for-profit companies, and growth itself seems unrelated to the relative wealth of the wealthy, with an inverse correlation with high levels of inequality. It seems to me that if you look at the individual pieces of evidence (rather than "we're successful, therefore capitalism"), pretty much everything that makes capitalism unique to other decentralized economic systems (i.e. things that benefit absentee owners) results in primarily negative outcomes to our economy and society as a whole.


It is certainly true that capitalism facilitates wealth creation when you already have the said wealth to put into investments.

But that very principle also leads people who control wealth to invest in individuals and ideas that promise to deliver them exponential wealth growth. Ergo, venture capital, PE, and the entire investment community.

Theoretically, it should be a marketplace where anyone with a great idea can get access to wealth (i.e. investor money) and use it to grow wealth for himself as well as his investors.

The problems emerge when human biases enter the picture. So instead of anyone, investors tend to favor, say, a Harvard grad. And getting into Harvard itself requires not just merit, but a modicum of stability and good schooling that the less privileged don't always have access to.

This is the true flaw in the system - the inherent bias of human beings

elasto
Posts: 3575
Joined: Mon May 10, 2010 1:53 am UTC

Re: sick realization: you have negative dollars

Postby elasto » Fri Nov 23, 2018 9:02 am UTC

ryanbryandyin wrote:This is the true flaw in the system - the inherent bias of human beings

That's just a different way of saying the same thing: Any system that doesn't take into account the deep flaws of human beings is itself deeply flawed.

I mean, theoretically the best possible system is a wise and benevolent dictatorship. It doesn't preclude the dictator seeking counsel and delegating after all, and any other system necessarily introduces delays, inefficiencies and self-serving bureaucracies. The best known example of a benevolent dictatorship would be the Christian 'heaven', right..? And it's why Putin, Trump and other 'strong men' are so appealing to many.

The problem is of course that wise and benevolent dictatorships rarely remain that way, and those who most seek power are often the ones least suitable to wield it... Hence limits on power whether through diffusion or other means works best whether in politics or in the marketplace. Which is why monopolies are not a good thing even if they have arisen totally organically because the companies in question are head and shoulders above the opposition...


Return to “Serious Business”

Who is online

Users browsing this forum: Jplus and 10 guests