Barney Frank’s Fantasy World

I hear your outrage at being challenged on this particular choice. But the reality for me is, I won't make that choice. That you will is a political decision, no question but I'm going to push hard on the morality of it.

Oh, so are you telling me
you agreed to bailout AIG from their derivative fiasco
and that it had NO effect on your portfolio? Is that what you're telling me?

Obama, Bernanke, And Jim Cramer Star In Movie "Stock Shock" About Sirius XM, Wall Street (LINK to Story) http://prlog.org/10511064

Thanks for the link. The reviews have been great.

Question: How can Fannie and Freddie be structured to avoid the moral hazard problem and a too-cozy relationship with regulators? (Russ Roberts, Café Hayek)

Inside Frank's head: Why would I want to do that?

Holy cow, that youtube clip posted by David in the second comment is totally unbelievable. How is it that that clip is not played over and over again in the national media?????

Frank is a despicable example of the worst that politics and socialism have to offer. Pathetic.

Oh pleeease Russ,
do you REALLY think the Rep. Barney Frank understands the words "moral" and "hazard"??
You give the Honorable Rep way, WAY, too much credit.

"And none of Frank’s answer addresses the moral hazard problem–that people kept lending to F and F as the quality of their portfolio deteriorated because they knew the government stood behind them."

While I agree that the factual error is bad and should be pointed out, I find the point in your last paragraph even stronger. Was Frank's quote the only part of his answer? If so, he didn't answer your question. It's not apparent that he understood your question. And, if anything, his answer showed gave evidence (though not factually correct evidence) of a too-cozy relationship.

A follow-up to his answer should have been, "so, you believe the too-cozy relationship is a real problem? Again, how would you structure F&F to avoid this and also avoid the moral hazard problem?"

Your position is Quarterback

The day of the week... Monday


http://cafehayek.com/2007/09/more-room.html


And I toot my horn directing you towards my concerns as stated in my reply at the time.

muirgeo 2 years ago
Wow! Is this supposed to be an argument for Liberal economics? Bigger houses seem well correlated with greater consumer debt. Consumer debt in turn seems to be well correlated with increasing wealth accumulation by the paper pushers and the money changers on the very top who rely not on free-market economies but instead rely heavily on the exact lending and monetary policies set up by our top down economic planners.

I don't remember any of this when I read The Road to Serfdom. And then there is the $50 billion recently pumped into the economy to save the Hedge Fund Managers and their houses. Is that really what Liberal economies do? I mean it sounds like a planned economy to me.


A further trip down memory lane of the archives specifically "Standard of Living " is very instructive. There's lots of room in fantasy land.

http://cafehayek.com/standard-of-living/page/1

Your position is Quarterback

The day of the week... Monday

Your position is idiot

day of the week: everyday in the village

The stream of non sequiturs flowing through your skull, while hilarious to those of us who read it, is not an argument. You didn't do very well on those "which of these things does not belong" thingies as a kid, did you?

Hey dopey... I first met you on this board over a discussion of the problems of financial derivatives. You defended them and tried to belittle me. Now the whole world has learned that they were nothing but an instrument used in a high tech robbery of hard working productive people by paper pushing electron pushing jack asses that in many cases should be frog-marched to a permanent place in one of our less fine penal institutions.

There's no non sequiturs. I've been right all along. The worlds figuring it out. Wall Streeters like yourself have assumed the lowest rungs on the respect scale and the good people of this nation will take it back from the opportunist lowlifes such as yourself.

What derivatives are you talking about? Commodity derivatives, interest rate swaps, index funds, foreign exchange swaps, OTC options contracts, exchange traded futures? I'm having a very hard time seeing how these derivative markets have caused any problems.

"I'm having a very hard time seeing how these derivative markets have caused any problems." txslr


Good point... it must be ALL Barney Franks fault. LOL

So you don't know? Or are there only two possibilities, derivatives or Barney Frank, and we must choose one or the other?

Come on, give it a try. You tell us that derivatives are somehow mechanisms by which great evil is done. Try explaining how. I'll get you started: Party A agrees to pay Party B the difference between the NYMEX crude oil price and $75/bbl. every month for the rest of the year. Where does the thievery begin?

Jeezesus, txslr, are you really that ignorant of what's been going on? Here are some quotes and links that might help you get up to speed.

Let's start with your fellow Ayn Rand disciple, Alan Greenspan:

On October 23, 2008, Greenspan acknowledged during a congression hearing that he had been wrong in opposing regulation of derivatives stating "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity — myself especially — are in a state of shocked disbelief." And regarding his laissez faire ideology, Greenspan said: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”

When a committee member asked Greenspan, “In other words, you found that your view of the world, your ideology, was not right, it was not working.” Greenspand repled, “Absolutely, precisely. You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

Greenspan also confessed error in his opposition to regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he had expected.

http://www.ronpaulforums.com/showthread.php?t=1...

* Warren Buffet: Derivatives are "financial instruments of mass destruction." see pages 13-15: http://image.guardian.co.uk/sys-files/Business/...

* Portion of a CNBC story:

"Derivatives caused the market Armageddon of recent years and if left unchecked by global leaders, the same market could cause another catastrophe, Mark Mobius, executive chairman of Templeton Asset Management, told CNBC Monday.

When asked by a CNBC viewer what kind of Armageddon could be expected if the derivatives problem is not addressed, Mobius replied: “The same kind of Armageddon that we just had, what we just saw in the last few years has been caused by derivatives.”

The lack of liquidity, transparency, coupled with its sheer size means the derivatives market poses a major risk to financial stability, according to Mobius. The currency derivatives market is especially at risk of causing problems, but interest-rate derivatives also, he said.

.... The derivatives market is ten times the total GDP of the world, or $600 trillion, Mobius pointed out. And the market has been responsible for numerous bankruptcies in recent years as companies don’t know what they have on their books and don’t read the fine print, he said."

http://74.125.47.132/search?q=cache:-V_FPlphSGg...

http://www.pbs.org/wgbh/pages/frontline/meltdown/

That's a might long way of saying you don't know!

I asked for an explanation of how it happens that derivatives are bad and you gave me a links to people saying that derivatives are bad. If I had asked whether or not anyone believed derivatives are bad this would have been a powerful argument, but I didn't. I asked for an explanation, and you pointedly didn't provide one. So I have to conclude that you don't know.

Sorry you couldn't figure it out, txslr.

Here, I'll spell it out for you:

These people are a lot smarter than you and don't just spout opinions like you do. And some of them even come from your side of your ideological spectrum.

But your attention span is probably too short to get thru any of these.

BTW, you know you have to click on those underlined blue things (called "links"), right?

BTW, one of your underlined blue things was attached to a Lyndon Larouche publication. Is this what you consider carefully reasoned opinion?

Ha! I chose that one because I'd come to the conclusion this is the type of logic that would appeal to you. You just have to communicate in a language your audience can understand. I apologize if it was above your head.

Okay, okay. I get it. You don't know the answer to my question. That's fine, particularly since it wasn't addressed to you and these things are complicated. No one said you had to understand derivative markets in order to post here, but a bit of humility would be good form under the circumstances.

How come, as one of our participants recently asked, we can't "like" a comment more than once?

Your comments confess your ignorance on certain issues.

1) Greenspan is not a "disciple" of Ayn Rand -- though he once, long ago, supported free markets and advocated a gold standard, he betrayed all of Rand‘s political and economic ideas by becoming a central financial planner in a heavily-regulated command economy that long ago ceased bearing any resemblance to a free economy.

His “flawed ideology” -- in reality -- was his belief that the Federal Reserve could always manipulate the money supply so as to successfully achieve a “soft landing” after creating still-yet-another asset bubble, which was merely the latest one in an endless series of asset bubbles that the Fed (with the active help of both the legislative and executive branches of the government) has managed to create decade after decade ever since its inception.

2) Greenspan is not an advocate of laissez-faire capitalism (LFC). LFC does not feature a fiat money supply -- nor does it feature a central bank with unlimited authority to inflate/deflate that fiat money and set its rates of interest -- nor does it feature universal, government-mandated, fractional reserve banking that is preposterously overleveraged to something like 25 - 1, thereby insuring that the banks can’t withstand the slightest loss in consumer confidence -- nor does it feature a government-run, government-mandated “deposit insurance” program that encourages depositors to pay no attention to the lending practices of the banks to whom they give their money -- nor does it feature central economic planners such a "Chairmen of the Fed" who pursue relentless policies of inflation that destroys the value of our savings and investments -- nor does it feature government-sponsored entities like Freddie Mac, Fannie Mae, Ginnie Mae, etc. to create a secondary market that insures an uninterrupted flow of funds for loans to unqualified borrowers -- nor does it feature government regulators like the Securities and Exchange Commission which sets all the rules by which investments are rated and markets -- nor does it feature government-controlled cartels of investment rating agencies which all issuers/purchasers of investments are required to use and which continues in business even after disastrously rating sub prime loan packages as “AAA” -- nor does it feature selectively-enforced legislation like the Community Reinvestment Act that effectively compels the creation of shaky loans to unqualified borrowers under a program to push homeownership, a program pushed for decades by Democrats and Republicans alike -- nor does it feature a Federal government that anesthetizes businesses and investors against risk by promising to bail them out when things go south and then follows through on that promise.

All of these things -- and many, many more I could list -- are features of a highly regulated, thoroughly fascist, “mixed” economy, which contains a few faint traces of capitalism that leftists, preposterously, blame every time the government screws up and creates an economic crises. Greenspan -- who advocates and agrees with all such features -- is thus the opposite of an advocate of laissez-fair capitalism; he’s a fascist/statist who believes in government control of the economy.

Any attempt to label Greenspan an advocate of laissez-faire capitalism -- just like any attempt to blame the current economic crises on laissez-faire capitalism -- rests on the delusional notion that laissez-faire capitalism is any economic system with any degree of freedom greater than the totalitarian slavery Joseph Stalin imposed on the Soviet Union. Such a definition would mean that the slave-based agrarian economy of the southern U.S. states in the 19th century constitutes “laissez-faire” -- because not everyone was a slave. If you wish to make that argument, you may proceed.

3) You’ve not answered “txslr’s” challenge to show how derivatives have done such horrific damage. You’ve merely posted links to others who share the same claim -- but neither they nor you have provided an explanation of how they have anything to do with the present economic crises.

By the way, my guess is that if you totaled up the value of all the life insurance policies that exist in the world today, that value would also be huge. And if the government created a health crises that caused mass death in the U.S., those life insurance companies would go bankrupt, their massive investment holdings would have to be liquidated, and great economic damage would result. This would not mean that life insurance was the cause of the problem -- it would mean that a government-caused rate-of-death vastly above any historical norm had caused a problem.

4) As far as “systemic risks” to the “system” are concerned, the fundamental systemic risk that exists is that central economic planners will continue to do what they’ve done throughout history -- create economic problems/crises that become an excuse for ever-more controls, rules and regulations, until they destroy sufficient wealth, employment and businesses that the economy collapses into chaos. For proof, see the economic history of every nation that has gone down the path to total government control of all economic activity. All of the nations that got there -- all of the ones that achieved total or near-total collectivization and control of economic activity proved to be spectacular failures that starved millions of people to death.

We are on the same path -- and we now have a delusional leftist at the wheel determined to drive us off the economic cliff.

Wow! Finally, a response with some substance in it. Thanks, MS.

1. Since you Any Rand loving, social Darwinist, Hayekians are too pure to ever compromise enough to have any impact on policy making, Greenspan is as close to a Rand disciple as you're ever likely to see. Yeah, I'm sure he doesn't meet you all's standards of purity.

You're incorrect about his confession of a "flawed ideology". He wasn't talking about managing the money supply. (Tell the truth now; you made that up didn't you.) He was talking about his laissez faire approach to regulation of the financial markets, especially derivatives.

In doubt? Read the transcript of the hearing.

2. Whew! Do you feel better, now?

I know, I know. If you Hayekians had your way you'd take us all back to a time of righteous purity far, far in the past. Just like the Taliban would.

3. I've already answered txslr elsewhere. I'll just say "ditto" to you.

Re: your life insurance industry metaphor: If the industry collapsed like you postulate here, it would be a bad thing. But it wouldn't be an economic disaster.

But if you...
- paid insurance agents to sell policies to every swingin' dick with a heartbeat,
- sliced and diced those policies,
- mixed the good and the bad into "traunches",
- securitized these frankensteins,
- bribed the rating agencies to get AAA ratings for these monsters,
- provide a false sense of security by buying an "insurance policy" (or CDO) from AIG,
- while all that time investing millions in lobbying dollars and campaign contributions to make sure the pols and regulators didn't impose any disclosure requirements (much less regulations) on you, and
- using your network of laissez faire-apologist think tanks, media outlets (like Fox and the WSJ editorial page), and opinion leaders to rationalize this travesty...

THEN you'd have a disaster on your hands.

How would having WEAKER regulatory oversight prevent this from occuring? This was a direct result of the industry gutting regulations over the past 20 years and creating an effective laissez faire environment for the industry.

4. Congrats. You've bored me to death with your Hayekian boilerplate bs.

Tex wrote:

1. Since you Any Rand loving, social Darwinist, Hayekians are too pure to ever compromise enough to have any impact on policy making, Greenspan is as close to a Rand disciple as you're ever likely to see. Yeah, I'm sure he doesn't meet you all's standards of purity.

Thank you for conceding that you were wrong, and that Greenspan is, in fact, NOT a disciple of Rand and NOT an advocate of laissez-faire capitalism.

You're incorrect about his confession of a "flawed ideology". He wasn't talking about managing the money supply.

You need to read more carefully. I did not say that Greenspan talked about managing the money supply. What I said was that in reality the flaw in Greenspan's beliefs was his assumption that money supply manipulation can first stimulate economic growth and then “manage” any asset bubbles that might arise, so as to avoid recessions. He failed at that, rather miserably.

But of course he did not say that. Like all interventionists, when the interventions blow up in their face, they seek to blame the private sector by finding some remaining scrap of freedom in the system and blaming THAT for the problem.


2. Whew! Do you feel better, now?

I know, I know. If you Hayekians had your way you'd take us all back to a time of righteous purity far, far in the past. Just like the Taliban would.

In other words, since you cannot answer my facts, you’ll just issue an insulting remark and pretend the facts don’t exist.

3. I've already answered txslr elsewhere. I'll just say "ditto" to you.

I’ll take this as an admission that you don’t have a clue how to answer the point that txslr brought up.


How would having WEAKER regulatory oversight prevent this from occuring?
This was a direct result of the industry gutting regulations over the past 20 years and creating an effective laissez faire environment for the industry.

Since you are obviously as delusional as “muirgeo” in your belief that we have an “effective laissez-faire environment” -- since you’ve already demonstrated that you intend to ignore the vast list of NON-laissez-faire features, rules, controls and regulations that characterize our fascist regulatory/welfare state that I pointed out in my last post -- I won’t waste any more time explaining to you why your claim is nonsense. You’ve convinced me you are beyond reason on the issue.

I’ll only note the following for other interested parties here who are not beyond reason.

Prior to the creation of the Federal Reserve in 1913, there was no fiat money supply , no central banking (except for brief interval in the middle of the 19th century) and little financial regulation. Why, in an environment that was NOT fully laissez-faire but was certainly characterized by much, much “weaker regulatory oversight” -- why in an environment that was far, far closer to laissez-faire than we have now -- why in THAT environment did we not have crises that saw the near-collapse of the entire financial system followed by a multi-year recession and multi-year double-digit unemployment?

We did experience occasional recessions prior to 1913, but nothing like what the Great Depression brought us -- nothing like the “stagflation” that plagued us throughout the 70’s -- nothing like the current recession and double-digit, persistent unemployment. If, as leftists claim, a laissez-faire environment creates these problems, why wasn’t the economic record of the first 130+ years of our nation’s history one long, massive economic crash and depression? Why was it, instead, a period of great economic progress and growth?

The effort to blame our problems on "laissez-faire" has reached the stage of being laughable. I, for one, hope the left keeps trying to convince the American people of this, because the effort is only serving to discredit them.

Yeh, I agree with you. This is pretty much a waste of time, but I love winding you guys up.

BTW, lots of your facts are wrong. Here's just one:

there was "no central banking (except for brief interval in the middle of the 19th century)"

Are you talking about the Second National Bank?

Spouting off without doing your homework. Typical.

Are you talking about the Second National Bank?

No, I'm not. I'm talking about the creation of a central bank -- i.e. one that is empowered to issue fiat money and is empowered to force all the nation's banks to use the fiat money in place of whatever bank notes they may have previously been issuing -- a fiat money that becomes legal tender by force of law. As far as I know, from the adoption of the Constitution in 1789 up to 1913, the only time an attempt was made to create such a system was during the Civil War when the Treasury issued the Greenbacks and all the nation's banks were forced to adopt them and drop their own banknotes.

I may be guilty in some cases of not doing my homework -- though you've yet to demonstrate such is the case -- but at least I do not ignore a vast array of facts that demonstrates just how ridiculous it is to claim we have any sort of "laissez-faire" economy.

By the way, nothing you've posted has me "wound up". What you fail to realize is that all your claims about too little regulation or too much laissez-faire are precisely what is claimed after EVERY significant economic problem or crises that occurs. So, for 45 years I've listened to the same baloney: first we have an economic problem/crises -- then the left cries that it is due to too little regulation or to "laissez-faire" -- then we have a wave of additional regulations imposed coupled with the promise that these regulations will insure that such problems never happen again -- then, eventually, the problems recur, whereupon all the leftists pretend that the previous regulations were never passed and that the problems is still laissez-faire -- so this is followed by still yet another set of additional regulations -- and on and on we go , ad nauseum.

This is why your effort to convince Americans -- at least those over the age of about 40 or so -- that laissez-faire is the root of our economic problems is failing and will continue to fail. We’ve heard it all before, we’ve seen all sorts of regulations passed every time these problems come up, and time and time again, we see the problems return. So when you rush in to claim that our problems today, here and now in the year 2010, are due to “laissez-faire”, it’s utterly laughable.

I thought you had given this dialogue up as a waste of time. Your run-on sentences and reiteration of the same points ad nauseum suggest you are in fact wound up.

I'm done with you on this issue.

I, and everyone on this blog wholly disagree with the notion that Alan Greenspan in any way represents our ideals. You are arguing with yourself.

None us have ever once claimed that markets are perfect (not that you even made a coherent argument that a market has done harm). People may get fucked left and right, but it's a better system than one in which fucking people is the expressed purpose of an institution that is professed by a large portion of the population as the source of all that is good.

"I, and everyone on this blog wholly disagree with the notion that Alan Greenspan in any way represents our ideals. You are arguing with yourself."

NS, your logic disappoints me. If I were arguing with myself, I'd be arguing on both sides of the Greenspan lazy-faire question. I'm not, of course. You all are so accustomed to agreeing with each other, you've lost touch with what an agrument is.

And "everyone" on this blog "disagrees" with me on this? So you've polled everyone on this site to reach that conclusion, right, or is this just another unfounded opinion? Let me guess.

"None us have ever once claimed that markets are perfect (not that you even made a coherent argument that a market has done harm). "

Yet another staw man (do you know what that means?). I've never said you've made that claim.

"People may get fucked left and right, but it's a better system than one in which fucking people is the expressed purpose of an institution that is professed by a large portion of the population as the source of all that is good."

My, my. Yet another example of how many of you can't help but resort to obscenities, name-calling, distortions and non sequiturs in lieu of reasoned argument.

The "expressed purpose" of government is "fucking people" and that government is "the source of all that is good"? Where is that "expressed" anywhere by people who advocate a more activist government than you do?

Surely you have some basis for this claim. Show me. Or is this another one of your irrational statements?

O yes, it's a non-sequitur... especially if you don't understand it. You have provided such clarity.

It's interesting you mention Greenspan, yet again. What was that term you just taught me oh great holy one? o yea, straw-man. I'd love to hear some more. Maybe you can continue to violate the same logical fallacies you thrust on others.

Cue the music from "Final Jeopardy" here.........still waiting.

I''ve lended a hand, HaywoodU, and supplied an answer below. Try to get educated.

HA! Amen, Brother Muirgeo.

But unfortunately, we're wasting our time trying to convinced most of these folks of anything (still, it's entertaining, isn't it). They are impervious to theory, logic, facts, or data that doesn't fit into their rigid Hey Yakian ideology.

It's group-think, my friend. Look at the banner at the top of the page. They're under "orders" and this is where they get them.

Well it's important that we de-throne this elitist form of economic thinking. It exist specifically to serve the elitist. Indeed I believe too its a form of group think. It's also got a simplicity that is attractive to simplistic thinkers who care not about nuanance and data but have black or white as their favored color. Thus the proclivity to reply with angish and name calling. THAT is something of which they are good at. How such intolerant people can assume the world would be tolerent and effecient if we only followed their way is beyond me. Their very personality type is the reason their ideology fails in the real world. As Keynes said, "Capitalism (laizzes faire) is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."

It gets far too much attention in the realms of policy and against the desires of the majority of people who understand the utlitity of a government directed by the people.

I had forgotten that mighty fine quote from Keynes. Astounding, indeed.

Yeah, these guys are so accustomed to talking to each other all they can do is call people (and their opinions) who disagree with them (hold on, I've been keeping a list here) "socialist", "stupid", "idiocy", "room temperature IQ", "meager intellect", "immoral scum", "thumbsuckers", "despicable", "pathetic", and that's just on this page!

Perhaps it IS a personality type. But how do you decide the nature vs nuture question? Maybe it's genetic, maybe it's social isolation, maybe it's sexual compensation. Who knows?

Say, I'm reading "Invisible Hands" by Kim Phillips-Fein. It traces the historical roots these guys grow from. You might enjoy it.

I don't have a statistical study to back this up, but more often then not progressive bloggers break into this idiot and that retard, or arguing with a table (http://krugman.blogs.nytimes.com/2009/12/17/din...). It is progressives who think they are more intelligent than the population at large and therefore deserve to control it.

Your complaint applies to many, if not most, intellectual elites, not just progressives. (Jeeze, I didn't know anyone on this site used that word to describe opponents. I thought they were all socialists. I applaud you, NS.)

There's no less hubris or arrogance among the Hayekians who think they're so smart that they recommend adopting an idealized economic state of nature best described as "nasty, brutish and short."

And if you want a model of arrogance among smart people, read Ayn Rand.

There is no less? At all?

Let me get this straight people that advocate you give them 50+% of your income so they can spend it better than you are just as hubristic as those who wish for you to keep your money and do as you please as long as it doesn't harm others?

It's interesting how it always comes full circle to Ayn Rand. The point of this website is to show that there are other, much better, libertarian thinkers than Ayn Rand. The fact that you have to trot her and Greenspan out numerous times to make your point shows how much of a straw man it is.

Like brotio, you're making stuff up. Where do I advocate a "50+% tax rate?

My god, a Kayekian who repudiates Any Rand! I thought that was blasphemous. Next you'll be abandoning Mises.

Rothbard has been making fun of Objectivism for decades.

http://video.google.com/videoplay?docid=-540482...

... not just progressives. Jeeze, I didn't know anyone on this site used that word to describe opponents...

Progressive: seeking progress on the road to socialism.

Progressive is just a disingenuous way of saying, "Socialist".

My point exactly, brotio.

Everyone who disagrees with you Kayekians is called a socialist so you can dismiss their arguments without presenting any evidence to support your ideology.

I've never called a Randian, or Misesean, a socialist. I wouldn't call myself any of the three. Also, if you haven't found any evidence supporting liberty on this blog, then you haven't been reading.

BTW: aren't you the one who opined that your neighbors should be obliged to fix a farm implement for you?

If you believe that you are entitled to the wealth of another, then you are a socialist.

You're just making shit up, brotio.

I've never said I "haven't found evidence of libery on this blog".

No I've never said anything about farm implements. More evidence that you don't do your homework.

Sorry. One of you recent posters said it was unfair that his neighbors didn't pitch in to help him fix a tractor, or other farm implement.

Everyone who disagrees with you Kayekians is called a socialist so you can dismiss their arguments without presenting any evidence to support your ideology.

This blog is maintained to promote liberty. If you haven't found any evidence of the defense of liberty, then you're not reading very carefully.

You claimed you're not a socialist. Does that mean that you are opposed to redistribution of wealth?

That's right, I don't support redistribution of wealth.

I also don't support policies that enable illegal confiscations of property, restrict free trade, allow the government's establishment of religion, support state ownership of the means of production and distribution, increase inequalities in the distribution of wealth, deny a good education to all students who seek it, concentrate political power in the hands of the wealthy and corporations, enable the extraction of rents through monopolies and oligopolies, violate the rights to privacy, represent unconstitutional restrictions on civil rights and civil liberties, maintain the power of the military-industrial complex, restrict the freedom of speech and press...

I could go on.

So am I a socialist in your book?

Where is this "logic" you've presented, TFI?

"Where is this "logic" you've presented, TFI?"
Methunks

The logic is in the last quarters GDP of 5.7% being shoved down your gullet with a good heaping of crow.

Yes, a 1.5 trillion deficit managed to produce a single quarter of 5% increase growth on a measure largely based on government spending. Congrats you get the gold start of economics for your fascinating insight.

5% growth ain't bad coming out of the worst recession the the Great, the last one brought to us by lazy-faire policies. And since most of the stimulus will hit this year, we'll just see if positive growth doesn't continue this year (as most economic models predict).

And how do you explain the fact that when Keynesian deficit spending finally hit its highest levels when restraints were released by US entry into WWII, the depression finally ended?

The depression did not end until the end of the war, and a reduction in government spending. This is basic history. I encourage you to learn it before posting here.

I know you Hayekians don't accept the evidence for this, but your position certainly isn't "basic history".

I'd like to hear you account for the fact that real GDP rose from $1.1 trillion in 1939 as US production increased in aid of the UK and Russia to $2 trillion in 1944 then fell back to $1.6 trillion as the war's stimulus ended, and didn't recover to $2 trillion until 1950.

Likewise, unemployment declined from 16% in 1939 to 2% in 1944 then rose again after the war to to 6% in 1949.

Conscription is not employment.

The US government printing 50+ billion dollars to build battleships and tanks does very little for a peace time economy. It created imbalances that took at least until 1950 to become fully stabilized.

The 1940-44 "boom" with it's general rationing of basic necessities was little more than creative accounting. It was only when this inflation basically invalidated all wage laws did the expansion in 45-49 of REAL GDP happen, coincidentally when the government posted surpluses, further proving the absurdity of the idea.

Do you honest to god believe that building weapons to destroy entire cities is a net positive economic activity? According to you the earthquake in Haiti is almost as good as if we had come along and nuked the place.

Yeh, I've seen that argument before. Now how do you explain away the...

* increase in GDP from $750 trillion in 1933 to $1.1 trillion in 1939, and

* the decrease in unemployment from 21% in 1934 to 16% in 1939?

I can guess your answer but go ahead.

And if all that government spending during the New Deal and WWII didn't generate "REAL" economic growth, why didn't GDP and unemployment collapse back to "REAL" levels when that spending ended, instead of...

* GDP giving up only 20% of the total increase in GDP between 1934 and 1944, and

* unemployment rising to a peak of 5% in 1949 (the same level as 1929) instead of the 21% in 1934?

How do you explain the stagnation in private sector consumption and capital creation during the 40-44 period? How do you explain the rapid recovery during the 1920 depression where we saw a massive drop in government spending.

You keep citing statistics (GDP, unemployment) that are patently manipulated. Government can spike GDP to 100 trillion tomorrow and manipulate the CPI to the point where it's impossible to gleam anything from the statistic. Government can create "jobs" programs paying people to stand around, skim coat roads, and build unused public housing. It doesn't change the fact that all these expenditures do nothing but suck money out of the private sector and waste it in ways that would never be undertaken by markets.

That's right, NaterS TaterS. Avoid the facts and change the subject.

You know there are pychotropic drugs and intense therapies that have sometimes been useful in treating paranoid scizophrenia. I wish you the best of luck.

I'm new to this blog, but my observation is based on an extensive dialogue on the Questions for the Speaker entry (you're welcome to take a look) and reviewing responses to others who disagree with the Hayekian theory that dominates this site.

Most, not all, of you all are closed-minded ideologues.

YASAFI, we all first met you on this blog (not board) when you came here claiming you want to learn. Your room temperature IQ prevents you from learning. Even as I respond to your idiocy, I don't expect you to understand my response because you are a TFI. I do still find your grandiose vision of your meager intellect amusing though.

Damn, methinks, this is impressively articulate! Your name was clearly inspired by an over-active imagination.

So what's the story, man? Are you just a contrarian? Reading further down that post you talk about the evils of government bailouts. But those bailouts and stimulus packages are ok now? Maybe I misread some sarcasm ... or maybe you weren't speaking out against them per se just saying that other small-l liberal economists should be?

Help me better understand your evolution of thought.

Muirgeo,

I have a funny feeling you've mentioned this before.

And I have responded that I didn't understand or appreciate the role of the federal government played in artificially jacking up the size of houses and their price.

What does that have to do with Barney Frank lying?

Barney, in my day, that sort of thing was called a bare-faced lie.

Does anyone know why this clown runs unopposed in every election?

Methinks it might have something to do with representing the district pretty well.

Naw, he is a socialist pretty boy gay oh so gay, and represents a socialist district, wait we are speaking of Mass. here so that was redundant, anyhow as Mass. for so many many years was iron curtain solid for socialists over real people, I think Frank's re-elections have more to do with that "group-think" thing you tried to smear "other than socialist" with above.

The advantage socialist immoral scum have over everyone else is that no one expects anything but immorality from them......move along people, nothing to see here. Just your typical socialist scum at play.

Group think, lock-step, and totally committed to redistribution of wealth, is what put Frank in the House and what keeps him there.

What is amusing is he has been caught out-right lying (as the case in debate here) so many times, yet he knows his socialist base will not care......nothing to see here folks, just step along.

And, of course Bush knew, and of course it was Bush's fault, and of course Obama's big flaw is that he isn't performing socialist enough for you guys. He should be seizing more industry, he should ram through "health-care deform" with an executive order instead of screwing around with the namby pambies in Congress.

I heard the same shit from Pacifica radio thumbsuckers when he, Clinton, was president: He isn't cramming through our agenda like he promised!

Here the news, Tex, only a select few total idiots want your brand of government. Yeah we have a lot of thumbsuckers in America, but when push comes to shove you guys learn the lesson of Mass., that lesson is that most of us are smart enough to know that your style of government always crashes at some point because as Maggie Thatcher said, "The trouble with socialism is that sooner or later you just run out of other people's money"

But, I know you're welcome to present some data you might call "new" that will convert all of us to your thumbsucking ways. Go for it, but expect push back from the people here, we know better.

Maybe you're right. Scot Brown looked pretty damn gay in that centerfold spread. I need to check whether he's a member of the Log Cabin Republicans.

Have you seen him at any of the meetings? You probably can't reveal when he's coming out of the closet.

Sorry to disappoint you, vidyohs, but I'm not one of those socialist "you guys" who criticizes Obama for "not being socialist enough".

And name me one industry Obama has "seized".

You just make shit up, don't you.

That Thatcher quote is great! Let's tweak it a bit:

"The trouble with laissez faire capitalism is that sooner or later you just run out of other people's money to plunder."

Naw, I don't make shit up, and I don't sit around sucking my thumb whining about my republican neighbors who want fix my poor baler or buy me a new one, damn republican scum, eh?

Obama has a pretty good start of seizing industry, let's see does General Motors count as an industry, yeah I think so. Obama is making one hell of an effort to seize the health care industry with his communistic version of health-care deform. How about major banks, do they count?

Now let's see you sort out how the word seize can be applied, the rest of us here already know.

If that is be best tweak you can come up with then I have to congratulate you for being a typical socialist intellectual Chihuahua.

The only power that can plunder laissez faire capitalism is government, and it does such a damn good job of that.

You looney lefties drop in here and think you're undercover operatives, and you have no clue just how easy your lunacy is to spot. But, like muirduck, you've really made no effort to conceal that you're another village idiot.

Socialism can be done if Tex and Muirduck get to hold the reins of power!!! LOL. The only reason socialism has failed is because true intelligent elites like Tex and the duckie weren't running things.

Kill capitalism, the cry that lays the label of stupid on you.

Let's review the shit you just made up in your post.

* I'm not a socialist.

* I don't claim to be an intellectual.

* I'm not a lefty, looney or otherwise, nor am I an undercover operative.

* I don't want to kill capitalism. In fact, I'm all for capitalism, just not the social Darwinist, laissez faire version you spout.

Vidyohs, are you even capable of mounting a coherent argument that marshals some logic, facts, scholarly citations, or theoretical arguments rather than bombast, opinion, and insults?
Haven't seen any evidence of it.

* I'm not a socialist. (Of course not)

* I don't claim to be an intellectual. (Of course not)

* I'm not a lefty, looney or otherwise, nor am I an undercover operative. (Of course not)

* I don't want to kill capitalism. In fact, I'm all for capitalism, just not the social Darwinist, laissez faire version you spout. (Of course you don't)

Vidyohs, are you even capable of mounting a coherent argument that marshals some logic, facts, scholarly citations, or theoretical arguments rather than bombast, opinion, and insults? (None that would make a dent in your smug leftist condensation to anyone who doesn't buy your line of bigoted shit.)
Haven't seen any evidence of it. (You wouldn't know it if I did. So, as with muirduck et. al. why bother. You introduced yourself here slinging shit at everything and everyone not on the left, and now you're suddenly mealy mouthed nice guy who is just misunderstood. Yeah, right.)

Why must you bring morals into the equation? I consider myself quite hedonistic and don't see the necessity of pointing out the moral flaws in socialism. We're on a blog entitled "Cafe Hayek". Can't we just stick to the obvious economic issues with socialism? Personally, I am pro-gay (it's that whole liberty thing...)

Also, groupthink is one word. Did any of you even read 1984? (disclaimer: I know it was not in the novel but the term is an allusion)

I am in awe, that was an incredible two paragraphs.

Why do I mention morals? Hmm, well it was because that was appropriately brought into the discussion by others above.

Strange that you are old enough to use a computer but don't realize that morals can't be separated out of human action(s). Morals are an ingredient of character, and character is always relevant to anything a human does. The question is simply, is good character on display or is bad character on display.

Morals, character, must be addressed in the discussion of any philosophy, even one so devoid of character as is socialism. By its very lack of character socialism stands alone as a theology of destruction.

Do you not find it passing strange, no disingenuous, duplicitous even, to hear socialist accuse their opposition of groupthink, and attempt to don the mantle of free thinking independence to themselves; yet, on examination it is just coincidence that they all think exactly alike?

I can randomly gather 100 socialist, in all the glorious diversity they claim, in a room, and among those straights, gays, genders, colors, lifestyles, nationalities, and ages, at the core we will find absolute lock-step agreement on what role government should play in society.

I can randomly gather 100 capitalist in a room, and no matter how many resemble one another, I will find 100 different opinions on the role of government in a society.

I long ago gave up caring about the niceties of dealing with people who believe in theft and slavery as a theology.

We know what you are, and we know who you are because you self identify.

I can tell by your posts that you would agree with Polonius on the necessity of brevity. And so, I will be brief.

Isn't bigotry in itself, slavery and theft? You would advocate that markets and participants should be left to act in their own self-interest, but in the case of one's personal life they should be persecuted? If I want drink, use drugs, gamble, have orgies, or (god forbid) have sex with men, how does that affect the price of corn in Chicago? Who is to judge YOUR morals to be the correct morals anyway?

I see this as a central problem with free-marketers advancing the cause. So many have joined forces with the moral majority that plenty of good old-fashioned hedonists and atheists won't even give it a glance.

I suppose at the end you were trying to call me out as a socialist. I am not anything of the sort. Furthermore, I'm not even gay. But, I do believe in freedom and equality for everyone (even Christians) and I believe in the power of capitalism and the restraint of government. It's unfortunate that we agree on the economics yet argue because you are a bigot.

"Isn't bigotry in itself, slavery and theft?"

I'd just love to see some thought and logic to support that little gem. Tell me how not liking people named Blake enslaves you in any way, tell me how a bigot steals from you through his bigotry. That is the about as convoluted a mess of bullshit as I have run onto in awhile....maybe just since I last read a post from Tex.

"If I want drink, use drugs, gamble, have orgies, or (god forbid) have sex with men, how does that affect the price of corn in Chicago?"

Show me where I said if you drank, used drugs, gamble, have orgies, or had sex with other consenting adults, that you were immoral. More of that weird disingenuous twisting that you guys on the left do. But, here is the odd thing you may not have noticed, all those queer priests that have been caught....did you notice it wasn't middle aged deacons they were having anal and oral sex with, it was the little ignorant impressionable boys. If you can show me how that equates to sex between consenting adults then I can go down that road with you. But, until then, I remain opposed in a most natural way to gays in any position to have real or theological power over adolescents. With Barney, well we know from the Clinton experience et. al. interns aren't protected from them either. People like Barney, whether on the left or the right, should not have power over young impressionable people.

"I see this as a central problem with free-marketers advancing the cause. So many have joined forces with the moral majority that plenty of good old-fashioned hedonists and atheists won't even give it a glance."

Now that was just plain silly. The free marketers in this country are almost exclusively Libertarian or those close to it, Republicans are as much in the regressive camp as are the moderates and the true socialists. Both daddy Bush and junior Bush were regressives unable to resist pushing the social programs, and bending to the will of the left as they presided. The last Republican congress was regressive, look at the crap they did in the name of appeasement to the left.

If honesty is bigotry in your world, then by any other name this rose should smell so sweet.

And, BTW, I seriously doubt further debate would find you anything more than continuously duplicitous about where you'd like to see the country go.


"Who is to judge YOUR morals to be the correct morals anyway?"

Oh yes the good old moral relativism, if it feels good do it. No sir, the morals I speak of are morals long developed through trial and error, morals the founding fathers and the conservative nation they founded understood very well.

Well said, bb. But vidyohs will dismiss your statement as "value-laden", as if his choice to argue all questions on the basis of laissez faire economics were not. This allows him to feel more comfortable that his intolerance, insults and closed-mindedness are the logical outcome of his ideological convictions.

Nevertheless, it IS fun to wind him up and watch him go.

must be a scary district. Or John K is right.

I think JohnK is right: http://www.govtrack.us/congress/findyourreps.xp...

certainly looks that way, doesn't it?

Something about wrestling with pigs in the mud.

gerrymandering

Considering that Barney Frank admitted a lengthy relationship with a male hooker who ran a bisexual prostitution service out of Frank's apartment, "Barney Frank’s Fantasy World" could mean things I don't even want to ponder.

Well, at least Barney was only screwing other consenting adults, while Bush and the lemming Rs on the Hill screwed the whole country.

Barney "Let's Roll the Dice with Freddie and Fannie" Frank, screwing only CONSENTING adults? Hmmm...OK.

If you're saying Barney screwed the country by supporting CRA's goals of increasing low-income home ownership then you're overlooking the fact he was one of 535 members of Congress and was in the majority of the banking subcommittee with jurisdiction over CRA for most of that period.

If you believe CRA was a mistake, you have to give the lion's share of responsibility to the Bush and Clinton administrations for supporting CRA and increasing the home-ownership goals.

I never said he was the ONLY one to blame- you are the one speaking absolutes, not me: "At least Barney was ONLY screwing other consenting adults..."

Thanks for helping me prove my point, which was that he played part in this.

I didn't realize that you meant he played a minor role. My bad.

So then we agree that focusing on Barney misses the point that most of the "blame" should be attributed to both Rep and Dem administrations and Congresses.

In that case, I'm more than happy to help you prove your point.

By the way, "never" isn't trucking in absolutes?

Tex, Barney is clearly lying and claiming no responsibility for his substantial role - a role more substantial than most other democrats and republicans as he is on the house financial services committee. You were making the argument that he has no particular responsibility because "everyone was doing it".

We have to hold individual politicians to account on their own record, don't we? The guy has been in congress since 1981.

No, I'm not saying "he has no particular responsibility." I'm saying he's a small fry compared to the R and D chairman of the House and Senate fin. services/banking committees and the White House under both Bush and Clinton. He doesn't warrant all the outrage spewing forth here. It's misdirected.

I agree with you that we ought to hold the bastards accountable; but before we march off with pitchforks, let's make sure we're going after the right bastards.

Nobody is marching off with pitchforks. What is being pointed out is that Barney Frank is a lying sack of shit who is complicit in screwing the whole country - not just consenting adults.

I know your first comment was meant to be witty, but you can't make that comment and then scream that we're all being unfair to Barney. I thought you claimed to be a master of logic, facts and data.

I think you mistook advanced Bush Derangement Syndrome for wit.

I'm not screaming anything (perhaps you think that disagreeing with you is screaming); I'm just saying your (plural) outrage is misdirected. And
I don't claim to be a master of anything, but compared to what I'm reading, I might be the master alpha to the mater betas I find here.

Here's another quote from him about this:

"These two entities (Fannie, Freddie)...are not facing any kind of financial crisis.... The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

What was the date of this quote, AU?

Maybe, like with Obama and health care reform, Frank just hasn't explained it carefully to us in sentences using only one syllable words.

We just don't get it.

or

Maybe its because when a person is holding a fairy(NPI) magic wand to explain things to you, you need to be holding your own magic wand in order to properly receive the message. The damn things just could be antennas.

A, you're famous. B, politicians suck. The honest ones just stay bought.

"I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing."

—Representative Barney Frank, September 25, 2003

Barney Frank (June 27, 2005):

"I think we have an excessive degree of concern right now about home ownership and its role in the economy. Obviously, speculation is never a good thing. But those who argue that housing prices are now at the point of a bubble seem to me to missing a very important point. Unlike previous examples we have had, where substantial excessive inflation of prices later caused some problems, we are talking here about an entity — home ownership, homes — where there is not the degree of leverage we have seen elsewhere. This is not the dot-com situation; we have problems with people having invested in business plans for which there was no reality. People building fiber-optic cable for which there was no need. Homes that are occupied may see an ebb and flow in the price at a certain percentage level, but you’re not going to see the collapse that you see when people talk about a bubble. And so, those of us on our committee in particular, will continue to push for home ownership."

http://www.youtube.com/watch?v=iW5qKYfqALE

God, I hate political speak. Such constant streams of bullshit.