[maxpot46]

His big mistakes are pushing the stimulus package and appointing Geitner. This shows he has no idea what is happening economically, and is easy prey for the "let's spend our way out of it" argument propagated by the very same idiots who caused the crisis (like Geitner). Which is to be expected, since Obama has the short-term vision of all democratic (note: not Democratic) politicians, so being told to spend more in the short-term is exactly what he wants to hear.

My criticism boils down to my economic disagreements with the mainstream arguments and approaches that Obama is following (most prominently Krugman).





maxpot46 added to this post, 4 minutes and 43 seconds later...

	Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Well it wasn't my assertation alone. But ok. It just didn't seem like you were saying anything except that you didn't like his policies.

No, it's that economics is my area of expertise, and in my model his actions are quite predictable in their effects -- short-term stimulus and long-term disaster. So it's not a matter of waiting and seeing, as if we had no idea of the consequences of the actions he's already taken. His stimulus will not affect the fundamentals at all, so will only prolong and exacerbate the pain of reallocating resources (a necessity due to all the malinvestment caused by 20 years of excessively low interest rates). Hyper-inflation is on its way -- there can be no other outcome from these actions.

[Lucid]

Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

His big mistakes are pushing the stimulus package and appointing Geitner. This shows he has no idea what is happening economically, and is easy prey for the "let's spend our way out of it" argument propagated by the very same idiots who caused the crisis (like Geitner). Which is to be expected, since Obama has the short-term vision of all democratic (note: not Democratic) politicians, so being told to spend more in the short-term is exactly what he wants to hear. My criticism boils down to my economic disagreements with the mainstream arguments and approaches that Obama is following (most prominently Krugman).

Paul Krugman the Nobel Prize winning economist? With all due respect, I'm going to take his word over yours... unless you have a Nobel Prize stashed under your bed somewhere.

Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

No, it's that economics is my area of expertise, and in my model his actions are quite predictable in their effects -- short-term stimulus and long-term disaster. So it's not a matter of waiting and seeing, as if we had no idea of the consequences of the actions he's already taken. His stimulus will not affect the fundamentals at all, so will only prolong and exacerbate the pain of reallocating resources (a necessity due to all the malinvestment caused by 20 years of excessively low interest rates). Hyper-inflation is on its way -- there can be no other outcome from these actions.

Then what's the solution?

[SeaCzar]

	Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Then what's the solution?

This is an excellent question. If you want to put a stimulus package together, I would suggest tax cuts and spending on infastructure, The government, any government really, is inefficient when it comes to allocating resources. They need to put regulations together (on an international basis) so that this mess does not repeat. Allocate resources back to the taxpayers, and we will eventually lift ourselves out of this mess. This is going to be a long hangover from all the previous excesses regardless of what the stimulus package contains. I do agree that, in its present form, this package will only prolong the agony. It has some very dangerous downsides as well.

[Lucid]

Originally Posted by SeaCzar To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

This is an excellent question. If you want to put a stimulus package together, I would suggest tax cuts and spending on infastructure, The government, any government really, is inefficient when it comes to allocating resources. They need to put regulations together (on an international basis) so that this mess does not repeat. Allocate resources back to the taxpayers, and we will eventually lift ourselves out of this mess. This is going to be a long hangover from all the previous excesses regardless of what the stimulus package contains. I do agree that, in its present form, this package will only prolong the agony. It has some very dangerous downsides as well.

Well I was asking maxpot... because he's saying that tax cuts and spending on infrastructure combined with some regulations is going to lead to the downfall of civilization.

And I gotta say, maxpot - if I was a lawyer who had been elected president and the economist who had recently won the nobel prize for economics called me up and said, "Hey, infrastructure is the way to go!" I'd listen to him. And based on some of the bizarre beliefs you've espoused in other threads - I'd certainly listen to him over you.

However, if you have a better idea, I'm all ears.

[LaoTzu]

I'd be interested too maxpot!

Not so much as a challenge, but... I'd really like some expert opinion on what the best strat would be in this situation, and why the powers that be haven't chosen it.

Most everyone says stimulus package is the way to go... most everyone agrees it has a less than half chance of working well... most everyone agrees that it needed to be done anyway.


Personally I think the best way to go was to raise the minimum wage to a living one, and have the gov. help small businesses afford it in the short term with subsidies....
(the poor don't save money...they spend it...
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)

But then I'm more Socialist than Jesus...

[Lucid]

	Originally Posted by LaoTzu To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	I'd be interested too maxpot! Not so much as a challenge, but... I'd really like some expert opinion on what the best strat would be in this situation, and why the powers that be haven't chosen it.

I don't mean it so much as a challenge, I'm just interested to hear what his idea is.

	Originally Posted by LaoTzu To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Most everyone says stimulus package is the way to go... most everyone agrees it has a less than half chance of working well... most everyone agrees that it needed to be done anyway.

I think our options are somewhat limited. I mean... what do we do, redistribute the wealth forcefully like Castro did? Please. This is America, nobody would go for that.

	Originally Posted by LaoTzu To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Personally I think the best way to go was to raise the minimum wage to a living one, and have the gov. help small businesses afford it in the short term with subsidies.... (the poor don't save money...they spend it... To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts. ) But then I'm more Socialist than Jesus...

Well I think a lot of people are confused about the stimulus. Yes, it will increase our debt. It's too bad we already incurred so much of that on a pointless war but... hindsight is 20/20 and all that. We're not going to be just printing money though. And if the debt is for a good reason and the money is invested wisely it's often worth it. For example: I took out student loans to go to college. This put me in debt. However, that debt is an investment and (if it weren't for this stupid economic crash coinciding with my graduation in a really inconvenient way) it would have been a good investment.

What we're seeing now is a VAST disparity between the rich and the poor. This disparity is growing to the point where it is starting to affect our economy. I am not very socialist in a lot of ways - but straight and unfettered capitalism is as bad as straight and unfettered communism or socialism or any other -ism you can think of. And this very disparity is what happens when you switch to supply side, trickle down economics and stop regulating business. As I think we've seen based on what Wall Street did with the bailout money - not to mention the craptastic mortgages and loans, the market does not regulate itself sufficiently.

[maxpot46]

	Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	And I gotta say, maxpot - if I was a lawyer who had been elected president and the economist who had recently won the nobel prize for economics called me up and said, "Hey, infrastructure is the way to go!" I'd listen to him.

Argumentum ad verecundium? A natural position but a fallacy nonetheless.

One thing to understand about economics is that there are different "schools" of thinking. Krugman is of the neo-classical school; I am of the Austrian school. Neo-classicals are the ascendant school -- it is what I was taught at Columbia and what Krugman espouses. Austrians are a distinct minority, but IMO has the distinction of having MUCH stronger arguments.

I understand that most of you are probably unfamiliar with the Austrian school, hence some of my views might come off as "bizarre", as Lucid so kindly puts it. But you will find that they are entirely consistent, both with each other and certain other tenets of the Austrian school, all of which are built on self-evident axioms and easy-to-follow trains of logical inferences. I'll attempt to introduce some of these lines of thinking in this post, but please keep in mind that these are not simply my personal opinions -- there is a large body of work supporting many of the assertions that I will make.

	Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	I think our options are somewhat limited. I mean... what do we do, redistribute the wealth forcefully like Castro did? Please. This is America, nobody would go for that.

Not overtly. Yet this "stimulus package" is exactly that -- a forceful redistribution of wealth. However, it is a covert one. You see, money creation (aka credit expansion) always benefits those that get the money first (governments, government contractors, government creditors, banks) at the expense of those that get the money last (working folks). They get away with it because the mechanism is hidden -- it is inflation. The money to pay for (the debt issued to pay for) the stimulus package ends up in specific hands. The act of spending that money raises prices in an uneven and distorted fashion (advantage - first receiver of money; disadvantage - payers of higher prices who have yet to receive any of the new money). It takes time -- years -- for the effects of newly created money to fully ripple through the economy, but the end effect is a reduction in the value of the currency, and anything denominated in that currency e.g. paychecks and savings accounts. Thus the value of these is reduced in order to fund the spending of the first recipients -- i.e. a transfer of wealth from the poor to the rich, essentially.

Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

Well I think a lot of people are confused about the stimulus. Yes, it will increase our debt. It's too bad we already incurred so much of that on a pointless war but... hindsight is 20/20 and all that. We're not going to be just printing money though. And if the debt is for a good reason and the money is invested wisely it's often worth it. For example: I took out student loans to go to college. This put me in debt. However, that debt is an investment and (if it weren't for this stupid economic crash coinciding with my graduation in a really inconvenient way) it would have been a good investment.

The difference is that you don't have the power to create money, so borrowing to finance your education has no monetary effect. However, the debt that the government is selling will be bought primarily by the Federal Reserve, who will pay for the bonds by electronically crediting the reserve accounts of the banks the US Treasury uses to sell the bonds; i.e. out of thin air. It is this newly created money that causes distortions in the economy, including inflation, recessions and the business cycle.

Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

What we're seeing now is a VAST disparity between the rich and the poor. This disparity is growing to the point where it is starting to affect our economy. I am not very socialist in a lot of ways - but straight and unfettered capitalism is as bad as straight and unfettered communism or socialism or any other -ism you can think of. And this very disparity is what happens when you switch to supply side, trickle down economics and stop regulating business. As I think we've seen based on what Wall Street did with the bailout money - not to mention the craptastic mortgages and loans, the market does not regulate itself sufficiently.

The market does regulate itself sufficiently -- not perfectly, but better (and with less corruption) than the government doing so. Why the assumption that the human beings in the market are devils, but the human beings in the government are angels? Who watches the watchmen, and all that... The only honesty to be found in human dealings is where competition punishes the liars, i.e. the market.

Also, I deny that unfettered capitalism is bad at all. It is simply freedom applied consistently -- i.e. the logical end result of completely voluntary transactions. It does result in a greater disparity of wealth, but because wealth is not zero-sum, it results in a rising tide that lifts all boats (albeit some higher than others). That is, everyone gains, but the rich gain more (and our obese poor owning nikes, cell phones and televisions complain).

	Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Then what's the solution?

To do nothing and let the economy heal itself. There must be some pain because resources must be reallocated. The constant money creation indulged in by the government causes malinvestments which must be corrected -- the houses must be taken from the unemployed single mothers and sold to people who can actually afford them, and the businesses wasting resources must go out of business. People must come to realize that they can't really spend $150/month on coffee (putting many Starbucks out of business) and still save for a future car/house/education/business. This correction period is called a recession and is an inevitable occurrence once the government creates unnecessary money. Attempting to prop up failing businesses (Starbucks hasn't asked for a bailout but many others have) only prolongs the correction period. For example, Japan faced a very similar situation 18 years ago, and chose to prop up failing banks and businesses. The nearly 2 decades of recession they've faced (Japanese stock market is still only 80% of what it was 18 years ago) is exactly what we have to look forward to. Except it's much worse for us due to the monetary importance of the dollar, and the extreme numbers involved in the bailouts/stimulus.

The problem is basically that the solution requires short-term pain for long-term success, but politicians do not think in the long term. They only care about the current election cycle, which is why they'll eat the seed corn so readily.

[Hanfgeist]

Stimulus package Schmimulus package, the UK and the USA are economic zombies at the moment, they have borrowed so much cash to shore up failed banks and businesses that the demographic problem with decreasing birthrates (less workers and taxpayers) and ageing population and associated healthcare costs may mean that there will come a point in the future where the interest payments alone may exceed GDP let alone the repayments themselves.....(this is for the UK but I think the USA will hit a similar problem with the cost of their old age pensioners as well). They are going to have to print money like crazy (create it out of thin air) as they have reduced interest rates to zero and that has'nt solved the liquidity problem.When that happens we may find ourselves living in a state similar to Zimbabwe or the Weimar republic....they may only have postponed the inevitable bankrupcies in these countries...

My suggestion for a solution, which will make everybody angry, is that we need to build our countries into a larger version of 'Galt's Gulch' where everyone works and produces useful, innovative, value adding products instead of selling real estate and shuffling money around on the stock market, that is how real wealth used to be created (the current slump may cause this to happen anyway).

I also suggest that we take this opportunity to bring about a manufacturing revolution and provide everyone with a home fabricator (3D printer/3D Metal laser sintering machine) so that they can create those new products and sell the designs to other fabbers online to download and make on their machines. This will cause an increase in demand for raw materials for people to make all those 'must have' new products. The fabber machines should be able to replicate most of their own component parts themselves (apart from electronics) so can be made for raw material cost and energy cost and propagated to everyone.Will also mean that we do not have to import so many products from abroad.In such an economy it will be raw materials and intellectual property that are valuable, the products themselves will
be less valuable as they will be easily made by anyone in possesion of a fabber machine. (I'm thinking why not, the way we used to do things has totally failed so we need to go to capitalism 2.0 where everybody has the means to manufacture wealth for themselves)


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These machines are going to evolve to a point where they can make parts and completed products for just about anything that can be made from plastic, metal or other types of materials...of course political racketeers have never heard of home fabbers and nor would they understand their potential for economic renewal. Borrow, spend and tax, business as usual is by far the easiest if more dangerous option.

[loosefanbelt]

I am not coming from an enlightened position AT ALL, so I pose this more as a question than anything.

The other day I heard a speaker describing that the government has consistently slowed on minimum wage increases since 1981.

This created a relationship between the lenders who were more than happy to give credit to make up the gap - and the base workforce who could not keep up with the America's "improved standard of living" culture.

So, it seems to me like the greed issue - of government, business and banks - are at fault here for being incredibly short-sighted. If people are not willing to share the wealth and have short-term greed-informed goals, it will usually shake out this way.

What do you all think? I would appreciate your feedback on this point.

[Lucid]

	Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Argumentum ad verecundium? A natural position but a fallacy nonetheless.

I'm not going to respond to most of your post. I will say that I'm not making an argument (referencing the quote above), just that listening to someone who has won a prestigious award for his expertise isn't a bad idea.

As for the rest of it: I see little difference between your prolamations and the end of the world 2012 people's proclamations. And I will add that I don't think you have anything but the most basic academic understanding of poverty and therefore you are prepared for other people (but I doubt you you would wish yourself to be in such a situation) to undergo the 'temporary discomfort' you speak of. I don't know anything about your financial situation, but the fact that you have the option of home schooling and the proclamations you've made about the "obese poor with their cell phones and tv's" and taking the homes away from unemployed single mothers tells me that you know little of it yourself. Also... unemployed single mothers generally live with relatives or in crackhead appartment buildings. I would be extremely surprised to see an unemployed single mother qualify for even the most craptastic and dishonest loan. I don't think you know anything about welfare or public aid either. Your theories about economics are probably valid in the world you describe in your post; however, (unfortunately for the single unemployed mothers - who I'm sure would love to be able to buy a home) we don't live in that world.

Go learn something about the actual situations you're speaking of - other than what you're seeing Bill O'Riley rant about - and then come back and reread that post of yours. I think you will be embarassed.

[maxpot46]

Originally Posted by loosefanbelt To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

The other day I heard a speaker describing that the government has consistently slowed on minimum wage increases since 1981. This created a relationship between the lenders who were more than happy to give credit to make up the gap - and the base workforce who could not keep up with the America's "improved standard of living" culture. So, it seems to me like the greed issue - of government, business and banks - are at fault here for being incredibly short-sighted. If people are not willing to share the wealth and have short-term greed-informed goals, it will usually shake out this way. What do you all think? I would appreciate your feedback on this point.

Minimum wages only cause unemployment by preventing the unskilled from finding positions (the only advantage the unskilled have in the labor market is the ability to reduce their asking wage). If that's all there was to it, why not raise the minimum wage to $1,000/hour? Because then we'd ALL be unemployed, and not just the politically weak unskilled labor voters. The fact that we don't should show that you can't solve economic problems through simple legislation -- there are always unintended consequences to regulation (such as causing more unemployment amongst the poor in the name of improving working conditions for the poor).

It IS a greed issue, and a short-sightedness issue, and a too-much-credit issue. But the mechanism used is the money supply and the interest rate and fractional reserve banking, not suppression of the minimum wage.

[Lucid]

Maxpot-

Incidentally, you should also recheck your logical fallacies. The
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is only a fallacy if the person in question is not an authority on the subject being discussed. For example, commercials that essentially argue that Tiger Woods drinks Sprite so you should also drink Sprite are using the appeal to authority in a fallacious manner. Saying "That guy is an economic expert who won the Pulitzer Prize for economics. I think I'll listen to him about economic matters" is not a fallacy at all.

[maxpot46]

Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

I'm not going to respond to most of your post. I will say that I'm not making an argument (referencing the quote above), just that listening to someone who has won a prestigious award for his expertise isn't a bad idea. As for the rest of it: I see little difference between your prolamations and the end of the world 2012 people's proclamations. And I will add that I don't think you have anything but the most basic academic understanding of poverty and therefore you are prepared for other people (but I doubt you you would wish yourself to be in such a situation) to undergo the 'temporary discomfort' you speak of. I don't know anything about your financial situation, but the fact that you have the option of home schooling and the proclamations you've made about the "obese poor with their cell phones and tv's" and taking the homes away from unemployed single mothers tells me that you know little of it yourself. Also... unemployed single mothers generally live with relatives or in crackhead appartment buildings. I would be extremely surprised to see an unemployed single mother qualify for even the most craptastic and dishonest loan. I don't think you know anything about welfare or public aid either. Your theories about economics are probably valid in the world you describe in your post; however, (unfortunately for the single unemployed mothers - who I'm sure would love to be able to buy a home) we don't live in that world. Go learn something about the actual situations you're speaking of - other than what you're seeing Bill O'Riley rant about - and then come back and reread that post of yours. I think you will be embarassed.

Fallacy: argumentum ad hominem.

I don't get where you're coming from. I'm just a poor waiter, struggling to pay off gigantic student loans and raise a family -- I sacrifice to home school because it's important to me. I was kicked out of my house at age 16, and raised myself up from nothing -- I was literally starving and homeless 15 years ago. Does knowing this have any relevance to my argument?

I have as much sympathy for single mothers as anyone, but that doesn't mean they should "own" houses that they can't afford.





maxpot46 added to this post, 4 minutes and 44 seconds later...

Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

Maxpot- Incidentally, you should also recheck your logical fallacies. The To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts. is only a fallacy if the person in question is not an authority on the subject being discussed. For example, commercials that essentially argue that Tiger Woods drinks Sprite so you should also drink Sprite are using the appeal to authority in a fallacious manner. Saying "That guy is an economic expert who won the Pulitzer Prize for economics. I think I'll listen to him about economic matters" is not a fallacy at all.

From the link:

"An appeal to authority or argument by authority is a type of argument in logic. It bases the truth value of an assertion on the authority, knowledge, expertise, or position of the source asserting it. If a criticism appears that contradicts the authority's statement, then merely the fact that the statement originated from the authority is not an argument for ignoring the criticism."

I fail to see how I've used the term incorrectly.

[Lucid]

	Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Fallacy: argumentum ad hominem.

No. It's not. Telling you that you're wrong about a situation is not an ad hominem.
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is a list of logical fallacies and their definitions. I think you need it.

	Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	I don't get where you're coming from. I'm just a poor waiter, struggling to pay off gigantic student loans and raise a family -- I sacrifice to home school because it's important to me. I was kicked out of my house at age 16, and raised myself up from nothing -- I was literally starving and homeless 15 years ago. Does knowing this have any relevance to my argument?

Yes, it does. And if what you say about your background is true I'm incredibly surprised that you put forward some of the ideas that you did. I have had quite a bit of experience both being and working with the impoverished and my experiences pretty conclusively show you to be wrong about how it is. Because we're talking about things that affect peoples actual lives it's not just a matter of academic thought. It has practical application.

	Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	I have as much sympathy for single mothers as anyone, but that doesn't mean they should "own" houses that they can't afford.

But the problem is that almost none of them do. I won't say absolutely none, because I'm sure there's 5 out there somewhere who do. But definately not in the numbers you seem to think or under the circumstances you seem to be describing.

Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

From the link: "An appeal to authority or argument by authority is a type of argument in logic. It bases the truth value of an assertion on the authority, knowledge, expertise, or position of the source asserting it. If a criticism appears that contradicts the authority's statement, then merely the fact that the statement originated from the authority is not an argument for ignoring the criticism." I fail to see how I've used the term incorrectly.

Did you read the whole article?

Also from the link:

	Arguments from authority are an important part of informal logic. Since we cannot have detailed knowledge of a great many topics, we must often rely on the judgments of those who do. There is no fallacy involved in simply arguing that the assertion made by an authority is true, in contrast to claiming that the authority is infallible in principle and can hence be exempted from criticis.

I mean no disrespect, but I think you must be new to using logical fallacies in arguments? You're using them in some strange ways. I'm surprised you don't know that the appeal to authoriy is only a fallacy in some cases and that you think telling a person that they are wrong in their assessments of a situation is an ad hominem. Do you usually try to use these definitions of the terms with people who understand them?

EDIT:

Maybe your use of these logical fallacies is the result of your seeming to think that this is just an abstract academic issue and that real world experiences or consequences or knowledge don't come into it. If we are having a formal argument about logic then yes, saying "You have not had the experiences to understand this issue" is a fallacy. If we're having an actual debate about real world issues, it's a different matter.

[maxpot46]

	Originally Posted by BostonIan To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Awesome idea. I didn't know those machines existed, thanks.

My thanks also... those things are pretty amazing, and might just be very useful for my current entrepreneurial venture
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maxpot46 added to this post, 9 minutes and 14 seconds later...

	Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	No. It's not. Telling you that you're wrong about a situation is not an ad hominem. To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts. is a list of logical fallacies and their definitions. I think you need it.

You should read your own links: "Ad Hominem: an argument that attacks the person who holds a view or advances an argument, rather than commenting on the view or responding to the argument". You did not respond to my argument; you implied that I was too rich to understand and that once I learned about poverty I would be embarrassed by my argument, i.e. a personal attack, i.e. argumentum ad hominem.

Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

Yes, it does. And if what you say about your background is true I'm incredibly surprised that you put forward some of the ideas that you did. I have had quite a bit of experience both being and working with the impoverished and my experiences pretty conclusively show you to be wrong about how it is. Because we're talking about things that affect peoples actual lives it's not just a matter of academic thought. It has practical application.

Exactly -- we have the same ends in mind, assuming you also want less poverty, less suffering, more goods, and better standards of living for all. Personally, I'm dedicated to those things. We disagree only on means.

Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

I mean no disrespect, but I think you must be new to using logical fallacies in arguments? You're using them in some strange ways. I'm surprised you don't know that the appeal to authoriy is only a fallacy in some cases and that you think telling a person that they are wrong in their assessments of a situation is an ad hominem. Do you usually try to use these definitions of the terms with people who understand them?

Same to you. I'm surprised you don't know that appeal to authority is always a fallacy when such is the entirety of your argument (it's different if you actually make the same arguments the authority does, which you have not) or that ad hominem is not telling someone you think they are wrong but substituting a personal attack/assessment in place of an argument.





maxpot46 added to this post, 4 minutes and 1 seconds later...

	Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Maybe your use of these logical fallacies is the result of your seeming to think that this is just an abstract academic issue and that real world experiences or consequences or knowledge don't come into it.

I use them to point out flawed arguments, no more or less. If I make rational economic arguments, and get responses of appeal to authority and personal attacks, then pointing out they are fallacies simply shows that no significant rebuttal has been raised. If you were to actually start making the objections to my views/model that Krugman would, instead of just citing Krugman, you would not be fallacious and I would have to respond to the specific objections raised. Currently, I have nothing to respond to except to point out fallacies.





maxpot46 added to this post, 5 minutes and 3 seconds later...

	Originally Posted by Lucid To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	But the problem is that almost none of them do. I won't say absolutely none, because I'm sure there's 5 out there somewhere who do. But definitely not in the numbers you seem to think or under the circumstances you seem to be describing.

The point was to try and illustrate the existence of malinvestment. If even one, let alone five, single-mothers got a fraudulent loan and is living in a house they can't afford, that is an example of malinvestment. She would never have gotten that house if not for credit expansion, because only excess money can drive the interest rate down to the point she could "afford" it (for a couple of years, at least, until the payments balloon).

The point was to show how the government causes the misallocation of resources by creating too much money, not to comment on the justice of our housing markets.

[Lucid]

Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

You should read your own links: "Ad Hominem: an argument that attacks the person who holds a view or advances an argument, rather than commenting on the view or responding to the argument". You did not respond to my argument; you implied that I was too rich to understand and that once I learned about poverty I would be embarrassed by my argument, i.e. a personal attack, i.e. argumentum ad hominem.

No. I commented on your argument by saying that you were not speaking of things as they are. I then suggested that this might be because you didn't know how they were because you were financially well off. The first is a response to your argument (saying, "No, you're premises are incorrect") the second is a possible reason for your incorrect views.

	Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Exactly -- we have the same ends in mind, assuming you also want less poverty, less suffering, more goods, and better standards of living for all. Personally, I'm dedicated to those things. We disagree only on means.

It doesn't seem that your idea will cause less suffering or less poverty. Instead it looks like you're advocating for a much higher poverty rate than we have currently.

	Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Same to you. I'm surprised you don't know that appeal to authority is always a fallacy when such is the entirety of your argumen (it's different if you actually make the same arguments the authority does, which you have not)

You're wrong. Appeal to authority is not always a fallacy. I'm sorry, but there's just no way around it. What I'm basically saying is, "I agree with the methods the nobel prize winner has put forward because I am not an expert on economics and I am dubious of your credentials and ideas. Furthermore, what this expert is saying seems to coincide with my own knowledge and experience."

	Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	or that ad hominem is not telling someone you think they are wrong but substituting a personal attack/assessment in place of an argument.

If that's what you think then you are not understanding my posts (or you're setting up a straw man). What I'm saying is that you're wrong about the poor and how they live. You don't seem to understand the obesity problem. Saying this economic crisis is because some unemployed single mothers bought houses they couldn't afford (something pretty far from the mark) makes me think that you don't understand the issue. Point this out is not a logical fallacy.

Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

I use them to point out flawed arguments, no more or less. If I make rational economic arguments, and get responses of appeal to authority and personal attacks, then pointing out they are fallacies simply shows that no significant rebuttal has been raised. If you were to actually start making the objections to my views/model that Krugman would, instead of just citing Krugman, you would not be fallacious and I would have to respond to the specific objections raised. Currently, I have nothing to respond to except to point out fallacies.

No, I think you could probably respond by offering some more substantial evidence to back up your claims about the poor or about the single mothers. That's all I called you on because I think a lot of your argument is based on an insufficient understanding of the situation. What I'm saying is that your premise is incorrect.

Actually, that's not entirely the case. I didn't respond to the majority of your argument in large part because don't see much merit in it. As I've mentioned I think it's bizarre and somewhat... I don't know, I don't want to comapre it to the claims that the govenment is covering up evidence of space aliens because that's harsh and unkind and not quite the case. I don't think it would be an entirely fair comparison. But I think it's a little like that. And I'm trying to spend less time arguing with people who put forward ideas that are outside the realm of the reasonable, since it's inevitably an immense waste of time for everyone involved. Maybe part of the problem is the ways you described the causes here and the circumstances of the poor. Perhaps you were trying to be purposely absurd to make a point - but it came off as just grossly inaccurate. I'm not trying to insult you or call you a nut and I'm trying really hard to word this so that it doesn't come off that way. I understand that you probably think something similar about my position. That's understandable. I doubt we'll get anywhere though.

You're incorrectly applying logical fallacies for this argument format. You seem to think that this is a formal logical argument. Like I said, if we're not talking about an apriori theory or idea. We're talking about situations where experiences do matter and where it's completely fair to refer to the work of experts.

Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

The point was to try and illustrate the existence of malinvestment. If even one, let alone five, single-mothers got a fraudulent loan and is living in a house they can't afford, that is an example of malinvestment. She would never have gotten that house if not for credit expansion, because only excess money can drive the interest rate down to the point she could "afford" it (for a couple of years, at least, until the payments balloon). The point was to show how the government causes the misallocation of resources by creating too much money, not to comment on the justice of our housing markets.

But your illustration is false. It's not a matter of justice, you're just wrong about the circumstances you're describing. That's what I'm telling you. That's the argument I'm putting forward. You are wrong about the conditions, causes and circumstances of poverty. Whether this is because you have not experienced it recently or at all, or because you just don't understand it, is a side point. At the end of the day what I'm telling you - again - is that your premise is incorrect.

[Algol]

Sure one can argue about what is the optimal form of government all day long but when faced with a crisis of this magnitude, action must be taken. The alternative is a precipitous deflationary spiral causing massive social upheaval and the possible dissolution of our political order (does not sound so bad until someone shoots you for a can of beans).

The essence of the problem I think is that a lot of the "growth" of the past 35 or so years has been completely artificial and unsustainable and we don't know how much. So the big risk now is throwing out the baby with the bathwater. I happen to think that there is no single perfect structure of government and am willing to compromise in order to keep us from losing some of the real progress we have made towards a better world.

I believe in lower taxes and that building infrastructure is a valid government role; in theory I don't have that much of a problem with the stimulus package, especially if transparency can be enforced for the allocation of the money.

What I do have a problem with is the constant bailing out of parasitic financial institutions that pat themselves on the back and fly high when times are good then want to unload everything on the taxpayer when things get rough. The "bad bank" proposal is absolutely insane. Please read
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as it is the only sane alternative I have come across for dealing with these institutions while preventing a total systemic collapse.

[Phalanx]

I had this idea a few days ago:

We should abolish the income tax and replace it with an equal tax on savings accounts instead.

Demand for everything will increase because people would rather buy stuff instead of watch their savings evaporate. With increased demand, more firms would open to employ people to create matching supply. With more firms, the competition would be harder so there would be greater innovation and lower prices. Basically everything gets rolling down the hill.

The poor people all get work and food. Rich people who actively use their money to produce things for society by investing in material assets instead of imaginary financial ones are rewarded. The currency stays strong because the government doesn't debase it by pulling trillions of dollars out of thin air. Republicans get more of what they make by working harder. Democrats get to leech off guys with lots of money doing nothing in their savings accounts. The Libertarians are okay because the government resolves the problem without directly regulating businesses.

Is there a flaw in my plan here that I overlooked?

[blueback]

	Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	She would never have gotten that house if not for credit expansion, because only excess money can drive the interest rate down to the point she could "afford" it...The point was to show how the government causes the misallocation of resources by creating too much money, not to comment on the justice of our housing markets.

My impression was that the malinvestment was on the part of the investment banks. They made money off of bundling together mortgages, and then the companies they sold them to bundled them again and sold them again, and then they sold them to someone else. After a while no one was sure where the actual asset was that they had invested in, and so they weren't sure what the risk was. At that point a bunch of banks started lowering the standards which people needed to meet to get the mortgages, so that they could sell more bundles. Then a few wise guys realized they could make money borrowing against their credit score by underwritting everyone else's leverage. . .and when the bad mortgages started snowballing through the system they hit everyone at once and no one had enough assets to meet the calls.

Are you saying that the only reason that happened was that the government made too much money available in the first place? I figured their primary mistake was allowing investors to invest in things they couldn't understand.

The way I see it there is only so much space available for investment at any particular moment. If there is more money chasing investment than there is room to invest then people will be tempted to invent new places to invest. There should be enough regulation in place to prevent them from investing in opportunities which don't actually exist. Just because someone can get into a mortgage doesn't mean they can pay it off, which means it's wrong to pretend that they can just to pretend there is more area for investment then there actually is.

At some point all investment must be in something which actually adds value to the world. But a lot of people on Wall Street think that it's their actions which create value. They are too far removed from the actual work, and they are too closely associated with the castles in the sky, so they have to be regulated enough that they don't fuck up with everyone else's money.





blueback added to this post, 6 minutes and 15 seconds later...

	Originally Posted by Phalanx To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	We should abolish the income tax and replace it with an equal tax on savings accounts instead...Is there a flaw in my plan here that I overlooked?

It seems like taxing savings accounts will only encourage people to save their money somewhere else, like not in a bank. That will mean that banks won't have any money to lend out and that people will save even less.

Part of what put us in this mess is the absimally low savings rate in this country, and by this country as a whole. We don't have anything to fall back on when times get rough.

I would think we'd want to encourage people to save as much as possible. That's where all the excess growth has come from; people spending what they should have been saving. It will take a while for things to rebalance because we should have less activity than we do, and more savings, so the excess activity has to disappear.

[Hanfgeist]

	Originally Posted by Phalanx To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Is there a flaw in my plan here that I overlooked?

Yeah, what you are talking about is wealth redistribution which will cause everyone who has savings to withdraw them from already dangerously undercapitalised banks making the current lack of liquidity situation a whole lot worse.....


Why should people who have worked hard all their lives to build up some capital have it stolen from them to pay for the mother of all screw ups which was caused by the greedy incompetent racketeers that we call 'bankers and politicians' ?

[loosefanbelt]

I fear even participating in this discussion, being uneducated to the ways of finance...

Originally Posted by maxpot46 To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

Minimum wages only cause unemployment by preventing the unskilled from finding positions (the only advantage the unskilled have in the labor market is the ability to reduce their asking wage). If that's all there was to it, why not raise the minimum wage to $1,000/hour? Because then we'd ALL be unemployed, and not just the politically weak unskilled labor voters. The fact that we don't should show that you can't solve economic problems through simple legislation -- there are always unintended consequences to regulation (such as causing more unemployment amongst the poor in the name of improving working conditions for the poor). It IS a greed issue, and a short-sightedness issue, and a too-much-credit issue. But the mechanism used is the money supply and the interest rate and fractional reserve banking, not suppression of the minimum wage.

This line of thinking does not make sense to me. Are you meaning unemployed or UNDERemployed? Because I would be happy to be underemployed for $1,000/hour, but if I were unemployed, I would be receiving nothing?

Something in your arguments are not lining up for me?

[BostonIan]

	Originally Posted by loosefanbelt To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	I fear even participating in this discussion, being uneducated to the ways of finance... This line of thinking does not make sense to me. Are you meaning unemployed or UNDERemployed? Because I would be happy to be underemployed for $1,000/hour, but if I were unemployed, I would be receiving nothing? Something in your arguments are not lining up for me?

I'm with you, in terms of not being completely comfortable in an economics debate yet.

Unemployed - it'll be less profitable for companies to hire workers at increased salaries. Companies work for profit, and worker wages are an expense that cuts into profit. So, they just lay them off or don't hire them.

Underemployed - I read that, during the Great Depression, the average work week was 24 hours per week. The government at the time focused on keeping the wages per hour high, so companies responded by having workers work less hours.

[Visum]

I am with Maxpot46. Nobel Prize winner or not, the stimulus package is a bunch of crap and our economy will be worse off when the paper trickles down. It is like writing an IOU from the wallet in your back pocket to the wallet in your front pocket.

The only thing going for putting the, or, a package through, is that it creates the illusion that Obama is doing something. That HOPEFULLY will generate consumer and world confidence in our economy leading to an increase of the
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, and foreign investment to pull us out of the deflation cycle. However, we are sitting on such a precarious edge that we are setting ourselves up for major inflation, if not hyperinflation.

Many have stated to expect the dollar to lose its reserve status in 2009-2010, but the average dollar holder has no idea what that means for their life. We live in a global economy where the world votes its confidence of a currency by buying or selling it. If the world begins to sell the dollar, it will be like opening the flood gate of the three gorges dam of China; literally, as China is the
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. The only thing the US has going for it is that the whole world is in bed with each other with the dollar as the mattress. Everyone wants a good night’s rest. Some want to change the mattress completely, others just want it dry-cleaned, and yet others would prefer to just put a cover over it. Further, the mattress, or reserve currency, can’t be changed until everyone gets off of it, and that most likely won’t happen until everyone is awake. I pray the stimulus package does not wake them.

[LaoTzu]

I agree with Maxpot to an extent about letting this all shake-out naturally, but reality can't allow for that... Chaos is too kind a word to describe what you'd be looking at.


Besides raising the minimum wage in the US, I'd also start moving towards universal healthcare. It's hurting competitiveness globally (considering they're the only industrialized nation without it). The Big3 could be profitable tomorrow if they weren't paying so much in health benefits.... and companies like Toyota are more inclined to build factories here in Canada because they don't have to pay those benefits....

The major media is not helping by scaring the pants off of everyday consumers either... maybe send them a gentle reminder to STFU for a week :P

[thod]

As a politician your first objective is to obtain the funding to implement your programs and the programs of your supporters.

These programs could be funded by your supporters alone outside of government. But then non contributers would benefit to the same degree as contributers. By using government you compel everyone to contribute so that nobody gets a free lunch. However this penalizes those that would not use or gain from such programs. They are now in a similar position to what the free loader was in before. Clearly the optimal outcome would be if the politician could compel everyone except his supporters to pay for the program. This way they would get the free lunch.

Thus all politicians are in the business of separating the public from its money, each wishing to spend that money differently. This common cause, government against the people, means that government will always seek to increase its spending. Nobody runs for office with an agenda of doing nothing and letting the people keep their money.

Economics is not a deterministic science, it is not a science at all. I recall the old quote that "An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen". Given that none of the economic schools has credibility the politicians are free to pick any. It is not surpassing that they choose Keynesianism. It offers them an academic justification for their agenda, to spend more money. Understand that this is not about economic crisis, fiscal or monetary policy. These are justifications in the same way that an alcoholic will find justification for his drinking. This is about desire, the desire to spend other peoples money. The politicians are thankful that they have an excuse. You see the same elsewhere, a general will always see good excuses for war. Not because it so, but because he wants his chance to fight a war and is thus going to view everything from that stance.

You wont get Austrian economics accepted for this reason. The politicians will never appoint such a man. They will always appoint those that allow them to spend freely. Knowing this you can see why appeals to authority are also flawed. Those in the most respected positions are there because of what they support and not because they are right. Thus a poll of expert opinion, the people holding high office, will always return a consensus of that view. Unlike the noble price for physics, where the discovery is testable for truth, a noble prize for economics provide no test. It is simply a vote by other members of the club for one of their own, adding further gravitas to their position. I have no more respect for a noble prize economist than I do for anyone else.