As an aside - and while I have time - if anyone is still reading this...

This conversation, to me at least, is a model of actual communication and rational discourse between people with widely differing views. I wish more folk I talk with were capable of this (heck, I have a rotten enough temper that I wish _I_ did more often as well).

If people with differing views could discuss them as rationally, and calmly as this conversation was, it would be a happier world.

OK - now I have to go back to my regularly scheduled life.

Talk to you soon, sonoftheright!

sorry didnt continue that thought. Nice talking with you - RL intrudes however

I dunno.

"relative value by the dollar balanced by the value of work as defined by the market - i.e., by supply and demand and the way prices have adjusted themselves for things to stay within their relative margins."

OK.

"The dollar represents a semi-morphic representation of loaning in a market where the theoretical payback of that loan depends on how much general productivity exists to counterbalance the amount of dollars in the market."

THIS is not the solution, it's the problem. It's trading the idea of capital as a medium of exchange for the idea capital as symbolic work. Just as the derivatives were the illusion of paid loans. You are trading the territory for the map. And you can't live in a map.

Nah thought you were still referring to your assertion that 1865-1929 was a golden age.

The housing crash was entirely predictable on many grounds, though. Prices were too high and rising only because banks could rationalize lending to risky buyers by using derivatives - where known risky investments were sold as if they had paid off. People bought based on the fantasy that only a few loans would not pay off because the value of property would just continue to rise. IOW, just like buying on margin. All it took was a cough and a short slide to bring the whole fictional house of cards down. (Yeah I know, I pretty much repeated you - I just wanted to emphasize the similarity to buying on margin). It was totally safe as long as prices rose.

And - there can NEVER be "enough cash for people to take and hide under their beds", as most of it is supposed to be out on loan. Bank runs are always a possibility.

Anyway, the stock market then, as now, had little connection to actual 'worth'. Speculation (fueled by the practice of buying on margin) made the disconnect worse. Price often has little to do with the value of company assets. Brokers and financial institutions will ALWAYS 'game' the system; regulation is supposed to reduce the impact while not completely eliminating risk. Regulations were eased, risk went up (payoff is better) and everybody though the rise was permanent - just like '29. Hell, I had a broker tell me that the market always rises, forever - before I kicked him to the curb (and he wanted to manage my long-term investments!).

History does repeat itself after all.

Now boom and bust, bubble and burst - that's the price we pay for not having a planned economy. I have no problem with that, either - as long as the most vulnerable aren't crushed under the economic engine. The most vulnerable segment - the bulk of US citizenry - is our country's best tangible asset after all. We don't need to burn opportunity like fuel. We can ensure that a 'bust' doesn't destroy us AND keep an open, unplanned market with bounds that keep corporations from abusing the market AND provide a baseline of care so that the few have a harder time wrecking the lives of the majority in the name of avarice.

If we can't, we might as well just go back to oligarchy - the natural result of Libertarianism, IMO.

Whoops forgot:

"And where do higher taxes benefit the labor market (genuine question here)?"

It's not as if the government banks these taxes after all. Besides the obvious (and insufficient) of hiring contractors and direct employees getting the money into circulation (again, this is healthier - or at least QUICKER - than handing it to the investor class because low income segments MUST spend the money if only to stay alive), business requires investment in infrastructure to establish itself.

"Buying on margin was only possible because, again, of the government involvement in the financial market: the Fed backing investments with the very currency that establishes their worth, inflationary money bringing interest rates down and warping the market, all inviting bad investment by good people in a market with no return"

Wow THAT was reaching. Essentially you said: "Since the Fed invested, all bad things are the Fed's fault". Interesting since, in fact, currency was backed by gold then, and therefore was a currency that had it's worth established by market forces, and the practice of buying on margin itself was unregulated at the time.

"I meant that the people would have more money due to lower cost of products"

Another article of faith...

"investments would inspire entrepreneurial ventures due to margins widening again and growth would occur."

But that hasn't happened this time around. _I_ assume it's because businesses have little savings and depend on borrowing and revenue from stock sales to invest. Since nobody is lending, borrowing also stopped, so no new ventures. Margins would have to rise further than is possible from tax cuts to make a difference; tax revenue is already low. Jobs aren't being created because corporations are ALREADY abusing their workforce, making the best of the fear of the (very real) chance of getting an illness that would result in medical bankruptcy. Since there aren't jobs, people can't spend money and there is less of a market to sell to. The contracting market mandates rather the SHEDDING of jobs; that worsens the situation. You want wider margins? Not going to happen without direct intervention and republican-style mandates of wages and prices, like Nixon did.. You want volume then? Get money into the hands of those who need to spend it - and that is NOT the investment class.

And "when the boom has ended through government intervention in the financial markets"? You must mean deregulation and lowering taxes for the investment class - because THAT'S what was occurring. Derivatives are the 'stocks on margin' of this crisis.

ps. read your comment re: non-necessities wrong. Apologies; I'm at lunch and trying to squeeze many activities into a short time

"Your first three examples are places in the social environment where law enforcement and the courts should take care of the citizens through property rights, personal liberties, and free speech enforcement. This is the place of government: to uphold the law. I think you'd need to provide specific examples of financial shenanigans in order to uphold that next claim."

None of those three were illegal, so law enforcement does not apply. All three are now prohibited by regulations that were enacted BECAUSE business was abusing the labor market. And as for financial shenanigans the most famous is, of course, "buying on margin" - something that depends on the market always rising - much like the financial shenanigans that caused the current economic wasteland.

"When you say "non-necessities," I take it that you mean things outside of healthcare, food, housing, education, etc."

No. I do not. I mean things necessary to life and to work.

"Lowering corporate taxes means lowering prices on products across the board"

And this has something to do with the hard line on individual taxes? The idea that investment income isn't really income and should be taxed at a lower rate because taxing at the rate of 'income' is 'raising taxes' and will somehow destroy the job market more than deregulation already has?

"We also need a way to attract our larger corporations BACK into the country, thus providing more tax money to the government and providing more jobs to the people. Tax cuts will help in this"

So don't tax 'em to raise tax revenue. You are skirting the Laffer curve with this - and we are already AT the most efficient, maximized point in that curve. Tax less and the infrastructure and quality of the labor market suffers - and that will NOT attract business to our shores. Now, giving the non-investment class worker third world wages and benefits might, but while that might make for a richer investment class, the rank and file will suffer.

"What's even more important, though, is lowering spending in decrepit departments and replacing our direct market involvement with law reinforcement to manage standards. Direct intervention is what warps markets, channels money into wasteful corners, and artificially inflates market prices, ultimately robbing the common man"

Tax incentives as a harness for business = good, IMO. Direct intervention is necessary from time to time, HOWEVER, I agree it should be a tool reserved for extraordinary circumstance.

"Take the foods market for example: requiring a baseline would mean forcing farmers to have customers in their local area"

No. Not unless you anticipate transportation of foodstuffs to become impractical, or that capital no longer works to purchase them. In which case cities will starve.

"People will have more money to spend, more money to invest, margins will open up for new business and growth can actually occur. This is what we need to bolster our economy."

This is a non-sequitur. It 'does not follow', and is a matter of faith. Only by making the labor market a commodity, and treating only the investment class as people, does this work. And to do that, participation in the election process must be limited, otherwise, the invisible hand that is the vox populi WILL adjust - just not in the ways Lib dogma predicts.

"Trust busting is anathema to libs when it means destroying a productive company - when it means increasing competition by diversifying a frozen market and allowing prices to reach market levels, then it is welcome."

Not that I've seen. Ever. I have yet to see a free marketeer cheer ANY trust-busting activity.

"Have you studied the era I described? The era involving steady economic growth, huge innovation and industrial expansion, and general welfare for the citizenry?"

Really. So no kids in mills, no rioting workers, no strike-busting with mercenaries. No financial shenanigans ruining the market, no huge inequities between the 'captains of industry' (defacto oligarchy) and the bulk of the people. No snake-oil salesmen selling deadly 'cures' on a national level. No extremely long hours in order to work at all. Common medical benefits - or medicine inexpensive enough - so that workers could pay for injury and sickness (besides the rare Oddfellow lodges). No starvation, no homeless veterans. A paradisical time in our nation's history. When was this again?

"A corporation would rather lower its prices and gain more customers than raise them and garner hatred - that's what a free market is about, the recognition that the customer is the ultimate arbiter of liberty and freedom of choice. When choices are deprived, everything is skewed."

Again, (and again and again) this ONLY works with non-necessities. Luxuries. With strict regulation, business would be able to make money on necessary commodities as well - but in order to have a healthy market, there must be a baseline of necessities guaranteed. Otherwise, misery swells to terrible proportions. It doesn't have to be comfortable, but it does have to exist. Your folk are against any such baseline, and also against restrictions that prevent companies from causing long-term problems for the sake of short term profits.

"It is the high rate of corporate taxes"...

And that's why Libs are against raising taxes - on individuals? I'm actually FOR using variable tax rates for business as 'stimulus' AND for 'governing' corporate behavior under our current tax code. Business must serve the people, not the other way around - and that is especially true in this, the day of outsourcing and supra-national corporations. In order to serve, business must also be healthy, though.

Actually, as far as taxes go, I'm all for changing the tax code to a flat tax - with one caveat. Any such income tax must be levied on 'net' income, not 'gross'. Tax discretionary income, not the income used to survive. Without such a condition, those least able to pay are saddled with a disproportionate tax compared to the ruling, or 'investment class'. I also think that corporations should be subject to the same rules.

No one used 'No True Scotsman'? It IS 'No true Scotsman' - and I wasn't replying to you in any case. I was replying (quite clearly) to "Free market theory is like Communism. Sounds good on paper" - with an explanation why it has adherents. But, since you insist on it...

"Free market ideology is not so weak"

As long as the people - the market - get no say and are considered a resource. Because if the people DO get a say, oppressive and destructive business practices get regulated. A 'bad thing' in your dogma, right? People should just have faith that someday an invisible hand will make everything better and endure until it does?

"Economic growth is directly proportional to the freedom of individuals to make their own economic choices."

As long as everything is a luxury. Because demand curves go all to hell when something is necessary to life, and businesses control it. This is where government should be the 'supplier' of a baseline of necessities. You know, the 'safety net' you free marketeers deride so often. Unregulated business cannot be trusted not to steal food from the mouths of babes or the pension funds they used (and contracted) as incentive for long-term employment.

"A central bank is the antithesis of a free market"

Yes. Yes it is. However, if you believe that competitive, unregulated banking wouldn't lead to "bubbles and busts that always follow bubbles" I have a bridge you might be interested in buying.

Outside of trust-busting? That's ANATHEMA to libs. And - that was the invisible hand of the market (the voters) taking action due to market abuses.

The republitarians would take us back there - to a very bad place for the people. Ron Paul would undo all protections and force the people to act all over again.

Unregulated banks lead to bank runs and loss of savings. Libertarian principles precipitated this crisis.

Unfettered markets kill people and leave most miserable for the sake of a defacto oligarchy. It is NOT for "the average citizen". THAT is what you want. Be honest. Now, do I think Ron Paul is a monster? No, just an idealogue.

"The solution is to cut out the unnecessary and harmful areas of government taking the place that productive citizens paid voluntarily could take " No that's a band aid - and one that would make the economy worse. And it's not even coherent. Are citizens not tax-payers? Do they not work in those 'places'? Did the citizens not vote for representatives that are responsible for what government does? THAT'S your 'invisible hand'. And that's what Libertarianism wants to STOP. Funny, huh.

"And then competition for resources can occur, where banks aren't artificially backed with inflationary funds so that economic bubbles occur when the citizens can't keep up with the production their loans require to counteract them."

So - competition doesn't occur? Competitive bids never happen? And - citizens couldn't keep up BEFORE the banks got govt funding from this crisis, so it's deregulation - a libertarian principle - that CAUSED this, and not some vague 'them' (government) not connected to the market (citizens). I am frankly tired of Libertarians making up an artificial divide in order to fool people.

"It seems as soon as someone gets elected to Congress, they are immediately bought by the wealthy elite to represent their interests."

They can't get that far without being bought and paid for in the first place.

Nah it's the "No True Scotsman" of economic theory. The closer you get to it, the fewer regulations, the worse things get.

Apologists always have 'reasons for it though', and it starts with not considering voters to be part of the market, and believing that regulation comes from an entity independent of the people. That's why they are currently trying to make people believe that they aren't represented by our representative government. They are working very hard online to convince people of this, too.

In any case, it's always 'No TRUE free market has (X)' or 'a TRUE free market would need (Y)' as an excuse as to why things get so much worse when 'free market' principles are applied. It's really amusing to hear adherents claim that no matter how hard their 'solutions' fail, they would have worked if it was a TRUE 'free market'. Its a matter of dogma, of faith with most of them. Finger-pointing is a way of life for the free-marketeer.

Almost as funny as the current ifn-yer-aint-fer-us-yer-agin-us meme that anyone against deregulation or for common worker representation at contract negotiations is Socialist/Communist scum trying to destroy the economy - when deregulation is what did it this time, around, and lack of regulation is what did it last time. And the ridiculous notion that we should trust 'market forces' and some magic invisible hand to adjust the market (while ignoring the fact that the people are the market, and the voice of the people is the 'vote', so gov regulation IS their invisible hand) as the only answer? That depends on all things being interchangeable, and there being an infinite job market not subject to supply and demand...

The 'Free Market' would seem to be a frail thing indeed - so frail it could never exist or last, even if it worked...

And more! You're a funny old troll, aren't you?

Because that could NEVER happen when climate change causes different - and possibly less - land to be arable, right?

And lord knows EVERY country will want to share what food they have, and wars would NEVER break out because of lack of food or water.

No, it's better to confront problems by ignoring them.

Right?