• Post Reply Bookmark Topic Watch Topic
  • New Topic
programming forums Java Mobile Certification Databases Caching Books Engineering Micro Controllers OS Languages Paradigms IDEs Build Tools Frameworks Application Servers Open Source This Site Careers Other Pie Elite all forums
this forum made possible by our volunteer staff, including ...
Marshals:
  • Campbell Ritchie
  • Ron McLeod
  • Paul Clapham
  • Jeanne Boyarsky
  • Liutauras Vilda
Sheriffs:
  • Rob Spoor
  • Bear Bibeault
  • Tim Cooke
Saloon Keepers:
  • Tim Moores
  • Stephan van Hulst
  • Tim Holloway
  • Carey Brown
  • Piet Souris
Bartenders:
  • Frits Walraven
  • Himai Minh

Failed Economies

 
Ranch Hand
Posts: 392
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Soviet Russia's economy failed because of Communism
Now we see Global economies facing trouble because of free markets
What's next model?
 
Bartender
Posts: 9625
16
Mac OS X Linux Windows
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Various incarnations of the free market have failed before. We'll just slap some duct tape regulations on it and ride it for another 20-50 years.
 
Sri Anand
Ranch Hand
Posts: 392
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Ride on this till this fails miserable and breaks down few more countries of the world
 
Ranch Hand
Posts: 81
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
If there will be a new model, it will still come from the U.S. No other country has such a system to support business innovation, competitiveness and growth.
 
Sri Anand
Ranch Hand
Posts: 392
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Criss has also started from USA :-) , To large extent it might be true , but since global markets are so penetrative into all countries it might be a collective change
 
Ranch Hand
Posts: 1479
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator

Originally posted by Joe Ess:
Various incarnations of the free market have failed before. We'll just slap some duct tape regulations on it and ride it for another 20-50 years.



Its by no means clear that the Depression was a simple free market collapse since the URL you gave (& others) mentions several major factors of govt distortions of the free market :

"Monetarists, including Milton Friedman and current Federal Reserve System chairman Ben Bernanke, argue that the Great Depression was caused by monetary contraction"

and

"Most historians and economists partly blame the American Smoot-Hawley Tariff Act (enacted June 17, 1930) for worsening the depression"


Without those 2 factors distorting the free market, many economists argue there would have been a recession, but not a depression. Recessions are a normal part of the business cycle. Currently we are not in any type of Great Depression, so the remarks regarding economic collapse are a bit pre-mature.
[ October 09, 2008: Message edited by: herb slocomb ]
 
Sheriff
Posts: 11343
Mac Safari Java
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Basically, it's like this...

 
Joe Ess
Bartender
Posts: 9625
16
Mac OS X Linux Windows
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator

Originally posted by herb slocomb:
Its by no means clear that the Depression was a simple free market collapse. . .



I didn't claim it was. The OP asked if there would be a different economic model to come out of this crisis and I responded that I didn't see it happening.
 
frank davis
Ranch Hand
Posts: 1479
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator

Originally posted by Joe Ess:


I didn't claim it was. The OP asked if there would be a different economic model to come out of this crisis and I responded that I didn't see it happening.



But you used the term "failed". There is no failure, as always and as expected, any market will economy fluctuate. Its called a business cycle.

What we have now is a recession that may get deeper. I blame the severity of the crisis not on the free market, but on government distortion of the mortgage markets via Government Special Entities such as Fannie Mae. Without Fannie Mae and the implicit government backing of Fannie Mae and Fannie Mae's mortgages, then the secondary US mortgage markets would not have hyper-ventilated to such a large degree. Fannie Mae also led the way in the creation of lower lending standards at the primary mortgage level, both in explicit statements and also in actions by buying more of the lower quality loans directly from lending banks.

Of course Fannie Mae was responding to some pressure from the Clinton admin and the Dept of HUD which explicitly gave them the goal of increasing mortgage's of lower income people. This could only be done by decreasing lending standards and thus the origin of the whole crisis.
 
Joe Ess
Bartender
Posts: 9625
16
Mac OS X Linux Windows
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator

Originally posted by herb slocomb:
But you used the term "failed". . .



You want to debate semantics AND economics? Try a forum not labeled "Meaningless Drivel"

Originally posted by herb slocomb:
I blame the severity of the crisis not on the free market. . .



You would get a kick out of this editorial:

Instead of stimulating productive activity by removing doubt, [the bailout] has impeded it by multiplying doubt. It has also encouraged lenders to hold off dealing with their bad debt in hopes of getting a better deal from the Treasury than they can dream of getting from anyone else.

 
Ranch Hand
Posts: 628
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
After Iceland looks like next is Pakistan
http://www.telegraph.co.uk/news/worldnews/asia/pakistan/3166421/Pakistan-seeks-US-funding-to-avoid-bankruptcy.html
 
Ranch Hand
Posts: 8944
Firefox Browser Spring Java
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator

Originally posted by Rambo Prasad:
After Iceland looks like next is Pakistan
http://www.telegraph.co.uk/news/worldnews/asia/pakistan/3166421/Pakistan-seeks-US-funding-to-avoid-bankruptcy.html



What abt India ?
 
Ranch Hand
Posts: 1609
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
"This situation may be likened to two people who are drawing diagrams, with only one pencil and one ruler between them. If one person takes the pencil and the other takes the ruler, a deadlock occurs when the person with the pencil needs the ruler and the person with the ruler needs the pencil, before he can give up the ruler. Both requests can't be satisfied, so a deadlock occurs."

-Source.
 
Ranch Hand
Posts: 1408
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Even in the earliest days of post-feudal free-market countries, the government still controlled the coining of money.

Through the creation of debt, banks effectively also create money. This may be a justification for heavy government regulation of banking -- as distinct from ordinary commerce.
 
marc weber
Sheriff
Posts: 11343
Mac Safari Java
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
 
Sri Anand
Ranch Hand
Posts: 392
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Govt is buying stakes in bank, its one step back from free ecomony's to little state controlled
 
Pradeep bhatt
Ranch Hand
Posts: 8944
Firefox Browser Spring Java
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Airlines in India - Jet[already] and govt. owned Air India is removing thousands.
 
Ranch Hand
Posts: 5397
1
Spring Java
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
No idea whether the following is true..but its hilarious



Investment Ideas!



If you purchased Rs 1,00,000 worth of Morgan Stanley stock 1 year ago, you would have Rs 4,900 today.

If you purchased Rs 1,00,000 worth of AIG stock 1 year ago, you would have Rs 3,300 today.

If you purchased Rs 1,00,000 worth of Lehman Brothers stock 1 year ago, you would have Rs 0 today.

But, if you purchased Rs 1,00,000 worth of beer 1 year ago, drank all the beer, returned the aluminum cans for a recycling refund, you would have Rs 21,400 NOW!!!

Moral : Invest Wisely ;-)
 
Ranch Hand
Posts: 1162
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
I think the real issue is that we have never allowed an economic system to function in a self contained, self moving, self correcting sort of way that these systems were designed to. Capitalism was supposed to be a self regulating system. I think one of the biggest lessons learnt in the fin. crisis was that the system does develop problems over time but I think we do a great disservice by not allowing the system to iron itself out. Govt. interventions I think are counterproductive. The system messes up so often because of the very institutions that are put there to regulate it end up becoming accomplices in its road to crisis. If the fed hadn't lowered rates in the first place maybe we would not be having this problem. Those same regulatory bodies then have to step in bail all these corporations out. I think capitalism would work beautifully if it was allowed to run without intervention. The regulatory bodies in my view should not try to drive or slow down growth or even push the case for more growth.
 
Frank Silbermann
Ranch Hand
Posts: 1408
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Russia's economy didn't fail because of communism. It stunk because of communism, but there's no law against languishing in poverty. They changed their approach because once the leadership could no longer convince themselves that Marx' promises would come true, what was the point of continuing?

As for free markets, booms and busts are inevitable due to human nature. People speculate because they predict that prices will rise, thereby causing prices to rise. This becomes a self-fulling prophesy until the bubble bursts, then everyone suddenly has less money than they thought they had and that they've been overspending. But without speculators, sellers have trouble finding buyers when they need one, and buyers have trouble finding sellers when they need one.

It is even worse when people speculate with borrowed money. That's like placing a sports bet with your local Mafia-connected bookie, even though you have no money to pay off if you lose. Unfortunately, there is no clear line between speculation and investment -- just two ends of a continuum. Investing borrowed money -- the synergy between a man with time and expertise but no money joining forces with an investor who has money but no time or expertise to run a business -- is the basis of economic progress. We want to deny loans to specculators but encourage loans to businessmen; what makes regulation difficult is the fuzzy line between the two.
 
Sri Anand
Ranch Hand
Posts: 392
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
There should be some rational on what people can speculate and what not, speculation needs to be healthy and not bring prices to level where ordinary man on the globe cannot compete and make a living
 
Rancher
Posts: 4686
7
Mac OS X VI Editor Linux
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator

Originally posted by Raghunandan Mamidala:
There should be some rational on what people can speculate and what not, speculation needs to be healthy and not bring prices to level where ordinary man on the globe cannot compete and make a living



Who decides what speculation is good/healthy and what is bad? Some giant group of bureaucrats?
 
Marshal
Posts: 26618
81
Eclipse IDE Firefox Browser MySQL Database
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator

Originally posted by Pat Farrell:
Who decides what speculation is good/healthy and what is bad? Some giant group of bureaucrats?

No, we do. You and I and Raghunandan. We all have the ability to decide what's good and what's bad.

For example we might decide that if the rice harvest in an Indian state is poor, and speculators buy it all up and sell only part of it at a very high price, that is bad because many people go hungry when there is rice rotting in warehouses. I think many people might decide that is bad. Others might decide that it is just economics at work and that there's no good or bad there.

But whether those many people can do anything about it is another thing. That's not economics, it's politics. Politics is where everybody decides what they think is good and bad and then vote for people who they think will act against the bad things and for the good things. It's a crude process but it's all we have.
 
Sri Anand
Ranch Hand
Posts: 392
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
Its responsibility of World bank , International Monetary Fund, and a coordinated effort of all countries to place these rules of Rational behind trading stocks, shares,commodities,real estate, Bubble in one country is sending down every one.
Right now Central banks woke up and coordinating their efforts, this should be proactive and preventive then looking for cure,and acting right at the time of crisis.
Investors always need something to speculate Dollar or Oil or Gold in future they might even control and speculate daily food and agricultural products too make them out of reach or an ordinary man. "Free market with out regulation is not equal opportunistic"
[ October 31, 2008: Message edited by: Raghunandan Mamidala ]
 
Rambo Prasad
Ranch Hand
Posts: 628
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
I thought USA is a rich country

http://news.yahoo.com/s/afp/20081120/bs_afp/financeeconomyusgulf_081120072928

http://www.google.com/hostednews/afp/article/ALeqM5hRHG8vaKg_32jRp6NiGAy6OBWYCg
 
reply
    Bookmark Topic Watch Topic
  • New Topic