Progressives of the World Unite!

[Kidlicious]

Originally posted by Japher


I disagree. If aide is given to create a leader, that leader will not be strong as he/she will be viewed as a product of foreign policy, and not out of national interest. The leader must come first, kind of.

I don't think Africans could care less about foreign influence. I think they really care about their economic conditions. They are certainly willing to have some foreign influence if it would mean less suffering.

[Dinner]

Subsidizing production is hardly free market capitalism. In fact subsidies destort the market and thus hinder the free market.

[Kidlicious]

Originally posted by Oerdin
Subsidizing production is hardly free market capitalism. In fact subsidies destort the market and thus hinder the free market.

I don't believe that distortion matters, because the free market doesn't work the way you think it does, but it really doesn't matter because subsidies have always been a part of capitalism and always will. Those who have the resources to subsidize their products and create better economies of scale will do so. That's the way capitalism works.

[Agathon]

Actually, I remember reading or hearing that this whole "birth rate" thing is complete codswallop.

I'll see if I can find the article.

[MichaeltheGreat]

Originally posted by Urban Ranger


So why is it that, in the last 20 years, in the United States, the rich have been getting richer while the poor have been getting poorer?

BTW, do you think Milken and Kravis deserve all their $?

Actually, I think Milken should be spending the rest of his life getting his ass pumped by Bubba at the Federal Prison in Marion. But that's just my view of extensive financial crimes which affect market credibility.

[MichaeltheGreat]

Originally posted by Kidicious


I don't believe that distortion matters, because the free market doesn't work the way you think it does, but it really doesn't matter because subsidies have always been a part of capitalism and always will. Those who have the resources to subsidize their products and create better economies of scale will do so. That's the way capitalism works.

You can't subsidize your own products.

[MichaeltheGreat]

Originally posted by Albert Speer
MtG:

improve infrastructure to make businesses more profitable, establish businesses which will be taxed (and this tax will pay for education to allow citizens to have better skills) and will provide jobs for the citizens some of whom may establish businesses themselves and all that...

You're thinking in a first world model.

In most of Africa (in terms of population), there is virtually no infrastructure. Abysmal health care, unsafe local water supplies, no sanitary waste disposal, no electricity, etc. Businesses are extremely hard to "make profitable" when you have a lack of basic support services, almost everything is imported, employees are unproductive when they're their, and they show up on "African time" The last thing you want to do with a fledgling profitable business is tax the hell out of it, because you're extracting capital needed for growth. You can't extract enough taxes to maintain what pathetic infrastructure you have, let alone to expand basic public services.

you open up a factory in a city and you now have several hundred employed workers who need housing, food, and consumer products so several businesses open up to provide these goods and services and the workers of these in turn require more goods and so on... same concept can be applied to the third world

Go there and try it.

[Sandman]

China?

Speer: China's a special case. The one-child policy was backed up by better than average female literacy, and the state did provide in old age, at least better than most other poor countries. The one-child policy was also not a complete success, the average number of children per couple only intermittantly dropped below two. On the other hand, even this is far, far better than the large families in places like Nigeria and Bangladesh.

[Saras]

Originally posted by MichaeltheGreat


Actually, I think Milken should be spending the rest of his life getting his ass pumped by Bubba at the Federal Prison in Marion. But that's just my view of extensive financial crimes which affect market credibility.

Milken is a scapegoat. Guilty, but not nearly as guilty as Boesky. But who knows Boesky?

[Imran Siddiqui]

I concur with Oerdin. You need stability first, then set up a market. Markets are notoriously ineffective when the country is unstable.

[MichaeltheGreat]

Originally posted by Saras


Milken is a scapegoat. Guilty, but not nearly as guilty as Boesky. But who knows Boesky?

Milken was more a promoter of the whole phenomenon. But I'd happily put Boesky in the same cell block. All of 'em. White collar market crimes have a far bigger impact than knocking off banks, etc., so I'm all in favor of slamming those precious yuppies with hard time.

[Saras]

I beg to differ. Milken was a promoter of junk bonds, in itself an asset class of higher risk, but also higher return. The fact that this instrument was used for many hostile raids put him in a position of knowing a lot of inside info. He didn't actively pursue insider trading opportunities. Boesky did.

[MichaeltheGreat]

Originally posted by Imran Siddiqui
I concur with Oerdin. You need stability first, then set up a market. Markets are notoriously ineffective when the country is unstable.

Which is why I actually (hard core free market type that I am) advocate socialism in the initial stage of a third world country's economic development.

To achieve stability, you have to reduce a majority of the basic sources of discontent that can motivate people to support one or another destabilizing force. There's little to no initial market incentive to providing basic food supply stabilization (quantity and quality), basic water and waste disposal, transport, health and education.

Elimination (or at least reduction to a tolerable level) of corruption and establishing a rule of law are also essential precursors to functioning markets.

[Imran Siddiqui]

Which is why I actually (hard core free market type that I am) advocate socialism in the initial stage of a third world country's economic development.

(Unfortunetly ) I agree with you. Go strong national government and gradually ease restrictions and ease in the market. Go slow, so the transition is smooth.

Of course the problem is that once a people get a free entitlement they don't want to go back, even if the market might provide it better.

[MichaeltheGreat]

Originally posted by Saras
I beg to differ. Milken was a promoter of junk bonds, in itself an asset class of higher risk, but also higher return. The fact that this instrument was used for many hostile raids put him in a position of knowing a lot of inside info. He didn't actively pursue insider trading opportunities. Boesky did.

Yes, but Milken's promotion of junk bonds was done with the full knowledge that (a) they weren't being used in a sound manner, and that the overpromotion of high risk debt undermined the stability of the market, and (b) the use of the high leverage / high interest combination for M&A transactions made it impossible to effectively absorb those M&A's, so the only parties who profited were those who speculated on the transactions themselves, not the bondholders or the majority of the companies who engaged in the high-risk transactions. Besides, Milken didn't have to engage in insider trading - simply promoting a financing mechanism that gave insider traders so many opportunities for illicit gains was lucrative enough for Milken.