Bailout Bonanza

[Agathon]

Originally posted by Kidicious
What are you refering to?

Their rejection of empiricism and falsfiability.

Not that mainstream economists have covered themselves in glory, but at least they make an effort. I saw that behavioural economics has finally started to takeoff. How many years did it take these retards?

[Kidlicious]

Originally posted by Agathon


Their rejection of empiricism and falsfiability.

Not that mainstream economists have covered themselves in glory, but at least they make an effort. I saw that behavioural economics has finally started to takeoff. How many years did it take these retards?

Well you've got to understand that empiricism doesn't work often in economics. That's actually one thing that I tend to agree with them about.

[Agathon]

Originally posted by Kidicious

Well you've got to understand that empiricism doesn't work often in economics. That's actually one thing that I tend to agree with them about.

? Surely you jest.

[Kidlicious]

Why do you think the orthodox economists are wrong so often?

[DanS]

Apparently, the Lehman Brothers CDS auction is settling for a little under 10 cents on the dollar. That means several hundred billion dollars will be changing hands today. I'm guessing that much of it will come from the hands of AIG.

[Saras]

Originally posted by Agathon
The Austrian school is Hayek, right? That guy was a serious lunatic.

and your so called philosophers Marx etc were not. rihjt.

[Kidlicious]

Monday they are expected to guarantee loans between banks. Why do I get the impression that banks already have cash to lend though?

[Imran Siddiqui]

Banks have the cash to lend, they are just frightened to lend to a bank that may be out of business next week.

[Kidlicious]

Originally posted by Imran Siddiqui
Banks have the cash to lend, they are just frightened to lend to a bank that may be out of business next week.

Is the problem that they won't lend to banks, or that they won't lend to the public? It seems to me that this will only solve the problem of them lending to each other. It isn't going to encourage them to lend to the public.

[Jon Miller]

They won't lend to the public because they want us to give them more money and they are scared aobut their usual profit sources.

JM

[Kidlicious]

That makes a hell of a lot of sense JM.

[Impaler[WrG]]

I'm gradually coming to a conclusion about how our economy should be organized. First some observations about the last century or two and why they have been in such upheaval.

Since about the time of the Renaissance economic activity in the west has been getting increasingly complex, Sometimes it has evolved new parts slowly and at other times a crisis has precipitated a dramatic shift to some new paradigm. A number of political/economic ideologies have been popularized, adopted and discredited in succession. Some ideologies are conservative others liberal but in all the situations their implementations have been ad-hoc and always at the whim of the ruling powers at the time. As opinion has swayed systems have been mutated and hybridized with little or no foresight. Much of our trouble has resulted from incompatible combinations of opposing systems brought about by the overly fluid nature of the rules governing the economy. In addition we can look back and see that all economic crisis and all discredited ideologies ultimately resulted from a failure in human nature be it greed or laziness which the system was unable to counteract and rectify.

This sloppy management is in marked contrast to the stable system of rules which define the structure of modern government. Most nations now have written constitutions which replaced the sloppy ad-hoc systems in place prior to writing these constitution. The oldest constitution belongs to the U.S. it provide a simple blueprint for a government which accomplishes a number of things. First it prevents the current group in power from changing the system to solidify its position permanently, only broad consensus can change the constitution which is self evident by the extreme rarity of such changes. Second it establishes checks and balances which have been specifically designed with fallible human nature in mind, the U.S. constitution was particularly notable for this concept at the time it was written and the idea has proven very durable and has been widely adopted.

Without constitutions we would have terrible governments because the temptation to alter the system would be irresistible. Once a group comes to power it would inevitably mangle the system to its advantage leading to both a great deal of worry, uncertainty and doubt. Likewise patronage and power accumulation would be used to solidify position to the point ware only a bloody revolution could bring a change in government. Dose that not sound similar to centuries long pattern of economic systems which have repeatedly become entrenched for long periods of time and are only modified when they 'collapse'. Is the orderly and smooth transition not superior to the chaotic overthrow?

You can clearly see ware I am going with this, I believe our economic system should be explicitly DESIGNED and then explicitly CODIFIED either as a part of the existing constitution or as a 'second' constitution dealing exclusively with the economic sphere, only activities codified in said document would be permissible and the design would be such that the system is self correcting and self policing.

In the last century we have had a great deal of economic theory, more in fact then we have had theory and thought about what type of constitutions to create. This is a sign that economics now rivals government in its importance to how we live our lives and is logical given that our economic system is so open to change theirs demand for academic 'economists' who study and design economics. But we don't have schools of 'constitutionists' constantly studying and redesigning the constitution because its so hard to change. Because only a broad consensus can change the constitution, the consitution and its amendments have remained readable and understandable too all.

Contrast that with the obscurity and aloofness of economic theory that makes it incomprehensible to the ordinary man whose understanding is critical for full acceptance of the system and for amendment of it to be policed to the necessary extent. A simple codification of economics will help to dispel this overly complex system which suffers from horrible ideological blind spots and replace it with something universally perceivable and understandable, and as with all perspectives multiple view points eliminate blind spots.

I believe this fundamental principle of design and codification should guide us in what every changes are to be adopted in the future regardless of ones proclivities for a leftward or a rightward shift in economic policy these two principles should be embraced by all.

[Imran Siddiqui]

Originally posted by Kidicious
Is the problem that they won't lend to banks, or that they won't lend to the public? It seems to me that this will only solve the problem of them lending to each other. It isn't going to encourage them to lend to the public.

The problem is both. So we have to fix both. Banks are scared of lending money that won't come back to them, especially when they are on shaky ground.

[Kidlicious]

Yeah, this will help the banking system, but then I don't think the banking system is the real problem anymore. This is just overkill in that regard. More give aways.

[fed1943]

If banks were scared of lending money that won't come back to them
that would be a very good thing.
Because when debtor cannot pay, it just means both the financial and
the economic that is behind are wrong bets,that should not be done.
And,if done,the sooner they die the better.
Best regards,