Economics has met the enemy, and it is economics

[Felch]

Also, what do you mean by mercantilism?

This should have been your first question. Mercantilism is a philosophy which encourages government involvement in trade in order to protect vital national interests. It is concerned with balance of trade and ensuring that strategic domestic industries are protected. Mercantilism views world trade as a zero-sum game, with winners and losers. In essence, it is the practical opposition to modern free trade. There is obviously a continuum, just like with socialism and capitalism, with countries weighing the advantages of each philosophy for given circumstances. In some cases these are rational strategic concerns, such as reliance on unstable sources of petroleum. In most cases, mercantilism shows itself through rent-seeking behavior, such as with labor unions that oppose free trade agreements. In general, free trade will make a society more wealthy (e.g. Singapore, Hong Kong), and contribute to peace and international cooperation (Zollverein, EU), while mercantilism distorts economies and sows distrust between nations (modern China, 18th century Europe).

Did the Kanagawa treaty expand trading opportunities? Yeah, since any trade is more than no trade. Did the establishment of trade benefit both nations? Certainly. The Japanese were finally able to come out of the middle ages, and the US was able to expand into a new market. Was it a free trade agreement? Not by any modern definition of the term. The Kanagawa treaty opened up Japan, and the Harris treaty lowered Japanese tariffs on American goods, but they were classic unequal treaties, with the US demanding and receiving concessions that it would not reciprocate. It was a mercantilist, colonialist treaty, not a free trade agreement.

[Jaguar]

http://en.wikipedia.org/wiki/United_States_housing_market_correction

This came first - before any other problems. Homes were simply priced too high. As I said, asset mispricing is very, very painful for the economy. And this was a very, very big mispricing. The United States residential real estate market lost several trillions of dollars in value from its peak. (Roughly in the 5-11 trillion range, or about 15 to 35 thousand dollars of real estate value per capita.) And consider that people expected the prices to rise, not to stay still. When people feel like they've lost a lot of wealth (and in a legitimate sense, they actually had lost tens of thousands of dollars), their behavior changes in ways that companies and governments and central banks didn't plan for.

We still have the same country as before, with the same people, the same skills, the same homes, and the same factories and office buildings. But we're struggling to adapt to a massive one-time change in how the economy is organized - a change that came when a mispriced asset was corrected to its proper price. The economy didn't crash because a couple of banks were wrong, and leveraged themselves highly in the wrong direction. The economy crashed because everyone was wrong. Lehman Brothers and Bear Stearns didn't drag the economy down because they were being risky. They're tiny, in the grand scheme of things. The entirety of the US real estate market, though, is a pretty big deal.

[Jon Miller]

Hmm, has anyone modeled what would happen if there was less leverage but the same asset loss?

JM

[Dinner]

The distortion here is in the fact that dividends are harshly double-taxed.

Bull****. I repeat ****ing bull****. You can't have it both ways. If "corporations are people" then the money earned by the corporation is taxable since they're a person, and then when that "person" gives the money to someone else it is a new transaction where the money is given to a new person. It's taxed once per transaction and if anything the corporation is cheating the tax man because the effective corporate tax rate is right around zero yet if the corporations were really treated like people it would be in the highest tax bracket. Hell, the ****ing bastards should hit with the alternative minimum tax since they literally get away with paying nothing.

The double taxation argument relies upon the argument that corporations aren't people so they're really owned by their shareholders so giving money to shareholders should be the taxable transaction, but, since the right wing majority on the supreme court has ruled corporations have the same rights as people and are in ALL ways people... Well, your own argument claiming double taxation goes up in smoke. Corporations are people so money to them is one taxable transation while when they pass the money on is a second taxable transaction just as if you gave money to a store. In other words legally there is absolutely no double taxation so please stop claiming there is.

[Hauldren Collider]

Oerdin, you not only thoroughly misunderstand the idea of "corporations as people" but you are applying the concept to mean essentially the opposite of what it implies. That's...actually not terribly surprising, given your track record.

[Dinner]

Quiet, son. Adults are talking. Oh, and I'm not misunderstanding because the IRS agrees with me so stuff it, junior.

[Hauldren Collider]

Oerdin, you keep talking about corporations as people as if the people who say it literally mean "corporations are human beings." That's not the case, they are teams of people, and so by taxing corporations you are actually taxing a group of people. So if you tax that group of people once in form of a corporate tax and again in some other tax, you are double taxing them. THAT is the point. It's the exact opposite of the idea you are suggesting, which is that the corporation is a separate entity with some meaning of its own beyond the people who comprise it, and thus should be taxed as well.

[Elok]

HC, he's alluding to a relatively recent (2009?) Supreme Court ruling that corporations have legal "personhood" in some contexts, specifically when it comes to spending money on political campaigns. I can't be arsed to look it up, but it made quite a stink in some circles.

[Hauldren Collider]

Yes, and I am using the logic of that ruling as well (Citizens United), which by the way, is absolutely and obviously correct

When looking at the facts of that case it would have been blatant censorship to ban the movie Citizens United made (Hillary: The Movie) under campaign finance laws. This revealed a fundamental contradiction in the idea of campaign finance reform, thus rendering the entire principal the supreme court struck down invalid. I frankly don't think the court went far enough.

[Elok]

And I am not surprised at all. However, if you are aware of what Oerdin's referring to, you should probably mention it in some way in your reply.

[Kuciwalker]

Bull****. I repeat ****ing bull****. You can't have it both ways. If "corporations are people" then the money earned by the corporation is taxable since they're a person, and then when that "person" gives the money to someone else it is a new transaction where the money is given to a new person. It's taxed once per transaction and if anything the corporation is cheating the tax man because the effective corporate tax rate is right around zero yet if the corporations were really treated like people it would be in the highest tax bracket. Hell, the ****ing bastards should hit with the alternative minimum tax since they literally get away with paying nothing.

1) Corporate personhood is a legal construct completely different from what you are envisioning, with far more limited application than you believe, and orthogonal to the economic question of tax incidence and tax efficiency.
2) Even on individuals taxes are not levied on a per-transaction basis, nor should they be.

The double taxation argument relies upon the argument that corporations aren't people

Not in the legal sense. Only in the sense that their actions are not independent of the shareholders, and their incentives are aligned with the shareholders.

since the right wing majority on the supreme court has ruled corporations have the same rights as people and are in ALL ways people...

No.

Well, your own argument claiming double taxation goes up in smoke.

No.

Corporations are people so money to them is one taxable transation while when they pass the money on is a second taxable transaction just as if you gave money to a store.

Taxes on individuals are not levied on a per-transaction basis, nor should they be.

In other words legally there is absolutely no double taxation so please stop claiming there is.

No I will not, because there is a double economic incidence of taxation regardless of your incorrect and irrelevant theories about the legal doctrine of corporate personhood.

[Dauphin]

Corporations can vote, don't you know. Well in London they can.

[DaShi]

Bubbles are, by definition, asset mispricing, not volatility. Asset mispricing is very painful for the economy and should be avoided.

Asset mispricing can be fought through things like transparency, speedy flow of information, and the presence of many traders studying the asset's price.

Or from Keynesian Beauty contests, which I should really get around to tallying the results of.

[DaShi]

Corporations can vote, don't you know. Well in London they can.

In South Carolina, corporations need to have a driver's license to vote.

[Kidlicious]

Bubbles are, by definition, asset mispricing, not volatility. Asset mispricing is very painful for the economy and should be avoided.

Asset mispricing can be fought through things like transparency, speedy flow of information, and the presence of many traders studying the asset's price.

This post is evidence that there will be future bubbles.