Democracy is as Much a Failure As Socialism

[JUICE]

To play devil's advocate, I'm becoming more keen on the idea that income inequality is the over arching structure that allowed each of the myriad causes of the crisis to coalesce into a tenuous house of cards structure that only needed a breeze to topple.

I hate that I agree with Krugman on this issue....

[whisper]

Originally Posted by Guerilla poster

How the rating agencies have managed to surive all this is rather amazing.....I guess there was no clear cut fraud just stupidity.

The rating agencies (according to the rating agencies) don't produce any work, literally. They survive because they are protected by the 1st amendment as a publisher of information. All they do is collect information and redistribute it.

[whisper]

Originally Posted by JUICE

To play devil's advocate, I'm becoming more keen on the idea that income inequality is the over arching structure that allowed each of the myriad causes of the crisis to coalesce into a tenuous house of cards structure that only needed a breeze to topple.

I hate that I agree with Krugman on this issue....

Inequality is a fact of life. You cannot eliminate it and trying to do so cause worse damage. Even in communist Russia where they did their damndest to eliminate inequality - the mishap of being born into the "right" family or the "wrong" family created vast levels of inequality.

The income inequality didn't cause the crisis. Trying to overcome the income inequality did.

[JUICE]

Originally Posted by whisper

Inequality is a fact of life. You cannot eliminate it and trying to do so cause worse damage. Even in communist Russia where they did their damndest to eliminate inequality - the mishap of being born into the "right" family or the "wrong" family created vast levels of inequality.

The income inequality didn't cause the crisis. Trying to overcome the income inequality did.

You're right from one perspective. On one hand you have a relatively poorer and poorer class trying to 'keep up with the Joneses' via debt... ie trying to overcome the inequality. On the other hand, you have a relatively wealthier and wealthier class sitting on idle money looking for new and risky high yield investments... ie trying to perpetuate the inequality.

Your point is valid, but is lacking some perspective. I have no moral qualms about the inequality itself, but there are still two sides to the issue. Morality and intervention aside, I think it's fair to argue that periods of relatively high inequality have not been the best chapters in human history.

[Guerilla poster]

Originally Posted by whisper

The rating agencies (according to the rating agencies) don't produce any work, literally. They survive because they are protected by the 1st amendment as a publisher of information. All they do is collect information and redistribute it.

??

Yes, but how they are still considered a credible source of information, one would think that screwing up so badly would cause them to lose their credibility. Of course, the banks have every incentive to ensure they remain the go to source for the information. Lets' be honest, the marking of bad debt as AA or AAA bonds was the clearest cause of the financial crisis in my view, one could create profit by buying crappy risk and repackaging it as good risk thanks to credit agencies. I know everyone thought the housing market would keep going up but there was a huge assumption in the models that the individual loans were somehow uncorrelated, which just seems like really bad modeling to me. Of course, everything is easier with 20 20 hindsight.

[whisper]

Originally Posted by Guerilla poster

??

Yes, but how they are still considered a credible source of information, one would think that screwing up so badly would cause them to lose their credibility.

Rating agencies are protected from their recommendations because they claim that they aren't producing information just republishing information. Essentially, they take no editorial responsibility. So, they are protected by the 1st amendment from claims against them.

Government backing of the rating agencies are why they exist. Granted, I think the courts are going to once again retest their assertion of 1st amendment protection....

[independent]

Originally Posted by JUICE

No. My theory is that vocabulary is sometimes messed up by design to keep the jacksheepleasses confused. See: conservative vs liberal. No matter what words I chose to use, someone was going to argue semantics because the words we NEED to use are not well defined and often full of ambiguity. Either that or they are far too specific... like I said before, 'democratic capitalism vs authoritative socialism' is too specific and would get nitpicked for that reason. Language is not perfect...

Allow me to rephrase the original proposition.... 'self-labeled democratic systems are as much a failure as self-labeled (authoritative or non-authoritative) socialist/communist systems. Nitpick that now... we can argue all day about the terminology without discussing anything worthwhile.

The issue is clearly complex. I am merely pointing out that a perceived end of the spectrum is, in practice, just as much a failure as the perceived opposite end.

I think you've already gotten some skeptism on any claim that the US and the USSR provided equal results in the 20th century. I'll vote with the "there's a really big difference in results" group.

That's not to say that we're perfect. I'd say that a big (maybe the biggest) contributor to our current troubles is an unfounded belief that markets always discipline individual players before they can do any really serious danger. So we went too far out on the "markets are perfect" end of the spectrum. Maybe we can agree on that without debating the historic performance of the USSR.

But I see that as an economic debate of unregulated market vs. regulated markets, which doesn't have much to say about the benefits of democracy.

OTOH, I think our other big current economic question, how to limit gov't spending to the amount that people will pay in taxes, is a question about democracy, but not about socialism vs. capitalism.

Like most things, I believe the solution lies somewhere in the middle. As a race, we need some sort of central planning - living longer and ever more comfortable lives isn't a productive goal in and of itself and will end up backfiring. What that goal should be is another thread entirely.

On the other hand, humans need motivation. It's hard to argue that we can make things just because people want them, in lieu of compensation and incentives. In terms of the governance angle, voting provides motivation to engage in policy making... but as I and others argued before, it tends to degenerate into idiocy.

I'll agree that the optimal point is often in the middle. Certainly we're better off if we do some group planning (I'm not sure if that's what you mean by "central" planning). .. I'd like to know what goal you've got that's better than longer and more comfortable lives, which is relevant to whether democracy works. .. Yes, we need motivation, but that's not the opposite of planning. .. Certainly, democracies are always subject to the "idiocy of the mob", our constitution's writers were very concerned about that.

Another viable angle, like I mentioned before, is that humans are not predisposed to centralized control... ie government. In this case I think a reversion to more primitive (or no) governance is ultimately beneficial. Why cause harm by pretending we can make it all work? Why keep up the charade?

I tend to agree that our genetic hard coding seems to be set up for whatever cooperation/control you need to live in an extended family group (kind of like chimps or wolves) not a modern society of hundreds of millions. But, we also developed these big brains that are capable of overcoming our genetic hardcoding with creative new ideas.

IMO, we clearly live better lives than our distant ancestors. Maybe you mean we hit a kind of sweet spot with the yeoman farmer and New England town meetings, or the with modern Amish, and we haven't really progressed since then?

[Baron Von Raschke]

Originally Posted by independent

That's not to say that we're perfect. I'd say that a big (maybe the biggest) contributor to our current troubles is an unfounded belief that markets always discipline individual players before they can do any really serious danger.

You have said this before. Who do you feel had the ability and foresight to exercise the discipline you feel the market failed to exercise? Seems like many non-market participants didn't have a clue.

[Standtall]

Why don't we all just agree that Government is generally a failure and work to remove as much of it from our lives as possible?

[Descalzo]

Originally Posted by JUICE

Oh jesus ****ing christ.... the vocabulary is messed up by design. See: conservative vs liberal.

Socialism usually implies common ownership of means of production and centralized economic planning. This is a dichotomy with respect to how most democracies behave in practice - private ownership and little or no centralized economic planning.

Someone would freak out no matter what terminology I used.... I would argue that it's by no accident. How can we debate important fundamental ideals like this when we get caught up in nitpicking the words used? You know what I mean - either contribute or get out.

I still don't understand what your point is. You said once that no government at all is better than any government. Did I misunderstand?