If You Don't Like Wealth Spread Your Way, Just Send It To Me
BretC...@peoplepc.com
Being an entrepreneurial type, I have a solution.
Send your share of redistributed wealth my way.
Email me for my palpay acct.
Bret Cahill
Publius
753497...@t39g2000prh.googlegroups.com:
> Some here have a problem with the gummint spreading wealth their way.
Not really. Most of us will see to it that our wealth is well out of
Obama's reach. Then the free lunchers can spread each other's wealth.
Michael Coburn
I once proposed an assets tax (still do, actually) and some people said
they'd simply hide their assets. And if you are stupid enough to bury
gold in your back yard then you deserve the loss of interest you could
have had on a real capital investment. One of the primary assets is
land, and you won't be hiding it "out of reach".
Rod Speed
And the voters wont be buying fools like you taxing that much more, you watch.
Publius
@news2.newsguy.com:
> I once proposed an assets tax (still do, actually) and some people said
> they'd simply hide their assets.
That would require a constitutional amendment, if you're speaking of a
federal tax. Good luck.
Question: why don't you create your own wealth, instead of trying to pilfer
somebody else's?
Always been curious about the workings of the free-luncher mind.
Shrik...@gmail.com
> On Sat, 25 Oct 2008 06:06:57 +0000, Publius wrote:
> > 7534977be...@t39g2000prh.googlegroups.com:
>
> >> Some here have a problem with the gummint spreading wealth their way.
>
> > Not really. Most of us will see to it that our wealth is well out of
> > Obama's reach. Then the free lunchers can spread each other's wealth.
>
> I once proposed an assets tax (still do, actually) and some people said
> they'd simply hide their assets. And if you are stupid enough to bury
> gold in your back yard then you deserve the loss of interest you could
> have had on a real capital investment. One of the primary assets is
> land, and you won't be hiding it "out of reach".
We already have an asset tax. It's called inflation. We
could just cut taxes, increase spending, cut interest rates
to zero (oh wait, we're already there), and wait for inflation
to soak the rich.
Shrik...@gmail.com
> Some here have a problem with the gummint spreading wealth their way.
Some just have a problem with lowering the seventies-style
economic stagflation boom.
> Being an entrepreneurial type, I have a solution.
Ha. You are about as entrepeneurial as you are
an expert in the info age.
> Send your share of redistributed wealth my way.
>
> Email me for my palpay acct.
But you are onto something here, you just have it backwards.
There are some here who think their taxes are too low. Why
wait for the middleman to increase you taxes. Eliminate the
middle man, hell yes. Just send what you'd like to pay in
more taxes directly to the helpless waifs like Cahill directly.
Or you could send it to Willam Ayers, I'm sure he has ideas
on where to spend it. It's the patriotic thing to do. It's the
real Progressive Tax: the do-it-yourself way. Why rely on
the maternalist and paternalistic Feds?
Bret Cahill
>
> > Not really. Most of us will see to it that our wealth is well out of
> > Obama's reach. Then the free lunchers can spread each other's wealth.
>
> I once proposed an assets tax (still do, actually) and some people said
> they'd simply hide their assets. And if you are stupid enough to bury
> gold in your back yard then you deserve the loss of interest you could
> have had on a real capital investment. One of the primary assets is
> land, and you won't be hiding it "out of reach".
Site value taxation is very smart.
Bret Cahill
Immortalist
Former Federal Reserve Chairman Alan Greenspan told Congress on
Thursday he is "shocked" at the breakdown in U.S. credit markets and
said he was "partially" wrong to resist regulation of some securities.
http://news.yahoo.com/s/nm/20081023/bs_nm/us_financial_greenspan
Immortalist
I'm wondering is it them or me?
2) Petrol is way too expensive these days. I actually can't afford to
drive.
Last time I went dogging, I had to ask my mum to give me a lift.
3) With the current market turmoil, what's the easiest way to make a
small fortune?
Start off with a large one.
4) How do you define optimism?
A banker who irons five shirts on a Sunday
5) What's the difference between an investment banker and a large
pizza?
A large pizza can still feed a family of four.
6) What's the difference between a merchant bank and Katie Price (aka.
Jordan)?
Both are institutions whose reputation is built on assets that, on
closer inspection, turn out to be entirely artificial, vastly over-
inflated and in danger of going through the floor at any moment. But
at least Katie Price is still worth something.
7) What's the difference between the BBC's business editor Robert
Peston and God?
God doesn't think he's Robert Peston
8) George Bush was asked today "what did he think of the Credit
Crunch?"
He replied: "It was his favourite Candy Bar."
9) What's the capital of Iceland?
About £3.50
10) Why have estate agents stopped looking out the window in the
morning?
Because otherwise they'd have nothing to do in the afternoon
(just seeing if google is posting right yet)
turtoni
Problem is that there wont be any wealth to send your way if you put
the wealth creators out of business.
Higher taxes for the small business owners means they'll hire less
people, reinvest less etc.
The less government involvement the better imo.
The government created the whole sub prime mortgage problem by
encouraging the banks to give out bad loans by allowing the people
like ACORN to bully banks and misguide people into buying into poor
investments that they could never repay.
Michael Coburn
> Michael Coburn <mik...@verizon.net> wrote in news:gdui1231ar4
> @news2.newsguy.com:
>
>> I once proposed an assets tax (still do, actually) and some people said
>> they'd simply hide their assets.
>
> That would require a constitutional amendment, if you're speaking of a
> federal tax. Good luck.
That may be the right thing to do. But it gets a little more complicated
with corporations. And it may be that a combination must be forged
between a head tax (just let the states collect the taxes however they
see fit and tax them based on population as the Constitution says), and a
corporate assets tax.
> Question: why don't you create your own wealth, instead of trying to
> pilfer somebody else's?
I might ask all the landowners the same question.
Michael Coburn
That is actually a very good point. It informs most of us concerning the
efforts of the very rich and their bought and paid for neoconomists in
painting inflation as this monster that will eat the children.
Michael Coburn
Most Nobel econ folks agree that it is the best way to tax.
orang...@googlemail.com
> On Sat, 25 Oct 2008 06:06:57 +0000, Publius wrote:
> > 7534977be...@t39g2000prh.googlegroups.com:
>
>
> > Not really. Most of us will see to it that our wealth is well out of
> > Obama's reach. Then the free lunchers can spread each other's wealth.
>
> I once proposed an assets tax (still do, actually) and some people said
> they'd simply hide their assets. And if you are stupid enough to bury
> gold in your back yard then you deserve the loss of interest you could
> have had on a real capital investment. One of the primary assets is
> land, and you won't be hiding it "out of reach".
by what method would you like the state to take my home?
orang...@googlemail.com
let's be clear about this. you want the state to send armed thugs to
my home to take my property by force.
Publius
>> Question: why don't you create your own wealth, instead of trying to
>> pilfer somebody else's?
> I might ask all the landowners the same question.
I certainly won't deny that some landowners have stolen their land. So have
some current possessors of cattle, automobiles, bicycles, books, and money.
But you seem to be claiming that *all* landowners have stolen their land.
What evidence do you have for that expansive claim?
Michael Coburn
The same method currently employed. If you don't pay the taxes you lose
the land/home. But nice job on the appeal of little old ladies, war
veterans, and churches. Why would an rational government pay Social
Security benefits and yet not offer a CAPPED tax relief for seniors?
The reason is obvious. It is not possible to do so in that not all
seniors are land owners. Seniors should _*MOVE*_ to areas where taxes
are lower. That frees up land that is economically suited to more
effective purposes.
Michael Coburn
I need none. I really do not care whether the current "owner" stole the
land or not. Sunk costs in natural resource "ownership" are irrelevant
to the current economy. So long as any the debt is discharged, the
current economy will proceed much better without the "owner" charging a
toll for the use of the resource.
Publius
news:ge2ld...@news5.newsguy.com...
>> I certainly won't deny that some landowners have stolen their land.
>> So have some current possessors of cattle, automobiles, bicycles,
>> books, and money. But you seem to be claiming that *all* landowners
>> have stolen their land.
>>
>> What evidence do you have for that expansive claim?
> I need none. I really do not care whether the current "owner" stole
> the land or not. Sunk costs in natural resource "ownership" are
> irrelevant to the current economy. So long as any the debt is
> discharged, the current economy will proceed much better without the
> "owner" charging a toll for the use of the resource.
Proceed better for nonpaying users of that resource, no doubt. That
would be true for the use of any "resource" --- labor, land, minerals,
livestock, crops, tools, inventions, etc. Anyone who could use any of
them for free would certainly consider themselves better off. The sunk
costs in any of them are not irrelevant to the current economy, however,
since had those costs not been sunk, the resources would not exist,
economically speaking. Are you suggesting they appeared by magic?
Michael Coburn
I love it. The natural resources do exactly that, fool. That is why
that word "natural" is an adjective preceding that word "resources". So
yes, such things might be described as appearing "by magic'.
Publius
@news5.newsguy.com:
>> Proceed better for nonpaying users of that resource, no doubt. That
>> would be true for the use of any "resource" --- labor, land, minerals,
>> livestock, crops, tools, inventions, etc. Anyone who could use any of
>> them for free would certainly consider themselves better off. The sunk
>> costs in any of them are not irrelevant to the current economy, however,
>> since had those costs not been sunk, the resources would not exist,
>> economically speaking. Are you suggesting they appeared by magic?
> I love it. The natural resources do exactly that, fool. That is why
> that word "natural" is an adjective preceding that word "resources". So
> yes, such things might be described as appearing "by magic'.
Knew you'd bite on that.
That is why the clause "economically speaking" followed "would not exist"
(since we're speaking of the purpose of words).
How a material came into physical existence is irrelevant to economics.
What matters is how it came into the economy --- how it became an economic
good available for use, for trade, etc. Natural materials have no uses and
no value until they are discovered; they have no price and are not traded
in any economy. Though they may have come into physical existence by magic,
they do not come into economic existence that way. They must be searched
for, and once discovered, recovered and introduced into the economy. At
equilibrium, *the marginal cost of natural materials is the cost to
discover and recover the next share.* The physical origin of the good is
irrelevant.
Michael Coburn
> Michael Coburn <mik...@verizon.net> wrote in news:ge3ads32r49
> @news5.newsguy.com:
>
>>> Proceed better for nonpaying users of that resource, no doubt. That
>>> would be true for the use of any "resource" --- labor, land, minerals,
>>> livestock, crops, tools, inventions, etc. Anyone who could use any of
>>> them for free would certainly consider themselves better off. The sunk
>>> costs in any of them are not irrelevant to the current economy,
>>> however, since had those costs not been sunk, the resources would not
>>> exist, economically speaking. Are you suggesting they appeared by
>>> magic?
>
>> I love it. The natural resources do exactly that, fool. That is why
>> that word "natural" is an adjective preceding that word "resources".
>> So yes, such things might be described as appearing "by magic'.
>
> Knew you'd bite on that.
>
> That is why the clause "economically speaking" followed "would not
> exist" (since we're speaking of the purpose of words).
>
> How a material came into physical existence is irrelevant to economics.
It is relevant because of incentive to produce it. How commodities come
into existence is most certainly relevant to their very existence.
> What matters is how it came into the economy --- how it became an
> economic good available for use, for trade, etc. Natural materials have
> no uses and no value until they are discovered; they have no price and
> are not traded in any economy.
What a play on words, again. Natural wilderness provides game and wild
fruit. But to GET the game and wild fruit one must labor and the produce
of that labor is called commodities or "goods".
> Though they may have come into physical
> existence by magic, they do not come into economic existence that way.
So?
> They must be searched for, and once discovered, recovered and introduced
> into the economy.
No. I know exactly where the land is that is home to deer. I need not
search for it and it isn't going anywhere. It is the deer which must be
sought and brought into economic use. And the seeking and the gathering
are labor as applied to the deer and the berries and the like. But the
land and the wild deer and berries are naturally occurring and no labor
was expended to "make" them.
> At equilibrium, *the marginal cost of natural
> materials is the cost to discover and recover the next share.* The
> physical origin of the good is irrelevant.
Equilibrium has Jack Shit to do with it. Nor does the "marginal cost".
The actual cost is the labor expended producing a consumable or a
commodity. The naturally occurring stuff is cost free. I am not real
sure why you refuse to know this, but you do.
Sean
"Michael Coburn" <mik...@verizon.net> wrote in message
news:ge3k8...@news3.newsguy.com...
Fixed Ideological Beliefs
and
Semantics
He knows what you mean, however in this conversation, he only has ONE
Perspective that is Valid for him.
Being *right* is far more important at this point in time.
Works both ways, btw. :)
Nature is NOT cost free when used by humans.
It is just not included in the illusory beliefs of *economics*.
Those beliefs are rapidly changing as we speak, and will produce a
co-dependent change in the economic models and the currently accepted
beliefs and cultural approaches to Life ---- eventually that is.
Publius
news:4905581a$0$31800$afc3...@news.optusnet.com.au:
> Fixed Ideological Beliefs
Only fixed until someone produces a valid refutation.
> and
>
> Semantics
>
> He knows what you mean, however in this conversation, he only has ONE
> Perspective that is Valid for him.
Of course I know what he means. What he means is mistaken.
Publius
>> That is why the clause "economically speaking" followed "would not
>> exist" (since we're speaking of the purpose of words).
>>
>> How a material came into physical existence is irrelevant to
>> economics.
>
> It is relevant because of incentive to produce it.
Only for goods which can be produced, in the sense of "brought into
physical existence." It is obviously not relevant to goods which cannot
be produced, or which can no longer be produced. Yet there are many such
goods valued and traded in the economy. Things, whether natural or
manmade, have no *economic* existence until they are brought into the
economy. There may be trillions of tons of gold on Mars, but it has no
economic existence.
> How commodities
> come into existence is most certainly relevant to their very
> existence.
What matters is that they exist, not how they came to exist. A hunter
may find a straight stick naturally cured and sharpened in a forest
fire. Or he may cure and sharpen a green stick himself. Both will
suffice equally well as spears, and will trade for the same price.
>> What matters is how it came into the economy --- how it became an
>> economic good available for use, for trade, etc. Natural materials
>> have no uses and no value until they are discovered; they have no
>> price and are not traded in any economy.
>
> What a play on words, again. Natural wilderness provides game and wild
> fruit. But to GET the game and wild fruit one must labor and the
> produce of that labor is called commodities or "goods".
Usually, yes. But a deer who has a sudden heart attack and dies in my
backyard will bring just as much in the market as a deer I spent 3 days
tracking and hunting. It will be just as much a "good." Neither will be
a good until it is available for use or trade.
>> They must be searched for, and once discovered, recovered and
>> introduced into the economy.
> No. I know exactly where the land is that is home to deer. I need not
> search for it and it isn't going anywhere.
That's because someone else has already done the searching for you.
> But the land and the wild deer and berries are naturally
> occurring and no labor was expended to "make" them.
Labor was expended to *discover* them --- usually a great deal, for most
natural goods. A good may be introduced into the economy --- made
available for use or trade --- by discovery or by manufacture. Labor is
required for both, and the quantity of labor (and other costs) required
to bring the next share to market --- the marginal cost --- will set the
floor for the market price.
>> At equilibrium, *the marginal cost of natural
>> materials is the cost to discover and recover the next share.* The
>> physical origin of the good is irrelevant.
>
> Equilibrium has Jack Shit to do with it. Nor does the "marginal
> cost". The actual cost is the labor expended producing a consumable
> or a commodity. The naturally occurring stuff is cost free. I am not
> real sure why you refuse to know this, but you do.
Heh. We seem to be back to your eclectic theory of cost. The "actual
cost" of any good is the combination of inputs --- land, labor, capital
--- required to bring that good to market.
Costs effect price only at equilibrium, when the the supply of a good
can be produced indefinitely to meet the demand in a competitive market.
At all other times price is demand-driven; any costs, labor or
otherwise, are irrelevant.
If you think the naturally occurring stuff is cost-free, you should go
grab some of the crude oil sure to exist --- somewhere --- beneath the
seafloor and haul it to market.
Errol
>
> And the voters wont be buying fools like you taxing that much more, you watch.- Hide quoted text -
>
Maybe he meant Asset tax "instead" of Income or Transaction based tax,
not "as well as"
Rod Speed
> Rod Speed <rod.speed....@gmail.com> wrote
>> Michael Coburn <mik...@verizon.net> wrote
>>> Publius wrote
>>>> BretC...@peoplepc.com wrote
>>>>> Some here have a problem with the gummint spreading wealth their way.
>>>> Not really. Most of us will see to it that our wealth is well out of
>>>> Obama's reach. Then the free lunchers can spread each other's wealth.
>>> I once proposed an assets tax (still do, actually) and some people
>>> said they'd simply hide their assets. And if you are stupid enough
>>> to bury gold in your back yard then you deserve the loss of interest
>>> you could have had on a real capital investment. One of the primary
>>> assets is land, and you won't be hiding it "out of reach".
>> And the voters wont be buying fools like you taxing that much more, you watch.
> Maybe he meant Asset tax "instead" of Income or Transaction based tax, not "as well as"
Irrelevant, the voters wont be buying that either.
Michael Coburn
> Michael Coburn <mik...@verizon.net> wrote in
> news:ge3k8...@news3.newsguy.com:
>
>>> That is why the clause "economically speaking" followed "would not
>>> exist" (since we're speaking of the purpose of words).
>>>
>>> How a material came into physical existence is irrelevant to
>>> economics.
>>
>> It is relevant because of incentive to produce it.
>
> Only for goods which can be produced, in the sense of "brought into
> physical existence."
BINGO!!! To me the word "goods" is an abbreviation of the word
"commodities" as that term is used by Adam Smith.
> It is obviously not relevant to goods which cannot
> be produced,
BINGO! Again!
> or which can no longer be produced. Yet there are many such
> goods valued and traded in the economy.
FACT!!! Cost is distinct from value.
> Things, whether natural or
> manmade, have no *economic* existence until they are brought into the
> economy. There may be trillions of tons of gold on Mars, but it has no
> economic existence.
How cute and utterly irrelevant. The Mars gold has no value. And it also
has no cost. That does not mean that cost and value are the same thing.
>> How commodities
>> come into existence is most certainly relevant to their very existence.
>
> What matters is that they exist, not how they came to exist.
As you say: Everything used to produce something is a "sunk cost". And
so in retrospect the production cost is irrelevant. The VALUE of
commodities is the replacement cost.
> A hunter
> may find a straight stick naturally cured and sharpened in a forest
> fire. Or he may cure and sharpen a green stick himself. Both will
> suffice equally well as spears, and will trade for the same price.
Yes. This is totally in line with Smith's version of "Labor Theory of
Value" that posits then the MARKET value of the stick is what it will
fetch or command in trade. And "cost" has nothing to do with market
value except as viewed by a buyer estimating his cost to acquire the
object. The LTV as proffered by Smith is in his discussion of produced
commodities and was not intended as a general value theory.
>>> What matters is how it came into the economy --- how it became an
>>> economic good available for use, for trade, etc. Natural materials
>>> have no uses and no value until they are discovered; they have no
>>> price and are not traded in any economy.
>>
>> What a play on words, again. Natural wilderness provides game and wild
>> fruit. But to GET the game and wild fruit one must labor and the
>> produce of that labor is called commodities or "goods".
>
> Usually, yes. But a deer who has a sudden heart attack and dies in my
> backyard will bring just as much in the market as a deer I spent 3 days
> tracking and hunting. It will be just as much a "good." Neither will be
> a good until it is available for use or trade.
Cost and value are two different concepts. The commodity markets assess
value primarily as replacement cost. The buyer obviously does not expect
a deer to walk into his arms and die of a heart attack.
>>> They must be searched for, and once discovered, recovered and
>>> introduced into the economy.
>
>> No. I know exactly where the land is that is home to deer. I need not
>> search for it and it isn't going anywhere.
>
> That's because someone else has already done the searching for you.
Ok. Fine. The location has a value. But the value is common knowledge
and therefore has no value in trade. It has become part of the common,
though not natural, resources.
>> But the land and the wild deer and berries are naturally occurring and
>> no labor was expended to "make" them.
>
> Labor was expended to *discover* them
Absolutely irrelevant.
> -- usually a great deal, for most
> natural goods. A good may be introduced into the economy --- made
> available for use or trade --- by discovery or by manufacture.
Simple discovery is irrelevant in most cases. The PRODUCTION of that
which is found is what matters.
> Labor is
> required for both, and the quantity of labor (and other costs) required
> to bring the next share to market --- the marginal cost --- will set the
> floor for the market price.
All of the activities you describe are PRODUCTION. All PRODUCTION has
cost. And all cost is labor. All PRODUCTION IS LABOR. But the
naturally occurring stuff has no cost. It just _IS_.
>>> At equilibrium, *the marginal cost of natural materials is the cost to
>>> discover and recover the next share.* The physical origin of the good
>>> is irrelevant.
>>
>> Equilibrium has Jack Shit to do with it. Nor does the "marginal cost".
>> The actual cost is the labor expended producing a consumable or a
>> commodity. The naturally occurring stuff is cost free. I am not real
>> sure why you refuse to know this, but you do.
>
> Heh. We seem to be back to your eclectic theory of cost. The "actual
> cost" of any good is the combination of inputs --- land, labor, capital
> --- required to bring that good to market.
Capital is PRODUCED by labor. So the only ingredients are LAND (natural
resources) and LABOR. The only thing needed to bring goods to market is
labor. The land (natural resources) either exist or not and no amount of
economic farting around will change it.
> Costs effect price only at equilibrium, when the the supply of a good
> can be produced indefinitely to meet the demand in a competitive market.
> At all other times price is demand-driven; any costs, labor or
> otherwise, are irrelevant.
More tap dancing with which no one will disagree. But it has virtually
nothing to do with the subject at hand. And the point of costs affecting
price is again a perception of cost (an estimate of cost) as opposed to
actual cost.
> If you think the naturally occurring stuff is cost-free, you should go
> grab some of the crude oil sure to exist --- somewhere --- beneath the
> seafloor and haul it to market.
That "grabbing" is called labor. None of this crap from you is going to
change the reality. There is no cost to natural abundance. It simply
_IS_. And all of your marginalist claptrap will not change that reality.
You can invent word games all you want and the oceans, the atmosphere,
and hard dry land and all will still exist totally free of any human
action whatsoever. Only the allocation of the natural abundance and the
stuff produced by labor are fit articles of economic discussion. The
great majority of economic rent is a fact of population contending for
these natural resources. The rent is allocative only and the disposition
of the rent is what is at issue in all cases. There is no economic
justification for the privatization of such rents.
Bret Cahill
>
> > Being an entrepreneurial type, I have a solution.
>
> > Send your share of redistributed wealth my way.
>
> > Email me for my palpay acct.
>
> > Bret Cahill
>
> Problem is that there wont be any wealth to send your way if you put
> the wealth creators out of business.
Working people are wealth creators.
> Higher taxes for the small business owners means they'll hire less
> people, reinvest less etc.
Higher taxes means they'll offshore less jobs.
> The less government involvement the better imo.
That's how we got into this mess in the 1st place.
> The government created the whole sub prime mortgage problem by
> encouraging the banks to give out bad loans by allowing the people
> like ACORN to bully banks and misguide people into buying into poor
> investments that they could never repay.
Average mean income is over $60.00/hr.
If you are making less than that you are either dumber than average or
getting ripped off or some combination thereof.
No matter how you respond I'm going to agree with you.
Bret Cahill
Publius
4bf8b0...@v15g2000hsa.googlegroups.com:
>> The government created the whole sub prime mortgage problem by
>> encouraging the banks to give out bad loans by allowing the people
>> like ACORN to bully banks and misguide people into buying into poor
>> investments that they could never repay.
>
> Average mean income is over $60.00/hr.
What does that have to do with the point made? What does the average income
have to do with *anything*?
Michael Coburn
>> > Some here have a problem with the gummint spreading wealth their way.
>>
>> > Being an entrepreneurial type, I have a solution.
>>
>> > Send your share of redistributed wealth my way.
>>
>> > Email me for my palpay acct.
>>
>> > Bret Cahill
>>
>> Problem is that there wont be any wealth to send your way if you put
>> the wealth creators out of business.
>
> Working people are wealth creators.
Productive people are wealth creators. The term "working people" has, in
the past, excluded a lot of truly SMALL business people such as
independent truckers, outside sales people, convenience store owners (not
a chain) and many others.
>> Higher taxes for the small business owners means they'll hire less
>> people, reinvest less etc.
>
> Higher taxes means they'll offshore less jobs.
There aren't any "higher taxes for small business owners". That is a
Republican lie.
>> The less government involvement the better imo.
There are some very strict limits to this. Companies that are to big to
fail are companies that are to damned big.
> That's how we got into this mess in the 1st place.
Yup.
>> The government created the whole sub prime mortgage problem by
>> encouraging the banks to give out bad loans by allowing the people like
>> ACORN to bully banks and misguide people into buying into poor
>> investments that they could never repay.
That has got to be the biggest whopper the RNC ever has come up with.
What started out as the "Community Reinvestment Act" was turned into a
housing bubble by the Republicans by virtue of the George Bush "American
Downpayment Act" and the Bush initiatives to increase minority home
ownership and the total non regulation of the financial sector.
> Average mean income is over $60.00/hr.
>
> If you are making less than that you are either dumber than average or
> getting ripped off or some combination thereof.
>
> No matter how you respond I'm going to agree with you.
>
>
> Bret Cahill
There will be no response.
Publius
>>> It is relevant because of incentive to produce it.
>> Only for goods which can be produced, in the sense of "brought into
>> physical existence."
> BINGO!!! To me the word "goods" is an abbreviation of the word
> "commodities" as that term is used by Adam Smith.
>> It is obviously not relevant to goods which cannot
>> be produced,
> BINGO! Again!
>> or which can no longer be produced. Yet there are many such
>> goods valued and traded in the economy.
> FACT!!! Cost is distinct from value.
I believe we agree on that. But what does it have to do with the
question at hand, which was what is required qualify something as a
"good" for economic purposes?
>> Things, whether natural or
>> manmade, have no *economic* existence until they are brought into the
>> economy. There may be trillions of tons of gold on Mars, but it has
>> no economic existence.
>
> How cute and utterly irrelevant. The Mars gold has no value. And it
> also has no cost. That does not mean that cost and value are the same
> thing.
I agree, but that is not the question. The question is, as above, When
does an item, whether natural or manmade, become a "good"?
Let's get back to basics here. A "good" (for purposes of economics) is
anything, whether tangible or intangible, natural or manmade, which
satisfies a desire of an agent, and which is available to agents to use
or trade. It becomes a good when it becomes available for use or trade,
regardless of when or how it came into physical existence.
>> What matters is that they exist, not how they came to exist.
>
> As you say: Everything used to produce something is a "sunk cost".
> And so in retrospect the production cost is irrelevant. The VALUE of
> commodities is the replacement cost.
No. We've been over this.
The *value* of a good X is the highest-ranking good Y an agent will give
up to obtain X.
The *cost* of a good X is whatever the agent has actually given up to
obtain X. The replacement cost of X is whatever the agent would have to
give up *now* to replace X. It may be above or below the value of X to
the agent.
>> A hunter
>> may find a straight stick naturally cured and sharpened in a forest
>> fire. Or he may cure and sharpen a green stick himself. Both will
>> suffice equally well as spears, and will trade for the same price.
> Yes. This is totally in line with Smith's version of "Labor Theory of
> Value" that posits then the MARKET value of the stick is what it will
> fetch or command in trade.
Yes. (I prefer "market price" to avoid confusion with "value" as above
defined).
> And "cost" has nothing to do with market
> value except as viewed by a buyer estimating his cost to acquire the
> object.
The buyer's cost will be whatever *he* is required to give up. He is not
concerned with what the present owner, the seller, had to give up.
>> Usually, yes. But a deer who has a sudden heart attack and dies in my
>> backyard will bring just as much in the market as a deer I spent 3
>> days tracking and hunting. It will be just as much a "good." Neither
>> will be a good until it is available for use or trade.
> Cost and value are two different concepts. The commodity markets
> assess value primarily as replacement cost. The buyer obviously does
> not expect a deer to walk into his arms and die of a heart attack.
Commodity markets do not set values; they set prices. A price is set
based on the *estimated marginal cost*, i.e., the cost to bring the next
share to market. That establishes a *floor price*. The seller or
producer must believe there will be a demand at that price, or he will
not bring another share to market. How it is actually priced will depend
upon the competitive environment when that share reaches the market.
>>> No. I know exactly where the land is that is home to deer. I need
>>> not search for it and it isn't going anywhere.
>> That's because someone else has already done the searching for you.
> Ok. Fine. The location has a value. But the value is common
> knowledge and therefore has no value in trade. It has become part of
> the common, though not natural, resources.
It is "common knowledge" only because someone discovered that resource
and disseminated that knowledge. Common knowledge of its location,
however, certainly doesn't make the land (or other natural good) itself
part of any common resource or ownership. All of my neighbors know where
my house is, and where I park my car. That knowledge does not endow them
with a common ownership in them.
>>> But the land and the wild deer and berries are naturally occurring
>>> and no labor was expended to "make" them.
>> Labor was expended to *discover* them
> Absolutely irrelevant.
That is an astounding claim. Why is labor relevant when expended to
build a house, but not when expended to find a petroleum deposit?
That makes no sense, Michael. Without the expenditure of effort, there
would be no more petroleum available for anyone's use than houses. You
would have use of whatever petroleum seeped up from the ground where you
happened to be, just as you would have use of whatever cave might be
nearby for shelter. I.e., you would enjoy the standard of living of
animals.
> Simple discovery is irrelevant in most cases. The PRODUCTION of that
> which is found is what matters.
The market certainly doesn't consider it irrelevant. A mineral or
petroleum deposit acquires a value in the market --- it will trade in
the market for a positive price --- as soon as its location, along with
an reliable estimate of its extent --- is known. Your claim here is
simply factually false. A known oil deposit has a value *in the ground*.
It has a higher value *at the wellhead*, a higher value still *at the
refinery*, and still higher value at the service station.
>> Labor is required for both [discovery and manufacture], and the
>> quantity of labor (and other costs) required to bring the next share
>> to market --- the marginal cost --- will set the floor for the market
>> price.
> All of the activities you describe are PRODUCTION. All PRODUCTION has
> cost. And all cost is labor. All PRODUCTION IS LABOR. But the
> naturally occurring stuff has no cost. It just _IS_.
Well, you can certainly describe discovery costs as part of production
costs; that's fair enough. But you surely can't claim they are
"irrelevant."
You're also right that naturally occurring stuff "just IS," and has no
cost --- *as is*. But it also has no value, it is not an economic good,
"as is." It is *useless* "as is," i.e., undiscovered and unrecovered. It
confers no benefits on anyone and cannot be traded. It does not appear
on anyone's balance sheet or contribute to any nation's GDP. For
economic purposes it does not exist.
>> Heh. We seem to be back to your eclectic theory of cost. The "actual
>> cost" of any good is the combination of inputs --- land, labor,
>> capital --- required to bring that good to market.
> Capital is PRODUCED by labor. So the only ingredients are LAND
> (natural resources) and LABOR. The only thing needed to bring goods
> to market is labor. The land (natural resources) either exist or not
> and no amount of economic farting around will change it.
It requires labor to bring the land to market also. Its mere physical
existence is what is irrelevant to the economy, until it is brought to
market.
The LTV (which I think we'd agree would be better described as the
"labor theory of costs") is true to this extent: all payments made in an
economy are payments to persons, not payments to "nature" or God. They
are payments for services rendered or goods delivered. The prices
charged and paid, however, cannot be plausibly traced to labor, unless
you count all payments to persons as "labor;" they also reflect the
subjective values placed on the goods by both buyer and seller. As we
discussed earlier, there is no correlation between the price asked and
paid for a first edition of *Moby Dick* and the labor Melville invested
in writing it or the labor invested by others in printing it.
Values of goods are subjective. That means that the prices buyers will
be willing to pay for a good are also subjective. The prices paid are
the *costs* of the good; hence costs are also subjective. Rather than
labor determining the values or costs of goods, it is the other way
around: the subjective value placed on a good by a buyer will determine
the value of the labor required to produce that good, and thus the price
he will be willing to pay for that labor. That is why the labor of an MD
is worth more than the labor of a janitor.
Labor is a commodity like any other. The basis for its value is the same
as that of a machine; its value is given by the value of the goods it
can produce. And those values are subjective.
>> If you think the naturally occurring stuff is cost-free, you should
>> go grab some of the crude oil sure to exist --- somewhere --- beneath
>> the seafloor and haul it to market.
>
> That "grabbing" is called labor.
Of course it is! Now you have to explain why that labor need not be paid
for.
> There is no cost to natural abundance. It simply _IS_.
Agree. But natural materials "as is" --- undiscovered and unrecovered
--- are useless and worthless.
> You can invent word games all you want and the oceans, the atmosphere,
> and hard dry land and all will still exist totally free of any human
> action whatsoever.
True of the oceans and atmosphere, but not land. That is why no one has
to pay to use the atmosphere or the oceans. But every acre of land,
every mineral deposit, every stand of timber, had to be discovered and
explored by someone, who made its resources known and available for
others to use. Every curious tribesman who set off to see what lay over
the next ridge expanded the human resource base. So did every early
farmer who discovered what kinds of soil would grow various crops, and
the hunters who discovered that certain kinds of rocks, when heated,
yielded droplets of metal which could be hammered into spear points;
they found new resources where others had seen only dirt.
Natural materials "just are," as you say. But for most of them to become
resources, a great deal of human action was required, and still is.
> The great majority of economic rent is a fact of population contending
> for these natural resources.
Without human action there would be no resources to contend for (or very
few).
Bret Cahill
>
> > Being an entrepreneurial type, I have a solution.
>
> > Send your share of redistributed wealth my way.
>
> > Email me for my palpay acct.
>
> > Bret Cahill
>
> let's be clear about this. you want the state to send armed thugs to
> my home to take my property by force.
I don't see anyone holding a gun to yer head forcing you to remain in
the collectively
acquired, collectively defended territory of the U. S. and pay taxes.
You can leave anytime.
Call 1-800-FLY-4-LESS and book the next one way flight to Mogadishu in
low tax Somalia.
Libertaria is breaking out!
Bret Cahill
Publius
>>> The government created the whole sub prime mortgage problem by
>>> encouraging the banks to give out bad loans by allowing the people
>>> like ACORN to bully banks and misguide people into buying into poor
>>> investments that they could never repay.
> That has got to be the biggest whopper the RNC ever has come up with.
> What started out as the "Community Reinvestment Act" was turned into a
> housing bubble by the Republicans by virtue of the George Bush
> "American Downpayment Act" and the Bush initiatives to increase
> minority home ownership and the total non regulation of the financial
> sector.
Are you kidding? That stupid program was passed by both houses of Congress
*unanimously*. It no doubt contributed to the bubble, but the subprime
loans which launched it, and whose defaults punctured it, are due to the
CRA and the Clinton admin's orders to Fannie and Freddy to buy, package,
"guarantee," and market those crappy loans. Those GSEs held or guaranteed
$1.4 *trillion* in subprime loans when they bit the dust.
It is pointless to try to pin blame on Dems or Repubs. They are all
politicians, and thus all in the free-lunch business. They'll all hand out
free lunches wherever they think it will buy them some votes.
They don't even learn from their own mistakes. In the 1960s, in a similar
nitwit scheme to "increase homeownership," the Johnson admin created the
FHA 235 housing program, which financed no-downpayment, subsidized loans
for "disadvantaged" buyers. When the default rate hit 18%, compared to the
normal 1-2% for standard mortgages, with many of the foreclosed homes
trashed by their occupants, Congress killed the program.
But, hey, we congresscritters need votes today! Nobody will remember
gagging on the free lunches of the 70s!
Logician
> Some here have a problem with the gummint spreading wealth their way.
>
> Being an entrepreneurial type, I have a solution.
>
> Send your share of redistributed wealth my way.
>
> Email me for my palpay acct.
>
> Bret Cahill
Or just send extra money to Obama so he can re-distribute the money
whilst starting a war.
And Europeans thought Bush was the dumbest American.
Bret Cahill
It just gets reinserted.
> >> The government created the whole sub prime mortgage problem by
> >> encouraging the banks to give out bad loans by allowing the people
> >> like ACORN to bully banks and misguide people into buying into poor
> >> investments that they could never repay.
>
> > Average mean income is over $60.00/hr.
>
> What does that have to do with the point made?
Well we'll just have to reinsert the rest of the post to find out:
<beginnning of cut/snip>
> > Some here have a problem with the gummint spreading wealth their way.
> > Being an entrepreneurial type, I have a solution.
> > Send your share of redistributed wealth my way.
> > Email me for my palpay acct.
> > Bret Cahill
> Problem is that there wont be any wealth to send your way if you put
> the wealth creators out of business.
Working people are wealth creators.
> Higher taxes for the small business owners means they'll hire less
> people, reinvest less etc.
Higher taxes means they'll offshore less jobs.
> The less government involvement the better imo.
That's how we got into this mess in the 1st place.
> The government created the whole sub prime mortgage problem by
> encouraging the banks to give out bad loans by allowing the people
> like ACORN to bully banks and misguide people into buying into poor
> investments that they could never repay.
Average mean income is over $60.00/hr.
If you are making less than that you are either dumber than average
or
getting ripped off or some combination thereof.
No matter how you respond I'm going to agree with you.
> What does the average income
> have to do with *anything*?
Try reading the header.
Bret Cahill
Bret Cahill
> >> the wealth creators out of business.
> > Working people are wealth creators.
> Productive people are wealth creators. �
That excludes the landowner who makes all his money from renting land.
> The term "working people" has, in
> the past, excluded a lot of truly SMALL business people such as
> independent truckers, outside sales people, convenience store owners (not
> a chain) and many others.
My definition includes Warren Buffet as well as SBO.
> >> Higher taxes for the small business owners means they'll hire less
> >> people, reinvest less etc.
> > Higher taxes means they'll offshore less jobs.
> There aren't any "higher taxes for small business owners". �That is a
> Republican lie.
Thanks for catching that one. Repugs have so many lies, deceptions
and scams they can overwhelm the opposition.
> >> The less government involvement the better imo.
>
> There are some very strict limits to this. �Companies that are to big to
> fail are companies that are to damned big.
>
> > That's how we got into this mess in the 1st place.
>
> Yup.
>
> >> The government created the whole sub prime mortgage problem by
> >> encouraging the banks to give out bad loans by allowing the people like
> >> ACORN to bully banks and misguide people into buying into poor
> >> investments that they could never repay.
>
> That has got to be the biggest whopper the RNC ever has come up with. �
> What started out as the "Community Reinvestment Act" was turned into a
> housing bubble by the Republicans by virtue of the George Bush "American
> Downpayment Act" and the Bush initiatives to increase minority home
> ownership and the total non regulation of the financial sector.
>
> > Average mean income is over $60.00/hr.
>
> > If you are making less than that you are either dumber than average or
> > getting ripped off or some combination thereof.
>
> > No matter how you respond I'm going to agree with you.
> There will be no response.
How about, "no matter how you respond I'm not going to disagree with
you."
? ? ?
Bret Cahill
Bret Cahill
>
> > Being an entrepreneurial type, I have a solution.
>
> > Send your share of redistributed wealth my way.
>
> > Email me for my palpay acct.
>
> > Bret Cahill
>
> Or just send extra money to Obama so he can re-distribute the money
> whilst starting a war.
Obama will be ending the ultramoronic Repug quagmire that didn't work
domestically to help Repugs cut and gut social security.
> And Europeans thought Bush was the dumbest American.
Ain't nuthin' dumber than Rove's,
"If you don't support tax cuts for the rich, you're a Saddam lover."
Bret Cahill
orang...@googlemail.com
'give us your money or get out of town.'
the basis of socialism is violence and bullying.
Publius
71c2ff...@i20g2000prf.googlegroups.com:
> Try to cut/snip context and guess what?
>
> It just gets reinserted.
>
>> >> The government created the whole sub prime mortgage problem by
>> >> encouraging the banks to give out bad loans by allowing the people
>> >> like ACORN to bully banks and misguide people into buying into poor
>> >> investments that they could never repay.
>>
>> > Average mean income is over $60.00/hr.
>>
>> What does that have to do with the point made?
>
> Well we'll just have to reinsert the rest of the post to find out:
Repeating irrelevancies does not make them more relevant.
>> What does the average income
>> have to do with *anything*?
>
> Try reading the header.
Header: "If You Don't Like Wealth Spread Your Way, Just Send It To Me."
So, again, what does the average income have to do with anything? For
example, what does the average income have to do with Bret's income? Or any
particular person's?
Michael Coburn
All of that strutting marginal claptrap does not alter the outcome. The
buyers will decide how much they will pay. That has nothing to do with
the "producers" and what kind of silly crap they want to indulge in. The
producer's costs have nothing to do with prices or MARKET values.
>>>> No. I know exactly where the land is that is home to deer. I need
>>>> not search for it and it isn't going anywhere.
>
>>> That's because someone else has already done the searching for you.
>
>> Ok. Fine. The location has a value. But the value is common
>> knowledge and therefore has no value in trade. It has become part of
>> the common, though not natural, resources.
>
> It is "common knowledge" only because someone discovered that resource
> and disseminated that knowledge. Common knowledge of its location,
> however, certainly doesn't make the land (or other natural good) itself
> part of any common resource or ownership. All of my neighbors know where
> my house is, and where I park my car. That knowledge does not endow them
> with a common ownership in them.
Nice leap. The point is that the knowledge of the location has no market
value. The place itself most certainly has value but the "discovery" of
it has become irrelevant. The discovery value has long since passed into
the public/common domain.
>>>> But the land and the wild deer and berries are naturally occurring
>>>> and no labor was expended to "make" them.
>
>>> Labor was expended to *discover* them
>
>> Absolutely irrelevant.
>
> That is an astounding claim. Why is labor relevant when expended to
> build a house, but not when expended to find a petroleum deposit?
> That makes no sense, Michael. Without the expenditure of effort, there
> would be no more petroleum available for anyone's use than houses. You
> would have use of whatever petroleum seeped up from the ground where you
> happened to be, just as you would have use of whatever cave might be
> nearby for shelter. I.e., you would enjoy the standard of living of
> animals.
Petroleum is tough, but if this was easy anybody could do it. I will
address it at the end because it is not simple like you.
>> Simple discovery is irrelevant in most cases. The PRODUCTION of that
>> which is found is what matters.
>
> The market certainly doesn't consider it irrelevant. A mineral or
> petroleum deposit acquires a value in the market --- it will trade in
> the market for a positive price --- as soon as its location, along with
> an reliable estimate of its extent --- is known. Your claim here is
> simply factually false. A known oil deposit has a value *in the ground*.
> It has a higher value *at the wellhead*, a higher value still *at the
> refinery*, and still higher value at the service station.
See below.
>>> Labor is required for both [discovery and manufacture], and the
>>> quantity of labor (and other costs) required to bring the next share
>>> to market --- the marginal cost --- will set the floor for the market
>>> price.
>
>> All of the activities you describe are PRODUCTION. All PRODUCTION has
>> cost. And all cost is labor. All PRODUCTION IS LABOR. But the
>> naturally occurring stuff has no cost. It just _IS_.
>
> Well, you can certainly describe discovery costs as part of production
> costs; that's fair enough. But you surely can't claim they are
> "irrelevant."
>
> You're also right that naturally occurring stuff "just IS," and has no
> cost --- *as is*. But it also has no value, it is not an economic good,
> "as is." It is *useless* "as is," i.e., undiscovered and unrecovered. It
> confers no benefits on anyone and cannot be traded. It does not appear
> on anyone's balance sheet or contribute to any nation's GDP. For
> economic purposes it does not exist.
There you go again, blathering about value and trying to tie it to cost
while at the same time trying to say it ain't so. I would think you'd
get dizzy or rip your underwear.
>>> Heh. We seem to be back to your eclectic theory of cost. The "actual
>>> cost" of any good is the combination of inputs --- land, labor,
>>> capital --- required to bring that good to market.
>
>> Capital is PRODUCED by labor. So the only ingredients are LAND
>> (natural resources) and LABOR. The only thing needed to bring goods to
>> market is labor. The land (natural resources) either exist or not and
>> no amount of economic farting around will change it.
>
> It requires labor to bring the land to market also. Its mere physical
> existence is what is irrelevant to the economy, until it is brought to
> market.
BWAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAAHA!!!!!!!!!!!!!!!!!!!!!!!!!!
Go out and lasso me some land, will ya?
> The LTV (which I think we'd agree would be better described as the
> "labor theory of costs") is true to this extent: all payments made in an
> economy are payments to persons, not payments to "nature" or God. They
> are payments for services rendered or goods delivered. The prices
> charged and paid, however, cannot be plausibly traced to labor, unless
> you count all payments to persons as "labor;" they also reflect the
> subjective values placed on the goods by both buyer and seller. As we
> discussed earlier, there is no correlation between the price asked and
> paid for a first edition of *Moby Dick* and the labor Melville invested
> in writing it or the labor invested by others in printing it.
As I have said in the actual "Labor Theory of Cost", "seemingly
successful attacks on "Labor Theory of Cost" (LTC) will be waged through
attacks on the Marx "Labor Theory of Value" (LTV)". The Smith version
holds only for commodities and undeniably assesses value as replacement
costs. Yet Smith is still incorrect to attempt to draw a direct
relationship between cost and value.
> Values of goods are subjective. That means that the prices buyers will
> be willing to pay for a good are also subjective. The prices paid are
> the *costs* of the good; hence costs are also subjective. Rather than
> labor determining the values or costs of goods, it is the other way
> around: the subjective value placed on a good by a buyer will determine
> the value of the labor required to produce that good, and thus the price
> he will be willing to pay for that labor. That is why the labor of an MD
> is worth more than the labor of a janitor.
>
> Labor is a commodity like any other. The basis for its value is the same
> as that of a machine; its value is given by the value of the goods it
> can produce. And those values are subjective.
Natural resources, Algebra, Language, Calculus, or the location of
Publius' home are not currently "produced". These things exist and are
cost free other then the individual effort to learn them. Therefore,
"the subjective value placed on a good by a buyer will determine the
value of the labor required to produce that good, and thus the price
he will be willing to pay for that labor", is at best misleading. It
infers that all things are produced by labor or could be so produced and
we know that (other than individual learning) this proposition is simply
false. (petroleum problem addressed later)
>>> If you think the naturally occurring stuff is cost-free, you should go
>>> grab some of the crude oil sure to exist --- somewhere --- beneath the
>>> seafloor and haul it to market.
>>
>> That "grabbing" is called labor.
>
> Of course it is! Now you have to explain why that labor need not be paid
> for.
What a preposterous statement. See below.
>> There is no cost to natural abundance. It simply _IS_.
>
> Agree. But natural materials "as is" --- undiscovered and unrecovered
> --- are useless and worthless.
>
>> You can invent word games all you want and the oceans, the atmosphere,
>> and hard dry land and all will still exist totally free of any human
>> action whatsoever.
>
> True of the oceans and atmosphere, but not land. That is why no one has
> to pay to use the atmosphere or the oceans. But every acre of land,
> every mineral deposit, every stand of timber, had to be discovered and
> explored by someone, who made its resources known and available for
> others to use.
Garbage. Please look at a world globe from 100 years ago. No person
alive today made any contribution to the maps on that globe and there has
been little if any change. And when I buy a map I am buying the labor of
the printers of the map, not the efforts of Louis and Clark or your great
granddaddy.
> Every curious tribesman who set off to see what lay over
> the next ridge expanded the human resource base. So did every early
> farmer who discovered what kinds of soil would grow various crops, and
> the hunters who discovered that certain kinds of rocks, when heated,
> yielded droplets of metal which could be hammered into spear points;
> they found new resources where others had seen only dirt.
>
> Natural materials "just are," as you say. But for most of them to become
> resources, a great deal of human action was required, and still is.
Was required is actually true. But that investment has long since
recovered its costs and returned its profits. The location of the land
and the natural benefits thereof are no longer a true subject of
"discovery". These are currently only "development". (see below)
>> The great majority of economic rent is a fact of population contending
>> for these natural resources.
>
> Without human action there would be no resources to contend for (or very
> few).
Yet another totally preposterous statement.
It is understood that there is oil in the ANWR and that there is oil
beneath the sea in the OCS. That is common knowledge and it is free and
without market value. The actual development of this resource will
involve what the oil people like to call "exploration". But that is
nothing like some dudes setting out in boats to find a rout to the Indies
and blundering upon "the new world" and Louis a Clark attempting to mark
out the west (for a profit?).
The oil in the ANWR and the OCS is currently controlled by the United
States government supposedly to the benefit of all citizens equally. And
though this may not pass your own muster for the word "ownership" it
probably would for the vast majority of sentient beings. In the case of
the oil we discuss not how to "discover" it (we know it is there), but
how to "develop it", because the geologists tell us that the stuff is
there. The United States government should contract the oil field
services companies to do the seismic surveys and to drill the exploratory
wells while retaining full ownership of the oil in the name of the people
of the United States. This will have made the point concerning labor =
cost most reliably I would think. The Value of the oil is whatever the
market will bear. The cost is the DEVELOPMENT and PRODUCTION of the oil.
Michael Coburn
> Michael Coburn <mik...@verizon.net> wrote in
> news:ge5u6...@news5.newsguy.com:
>
>>>> The government created the whole sub prime mortgage problem by
>>>> encouraging the banks to give out bad loans by allowing the people
>>>> like ACORN to bully banks and misguide people into buying into poor
>>>> investments that they could never repay.
>
>> That has got to be the biggest whopper the RNC ever has come up with.
>> What started out as the "Community Reinvestment Act" was turned into a
>> housing bubble by the Republicans by virtue of the George Bush
>> "American Downpayment Act" and the Bush initiatives to increase
>> minority home ownership and the total non regulation of the financial
>> sector.
>
> Are you kidding? That stupid program was passed by both houses of
> Congress *unanimously*. It no doubt contributed to the bubble, but the
> subprime loans which launched it, and whose defaults punctured it, are
> due to the CRA and the Clinton admin's orders to Fannie and Freddy to
> buy, package, "guarantee," and market those crappy loans. Those GSEs
> held or guaranteed $1.4 *trillion* in subprime loans when they bit the
> dust.
Fact: The Gingrich Republican Congress did this in 1999 as a part of the
greed based Gramm-Leach-Blily act that did away with Glass-Steagall. Buo
more to the point, Clinton's HUD warned Fannie Mae that It would not
credit Fannie Mae for overpriced loans. (these were many of the higher
risk thus very high interest rate sub-prime loans). And even more to the
point, HUD and the administration passed into the hands of the
Republicans in 2001. That was 7 &@%$$#%^#* years ago and for or 6 of the
7 years the Republicans had total control of the government. If these
policies were bad then the lying pig Republicans had the power to change
them. But they didn't. They pressed the pedal to the metal and blew the
biggest bubble in history.
> It is pointless to try to pin blame on Dems or Repubs. They are all
> politicians, and thus all in the free-lunch business. They'll all hand
> out free lunches wherever they think it will buy them some votes.
This SHIT would not have gotten out of control if the grownups had been
in charge.
> They don't even learn from their own mistakes. In the 1960s, in a
> similar nitwit scheme to "increase homeownership," the Johnson admin
> created the FHA 235 housing program, which financed no-downpayment,
> subsidized loans for "disadvantaged" buyers. When the default rate hit
> 18%, compared to the normal 1-2% for standard mortgages, with many of
> the foreclosed homes trashed by their occupants, Congress killed the
> program.
YES!!! BINGO!! BINGO!!! Rah, rah rah __ ** SIX &*&*^%^%^&* YEARS
THESE ASSHOLES HAD TO GET IT FIXED IF IT WAS BUSTED (which in its limited
scope it was not) **
> But, hey, we congresscritters need votes today! Nobody will remember
> gagging on the free lunches of the 70s!
The WOP was a total failure in my opinion but the CRA was a very limited
program that did not cause the current disaster:
-Robert Gordon, American Prospect
>
I have been meaning to get back to this issue, but events in the market
have kept me a tad busy.
Making the rounds amongst a certain subset of wingnuts on CNBC, at IBD
and other selfconfoozled folks has been the meme that the entire housing
and credit crisis traces to the the Community Reinvestment Act (CRA) of
1977. An alternative zombie myth is the credit crisis is due to Fannie
Mae and Freddie Mac. A 1999 article from the New York Times about the
GSE's role in subprime mortgages has been circulating as if its the
rosetta stone of the credit crisis.
These memes have become a rallying cry -- cognitive dissonance writ large
-- of those folks who have been pushing for greater and greater
deregulation, and are now attempting to disown the results of their
handiwork.
I feel compelled to set the record straight about this
pseudo-intellectual detritus. As we have painstakingly discussed over the
past few years, there were many direct and indirect causes of the current
financial mess.
Let's clarify the causes of current circumstances. Ask yourself the
following questions about the impact of the Community Reinvestment Act
and/or the role of Fannie & Freddie:
• Did the 1977 legislation, or any other legislation since,
require banks to not verify income or payment history of mortgage
applicants?
• 50% of subprime loans were made by mortgage service companies
not subject comprehensive federal supervision; another 30% were made by
banks or thrifts which are not subject to routine supervision or
examinations. How was this caused by either CRA or GSEs ?
• What about "No Money Down" Mortgages (0% down payments) ? Were
they required by the CRA? Fannie? Freddie?
• Explain the shift in Loan to value from 80% to 120%: What was it
in the Act that changed this traditional lending requirement?
• Did any Federal legislation require real estate agents and
mortgage writers to use the same corrupt appraisers again and again? How
did they manage to always come in at exactly the purchase price, no
matter what?
• Did the CRA require banks to develop automated underwriting (AU)
systems that emphasized speed rather than accuracy in order to process
the greatest number of mortgage apps as quickly as possible?
• How exactly did legislation force Moody's, S&Ps and Fitch to
rate junk paper as Triple AAA?
• What about piggy back loans? Were banks required by Congress to
lend the first mortgage and do a HELOC for the down payment -- at the
same time?
• Internal bank memos showed employees how to cheat the system to
get poor mortgages prospects approved that shouldn't have been: Titled
How to Get an "Iffy" loan approved at JPM Chase. (Was circulating that
memo also a FNM/FRE/CRA requirement?)
Caseshillerpricedeclines_2
• The four biggest problem areas for housing (by price decreases)
are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San Diego,
California. Explain exactly how these affluent, non-minority regions were
impacted by the Community Reinvesment Act ?
• Did the GSEs require banks to not check credit scores? Assets?
Income?
• What was it about the CRA or GSEs that mandated fund managers
load up on an investment product that was hard to value, thinly traded,
and poorly understood
• What was it in the Act that forced banks to make "interest only"
loans? Were "Neg Am loans" also part of the legislative requirements
also?
• Consider this February 2003 speech by Countrywide CEO Angelo
Mozlilo at the American Bankers National Real Estate Conference. He
advocated zero down payment mortgages -- was that a CRA requirement too,
or just a grab for more market share, and bad banking?
The answer to all of the above questions is no, none, and nothing at all.
The CRA is not remotely one of the proximate causes of the current credit
crunch, Housing collapse,and mortgage debacle. As I detailed in Barron's,
there is plenty of things to be angry at D.C. about -- but this ain't one
of them.
If you were to ask me to reveal the prime causative factor for the
Housing boom, I would point you to Fed Chairman Greenspan taking rates to
1%, and then leaving them there for a year. The prime factor in the bust
was nonfeasance on the Fed's part in supervising bank lending, allowing
banks to give money to people who couldn't possibly pay it back.
The root legislative cause of the credit crisis was excessive
deregulation. From exempting derivatives from regulation (2000
Commodities Futures Modernization Act) to failing to adequately oversee
ratings agencies that slapped a triple AAA on junk paper, the pendulum
swung too far away from reasonable oversight. By taking the refs off of
the field and erroneously expecting market participants could
self-regulate, the powers that be in DC gave the players on Wall Street
enough rope to hang themselves with -- which they promptly did.
There are too many people who are trying to duck responsibility for the
current mess, and seeking to place blame elsewhere. I find this to be
terribly important, as we seek to repair the damage amidst an economic
crisis. Rather than objectively evaluate the present crisis in an attempt
to craft an appropriate response, the partisan hacks are trying to
obscure the causes of the current situation. Like burglars trying to
destroy the surveillance tape, they are all too aware of their role in
the present debacle.
Shame on them for their foolishness or cowardice.
Whenever I see a CRA proponent blathering, I have a "Star Trek moment."
That's when Captain Kirk proves to some random alien computer that its
basic programming is logically inconsistent. It's the AI (artificial
intelligence) version of cognitive dissonance. The computer, recognizing
the fraud its entire existence was based upon, seeing the futility of its
belief system, at least has the dignity to blow itself up. No such luck
with the wingnuts, who merely move on to their next piece of spin . . .
"You can fool some of the people some of the time and some of the
people all of the time. That's usually enough."
-MILTON BERLE
~~~
Note in the Sources section, we have a few subtopics: "Sources" is what I
use to show where data, quotes and charts are from. "Previously"
discusses commentary on this subject we have written in the past.
"Related" is a good jumping off point for further reading; lastly,
Consistently Wrongis where we point out the willfully misleading tripe
written by people who should know better, but publish nonsense anyway. In
the case where it appears some are trying to mislead the public, the
least we can do is call them out.
Previously:
A Memo Found in the Street
Uncle Sam the enabler
BARRY L. RITHOLTZ
MONDAY, SEPTEMBER 29, 2008
http://online.barrons.com/article/SB122246742997580395.html Download A
Memo Found.pdf (PDF)
The Ongoing Impact of the Housing Sector Barry Ritholtz Investor Insight,
Aug 27 2007, 11:50 AM
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/
rchive/2007/08/27/the-ongoing-impact-of-the-housing-sector.aspx
Real Estate and the Post-Crash Economy Barry Ritholtz Thoughts from the
Frontline,December 29, 2006
http://www.2000wave.com/article.asp?id=mwo122906
Related:
Community Reinvestment Act had nothing to do with subprime crisis Aaron
Pressman
BusinessWeek, September 29
http://www.businessweek.com/investing/insights/blog/archives/2008/09/
ommunity_reinv.html
It's Still Not CRA
Ellen Seidman
New America Foundation, September 22, 2008 - 9:36pm
http://www.newamerica.net/blog/asset-building/2008/its-still-not-
ra-7222
“The Community Reinvestment Act: Thirty Years of Accomplishments, But
Challenges Remain”
Prepared Testimony of Michael S. Barr Professor of Law, University of
Michigan Law School Before the Committee on Financial Services U.S. House
of Representatives, February 13, 2008
http://tinyurl.com/CRA-Michael-S-Barr-testimony
The GOP Blames the Victim
Capitalism sure is fragile if subprime borrowers can ruin it. THOMAS
FRANK
WSJ, OCTOBER 1, 2008
http://online.wsj.com/article/SB122282690823092989.html
Did Liberals Cause the Sub-Prime Crisis? Robert Gordon The American
Prospect, April 7, 2008
http://www.prospect.org/cs/articles?
rticle=did_liberals_cause_the_subprime_crisis
After the Deal, the Focus Will Shift to Regulation FLOYD NORRIS NYT
September 28, 2008
http://www.nytimes.com/2008/09/29/business/29norris.html
Consistently Wrong:
Don't Blame the Markets
JERRY BOWYER
NY Sun, April 18, 2008
http://www.nysun.com/opinion/dont-blame-the-markets/74903/
How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable TERRY
JONES
INVESTOR'S BUSINESS DAILY, September 24, 2008 4:30 PM
http://www.ibdeditorials.com/IBDArticles.aspx?id=307149667289804
Wingnuttery on CNBC
TBP, Wednesday, September 17, 2008
Michelle Caruso Caberra
http://bigpicture.typepad.com/comments/2008/09/wingnuttery-on.html
IT’S NOT JUST THE LENDERS
There has been plenty of talk about “predatory lending,” but
“predatory
borrowing” may have been the bigger problem. TYLER COWEN NYT, January
13,
2008
http://www.nytimes.com/2008/01/13/business/13view.html
Publius
>> Are you kidding? That stupid program was passed by both houses of
>> Congress *unanimously*. It no doubt contributed to the bubble, but
>> the subprime loans which launched it, and whose defaults punctured
>> it, are due to the CRA and the Clinton admin's orders to Fannie and
>> Freddy to buy, package, "guarantee," and market those crappy loans.
>> Those GSEs held or guaranteed $1.4 *trillion* in subprime loans when
>> they bit the dust.
>
> Fact: The Gingrich Republican Congress did this in 1999 as a part of
> the greed based Gramm-Leach-Blily act that did away with
> Glass-Steagall. Buo more to the point, Clinton's HUD warned Fannie Mae
> that It would not credit Fannie Mae for overpriced loans.
The GLBA was definitely a factor. Why? Because it tied the
liberalizations on banking to satisfactory CRA ratings. So, to enter one
of these newly-allowed lines of business, the bank had to make more
crappy loans.
The GSEs could not buy "overpriced" loans. But they bought $1.4 trillion
of subprime loans --- loans made to unqualified borrowers. Subprimes
were *invented* by banks to satisfy CRA requirements, and the secondary
market for them was invented by the GSEs under pressure from HUD.
> And even more to the point, HUD and the administration passed into
> the hands of the Republicans in 2001. That was 7 &@%$$#%^#* years ago
> and for or 6 of the 7 years the Republicans had total control of the
> government. If these policies were bad then the lying pig Republicans
> had the power to change them. But they didn't. They pressed the
> pedal to the metal and blew the biggest bubble in history.
No argument. Republicans supported most of this nonsense, and created
their share of it (like the ADDI).
Some comments on Gordon:
> • Did the 1977 legislation, or any other legislation since,
> require banks to not verify income or payment history of mortgage
> applicants?
No. The CRA did not specify how banks were to make these loans. But
obviously, if they adhered to standard lending criteria, they could not
lend to the targeted borrowers. So the standards had to go.
> • 50% of subprime loans were made by mortgage service companies
> not subject comprehensive federal supervision; another 30% were made
> by banks or thrifts which are not subject to routine supervision or
> examinations. How was this caused by either CRA or GSEs ?
Because the GSEs bought these loans regardless of who originated them.
They *established* the secondary market for these loans, and invented
the securities based on them. Fannie once lauded Countrywide, a non-
depository lender not subject to CRA, as "a paragon of affordable-
housing lending." The GSEs bought billions in subprimes from such
lenders.
BTW, the 50% figure is true only of the last 2 years or so. Most of the
securitized subprimes out there were made by CRA-coverred banks, or at
least were bought, guaranteed, and securitized by the GSEs.
> • What about "No Money Down" Mortgages (0% down payments) ? Were
> they required by the CRA? Fannie? Freddie?
They weren't required to offer any particular terms or options. They
were only required to serve "disadvantaged" borrowers, i.e., borrowers
who could not get mortgage loans under standard criteria. In the case of
the GSEs, 50% of their resources were to be devoted to these loans, per
orders from HUD.
> • Explain the shift in Loan to value from 80% to 120%: What was
> it in the Act that changed this traditional lending requirement?
Same comment as above.
> • Did any Federal legislation require real estate agents and
> mortgage writers to use the same corrupt appraisers again and again?
> How did they manage to always come in at exactly the purchase price,
> no matter what?
Banks and realtors have always chosen appraisers who'll tell them what
they want to hear.
> • Did the CRA require banks to develop automated underwriting
> (AU)
> systems that emphasized speed rather than accuracy in order to
> process the greatest number of mortgage apps as quickly as possible?
Nothing wrong with automated mortgage processing. What is wrong are the
relaxed lending standards built into them for the reasons above.
> • How exactly did legislation force Moody's, S&Ps and Fitch to
> rate junk paper as Triple AAA?
The rating services *automatically* rate "agency" bonds (those issued by
Freddie, Freddy, or Ginnie) AAA, based on their presumed gummint
"guarantees," just as they do T-bills. Non-agency bonds receive various
ratings, but those with structures similar to the agencies' also get AAA
ratings. Bad practice, but understandable. Greenspan lambasted this
situation several years ago, accusing the GSEs of touting their bonds as
being "as secure as Treasuries" when they were in fact based on very
risky loans.
> • What about piggy back loans? Were banks required by Congress
> to
> lend the first mortgage and do a HELOC for the down payment -- at the
> same time?
>
> • Internal bank memos showed employees how to cheat the system
> to
> get poor mortgages prospects approved that shouldn't have been:
> Titled How to Get an "Iffy" loan approved at JPM Chase. (Was
> circulating that memo also a FNM/FRE/CRA requirement?)
Same as previous comments on lending standards. Banks will make these
loans when they are under CRA pressure to do so, and when there is a
secondary market for them.
> • The four biggest problem areas for housing (by price
> decreases)
> are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San
> Diego, California. Explain exactly how these affluent, non-minority
> regions were impacted by the Community Reinvesment Act ?
Those were already "hot" housing markets. Relaxing lending standards and
creating a secondary market for bad loans will amplify activity in such
markets.
> • Did the GSEs require banks to not check credit scores? Assets?
> Income?
Repetitive.
> • What was it about the CRA or GSEs that mandated fund managers
> load up on an investment product that was hard to value, thinly
> traded, and poorly understood
Because most of them were "guaranteed" by the GSEs, and the ones which
weren't were similar to those which were.
> • What was it in the Act that forced banks to make "interest
> only"
> loans? Were "Neg Am loans" also part of the legislative requirements
> also?
Repetitive.
> • Consider this February 2003 speech by Countrywide CEO Angelo
> Mozlilo at the American Bankers National Real Estate Conference. He
> advocated zero down payment mortgages -- was that a CRA requirement
> too, or just a grab for more market share, and bad banking?
He had a buyer for his stuff, namely, the GSEs. He was, after all, a
"paragon" of non-discriminatory lending.
I don't deny that numerous people dropped the ball in this meltdown,
including brokerage houses, ratings agencies, and investors. All failed
to exercise prudence and due diligence. But subprimes would not exist,
and neither would any secondary market for them, but for the intrusions
of gummint into the housing market --- just another example of the
effort of politicians to win votes by handing out free lunches.
Michael Coburn
> Michael Coburn <mik...@verizon.net> wrote in
> news:ge7qf...@news1.newsguy.com:
>
>>> Are you kidding? That stupid program was passed by both houses of
>>> Congress *unanimously*. It no doubt contributed to the bubble, but the
>>> subprime loans which launched it, and whose defaults punctured it, are
>>> due to the CRA and the Clinton admin's orders to Fannie and Freddy to
>>> buy, package, "guarantee," and market those crappy loans. Those GSEs
>>> held or guaranteed $1.4 *trillion* in subprime loans when they bit the
>>> dust.
>>
>> Fact: The Gingrich Republican Congress did this in 1999 as a part of
>> the greed based Gramm-Leach-Blily act that did away with
>> Glass-Steagall. Buo more to the point, Clinton's HUD warned Fannie Mae
>> that It would not credit Fannie Mae for overpriced loans.
>
> The GLBA was definitely a factor. Why? Because it tied the
> liberalizations on banking to satisfactory CRA ratings. So, to enter one
> of these newly-allowed lines of business, the bank had to make more
> crappy loans.
HUH! What planet are you from? Where do you get this crap other than
pulling out of your ass? I want to see ANYTHING that would back up that
nonsense claim. There were few newly-allowed lines of business for the
commercial banks Branches, and mergers and acquisitions within the
commercial banks were allowed prior to this bill and most of the mergers
that you want to speak of were between entities that were in no way
subject to the CRA.
> The GSEs could not buy "overpriced" loans. But they bought $1.4 trillion
> of subprime loans --- loans made to unqualified borrowers. Subprimes
> were *invented* by banks to satisfy CRA requirements,
Regardless of who "invented" interest only, ARM's, and negative
amortizations, these were AB-USED by unscrupulous buyers and lenders for
the purpose of speculation.
> and the secondary
> market for them was invented by the GSEs under pressure from HUD.
Dayem! Those statements are almost correct. The only thing wrong is
that the pressure on the GSE's from HUD came after George Bush took it
over. And from George Bush directly. As a matter of fact in 2003 George
Bush proposed that the GSE's be regulated by the Bush Treasury Department
so that Bush could use even more direct force on the GSE's:
http://charts.technorati.com/posts/KDx%2B85k4mdfTGGXSzky8Mq%
2Br20dPf5h1r5O0pJd8Vw0%3D ------------------------------------------
September 11, 2003 New Agency Proposed to Oversee Freddie Mac and Fannie
Mae By STEPHEN LABATON The Bush administration today recommended the most
significant regulatory overhaul in the housing finance industry since the
savings and loan crisis a decade ago. Under the plan, disclosed at a
Congressional hearing today, a new agency would be created within the
Treasury Department to assume supervision of Fannie Mae and Freddie Mac,
the government-sponsored companies that are the two largest players in
the mortgage lending industry.
-------------------------------------------------------------------
>> And even more to the point, HUD and the administration passed into
>> the hands of the Republicans in 2001. That was 7 &@%$$#%^#* years ago
>> and for or 6 of the 7 years the Republicans had total control of the
>> government. If these policies were bad then the lying pig Republicans
>> had the power to change them. But they didn't. They pressed the pedal
>> to the metal and blew the biggest bubble in history.
>
> No argument. Republicans supported most of this nonsense, and created
> their share of it (like the ADDI).
>
> Some comments on Gordon:
>
>> • Did the 1977 legislation, or any other legislation since,
>> require banks to not verify income or payment history of mortgage
>> applicants?
>
> No. The CRA did not specify how banks were to make these loans. But
> obviously, if they adhered to standard lending criteria, they could not
> lend to the targeted borrowers. So the standards had to go.
Bullshit. The banks were found to have overcharged the borrowers because
the borrowers lived in a bad neighborhood and because they were black.
And the CRA informed the banks that they would be monitored and denied
certain requested mergers/etc. unless they could show an attempt at
compliance:
http://en.wikipedia.org/wiki/Community_Reinvestment_Act -----------
The Act requires the appropriate federal financial supervisory agencies
to encourage regulated financial institutions to meet the credit needs of
the local communities in which they are chartered, consistent with safe
and sound operation. (See full text of Act and current regulations.[5])
To enforce the statute, federal regulatory agencies examine banking
institutions for CRA compliance, and take this information into
consideration when approving applications for new bank branches or for
mergers or acquisitions.[6]
--------------------------------------------------------------------
The percentage of the loans subject to this act was tiny and a small hit
on profits (if any) would have covered any loses. And the percentage of
institutions that were subject to the "federal supervisory agencies"
mentioned (most especially after the GLBA ) was next to zip.
>> • 50% of subprime loans were made by mortgage service companies
>> not subject comprehensive federal supervision; another 30% were made
>> by banks or thrifts which are not subject to routine supervision or
>> examinations. How was this caused by either CRA or GSEs ?
>
> Because the GSEs bought these loans regardless of who originated them.
> They *established* the secondary market for these loans, and invented
> the securities based on them.
More horseshit: The CRA was not even a consideration for lenders in 80%
of the sub-prime loans being discussed regardless of what the GSE's would
or would not accept.
> Fannie once lauded Countrywide, a non-
> depository lender not subject to CRA, as "a paragon of affordable-
> housing lending." The GSEs bought billions in subprimes from such
> lenders.
Lets see some actual cites and dates for this crap. If this is true you
will find that it all happened post 2001 when the Republicans controlled
the entire mess.
> BTW, the 50% figure is true only of the last 2 years or so.
NOPE.
> Most of the
> securitized subprimes out there were made by CRA-coverred banks, or at
> least were bought, guaranteed, and securitized by the GSEs.
NOPE.
Over the last two years the GSE's have been compelled by the meltdown to
buy more of these loans. That is what they do in this situation. The Fed
is the lender of last resort and these GSE's are the mortgage
underwriters of last resort. And again, HUD oversees the GSE's as regards
the standards, the congress and the OHFEO oversee the accounting.
>> • What about "No Money Down" Mortgages (0% down payments) ? Were
>> they required by the CRA? Fannie? Freddie?
>
> They weren't required to offer any particular terms or options. They
> were only required to serve "disadvantaged" borrowers, i.e., borrowers
> who could not get mortgage loans under standard criteria. In the case of
> the GSEs, 50% of their resources were to be devoted to these loans, per
> orders from HUD.
Nope. No bank was ever required to do anything at all. And the bulk of
the mortgages were done by institutions that were not in the least
subject to any regulatory body that had anything top do with CRA.
But I would be REEEEEEEEEEEEEEEEEEllll Interested in a cite that shows
me these pressures and instructions from HUD. As I say below, Congress
and the OFHEO are responsible to keep an eye on the accounting in the
GSE's. But HUD sets the rules on loans acceptance. And HUD is run by
Bush.
So it all really maps back to the Republican AB-use of the GSE's.
Republicans hate government. And they will ever do whatever it takes to
destroy good government. This time they may have ended up shooting off
both feet. How you like the nationalization of the mortgage underwriting
segment of the economy?
>> • What about piggy back loans? Were banks required by Congress to
>> lend the first mortgage and do a HELOC for the down payment -- at the
>> same time?
>>
>> • Internal bank memos showed employees how to cheat the system to
>> get poor mortgages prospects approved that shouldn't have been: Titled
>> How to Get an "Iffy" loan approved at JPM Chase. (Was circulating that
>> memo also a FNM/FRE/CRA requirement?)
>
> Same as previous comments on lending standards. Banks will make these
> loans when they are under CRA pressure to do so, and when there is a
> secondary market for them.
How far are you going to try to carry this lie about the CRA and the
Democrats?
>> • The four biggest problem areas for housing (by price decreases)
>> are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San
>> Diego, California. Explain exactly how these affluent, non-minority
>> regions were impacted by the Community Reinvesment Act ?
>
> Those were already "hot" housing markets. Relaxing lending standards and
> creating a secondary market for bad loans will amplify activity in such
> markets.
But this has nothing to do with CRA. Just as all the rest of the crap
you want to tie to CRA has nothing to do with CRA.
>> • Did the GSEs require banks to not check credit scores? Assets?
>> Income?
>
> Repetitive.
Yes. It is.
>> • What was it about the CRA or GSEs that mandated fund managers
>> load up on an investment product that was hard to value, thinly
>> traded, and poorly understood
>
> Because most of them were "guaranteed" by the GSEs, and the ones which
> weren't were similar to those which were.
And it all gets back to Bush the bartender and Bush's HUD.
http://www.portfolio.com/news-markets/top-5/2008/07/23/Bush-Wall-Street-
Got-Drunk
>> • What was it in the Act that forced banks to make "interest
only"
>> loans? Were "Neg Am loans" also part of the legislative requirements
>> also?
>
> Repetitive.
>
>> • Consider this February 2003 speech by Countrywide CEO Angelo
>> Mozlilo at the American Bankers National Real Estate Conference. He
>> advocated zero down payment mortgages -- was that a CRA requirement
>> too, or just a grab for more market share, and bad banking?
>
> He had a buyer for his stuff, namely, the GSEs. He was, after all, a
> "paragon" of non-discriminatory lending.
>
> I don't deny that numerous people dropped the ball in this meltdown,
> including brokerage houses, ratings agencies, and investors. All failed
> to exercise prudence and due diligence. But subprimes would not exist,
> and neither would any secondary market for them, but for the intrusions
> of gummint into the housing market --- just another example of the
> effort of politicians to win votes by handing out free lunches.
On this we can agree. But we will not agree on WHO's intrusions and
WHO's deregulation cause the problem. It was a Republican created
calamity all the way. With a minor assist by Clinton and the Democrats
on the Gramm-Leach-Bliley Act. The only problem is that Clinton has been
gone for 7 years and the Republicans had total control until 2007. The
housing bubble busted in 2006 before the Democrats took back the House of
Representatives. HUD is STILL run by Bush.
Publius
news:ge8or...@news4.newsguy.com...
>> The GLBA was definitely a factor. Why? Because it tied the
>> liberalizations on banking to satisfactory CRA ratings. So, to enter
>> one of these newly-allowed lines of business, the bank had to make
>> more crappy loans.
> HUH! What planet are you from? Where do you get this crap other than
> pulling out of your ass? I want to see ANYTHING that would back up
> that nonsense claim. There were few newly-allowed lines of business
> for the commercial banks Branches, and mergers and acquisitions
> within the commercial banks were allowed prior to this bill and most
> of the mergers that you want to speak of were between entities that
> were in no way subject to the CRA.
Banks were allowed under GLBA to enter into the securities and insurance
business, or merge with such companies, which they were previously not
allowed to do. But to take advantage of those options, a bank had to
have a "satisfactory" CRA rating.
Gramm-Leach-Bliley
Summary of Provisions
* Repeals the restrictions on banks affiliating with securities firms
contained in sections 20 and 32 of the Glass-Steagall Act.
* Creates a new "financial holding company" under section 4 of the Bank
Holding Company Act. Such holding company can engage in a statutorily
provided list of financial activities, including insurance and
securities underwriting and agency activities, merchant banking and
insurance company portfolio investment activities. Activities that are
"complementary" to financial activities also are authorized. The
nonfinancial activities of firms predominantly engaged in financial
activities (at least 85% financial) are grandfathered for at least 10
years, with a possibility for a five year extension.
* The Federal Reserve may not permit a company to form a financial
holding company if any of its insured depository institution
subsidiaries are not well capitalized and well managed, or did not
receive at least a satisfactory rating in their most recent CRA exam.
http://banking.senate.gov/conf/grmleach.htm
"Crap," eh?
>> The GSEs could not buy "overpriced" loans. But they bought $1.4
>> trillion of subprime loans --- loans made to unqualified borrowers.
>> Subprimes were *invented* by banks to satisfy CRA requirements,
>
> Regardless of who "invented" interest only, ARM's, and negative
> amortizations, these were AB-USED by unscrupulous buyers and lenders
> for the purpose of speculation.
Of course! You shoo a sheep to a pack of wolves, and they'll have a
feeding frenzy. What, you expect speculators to behave like choir boys?
Wolves will be wolves. The idiot is the shepherd who turned loose the
sheep.
Don't try to dismiss the inventors of subprime loans. The feds created
an entirely new class of investment comprised of mortgages made to
unqualified borrowers. It was the equivalent of counterfeit money ---
$1.4 trillion worth, just counting the holdings and liabilities of the
GSEs. Those borrowers fell upon the housing market like a swarm of
locusts, creating the bubble. Then they began to default.
Speculators speculate. If you sell wheat, they'll speculate on that. Of
you peddle crappy bonds, they'll speculate on those. The speculation is
not the problem; the crappy bonds are.
>> and the secondary
>> market for them was invented by the GSEs under pressure from HUD.
>
> Dayem! Those statements are almost correct. The only thing wrong is
> that the pressure on the GSE's from HUD came after George Bush took it
> over.
False. The GSE's were ordered to devote 20% of their resources to
promoting "affordable housing" in 1995. In 1999, they were ordered to
increase that to 50% by 2001.
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260
"Fannie Mae and Freddie Mac purchased and guaranteed "many more
low-documentation, low-verification and non-standard" mortgages in 2006
and 2007 "than they had in the past." He said the companies increased
their exposure to risks in 2006 and 2007 despite the regulator's
warnings.
"Roughly 33 percent of the companies' business involved buying or
guaranteeing these risky mortgages, compared with 14 percent in 2005.
Those bad bets on mortgages led to billions of dollars in losses at the
firms. "The capacity to raise capital to absorb further losses without
Treasury Department support vanished," Lockhart said."
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/23/AR2008092301718.html
"In 1999, The New York Times reported that with the corporation's move
towards the subprime market 'Fannie Mae is taking on significantly more
risk, which may not pose any difficulties during flush economic times.
But the government-subsidized corporation may run into trouble in an
economic downturn, prompting a government rescue similar to that of the
savings and loan industry in the 1980's.'[10] Alex Berenson of The New
York Times reported in 2003 that Fannie Mae's risk is much larger than
is commonly held.[11] Nassim Taleb wrote 'The government-sponsored
institution Fannie Mae, when I look at its risks, seems to be sitting on
a barrel of dynamite, vulnerable to the slightest hiccup. But not to
worry: their large staff of scientists deem these events
'unlikely'.[12]"
http://en.wikipedia.org/wiki/Fannie_Mae
> As a matter of fact in 2003
> George Bush proposed that the GSE's be regulated by the Bush Treasury
> Department so that Bush could use even more direct force on the GSE's:
> http://charts.technorati.com/posts/KDx%2B85k4mdfTGGXSzky8Mq%
> 2Br20dPf5h1r5O0pJd8Vw0%3D
You should read the entire article. That proposal was an attempt to get
a better grip on those agencies:
-----------------
NYT Sept. 11, 2003
"The Bush administration today recommended the most significant
regulatory overhaul in the housing finance industry since the savings
and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency
would be created within the Treasury Department to assume supervision of
Fannie Mae and Freddie Mac, the government-sponsored companies that are
the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress,
to set one of the two capital-reserve requirements for the companies. It
would exercise authority over any new lines of business. And it would
determine whether the two are adequately managing the risks of their
ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of
Fannie Mae and Freddie Mac -- which together have issued more than $1.5
trillion in outstanding debt -- is broken. A report by outside
investigators in July concluded that Freddie Mac manipulated its
accounting to mislead investors, and critics have said Fannie Mae does
not adequately hedge against rising interest rates.
''There is a general recognition that the supervisory system for
housing-related government-sponsored enterprises neither has the tools,
nor the stature, to deal effectively with the current size, complexity
and importance of these enterprises,'' Treasury Secretary John W. Snow
told the House Financial Services Committee in an appearance with
Housing Secretary Mel Martinez, who also backed the plan. ...
Significant details must still be worked out before Congress can approve
a bill. Among the groups denouncing the proposal today were the National
Association of Home Builders and Congressional Democrats who fear that
tighter regulation of the companies could sharply reduce their
commitment to financing low-income and affordable housing.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any
kind of financial crisis,'' said Representative Barney Frank of
Massachusetts, the ranking Democrat on the Financial Services Committee.
''The more people exaggerate these problems, the more pressure there is
on these companies, the less we will see in terms of affordable
housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
''I don't see much other than a shell game going on here, moving
something from one agency to another and in the process weakening the
bargaining power of poorer families and their ability to get affordable
housing,'' Mr. Watt said."
---------------
"Not facing any kind of financial crisis," Mr. Frank? LOL.
Arguing Democrats v. Republicans is silly. They are all pols, all
looking for free lunches to trade for votes.
>> No. The CRA did not specify how banks were to make these loans. But
>> obviously, if they adhered to standard lending criteria, they could
>> not lend to the targeted borrowers. So the standards had to go.
> Bullshit. The banks were found to have overcharged the borrowers
> because the borrowers lived in a bad neighborhood and because they
> were black.
Rubbish. There were no such findings *for all banks*. Any bank which
denied a loan based on race would violate numerous state and federal
laws. If there is evidence that a bank or its officers illegally
discriminated, they can be sued. Few such suits have been succesful.
The major study of the issue was that conducted by the Federal Reserve
Bank of Boston. It's metholology was purely statistical. The fact that
statistically fewer loans are made to minorities is not evidence of
discrimination. The CRA forces banks to make bad loans whether there is
any evidence of discrimination or not.
Banks *did* redline. That is because the house is the collateral for the
mortgage. Houses in declining neighborhoods are poor security.
Forbidding redlining is another factor which makes mortgages risky.
Banks are private institutions. They are not welfare agencies. They have
no duty to make any loans, on any terms, to anybody.
> The percentage of the loans subject to this act was tiny and a small
> hit on profits (if any) would have covered any loses.
What are you talking about? Loans are not subject to the act, banks are.
They are required to make loans to minorities and low-income persons
roughly in proportion to the ratios of such groups in the communities in
which they do business.
>> Because the GSEs bought these loans regardless of who originated
>> them. They *established* the secondary market for these loans, and
>> invented the securities based on them.
>
> More horseshit: The CRA was not even a consideration for lenders in
> 80% of the sub-prime loans being discussed regardless of what the
> GSE's would or would not accept.
>
>> Fannie once lauded Countrywide, a non-
>> depository lender not subject to CRA, as "a paragon of affordable-
>> housing lending." The GSEs bought billions in subprimes from such
>> lenders.
>
> Lets see some actual cites and dates for this crap. If this is true
> you will find that it all happened post 2001 when the Republicans
> controlled the entire mess.
"In June 2008, the Wall Street Journal reported that two former CEOs of
Fannie Mae, James A. Johnson and Franklin Raines had received loans
below market rate from Countrywide Financial. Fannie Mae was the biggest
buyer of Countrywide's mortgages. [33]
"Fannie Mae and Freddie Mac have strategically given contributions to
lawmakers currently sitting on committees that primarily regulate their
industry: The House Financial Services Committee; the Senate Banking,
Housing & Urban Affairs Committee; or the Senate Finance Committee. The
others have seats on the powerful Appropriations or Ways & Means
committees, are members of the congressional leadership or have run for
president.
"Barney Frank has been a member of the House Financial Services
Committee since 1991 (and is currently the chair). The HFSC is one of
two government entities responsible for oversight over Fannie Mae. From
1991 to 1998, Barney Frank had a lover, Herb Moses, who was an executive
at Fannie Mae. While at Fannie Mae, Moses helped develop many of Fannie
Mae's affordable housing and home improvement lending programs. Other
lawmakers have called this a 'clear conflict of interest.' [34]"
http://en.wikipedia.org/wiki/Fannie_Mae
http://online.wsj.com/article/SB121279970984353933.html?loc=interstitialskip
Do a little research, Michael.
> Over the last two years the GSE's have been compelled by the meltdown
> to buy more of these loans. That is what they do in this situation.
> The Fed is the lender of last resort and these GSE's are the mortgage
> underwriters of last resort. And again, HUD oversees the GSE's as
> regards the standards, the congress and the OHFEO oversee the
> accounting.
Yup. Except the GSEs are not lenders, first resort or last. They are
buyers and guarantors of mortgages.
>> They weren't required to offer any particular terms or options. They
>> were only required to serve "disadvantaged" borrowers, i.e.,
>> borrowers who could not get mortgage loans under standard criteria.
>> In the case of the GSEs, 50% of their resources were to be devoted to
>> these loans, per orders from HUD.
> Nope. No bank was ever required to do anything at all.
Only if they wanted to merge, open a branch, enter a new line of
business, etc.
> And the bulk
> of the mortgages were done by institutions that were not in the least
> subject to any regulatory body that had anything top do with CRA.
"Subprime Bonds
Prices for AAA rated subprime securities from the first half of last
year ranged from 92 cents on the dollar to 45 cents on the dollar,
depending on their repayment priority, RBS said.
"About $500 billion of prime-jumbo securities and $825 billion of Alt-A
bonds are outstanding, compared with $559 billion of subprime, excluding
derivatives versions of that debt, according to a report last month by
FTN Financial.
"`Agency' home-loan securities, an almost $5 trillion market, carry
guarantees from government-run Fannie Mae or Freddie Mac or U.S. agency
Ginnie Mae. After the collapse of non- agency bonds and bank retreats,
`most every loan is tied to a Fannie, Freddie or Ginnie security these
days,' Garry Cipponeri, director of capital markets for home lending for
JPMorgan Chase & Co.'s mortgage unit, said at a conference last week."
http://www.bloomberg.com/apps/news?pid=20602007&sid=ayXMdrVk8rZs&refer=govt_bonds
The GSE's held or guaranteed $1.4 trillion in subprimes. Non-agency
subprimes are thus about 25% of the market.
Getting tired of educating you, Michael.
> But I would be REEEEEEEEEEEEEEEEEEllll Interested in a cite that
> shows me these pressures and instructions from HUD.
Gave that above.
>> I don't deny that numerous people dropped the ball in this meltdown,
>> including brokerage houses, ratings agencies, and investors. All
>> failed to exercise prudence and due diligence. But subprimes would
>> not exist, and neither would any secondary market for them, but for
>> the intrusions of gummint into the housing market --- just another
>> example of the effort of politicians to win votes by handing out free
>> lunches.
>
> On this we can agree. But we will not agree on WHO's intrusions and
> WHO's deregulation cause the problem. It was a Republican created
> calamity all the way. With a minor assist by Clinton and the
> Democrats on the Gramm-Leach-Bliley Act. The only problem is that
> Clinton has been gone for 7 years and the Republicans had total
> control until 2007. The housing bubble busted in 2006 before the
> Democrats took back the House of Representatives. HUD is STILL run by
> Bush.
Bah. Pols are pols.
Andy F.
"Publius" <m.pu...@nospam.comcast.net> wrote in message
news:Xns9B4594D3C63CEmp...@69.16.185.247...
>> require banks to not verify income or payment history of mortgage
>> applicants?
>
> No. The CRA did not specify how banks were to make these loans. But
> obviously, if they adhered to standard lending criteria, they could not
> lend to the targeted borrowers. So the standards had to go.
>
didn't like it could just get out of the business.
And in a rational market that's what would have happened. the CRA
requirements made the mortgage business less attractive. So so fewer people
would have gone into it.
The end result would be that everyone's mortgage got a bit more expensive,
and the 'good' loans would be subsidizing the 'bad' ones.
There's no reason why that should cause a bubble.
What caused the bubble in fact was the same as what always causes bubbles -
greed and stupidity. Too many people fooled themselves into thinking that
prices would keep going up forever.
Publius
>> Commodity markets do not set values; they set prices. A price is set
>> based on the *estimated marginal cost*, i.e., the cost to bring the
>> next share to market. That establishes a *floor price*. The seller or
>> producer must believe there will be a demand at that price, or he
>> will not bring another share to market. How it is actually priced
>> will depend upon the competitive environment when that share reaches
>> the market.
> All of that strutting marginal claptrap does not alter the outcome.
Not sure why you consider marginal cost as "claptrap." You do know what
it means, don't you? Are you denying that marginal costs sets a floor
price?
> The buyers will decide how much they will pay. That has nothing to do
> with the "producers" and what kind of silly crap they want to indulge
> in. The producer's costs have nothing to do with prices or MARKET
> values.
"Market values" and prices are the same thing (prices paid, not asking
prices). Otherwise we agree here.
>> It is "common knowledge" only because someone discovered that
>> resource and disseminated that knowledge. Common knowledge of its
>> location, however, certainly doesn't make the land (or other natural
>> good) itself part of any common resource or ownership. All of my
>> neighbors know where my house is, and where I park my car. That
>> knowledge does not endow them with a common ownership in them.
> Nice leap. The point is that the knowledge of the location has no
> market value.
No, the location has value. Knowledge of the location only has value
until the resource enters the economy (by virtue of that knowledge). The
value of the knowledge is a function of the estimated value of the
resource.
> The place itself most certainly has value but the
> "discovery" of it has become irrelevant. The discovery value has long
> since passed into the public/common domain.
When that knowledge enters the public domain then it no longer has a
market value. The resource itself does however, and it has *not* entered
the public domain (if it did --- if it became a common --- the knowledge
of it would have had no value, and no one would have invested any labor
in gaining that knowledge).
>> You're also right that naturally occurring stuff "just IS," and has
>> no cost --- *as is*. But it also has no value, it is not an economic
>> good, "as is." It is *useless* "as is," i.e., undiscovered and
>> unrecovered. It confers no benefits on anyone and cannot be traded.
>> It does not appear on anyone's balance sheet or contribute to any
>> nation's GDP. For economic purposes it does not exist.
> There you go again, blathering about value and trying to tie it to
> cost while at the same time trying to say it ain't so. I would think
> you'd get dizzy or rip your underwear.
Of course values and costs are tied together. The cost of a good is what
one must give up to obtain it. What he will be willing to give up
depends both upon the value he places on the good to be acquired, and on
the thing to be given up.
Natural goods "as is" have no costs *because they have no value*. No one
will give up anything for them because they satisfy no desires. They are
not economic goods. Someone must invest some labor, or ingenuity, or
insight, etc., to bring them into the economy. *Then* they have a cost
and a value.
>> It requires labor to bring the land to market also. Its mere physical
>> existence is what is irrelevant to the economy, until it is brought
>> to market.
> BWAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAAHA!!!!!!!!!!!!!!!!!!!!!!!!!!
> Go out and lasso me some land, will ya?
Has been done time and again, throughout history. Whole continents, not
to mention thousands of islands, have been added to the economy by
intrepid explorers. Still possible in the case of islands, although much
less likely now, given satellite imagery. Still possible for land on the
seafloor or elsewhere in the solar system.
> As I have said in the actual "Labor Theory of Cost", "seemingly
> successful attacks on "Labor Theory of Cost" (LTC) will be waged
> through attacks on the Marx "Labor Theory of Value" (LTV)". The Smith
> version holds only for commodities and undeniably assesses value as
> replacement costs. Yet Smith is still incorrect to attempt to draw a
> direct relationship between cost and value.
There is direct relationship between cost and value *for a given agent
and a given transaction*. His cost must be less than the value of the
good purchased, or the transaction will not occur. The cost of the good
to the seller, however, is irrelevant to the buyer. That will have
depended upon the seller's own valuations of the goods involved.
>> Labor is a commodity like any other. The basis for its value is the
>> same as that of a machine; its value is given by the value of the
>> goods it can produce. And those values are subjective.
> Natural resources, Algebra, Language, Calculus, or the location of
> Publius' home are not currently "produced". These things exist and
> are cost free other then the individual effort to learn them.
> Therefore, "the subjective value placed on a good by a buyer will
> determine the value of the labor required to produce that good, and
> thus the price he will be willing to pay for that labor", is at best
> misleading. It infers that all things are produced by labor or could
> be so produced and we know that (other than individual learning) this
> proposition is simply false. (petroleum problem addressed later)
No. It implies no such thing. We have two senses of "produced" in play
here: "brought into physical existence," and "introduced into the
economy." How a good is physically produced is irrrelevant, economically
speaking, unless physically producing it is the only way to introduce it
into the economy. The discoverer of an island, or an oil deposit,
"produces" it in the sense of bringing it into the economy. That is what
we are paying him for. We don't care where he got it (as long as he
didn't steal it!); it may have fallen from the sky, or he may have
worked for months to make it. It will be worth the same to us in either
case.
This is, you may have noticed, just an instance of the principle to
which you've already agreed. I.e., the seller's costs are irrelevant to
the utility or the value of a good, or the price charged for it,
*except* for goods which can continue to be produced (in the second
sense). Then the floor price will be the estimated cost to produce the
next share (but can be well above that if the seller/producer thinks he
can get it). But he won't produce that next share if he does not expect
to recover his estimated costs to produce it.
This holds for natural as well as manmade goods. A gold prospector can
guess how much time and effort it will take him to find another ounce of
placer gold. If the expected price will not compensate for that effort,
he'll find some other way to spend his time, and that ounce of gold will
not appear in the market.
>> True of the oceans and atmosphere, but not land. That is why no one
>> has to pay to use the atmosphere or the oceans. But every acre of
>> land, every mineral deposit, every stand of timber, had to be
>> discovered and explored by someone, who made its resources known and
>> available for others to use.
> Garbage. Please look at a world globe from 100 years ago. No person
> alive today made any contribution to the maps on that globe and there
> has been little if any change. And when I buy a map I am buying the
> labor of the printers of the map, not the efforts of Louis and Clark
> or your great granddaddy.
Huh? What do maps have to do with anything? You pay the person who
introduces a good into the economy --- who makes it available for you
and others to use, to benefit from, not someone who draws a picture of
it (unless that's what you want, not the resource itself).
> Was required is actually true. But that investment has long since
> recovered its costs and returned its profits.
Huh? It hasn't "returned its profits" until there are no longer
customers willing to buy it. Are you suggesting there is some arbitrary
limit on the profits one may derive from a good (or proposing one)?
>> Without human action there would be no resources to contend for (or
>> very few).
> Yet another totally preposterous statement.
> It is understood that there is oil in the ANWR and that there is oil
> beneath the sea in the OCS. That is common knowledge and it is free
> and without market value.
Yep.
> The actual development of this resource
> will involve what the oil people like to call "exploration". But that
> is nothing like some dudes setting out in boats to find a rout to the
> Indies and blundering upon "the new world" and Louis a Clark
> attempting to mark out the west (for a profit?).
It isn't? What's the difference? The 15th and 16th century explorers and
Lewis and Clark, of course, were working for others, on contract, who
subsequently cldaimed the resources discovered (the US gummint in the
case of L&C).
> The oil in the ANWR and the OCS is currently controlled by the United
> States government supposedly to the benefit of all citizens equally.
> And though this may not pass your own muster for the word "ownership"
> it probably would for the vast majority of sentient beings.
There is nothing wrong with common ownerships, including gummint
ownerships, provided there is some basis for the claims asserted. Except
such ownerships are usually un- or underproductive and subject to the
"tragedy of the commons." In the case of ANWR the gummint has done
considerable surveying and surface exploration, as well as provides
defense. That is a plausible basis for a claim of ownership.
But if someone developed a means to explore and recover oil in the deep
ocean, no gummint would have any claim to any oil produced.
> The United States government should contract the
> oil field services companies to do the seismic surveys and to drill
> the exploratory wells while retaining full ownership of the oil in the
> name of the people of the United States. This will have made the
> point concerning labor = cost most reliably I would think. The Value
> of the oil is whatever the market will bear. The cost is the
> DEVELOPMENT and PRODUCTION of the oil.
The oil will sell for the market price, regardless who owns it. It is
only a question of who gets the profits.
Most oil is discovered on private lands. The "standard" payment to the
landowner --- his royalty --- is 1/8 the wellhead price.
Publius
news:6ms765F...@mid.individual.net:
> In fact, the CRA never forced anyone to make any loans at all.Anyone
> who didn't like it could just get out of the business.
Sure. And anyone who didn't wanna pay protection money to Al Capone could
just get out of business, and anyone who doesn't wanna be mugged can just
move to a safer neighborhood.
> And in a rational market that's what would have happened. the CRA
> requirements made the mortgage business less attractive. So so fewer
> people would have gone into it.
Hardly. The gummint made it attractive by creating a secondary market for
the crappy loans, namely, the GSEs. So the banks could write the garbage,
peddle it to Fannie and Freddie, and keep their noses clean on CRA. The
gummint does not want banks to go out of business, or make mortgages more
expensive. That would defeat their free-lunch wagon. Some congresscritters
would lose votes.
> What caused the bubble in fact was the same as what always causes
> bubbles - greed and stupidity. Too many people fooled themselves into
> thinking that prices would keep going up forever.
First you have to understand why they were going up on the first place. It
is because tens of thousands of new buyers had entered the market,
expanding demand against an inadequate supply. Most of those borrowers were
unqualified and thus were default risks.
Sean
> "Andy F." <never...@tesco.net> wrote in
> news:6ms765F...@mid.individual.net:
>
>> In fact, the CRA never forced anyone to make any loans at all.Anyone
>> who didn't like it could just get out of the business.
>
> Sure. And anyone who didn't wanna pay protection money to Al Capone could
> just get out of business, and anyone who doesn't wanna be mugged can just
> move to a safer neighborhood.
>
Yes, exactly Pub. That's what they should do. Unless you want the Government
to do it for you, and make things like solid business propositions like
*protection* illegal, when all it is is a growing local enterprise by a wise
entrepreneur.
And the govt shouldn't be forcing people to pay taxes to provide an
effective police force in places where you do not need it, it should,be left
only to Private businesses who are able to offer *protection* and the locals
should pay for that on a private basis.
Um, hang on ...... ah, um, huh?
>> And in a rational market that's what would have happened. the CRA
>> requirements made the mortgage business less attractive. So so fewer
>> people would have gone into it.
>
> Hardly. The gummint made it attractive by creating a secondary market for
> the crappy loans, namely, the GSEs.
SO? There was NO force applied by the govt, any decent free-marketeer would
have avoided this obvious crappy loan senario in the self-interests of their
shareholders, ie themselves right?
So the banks could write the garbage,
> peddle it to Fannie and Freddie, and keep their noses clean on CRA. The
> gummint does not want banks to go out of business, or make mortgages more
> expensive. That would defeat their free-lunch wagon. Some congresscritters
> would lose votes.
>
Um, you mean, some bankers and stock-holders would have lost money if THEY
ignored the free-lunch wagon
>> What caused the bubble in fact was the same as what always causes
>> bubbles - greed and stupidity. Too many people fooled themselves into
>> thinking that prices would keep going up forever.
>
> First you have to understand why they were going up on the first place. It
> is because tens of thousands of new buyers had entered the market,
> expanding demand against an inadequate supply. Most of those borrowers
> were
> unqualified and thus were default risks.
>
FARK .............. dream on . Fed Interest rates at ah zero to 1%
?????????????????????
There was a real estate bubble all over the world you silly man, but ONLY
the USA had Sub-Prime, had a F & F, had GSE's in the real eastate finance
markets, had an absence of Regulation on Financial products like MBS's, only
the USA was bleeding at $10 billion a month plus in Iraq, only the USA had
GW Bush, only the USA had such lousy RE regulatory practices and enforcement
against FRAUD, only the USA had Alan Greespan in the seat for 18 years, and
only the USA real estate bubble has dropped regionally 30 to 50% on a year
ago.
There are manifold reaons that have come together at the same time, and
sub-prime loans to some people who were serious default risks is but a tiny
tiny tip of a huge corrupted ice-berg of improprietry that extends across
all industries and the entire nation in different forms.
Start at your inept and dysfunctional electoral system then work your way
up, if you really want to solve the real causes of the crisis which is
nothing more than the dis-illusions of the past.
Sean
LOL, I love synchronicity in the morning :)
I was just listening to NPR Radio "all things considered" show, on my local
radio here in Australia, of all places.
And of course the subject was sub-prime loans and the lessons learned in
Texas 20 years ago in the SnL scandals.
Today Texas banks and SnL's are doing just fine and dandy. Some excerpt
quotes by BANKERS:
"it's easy to avoid the greed and stupidity of the 80's these days."
"this man came in to ask for a re-finance loan, and i asked why is your
income listed as $150,000 isn;t it $90,000? --- Yes it;s $90k, but the
*mortgage broker* said I had to put $150K on the form in order for me to
qualify for the loan"
The banker just laughed as he described that story.
"Well we simply avoided sub-prime loans altogether, because they were not
the business we were prepared to get into. We did not want to revisit the
80's when so many stupid things were done where all these banks and SnL's
went bust, and thousands ended up in jail for fraud." [sic]
"What caused the SnL's scandals was completely lax or absent sensible
Regulations of the industry by Governments. When controls are absent then
all types of crooks and theives enter the business, and in the long run
everyone gets hurt." [sic]
OK, let me repeat that was BANKERS doing business today in Texas, where
business is going up as well as profits right now as we speak!!!
So any excuse that it's Govt that has forced anyone into making poor
commercial decisions by offering sub-prime loans to unqualified borrowers
that were default risks, is a complete lie and a misrepresentation of the
real story on the ground.
If bankers in texas were able to learn form the bad mistakes of the SnL's of
the 80's then ALL OF THEM WERE, therefore why this happened is in fact more
than likely the ongoing greed and studpidity by both borrowers and lenders,
and re-financers , as well as the absence of any rational Regulation of
Finance and Real Estate operators that existed in every other advanced
economy, except the USA.
Did the CRA and GSE's encourage the extent of sub-prime activities ? YES.
Can they be blamed as being the main problem? NO
Who is really at fault here? The USA voter who allowed this crap to go on
for decades and not call out their Politicians on their irresponsible
actions and inactions that allows self-interest greed to drive the system
into a chasm, and the lack of Consumer Protection Regulations that has
permitted stupidity to run rampantly out of control.
So ask your self who is mainly responsible for the lack of rational
Regulation in the USA? Then vote accordingly, and demand your Reps fix it in
the coming Congress, or else.
Along the way the stupidity of a Govt writing Laws that place the
responsibility for improving low levels of loans going to the poor and
minorites onto Private Banks and GSE's instead of the Governments OWN Policy
responses to lift poor working people out of entreneched poverty and
unemployment will likely come to to fore, and be fixed.
If you're lucky your entire archaic Home Mortgage system might lift itself
out of the 1930's mindset, and into the 21st Century with the rest of us.
IF ............ lol
Bret Cahill
> > who didn't like it could just get out of the business.
>
> Sure. And anyone who didn't wanna pay protection money to Al Capone could
> just get out of business, and anyone who doesn't wanna be mugged can just
> move to a safer neighborhood.
Sounds like we're _already_ in libertaria!
Bret Cahill
Michael Coburn
> Michael Coburn <mik...@verizon.net> wrote in
> news:ge7pk...@news1.newsguy.com:
>
>>> Commodity markets do not set values; they set prices. A price is set
>>> based on the *estimated marginal cost*, i.e., the cost to bring the
>>> next share to market. That establishes a *floor price*. The seller or
>>> producer must believe there will be a demand at that price, or he will
>>> not bring another share to market. How it is actually priced will
>>> depend upon the competitive environment when that share reaches the
>>> market.
>
>> All of that strutting marginal claptrap does not alter the outcome.
>
> Not sure why you consider marginal cost as "claptrap." You do know what
> it means, don't you? Are you denying that marginal costs sets a floor
> price?
I am denying that commodity prices are set by costs. And the reason is
because prices are set by demand. If the demand exists the requisite
labor will be expended. It has to do with cause and effect. Supply side
economics is horseshit and it has landed this country in debt up to our
asses. Demand is what determines prices and production; not cost.
>> The buyers will decide how much they will pay. That has nothing to do
>> with the "producers" and what kind of silly crap they want to indulge
>> in. The producer's costs have nothing to do with prices or MARKET
>> values.
>
> "Market values" and prices are the same thing (prices paid, not asking
> prices). Otherwise we agree here.
Make up your alleged mind. You just told us that the "floor" price is
set by costs. There is no such thing as a "floor" price unless you are
talking purely about ones own labor. And then we still have demand
driving production.
>>> It is "common knowledge" only because someone discovered that resource
>>> and disseminated that knowledge. Common knowledge of its location,
>>> however, certainly doesn't make the land (or other natural good)
>>> itself part of any common resource or ownership. All of my neighbors
>>> know where my house is, and where I park my car. That knowledge does
>>> not endow them with a common ownership in them.
>
>> Nice leap. The point is that the knowledge of the location has no
>> market value.
>
> No, the location has value. Knowledge of the location only has value
> until the resource enters the economy (by virtue of that knowledge). The
> value of the knowledge is a function of the estimated value of the
> resource.
Point of fact. Once the location is known by the general society that
knowledge ceases to be of any value. It has been fully depreciated. In
the best economic sense of the term. You must hold a government license
to the use of the location or you are SOL. The closest concept I can
think of is a patent.
>> The place itself most certainly has value but the
>> "discovery" of it has become irrelevant. The discovery value has long
>> since passed into the public/common domain.
>
> When that knowledge enters the public domain then it no longer has a
> market value. The resource itself does however, and it has *not* entered
> the public domain (if it did --- if it became a common --- the knowledge
> of it would have had no value, and no one would have invested any labor
> in gaining that knowledge).
Those who "invest" their labor in finding a resource should have a valid
claim on the use of the resource (a form of land patent granted by the
state). And in a just society such patents should be honored but not in
perpetuity. Land patents should be dissolved after 50 years or upon death
of the original patent holder whichever is longer. At that point
"discovery" should have no actual claim on the land any longer.
Privatization of a natural resource in perpetuity is economically
perverse.
>>> You're also right that naturally occurring stuff "just IS," and has no
>>> cost --- *as is*. But it also has no value, it is not an economic
>>> good, "as is." It is *useless* "as is," i.e., undiscovered and
>>> unrecovered. It confers no benefits on anyone and cannot be traded. It
>>> does not appear on anyone's balance sheet or contribute to any
>>> nation's GDP. For economic purposes it does not exist.
>
>> There you go again, blathering about value and trying to tie it to cost
>> while at the same time trying to say it ain't so. I would think you'd
>> get dizzy or rip your underwear.
>
> Of course values and costs are tied together.
Not unless you want to subscribe to Labor Theory of Value.
> The cost of a good is what
> one must give up to obtain it.
True.
> What he will be willing to give up
> depends both upon the value he places on the good to be acquired, and on
> the thing to be given up.
(s)he may have to give up nothing to acquire the desired state or object.
There may be no costs at all. Yet (S)he may value the acquisition
greatly. Ergo, there is no fixed relationship between cost and value.
> Natural goods "as is" have no costs *because they have no value*.
BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!
> No one
> will give up anything for them because they satisfy no desires.
BWAHAHAHAHAHAHahahahahahahahahahahahahahahaha!!!!!!!!!!!!!!!!!!!!1
> They are
> not economic goods. Someone must invest some labor, or ingenuity, or
> insight, etc., to bring them into the economy. *Then* they have a cost
> and a value.
BWHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!!
Please run right out and "bring us some land into the economy". I am not
speaking of improvements here. Bring us some totally new acreage.
>>> It requires labor to bring the land to market also. Its mere physical
>>> existence is what is irrelevant to the economy, until it is brought to
>>> market.
>
>> BWAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAAHA!!!!!!!!!!!!!!!!!!!!!!!!!! Go
>> out and lasso me some land, will ya?
>
> Has been done time and again, throughout history. Whole continents, not
> to mention thousands of islands, have been added to the economy by
> intrepid explorers. Still possible in the case of islands, although much
> less likely now, given satellite imagery. Still possible for land on the
> seafloor or elsewhere in the solar system.
The CURRENT KNOWN land exists and it is valuable without the effort of
anyone. Discovery is labor. But the discovery cost is quickly recovered
and amortized and profited. The value of the knowledge of the location
wanes very quickly while the land itself does not deteriorate in value.
Perpetual land ownership (current privatization) is economically perverse.
>> As I have said in the actual "Labor Theory of Cost", "seemingly
>> successful attacks on "Labor Theory of Cost" (LTC) will be waged
>> through attacks on the Marx "Labor Theory of Value" (LTV)". The Smith
>> version holds only for commodities and undeniably assesses value as
>> replacement costs. Yet Smith is still incorrect to attempt to draw a
>> direct relationship between cost and value.
>
> There is direct relationship between cost and value *for a given agent
> and a given transaction*.
Tangential.
> His cost must be less than the value of the
> good purchased, or the transaction will not occur.
While it may be true that the value (s)he places on what (s)he gives up
must be less than the value (s)he places on the thing of or condition
acquired, there is no "rule" by which that difference can be calculated.
> The cost of the good
> to the seller, however, is irrelevant to the buyer.
No argument.
A very nice and long winded dissertation without any real relevance. I
have allowed that discovery has cost and value. I have given discovery
its due. Do not, therefore, attempt to conflate it with development or
production past its actual cost and reasonable profit. Investing land
discovery with a perpetual patent is economically perverse -- just plain
stupid.
>>> True of the oceans and atmosphere, but not land. That is why no one
>>> has to pay to use the atmosphere or the oceans. But every acre of
>>> land, every mineral deposit, every stand of timber, had to be
>>> discovered and explored by someone, who made its resources known and
>>> available for others to use.
>
>> Garbage. Please look at a world globe from 100 years ago. No person
>> alive today made any contribution to the maps on that globe and there
>> has been little if any change. And when I buy a map I am buying the
>> labor of the printers of the map, not the efforts of Louis and Clark or
>> your great granddaddy.
>
> Huh? What do maps have to do with anything? You pay the person who
> introduces a good into the economy --- who makes it available for you
> and others to use, to benefit from, not someone who draws a picture of
> it (unless that's what you want, not the resource itself).
You, nor anyone else, is required to make known land available for use.
Land itself is not produced by labor. If I want to PAY someone for
granting me the exclusive use of some land it will be the government that
enforces the contracts that say I have the exclusive use of the land for
some period of time. Land owners are not needed or desired in that
relationship. Your granddaddy's land patent expired long ago.
>> Was required is actually true. But that investment has long since
>> recovered its costs and returned its profits.
>
> Huh? It hasn't "returned its profits" until there are no longer
> customers willing to buy it. Are you suggesting there is some arbitrary
> limit on the profits one may derive from a good (or proposing one)?
Is the depreciation period for commercial real estate arbitrary? Do you
think that drug patents should be perpetual and everlasting? Both of
these would be economically perverse.
>>> Without human action there would be no resources to contend for (or
>>> very few).
>
>> Yet another totally preposterous statement.
>
>> It is understood that there is oil in the ANWR and that there is oil
>> beneath the sea in the OCS. That is common knowledge and it is free
>> and without market value.
>
> Yep.
>
>> The actual development of this resource will involve what the oil
>> people like to call "exploration". But that is nothing like some dudes
>> setting out in boats to find a route to the Indies and blundering upon
>> "the new world" and Louis a Clark attempting to mark out the west (for
>> a profit?).
>
> It isn't? What's the difference? The 15th and 16th century explorers and
> Lewis and Clark, of course, were working for others, on contract, who
> subsequently cldaimed the resources discovered (the US gummint in the
> case of L&C).
Of course it is not the same. The resources are KNOWN to exist. And the
rights to those resources will be administered by the US government. The
oil companies are not currently granted the right to take _MY_ oil, nor
have they yet been commissioned by the US government to DEVELOP these
resources. Those regions are KNOWN and are not NEW land that must be
discovered.
>> The oil in the ANWR and the OCS is currently controlled by the United
>> States government supposedly to the benefit of all citizens equally.
>> And though this may not pass your own muster for the word "ownership"
>> it probably would for the vast majority of sentient beings.
>
> There is nothing wrong with common ownerships, including gummint
> ownerships, provided there is some basis for the claims asserted. Except
> such ownerships are usually un- or underproductive and subject to the
> "tragedy of the commons." In the case of ANWR the gummint has done
> considerable surveying and surface exploration, as well as provides
> defense. That is a plausible basis for a claim of ownership.
>
> But if someone developed a means to explore and recover oil in the deep
> ocean, no gummint would have any claim to any oil produced.
>
>> The United States government should contract the oil field services
>> companies to do the seismic surveys and to drill the exploratory wells
>> while retaining full ownership of the oil in the name of the people of
>> the United States. This will have made the point concerning labor =
>> cost most reliably I would think. The Value of the oil is whatever the
>> market will bear. The cost is the DEVELOPMENT and PRODUCTION of the
>> oil.
>
> The oil will sell for the market price, regardless who owns it. It is
> only a question of who gets the profits.
We were talking about costs and value and how they are two different
things. I think I have made my point. But you will do well to remember
your point concerning ownership.
> Most oil is discovered on private lands. The "standard" payment to the
> landowner --- his royalty --- is 1/8 the wellhead price.
I am in firm disagreement with that. But it is not politically possible
to change it in any real degree. And is not a worthwhile discussion.
Publius
news:490901a2$0$28212$afc3...@news.optusnet.com.au:
>> Sure. And anyone who didn't wanna pay protection money to Al Capone
>> could just get out of business, and anyone who doesn't wanna be
>> mugged can just move to a safer neighborhood.
> Yes, exactly Pub. That's what they should do. Unless you want the
> Government to do it for you, and make things like solid business
> propositions like *protection* illegal, when all it is is a growing
> local enterprise by a wise entrepreneur.
I'm glad you grasp the similarities. And of course, if protection rackets
("pay me or I'll burn down your place") is a solid business enterprise,
then there is no need for police. Anything goes.
> SO? There was NO force applied by the govt, any decent free-marketeer
> would have avoided this obvious crappy loan senario in the
> self-interests of their shareholders, ie themselves right?
No force is applied by the racketeer, either, unless you refuse to do what
he says. Same with the banker. If the banker said, "To hell with you and
your CRA, we're gonna open this new branch whether you like it or not,"
he'd soon find himself in jail and his bank overrun with armed goons.
> Um, you mean, some bankers and stock-holders would have lost money if
> THEY ignored the free-lunch wagon
Certainly. They'd be locked out of the market.
> There was a real estate bubble all over the world you silly man,
Certainly not. There were bubbles in various other places --- there always
are, someplace or other --- but each had its own reasons. In the UK and
Australia, increasing difficulties adding to supply (largely due to gummint
restrictions on building) or increased immigration; in places like India,
rising incomes, which increased demand for housing.
There was not even a bubble in many places in the US. Still isn't. In my
city (pop 600,000), for instance, the median price is up 0.3% over a year
ago. Foreclosures have been normal.
> ONLY the USA had Sub-Prime, had a F & F, had GSE's in the real eastate
> finance markets, had an absence of Regulation on Financial products
> like MBS's,
LOL. I'm amazed at all this misplaced confidence in the wisdom and
integrity of politicians and bureaucrats. It all rests on the ridiculous
notion that markets cannot possibly work without some "higher power" to
oversee them, and the even more ridiciulous notion that politicians
represent a "higher power." All this confidence despite the overwhelming
evidence that political interference in markets virtually always has
detrimental consequences.
The US has dozens of bureaucracies, with tens of thousands of bureaucrats,
"overseeing" the financial industry. How many thousands more do you want to
featherbed?
> Start at your inept and dysfunctional electoral system then work your
> way up, if you really want to solve the real causes of the crisis
> which is nothing more than the dis-illusions of the past.
I agree. Any electoral system not subject to narrow and strict
constitutional limits is an invitation to disaster, and eventually
totalitarianism.
turtoni
> LOL, I love synchronicity in the morning :)
You'll be getting plenty of synchronicity by tuning into whatever your
tuning into since it's running all your patterns from the previous
mornings..
HTHelps.
Sean
> "Sean" <rela...@theBeach.down.under> wrote in
> news:490901a2$0$28212$afc3...@news.optusnet.com.au:
>
>>> Sure. And anyone who didn't wanna pay protection money to Al Capone
>>> could just get out of business, and anyone who doesn't wanna be
>>> mugged can just move to a safer neighborhood.
>
>> Yes, exactly Pub. That's what they should do. Unless you want the
>> Government to do it for you, and make things like solid business
>> propositions like *protection* illegal, when all it is is a growing
>> local enterprise by a wise entrepreneur.
>
> I'm glad you grasp the similarities. And of course, if protection rackets
> ("pay me or I'll burn down your place") is a solid business enterprise,
> then there is no need for police. Anything goes.
>
Oh yes I grasp the similarities alright, but it's you i think that's missing
the whole point here. If you don't want to do business or live in a space or
pay taxes to a govt that is in power and that has the LEGALALITY of power
transfered to it by THE People then you can either not do business under the
standard regulations, or move to a new neighbourhood, say Somalia, where I
hear Libertaria is breaking out. :)
>> SO? There was NO force applied by the govt, any decent free-marketeer
>> would have avoided this obvious crappy loan senario in the
>> self-interests of their shareholders, ie themselves right?
>
> No force is applied by the racketeer, either, unless you refuse to do what
> he says. Same with the banker. If the banker said, "To hell with you and
> your CRA, we're gonna open this new branch whether you like it or not,"
> he'd soon find himself in jail and his bank overrun with armed goons.
>
How many bankers in Texas were jailed for NOT issuing CRA/sub-prime loans
Pub?
And the bankers have the freedom and legal right to shut their doors and NOT
do business if the State is actually acting like a Mafia Protection Racket,
in fact, I would have thought if things were as bad as you are suggesting
they are, then they actually had the moral responsibility to do so, so that
the *oppressive* Laws were brought fully to the attention of the electorate,
the President, and the world, and changes demanded for the good of the
nation.
Had they done so, then these people would be getting lauded now, and not
kicked out of town with tar and feathers. Follow how *individuals* are
supposed to act under duress --- not to act like cowards!!!
So the question is - how many really had the Mafia guns at thwir heads? and
how many were just greedy and passed the problem down the line .... all the
way to Europe and Australia and parts in-between?
>> Um, you mean, some bankers and stock-holders would have lost money if
>> THEY ignored the free-lunch wagon
>
> Certainly. They'd be locked out of the market.
>
GREAT - they'd be ahead now then wouldn't they?
They could have closed up shop and gone to invest in Australia and
elsewhere where people know how to do good business and keep the economy
ticking over.
>> There was a real estate bubble all over the world you silly man,
>
> Certainly not. There were bubbles in various other places --- there always
> are, someplace or other --- but each had its own reasons. In the UK and
> Australia, increasing difficulties adding to supply (largely due to
> gummint
> restrictions on building) or increased immigration; in places like India,
> rising incomes, which increased demand for housing.
>
> There was not even a bubble in many places in the US. Still isn't. In my
> city (pop 600,000), for instance, the median price is up 0.3% over a year
> ago. Foreclosures have been normal.
>
<shaking my head> **** Pub, there was a real eastate bubble ALL OVER THE
WORLD ; including the USA and that was NOT related to any sub-prime
horseshit as the PRIMARY CAUSE.
Follow me yet????
>> ONLY the USA had Sub-Prime, had a F & F, had GSE's in the real eastate
>> finance markets, had an absence of Regulation on Financial products
>> like MBS's,
>
> LOL. I'm amazed at all this misplaced confidence in the wisdom and
> integrity of politicians and bureaucrats. It all rests on the ridiculous
> notion that markets cannot possibly work without some "higher power" to
> oversee them, and the even more ridiciulous notion that politicians
> represent a "higher power." All this confidence despite the overwhelming
> evidence that political interference in markets virtually always has
> detrimental consequences.
>
> The US has dozens of bureaucracies, with tens of thousands of bureaucrats,
> "overseeing" the financial industry. How many thousands more do you want
> to
> featherbed?
>
Obviously what I said was difficult to grasp, because you have completely
MISSED IT.
Zooooooooooooom .... there it goes :)
>> Start at your inept and dysfunctional electoral system then work your
>> way up, if you really want to solve the real causes of the crisis
>> which is nothing more than the dis-illusions of the past.
>
> I agree. Any electoral system not subject to narrow and strict
> constitutional limits is an invitation to disaster, and eventually
> totalitarianism.
Forget about that, how about a system that is able to register and count
votes accurately first!!!!
Even that the USA seems incapable of doing on a consistent basis. Once you
can that part right, then move up the line to electing representatives
honestly, and throwing around a few Ammendments and passing Laws.
Publius
news:gebdb...@news1.newsguy.com...
>> Not sure why you consider marginal cost as "claptrap." You do know
>> what it means, don't you? Are you denying that marginal costs sets a
>> floor price?
> I am denying that commodity prices are set by costs.
I didn't say they were. I said floor prices are set by costs.
> And the reason is because prices are set by demand.
Of course.
> If the demand exists the requisite labor will be expended.
Demand is only defined at a price. There must be a demand at a price above
costs. That is why costs set the floor price. The selling price may be well
above that. It may even fall below the floor price, if the demand changes
after production has started but before the product can reach the market.
>> "Market values" and prices are the same thing (prices paid, not
>> asking prices). Otherwise we agree here.
> Make up your alleged mind. You just told us that the "floor" price is
> set by costs.
Yes. The "floor price" is the minimum price a producer must expect to get
before he will begin production. If there is no demand at or above that
price, he will not produce the good.
> There is no such thing as a "floor" price unless you are
> talking purely about ones own labor. And then we still have demand
> driving production.
??
>> No, the location has value. Knowledge of the location only has value
>> until the resource enters the economy (by virtue of that knowledge).
>> The value of the knowledge is a function of the estimated value of
>> the resource.
> Point of fact. Once the location is known by the general society that
> knowledge ceases to be of any value.
I think that's what I just said.
> You must hold a government
> license to the use of the location or you are SOL. The closest
> concept I can think of is a patent.
You mean by "license" that if you don't pay taxes the gummint will
confiscate your property? That is not a license; it is a penalty for breach
of an implied contract. They will sell the property to recover the taxes
owed. Any excess above the sale and costs goes to you, just as with a bank
foreclosure. The gummint does not own the property, and therefore cannot
license its use. Neither are patents "licenses." The gummint doesn't own
inventions, either. A patent is an agreement by the gummint that it will
enforce your property rights to an invention for a certain period of time.
After that you're on your own.
> Those who "invest" their labor in finding a resource should have a
> valid claim on the use of the resource (a form of land patent granted
> by the state). And in a just society such patents should be honored
> but not in perpetuity. Land patents should be dissolved after 50 years
> or upon death of the original patent holder whichever is longer.
You *could* do something like that. But there is an economic reason for
limiting the duration of patents which does not apply to land or many other
tangible goods. That is that the enforcement costs become prohibitive for
inventions after a few years, as they are modified, combined with other
inventions, and stimulate the appearance of clones and functionally
equivalent devices. It becomes very difficult to determine what portion of
the value of a product is due to the patented device. Most patented
inventions also have a fairly short "shelf life," i.e., they become less
valuable over time, until finally they are obsolete. Hence enforcement costs
constantly increase to protect values that constantly decline. That is not
the case with land.
Other tangible goods also become obsolete, of course. But enforcement costs
there tend to be self-limiting. If someone steals the rusty pushmower from
my garage, I'll not bother calling the cops. Indeed, I'll be glad someone
has rid me of it.
> At
> that point "discovery" should have no actual claim on the land any
> longer. Privatization of a natural resource in perpetuity is
> economically perverse.
Why is that? "Perverse" in what sense, for what reason? What makes it more
perverse than ownership in perpetuity of a house, or a painting? Or should
titles to those be temporary also?
>> Of course values and costs are tied together.
> Not unless you want to subscribe to Labor Theory of Value.
I said or implied nothing about labor. It might lead *you* to subscribe to
that theory, but that is because you refuse to recognize anything but labor
as a cost.
>> The cost of a good is what one must give up to obtain it.
> True.
Which may be something other than labor. Correct?
>> What he will be willing to give up
>> depends both upon the value he places on the good to be acquired, and
>> on the thing to be given up.
> (s)he may have to give up nothing to acquire the desired state or
> object. There may be no costs at all. Yet (S)he may value the
> acquisition greatly. Ergo, there is no fixed relationship between
> cost and value.
Entirely right in that case. There is only a relationship when one *must*
give up something to obtain a desired good. Where there *is* a cost, then
there will be a relationship between the value of the "cost-good" and the
acquired good, namely, Vg > Vc.
>> Natural goods "as is" have no costs *because they have no value*.
>
> BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!
You disagree? If so, what is that value? How did you determine it? What
prices do minerals on Mars bring in the market?
> BWHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!!
> Please run right out and "bring us some land into the economy". I am
> not speaking of improvements here. Bring us some totally new acreage.
You seem to be promoting a practical difficulty to a philosophical one. But
suppose someone sends a robotic spacecraft to a well-chosen asteroid,
diverts its present orbit so that it becomes a new Moon in near-Earth orbit,
and proceeds to lease space on that asteroid for companies that need vacuum
and zero-G for various manufacturing processes. Or for a telescope that
would be larger and easier to maintain than the Hubble. Or maybe even a
weekend getaway for a fatcat who can afford a ticket on a private orbital
shuttle a few times a year.
> While it may be true that the value (s)he places on what (s)he gives
> up must be less than the value (s)he places on the thing of or
> condition acquired, there is no "rule" by which that difference can be
> calculated.
Absolutely right. That is because the values of both are subjective,
determinable only by the parties to the transaction. There is a rule,
however, the one I just gave above. For both parties Vg > Vc.
> A very nice and long winded dissertation without any real relevance.
> I have allowed that discovery has cost and value. I have given
> discovery its due. Do not, therefore, attempt to conflate it with
> development or production past its actual cost and reasonable profit.
What is a "reasonable profit"?
> Investing land discovery with a perpetual patent is economically
> perverse -- just plain stupid.
You'll need to spell out the reason(s) it is "perverse" or "stupid." Those
aren't very informative terms.
>> Huh? What do maps have to do with anything? You pay the person who
>> introduces a good into the economy --- who makes it available for you
>> and others to use, to benefit from, not someone who draws a picture
>> of it (unless that's what you want, not the resource itself).
> You, nor anyone else, is required to make known land available for
> use. Land itself is not produced by labor.
Which sense of "produces" are you using here? I think we've already agreed
that the sense meaning "brought into physical existence" is irrelevant
economically. It is neither necessary nor sufficient to transform many items
into goods, and is irrelevant to the value of any goods.
> If I want to PAY someone
> for granting me the exclusive use of some land it will be the
> government that enforces the contracts that say I have the exclusive
> use of the land for some period of time. Land owners are not needed
> or desired in that relationship. Your granddaddy's land patent
> expired long ago.
They certainly are. You are merely proposing that the gummint become the
land owner, empowered to "license" use of the land to others. Nothing wrong
with that, provided the gummint has some legitimate claim to the land it is
presuming to license. Which it doesn't, for most land.
Land in inhabited territories cannot be unowned. Someone must have the power
to decide who may use it and for what purposes, else it will be the object
of constant warfare. Same with any other valuable good. The only serious
question is who has the more credible claim. You could offer the same
proposal for houses, ships, factories --- whatever you thought it might be
beneficial to confiscate.
BTW, my granddaddy did not have a license or a patent. He had a deed. The
gummint could not issue licenses or patents because it did not own the land.
>> Huh? It hasn't "returned its profits" until there are no longer
>> customers willing to buy it. Are you suggesting there is some
>> arbitrary limit on the profits one may derive from a good (or
>> proposing one)?
> Is the depreciation period for commercial real estate arbitrary?
Yes. The entire internal revenue code is arbitrary. Every deduction,
exclusion, bracket, and loophole is there because some congresscritter
thought he could win some votes by inserting it. Most real property does not
depreciate.
> Do
> you think that drug patents should be perpetual and everlasting? Both
> of these would be economically perverse.
No, for the reasons given above.
>> It isn't? What's the difference? The 15th and 16th century explorers
>> and Lewis and Clark, of course, were working for others, on contract,
>> who subsequently cldaimed the resources discovered (the US gummint in
>> the case of L&C).
> Of course it is not the same. The resources are KNOWN to exist. And
> the rights to those resources will be administered by the US
> government. The oil companies are not currently granted the right to
> take _MY_ oil, nor have they yet been commissioned by the US
> government to DEVELOP these resources. Those regions are KNOWN and
> are not NEW land that must be discovered.
The Northwest was not "new land" either. It was certainly known to exist.
Nor was the New World, for any of the explorers who followed Columbus. What
was new at that point were the various resources available in those lands,
each of which required discovery.
>> Most oil is discovered on private lands. The "standard" payment to
>> the landowner --- his royalty --- is 1/8 the wellhead price.
> I am in firm disagreement with that. But it is not politically
> possible to change it in any real degree. And is not a worthwhile
> discussion.
Oil companies take title to the oil they produce on gummint lands, just as
they do on private lands. The main difference is that they bid for
exploration rights and the royalty to be paid. Private land owners could use
the same procedure. But most royalties to the government hover around the
industry standard. That is also the case with oil produced from state lands,
as in Alaska. The state gets the royalties, typically also 12.5%.
http://www.dog.dnr.state.ak.us/oil/programs/royalty/royalty.htm
Fred Weiss
> "Michael Coburn" <mik...@verizon.net> wrote in message
>
> > You, nor anyone else, is required to make known land available for
> > use. Land itself is not produced by labor.
>
> Which sense of "produces" are you using here? I think we've already agreed
> that the sense meaning "brought into physical existence" is irrelevant
> economically. It is neither necessary nor sufficient to transform many items
> into goods, and is irrelevant to the value of any goods.
Also, while land itself is usually not produced (altho' even that is
not true), its usability and productivity (and therefore value)
certainly is. A given piece of land can increase in value continually
over a very long period of time. Farmland in many areas of the US is a
good example, as yields per acre continue improving - and then right
on up to it being transformed into a shopping mall or housing
development with even greater economic value.
The continually increasing productivity (and value) of land is
precisely what increases the value of undeveloped land which its owner
might hold indefinitely as an investment, knowing that its value is
increasing over time.
Fred Weiss
Publius
news:490957cc$0$4451$afc3...@news.optusnet.com.au:
>> I'm glad you grasp the similarities. And of course, if protection
>> rackets ("pay me or I'll burn down your place") is a solid business
>> enterprise, then there is no need for police. Anything goes.
> Oh yes I grasp the similarities alright, but it's you i think that's
> missing the whole point here. If you don't want to do business or live
> in a space or pay taxes to a govt that is in power and that has the
> LEGALALITY of power transfered to it by THE People then you can either
> not do business under the standard regulations, or move to a new
> neighbourhood, say Somalia, where I hear Libertaria is breaking out.
Yep, one can always do that, just as the shopkkeeper can move his
business to a different town to escape the racketeer.
A few days aho I predicted here that there would be a major capital
flight if Obama is elected. Today economist Thomas Sowell makes the same
prediction.
Sorry if I'm not impressed with the legality of gummint edicts which
violate rights. It is a legality founded solely on "might makes right."
The "people" cannot transfer to gummint any power they do not have, and
none of them has any power to order anyone to make loans to anyone, or
to dictate the terms of any loans made. If people do not have that power
individually, then they cannot have it collectively. Zero times 1
million is still zero. Except for the power of "might makes right," of
course. Then it is just a matter of "my gang is bigger than your gang."
Needless to say, no banker, or any other productive person, would
voluntarily submit to the judgments of bureaucrats, much less that of
"the people," on the grounds that they are wiser, more talented, better
understand the banking business, or possess more integrity than the
banker himself. Most of "the people" who elect the pols who hire the
bureaucrats can barely balance their checkbooks. Most of them will not
remember who their congresscritter is six months after voting for him,
and will not be able to tell you how he voted on a single bill.
The "power of the people" is the power to form a gang and grab some free
lunches. It is not the power to solve problems or produce anything of
value.
> And the bankers have the freedom and legal right to shut their doors
> and NOT do business if the State is actually acting like a Mafia
> Protection Racket, in fact, I would have thought if things were as bad
> as you are suggesting they are, then they actually had the moral
> responsibility to do so, so that the *oppressive* Laws were brought
> fully to the attention of the electorate, the President, and the
> world, and changes demanded for the good of the nation.
LOL. "Brought to the attention of the electorate"? It is the electorate
who is demanding the free lunches! You are proposing that the shopkeeper
complain to the Mob about the goon the Mob has sent to extort him.
>> There was not even a bubble in many places in the US. Still isn't. In
>> my city (pop 600,000), for instance, the median price is up 0.3% over
>> a year ago. Foreclosures have been normal.
>>
>
> <shaking my head> **** Pub, there was a real eastate bubble ALL OVER
> THE WORLD ; including the USA and that was NOT related to any
> sub-prime horseshit as the PRIMARY CAUSE.
>
>
> Follow me yet????
You are simply mistaken. There has never been a housing bubble all over
the world at any one time, and there was not even one all over the US.
>> The US has dozens of bureaucracies, with tens of thousands of
>> bureaucrats, "overseeing" the financial industry. How many thousands
>> more do you want to
>> featherbed?
> Obviously what I said was difficult to grasp, because you have
> completely MISSED IT.
Guess so. Perhaps it was invisible?
> Forget about that, how about a system that is able to register and
> count votes accurately first!!!!
>
> Even that the USA seems incapable of doing on a consistent basis. Once
> you can that part right, then move up the line to electing
> representatives honestly, and throwing around a few Ammendments and
> passing Laws.
Heh. You are operating under the assumption that the political system is
flawed because it does not reflect the will of "the people." The problem
with it is exactly the opposite --- it *does* reflect the will of the
people, more so every year. That's why we are now in the post-
Constitutional Era. "The people" do not want a gummint that keeps them
free and protects their rights. They want a free lunch. And they vote
accordingly.
Andy F.
> "Andy F." <never...@tesco.net> wrote in
> news:6ms765F...@mid.individual.net:
>
>> In fact, the CRA never forced anyone to make any loans at all.Anyone
>> who didn't like it could just get out of the business.
>
> Sure. And anyone who didn't wanna pay protection money to Al Capone could
> just get out of business, and anyone who doesn't wanna be mugged can just
> move to a safer neighborhood.
That's got nothing to do with the question of whether the bubble was caused
by the CRA.
>
>> And in a rational market that's what would have happened. the CRA
>> requirements made the mortgage business less attractive. So so fewer
>> people would have gone into it.
>
> Hardly. The gummint made it attractive by creating a secondary market for
> the crappy loans, namely, the GSEs. So the banks could write the garbage,
> peddle it to Fannie and Freddie, and keep their noses clean on CRA. The
> gummint does not want banks to go out of business, or make mortgages more
> expensive. That would defeat their free-lunch wagon. Some congresscritters
> would lose votes.
Fannie and Freddie weren't the only players in the secondary market. In
fact, most of the mortgages they bought were repackaged and sold on at a
profit.
And the same argument applies to the secondary market as the primary market.
Rational investors would have demanded a higher interest rate for investing
in riskier mortgages.
>
>> What caused the bubble in fact was the same as what always causes
>> bubbles - greed and stupidity. Too many people fooled themselves into
>> thinking that prices would keep going up forever.
>
> First you have to understand why they were going up on the first place. It
> is because tens of thousands of new buyers had entered the market,
> expanding demand against an inadequate supply. Most of those borrowers
> were
> unqualified and thus were default risks.
>
No, it was mostly because the collapse of the dotcom boom led to lower
interest rates, making property more attractive.
Sean
Of course you are right, from a pov. No doubt about it. Still it wasn't
robots or factories that won a war of independence, founded a nation, voted
on a constitution, and all the people that came after to today can equally
do the same thing, or reverse it.
You may of course call it a mob, just like the British did in 1776, and I'm
sure they couldn't balance their check books either.
So sooner or later it's gotta come down to some level of agreement of where
the government gets it's power. A quick look at the people on the streets
before Marcos resigned without a shot might tend clear up where the real
power always resides. Call it a mob if you want, that's your words, not
mine. Aparently you have no respect for the people. The difference between
you and I, besides respect, is that I just expect far more from them than
they are apparently willing to accept. You just blame the government for
everything.... as in the free lunches, whilst ignoring all your own free
lunches of real value earnt by blood sweat and tears of people since 1776.
That's some free-lunch you're enjoying!
>> And the bankers have the freedom and legal right to shut their doors
>> and NOT do business if the State is actually acting like a Mafia
>> Protection Racket, in fact, I would have thought if things were as bad
>> as you are suggesting they are, then they actually had the moral
>> responsibility to do so, so that the *oppressive* Laws were brought
>> fully to the attention of the electorate, the President, and the
>> world, and changes demanded for the good of the nation.
>
> LOL. "Brought to the attention of the electorate"? It is the electorate
> who is demanding the free lunches!
Really? Show me when and where the "electorate" demanded these free-lunches
you speak of. And the outcomes of a trashed economy that went with them?
> You are proposing that the shopkeeper
> complain to the Mob about the goon the Mob has sent to extort him.
>
Bad analogy, but in essence you betcha YES ... you obviously have no idea
about how the Mafia Mob works either, and why, up to a point the locals
loved them and they got good things done.
>>> There was not even a bubble in many places in the US. Still isn't. In
>>> my city (pop 600,000), for instance, the median price is up 0.3% over
>>> a year ago. Foreclosures have been normal.
>>>
>>
>> <shaking my head> **** Pub, there was a real eastate bubble ALL OVER
>> THE WORLD ; including the USA and that was NOT related to any
>> sub-prime horseshit as the PRIMARY CAUSE.
>>
>>
>> Follow me yet????
>
> You are simply mistaken. There has never been a housing bubble all over
> the world at any one time, and there was not even one all over the US.
>
You're just being pendantic, and splitting hairs. Would you prefer a list of
every nation on earth, with every city/town/county, and for me to mark those
that did and those that didn't have a bubble in 2007, so your demand for
accuracy and detail was saited? ?
or are you just misinformed about the state of the real estate markets over
the last few years in the world?
>>> The US has dozens of bureaucracies, with tens of thousands of
>>> bureaucrats, "overseeing" the financial industry. How many thousands
>>> more do you want to
>>> featherbed?
>
>> Obviously what I said was difficult to grasp, because you have
>> completely MISSED IT.
>
> Guess so. Perhaps it was invisible?
>
No. It was there.
>> Forget about that, how about a system that is able to register and
>> count votes accurately first!!!!
>>
>> Even that the USA seems incapable of doing on a consistent basis. Once
>> you can that part right, then move up the line to electing
>> representatives honestly, and throwing around a few Ammendments and
>> passing Laws.
>
> Heh. You are operating under the assumption that the political system is
> flawed because it does not reflect the will of "the people." The problem
> with it is exactly the opposite --- it *does* reflect the will of the
> people, more so every year. That's why we are now in the post-
> Constitutional Era. "The people" do not want a gummint that keeps them
> free and protects their rights. They want a free lunch. And they vote
> accordingly.
>
>
So you say. it probably looks that way to many people. And I'm operating
under no assumptions btw.
Bret Cahill
> > > use. �Land itself is not produced by labor.
>
> > Which sense of "produces" are you using here? I think we've already agreed
> > that the sense meaning "brought into physical existence" is irrelevant
> > economically. It is neither necessary nor sufficient to transform many items
> > into goods, and is irrelevant to the value of any goods.
>
> Also, while land itself is usually not produced (altho' even that is
> not true), its usability and productivity (and therefore value)
> certainly is. A given piece of land can increase in value continually
> over a very long period of time. Farmland in many areas of the US is a
> good example, as yields per acre continue improving -
The productivity increases are due to advanced farming techniques and/
or improvements that wouldn't be taxed anyway with site value
taxation.
In fact, the land was better before farming stripped it of topsoil.
Bret Cahill
Sean
"Andy F." <never...@tesco.net> wrote in message
news:6mtv3cF...@mid.individual.net...
You're being waaaaaaaaay too rational here! :)
>
Fred Weiss
> So sooner or later it's gotta come down to some level of agreement of where
> the government gets it's power.
From its Constitution? A document which clearly specifies the limits
of that power (see The Bill of Rights) and constrains the manner in
which the gov't can operate.
Now, true, if the vast majority want to run roughshod over a minority
- whether it's to segregate Negroes, or put Jews in concentration
camps, or boot out immigrants, or loot the rich - it will be difficult
to stop them and they can even change the Constitution to legalize
their thuggery.
Then however it may be time for another revolution, assuming we
haven't already sunk into dictatorship which can easily squelch it.
Dictatorship in fact is the greatest danger we face with the upcoming
administration - just as we did with FDR - especially if the Democrats
also dominate Congress. Only a vigorous and unbending opposition has
even a remote change of stopping them. It never completely stopped FDR
- and thus he was able to keep the country in Depression and
continually expand the power of the gov't - but it was at least able
to restrain him somewhat.
Btw, the conservatives are badly mistaken and they probably could have
strengthened their message somewhat if they had gotten it right. It is
not socialism we have to most fear from the Democrats. It is fascism,
the gov't getting a total stranglehold on the economy and instituting
censorship, e.g. the Fairness Doctrine or bans on "hate speech" (where
they of course get to define what that is).
Fred Weiss
Fred Weiss
> In fact, the land was better before farming stripped it of topsoil.
Better for what?
Fred Weiss
Sean
"Fred Weiss" <fred...@papertig.com> wrote in message
news:4daaba96-6be3-44d9...@y29g2000hsf.googlegroups.com...
On Oct 30, 10:54 am, "Sean" <relax...@theBeach.down.under> wrote:
> So sooner or later it's gotta come down to some level of agreement of
> where
> the government gets it's power.
From its Constitution? A document which clearly specifies the limits
of that power (see The Bill of Rights) and constrains the manner in
which the gov't can operate.
---------------------------------------------
Sean: So a piece of paper has all the power then, that's exactly what you
are saying here.
Well it's so damn powerful, that the current President has been able to
ignore it and over-ride it so easily for most of the time, except when the
SCOTUS has intervened.
Now, and this may be seen as a trick question but -- who or what gave power
to the Constitution?
The Ink, or The People who voted for it?
But before you answer please do some research on the terms *Republic* and
*Democracy* and discover what those words actually mean in the real world,
absent of any fantasy and ignorance that is.
-------------------------------------------------------------------------------------------
Now, true, if the vast majority want to run roughshod over a minority
- whether it's to segregate Negroes, or put Jews in concentration
camps, or boot out immigrants, or loot the rich - it will be difficult
to stop them and they can even change the Constitution to legalize
their thuggery.
Then however it may be time for another revolution, assuming we
haven't already sunk into dictatorship which can easily squelch it.
Dictatorship in fact is the greatest danger we face with the upcoming
administration - just as we did with FDR - especially if the Democrats
also dominate Congress. Only a vigorous and unbending opposition has
even a remote change of stopping them. It never completely stopped FDR
- and thus he was able to keep the country in Depression and
continually expand the power of the gov't - but it was at least able
to restrain him somewhat.
Btw, the conservatives are badly mistaken and they probably could have
strengthened their message somewhat if they had gotten it right. It is
not socialism we have to most fear from the Democrats. It is fascism,
the gov't getting a total stranglehold on the economy and instituting
censorship, e.g. the Fairness Doctrine or bans on "hate speech" (where
they of course get to define what that is).
Fred Weiss
-----------------------------------------------------------
Sean: Boy where do you and the many others like you get all these fantasy
beliefs from?
According to most scholars of fascism, there are both left and right
influences on fascism as a social movement, and fascism, especially once in
power, has historically attacked communism, conservatism and parliamentary
liberalism, attracting support primarily from the "far right" or "extreme
right." !!!!!!!!!!!!!
----------------------------------------------------------------------
Franklin D. Roosevelt, president of the United States from 1933 to 1945,
described fascism in his 1942 "Message from the President of the United
States Transmitting Recommendations Relative to the Strengthening and
Enforcement of Anti-trust Laws" as follows:
The first truth is that the liberty of a democracy is not safe if the
people tolerate the growth of private power to a point where it becomes
stronger than their democratic state itself. That, in its essence, is
fascism--ownership of government by an individual, by a group, or by any
other controlling private power.[10]
Sean: I'd suggest you have a reall good look at the current situation and
what has been the progressive steps up to this, then have another really
hard look at what FDR had to say about it, and what you have to say about
it.
-----------------------------------------------------------------------
[F]ascism is best defined as a revolutionary form of nationalism, one that
sets out to be a political, social and ethical revolution, welding the
'people' into a dynamic national community under new elites infused with
heroic values. The core myth that inspires this project is that only a
populist, trans-class movement of purifying, cathartic national rebirth
(palingenesis) can stem the tide of decadence"[15]
PALIN-genesis !!!! That's some co-incidence!!!
---------------------------------------------------------------------
Fascism is a totalitarian nationalist ideology[1][2][3] that is primarily
concerned with perceived problems associated with cultural, economic,
political, and social decline or decadence. It seeks to solve such problems
by achieving a millenarian national rebirth by exalting the nation or race
as well as promoting cults of unity, strength and purity.[4][5][6][7][8]
Various scholars attribute different characteristics to fascism, but the
following elements are usually seen as its integral parts: nationalism
(includingcollectivism and populism based on nationalist values); Third
Position (including class collaboration, corporatism, economic planning,
mixed economy,national socialism, national syndicalism, protectionism,);
totalitarianism (including dictatorship, holism, major social
interventionism, and statism); andmilitarism.[9][10] Fascism opposes
communism, liberalism, conservatism and international
socialism.[11][5][4][12][13][14][15][16]
Some authors reject broad usage of the term or exclude certain parties and
regimes.[17] Following the defeat of the Axis powers in World War II, there
have been few self-proclaimed fascist groups and individuals. In
contemporary political discourse, the term fascist is often used by
adherents of some ideologies as a pejorative description of their opponents.
[ That last phrase is speaking about YOU in spades Fred!!! Try waking up to
your own self-delusions, if you feel the urge!]
----------------------------------------------------------------------------------------------------------------------------------------------
Now, feel free to snip all those bits you don't like to look at
objectively.............. but my reply stands and is in the archives untill
Google goes the way of Atlantis. cheers
Publius
news:4909cabf$0$18425$afc3...@news.optusnet.com.au:
>> The "power of the people" is the power to form a gang and grab some
>> free lunches. It is not the power to solve problems or produce
>> anything of value.
> Of course you are right, from a pov. No doubt about it. Still it
> wasn't robots or factories that won a war of independence, founded a
> nation, voted on a constitution, and all the people that came after to
> today can equally do the same thing, or reverse it.
The Consitution was ratified by the state legislatures, not by popular vote.
And the people of that era, having recently thrown off an oppressive gummint,
were far more concerned about keeping government in check than in milking it
for free lunches. It took a while for the pols to create that expectation:
"Elect me and I'll subsidize your housing costs, food costs, education costs
. . ." Etc., etc.
> So sooner or later it's gotta come down to some level of agreement of
> where the government gets it's power.
Nearly everyone would agree with Mao on that one: "Political power grows out
of the barrel of a gun." There are compelling reasons for imposing some
narrow limits on such power, but they depend upon economic, historical, and
philosophical arguments which are unfamiliar to and beyond the grasp of most
voters. Most of them have only a superficial (and distorted) acquaintance
with history, and have had no exposure whatsoever to economics or moral
theory. They are no better equipped to understand and analyze such arguments
than they are quantum theory. They are incomprehensible abstractions which
stand no chance at all against the prospect of a free lunch.
> Aparently you have no respect for the people.
As political decision-makers, none whatsoever.
> expect far more from them than they are apparently willing to accept.
> You just blame the government for everything.... as in the free
> lunches, whilst ignoring all your own free lunches of real value earnt
> by blood sweat and tears of people since 1776.
There is certainly a valuable legacy there. That is what "the people" are
gradually throwing away.
>> LOL. "Brought to the attention of the electorate"? It is the
>> electorate who is demanding the free lunches!
> Really? Show me when and where the "electorate" demanded these
> free-lunches you speak of. And the outcomes of a trashed economy
> that went with them?
You're asking for examples of demands for free lunches? Don't you read this
newsgroup?
Sean
Nuances of language, and the specific meanings of phrases in context seems
to escape you. You must be another one of those less well equipped. <shrug>
And yet people complain about me being 'supposedly' critical and down on
Americans, sheesh, talk about deluded and depressed. One only needs to copy
and paste from any number of americans to sound insultingly critical. And
most often that's exactly what I do do with a tweaking edit. ;)
Oh well, back to relaxing on the beach i guess. Chow, and happy daze ahead.
ro...@telus.net
<m.pu...@nospam.comcast.net> wrote:
>Question: why don't you create your own wealth, instead of trying to pilfer
>somebody else's?
I do. It is then pilfered from me by landowners who did not, repeat,
_not_ create any wealth, but merely charge me a fee for not violating
my rights.
>Always been curious about the workings of the free-luncher mind.
Whereas I know very well how the rentier mind works: "It's not
stealing because the government says it's my property."
-- Roy L
ro...@telus.net
<m.pu...@nospam.comcast.net> wrote:
>Michael Coburn <mik...@verizon.net> wrote in
>news:ge193...@news2.newsguy.com:
>
>>> Question: why don't you create your own wealth, instead of trying to
>>> pilfer somebody else's?
>
>> I might ask all the landowners the same question.
>
>I certainly won't deny that some landowners have stolen their land.
All land is stolen. There is no way land can become private property
in the first place but by forcible appropriation.
I've proved all this to you before, stupid liar.
>So have
>some current possessors of cattle, automobiles, bicycles, books, and money.
They were all produced by labor, and were at least the rightful
property of their producers. As land was never produced by anyone's
labor, it can never rightly have become anyone's property.
>But you seem to be claiming that *all* landowners have stolen their land.
No, just that all their land is stolen. There's a difference. In
most cases the landowners have simply received the stolen land from
government, without having to go to the trouble and risk of stealing
it themselves.
>What evidence do you have for that expansive claim?
There is by definition no other way land can become private property.
-- Roy L
ro...@telus.net
<m.pu...@nospam.comcast.net> wrote:
>"Michael Coburn" <mik...@verizon.net> wrote in message
>news:ge2ld...@news5.newsguy.com...
>
>>> I certainly won't deny that some landowners have stolen their land.
>>> So have some current possessors of cattle, automobiles, bicycles,
>>> books, and money. But you seem to be claiming that *all* landowners
>>> have stolen their land.
>>>
>>> What evidence do you have for that expansive claim?
>
>> I need none. I really do not care whether the current "owner" stole
>> the land or not. Sunk costs in natural resource "ownership" are
>> irrelevant to the current economy. So long as any the debt is
>> discharged, the current economy will proceed much better without the
>> "owner" charging a toll for the use of the resource.
>
>Proceed better for nonpaying users of that resource, no doubt.
No, you are just evil lying garbage. The user of a resource should
rightly compensate the community of all he deprives of it, as they
would otherwise have been at liberty to use it.
>That
>would be true for the use of any "resource" --- labor, land, minerals,
>livestock, crops, tools, inventions, etc.
No, now you're just lying again. Land and minerals are natural
resources that would have existed and been accessible anyway. Labor,
livestock, tools, etc. are not natural resources.
But then, you already knew that, didn't you? You just decided that as
the truth proved you wrong, you had better continue lying, like the
filthy, evil, lying garbage you are.
>Anyone who could use any of
>them for free would certainly consider themselves better off.
The difference is that anyone _would_ otherwise have been at liberty
to use the natural resources for free because they were already there,
ready to use, with no help from any rent-collecting parasite.
>The sunk
>costs in any of them are not irrelevant to the current economy, however,
>since had those costs not been sunk, the resources would not exist,
>economically speaking.
Of course they would, evil lying garbage. They'd all still be there,
ready to use.
Why lie so stupidly? Do you really imagine anyone will believe your
evil nonsense?
>Are you suggesting they appeared by magic?
ROTFL!! Are you suggesting someone made natural resources, stupid,
vicious, evil, lying garbage? Or that they did not exist before any
human being existed?
-- Roy L
ro...@telus.net
<m.pu...@nospam.comcast.net> wrote:
>Michael Coburn <mik...@verizon.net> wrote in news:ge3ads32r49
>@news5.newsguy.com:
>
>>> Proceed better for nonpaying users of that resource, no doubt. That
>>> would be true for the use of any "resource" --- labor, land, minerals,
>>> livestock, crops, tools, inventions, etc. Anyone who could use any of
>>> them for free would certainly consider themselves better off. The sunk
>>> costs in any of them are not irrelevant to the current economy, however,
>>> since had those costs not been sunk, the resources would not exist,
>>> economically speaking. Are you suggesting they appeared by magic?
>
>> I love it. The natural resources do exactly that, fool. That is why
>> that word "natural" is an adjective preceding that word "resources". So
>> yes, such things might be described as appearing "by magic'.
>
>Knew you'd bite on that.
>
>That is why the clause "economically speaking" followed "would not exist"
>(since we're speaking of the purpose of words).
But that's just sophistry (which is _always_ the purpose of _your_
words). It's just question-begging, because you _define_
"economically speaking" as "under someone's ownership."
>How a material came into physical existence is irrelevant to economics.
No, it is not, which is why classical economists divided the factors
of production into land, labor and capital. You have simply decided
to say and believe _anything_whatever_ in order to avoid knowing the
fact that land does not need to be produced in order to be used, and
that the landowner is therefore a pure parasite.
>What matters is how it came into the economy --- how it became an economic
>good available for use, for trade, etc.
There are only two ways things can "come into the economy": if they
are products of labor they can be produced, and if they are natural
resources they can be appropriated.
>Natural materials have no uses and
>no value until they are discovered; they have no price and are not traded
>in any economy.
Right. So you are just begging the question by defining "what
matters" as "being property."
>Though they may have come into physical existence by magic,
>they do not come into economic existence that way. They must be searched
>for,
No, that is another bald lie, evil, lying garbage. Almost none of the
land people own was ever "searched for." It was simply discovered in
the course of people's ordinary activities long before it had any
value.
>and once discovered, recovered and introduced into the economy.
No, that is another lie. People used land for economic purposes long
before anyone imagined the notion of being able to own it or charge
others a fee for using it.
>At
>equilibrium, *the marginal cost of natural materials is the cost to
>discover and recover the next share.*
Meaningless gibberish. There is no such equilibrium, because all the
natural resources are already there, ready to use. Their supply is
fixed.
Stupid.
>The physical origin of the good is irrelevant.
LOL! The credo of a thief...
-- Roy L
ro...@telus.net
<m.pu...@nospam.comcast.net> wrote:
>"Andy F." <never...@tesco.net> wrote in
>news:6ms765F...@mid.individual.net:
>
>> In fact, the CRA never forced anyone to make any loans at all.Anyone
>> who didn't like it could just get out of the business.
>
>Sure. And anyone who didn't wanna pay protection money to Al Capone could
>just get out of business, and anyone who doesn't wanna be mugged can just
>move to a safer neighborhood.
And anyone who doesn't want to pay a landowner for what nature
provided for free can just jump in the ocean....
-- Roy L
Publius
> No, you are just evil lying garbage. The user of a resource should
> rightly compensate the community of all he deprives of it, as they
> would otherwise have been at liberty to use it.
He sure should, had he deprived anyone of it. But of course he didn't. One
cannot deprive someone of something he does not possess and in fact does
not know exists.
Please don't trot out the subjunctive conditionals, i.e., "he would have
had it or might have had it had the planets been properly aligned or the
dice rolled the right way." That is silly.
> No, now you're just lying again. Land and minerals are natural
> resources that would have existed and been accessible anyway.
Everything in anyone's possession is accessible to someone, else no one
would possess it. Few things are accessible to every person, however. And
the fact that something is accessible does not create a property in it. It
does not become a property until someone takes advantage of that
accessibility and takes possession of it. That person will then most likely
make it accessible to many more people.
> The difference is that anyone _would_ otherwise have been at liberty
> to use the natural resources for free because they were already there,
> ready to use, with no help from any rent-collecting parasite.
Sorry, but they were obviously not ready to use, else someone would have
been using them, assuming they are useful. Something whose existence or
location is unknown is not "ready to use."
>>The sunk
>>costs in any of them are not irrelevant to the current economy, however,
>>since had those costs not been sunk, the resources would not exist,
>>economically speaking.
> Of course they would, evil lying garbage. They'd all still be there,
> ready to use.
The physical existence of a natural material is irrelevant, economically
speaking. It has no price, no value, and confers no benefits on anyone
until it is discovered and introduced into an economy. Only then does it
acquire *economic* existence.
> ROTFL!! Are you suggesting someone made natural resources, stupid,
> vicious, evil, lying garbage? Or that they did not exist before any
> human being existed?
How long they physically existed, and how they came to physically exist,
before being discovered is irrelevant to economics.
Publius
> All land is stolen. There is no way land can become private property
> in the first place but by forcible appropriation.
Er, no. A good cannot be stolen unless it already has an owner. I know you
labor under the "primordial common ownership" fallacy, but that is a
gratuitous and vacuous notion. Nor does acquiring an unowned good involve
"force," in the morally relevant sense, since it was not already in
anyone's possession. Thus there is no one against whom any "force" could be
exercised, and no need for any.
>>So have
>>some current possessors of cattle, automobiles, bicycles, books, and
>>money.
> They were all produced by labor, and were at least the rightful
> property of their producers. As land was never produced by anyone's
> labor, it can never rightly have become anyone's property.
Labor is relevant to ownership only because it is one way to bring about
first possession. It is morally and economically irrelevant in itself.
> No, just that all their land is stolen.
From whom? You'll need some evidence for your ownership claim here. A
baseless assertion of a primordial common ownership will not suffice.
>>What evidence do you have for that expansive claim?
>
> There is by definition no other way land can become private property.
LOL. Whose definition would that be?
Publius
>>Question: why don't you create your own wealth, instead of trying to
>>pilfer somebody else's?
> I do. It is then pilfered from me by landowners who did not, repeat,
> _not_ create any wealth, but merely charge me a fee for not violating
> my rights.
Well, no. That is what gummints do. Owners of land and other natural
resources, or their forebears, create wealth by discovering those natural
materials, transforming them into resources, and introducing them into an
economy, where the benefits they offer become available to many people who
previously had no knowledge of their existence or whereabouts or of the
benefits they could derive from them.
Publius
news:490ae793$0$4453$afc3...@news.optusnet.com.au:
> Nuances of language, and the specific meanings of phrases in context
> seems to escape you. You must be another one of those less well
> equipped. <shrug>
Hm. If there were nuances and contextual meanings they were apparently
drawn from some sort of private language of your own. You'll have to stick
with public languages and words with public meanings if you expect others
to understand you.
Michael Coburn
> "Michael Coburn" <mik...@verizon.net> wrote in message
> news:gebdb...@news1.newsguy.com...
>
>>> Not sure why you consider marginal cost as "claptrap." You do know
>>> what it means, don't you? Are you denying that marginal costs sets a
>>> floor price?
>
>> I am denying that commodity prices are set by costs.
>
> I didn't say they were. I said floor prices are set by costs.
>
>> And the reason is because prices are set by demand.
>
> Of course.
>
>> If the demand exists the requisite labor will be expended.
>
> Demand is only defined at a price.
No. Demand exists independent of price. There may not be any trades.
There may not be any production because the labor is too much. But the
idea that price controls things has got to go.
> There must be a demand at a price
> above costs. That is why costs set the floor price. The selling price
> may be well above that. It may even fall below the floor price, if the
> demand changes after production has started but before the product can
> reach the market.
Then we have firmly established that price and value are not the same.
And that prices are a slave of demand and not costs. Supply side
economics is a crock of crap.
>>> "Market values" and prices are the same thing (prices paid, not asking
>>> prices). Otherwise we agree here.
>
>> Make up your alleged mind. You just told us that the "floor" price is
>> set by costs.
>
> Yes. The "floor price" is the minimum price a producer must expect to
> get before he will begin production. If there is no demand at or above
> that price, he will not produce the good.
>
>> There is no such thing as a "floor" price unless you are talking purely
>> about ones own labor. And then we still have demand driving
>> production.
>>
>>> No, the location has value. Knowledge of the location only has value
>>> until the resource enters the economy (by virtue of that knowledge).
>>> The value of the knowledge is a function of the estimated value of the
>>> resource.
>
>> Point of fact. Once the location is known by the general society that
>> knowledge ceases to be of any value.
>
> I think that's what I just said.
>
>> You must hold a government
>> license to the use of the location or you are SOL. The closest concept
>> I can think of is a patent.
>
> You mean by "license" that if you don't pay taxes the gummint will
> confiscate your property?
No. What I am stressing is that "ownership" regarding physical alienable
items is a societal concept enforced by a government.
> That is not a license; it is a penalty for
> breach of an implied contract. They will sell the property to recover
> the taxes owed. Any excess above the sale and costs goes to you, just as
> with a bank foreclosure. The gummint does not own the property, and
> therefore cannot license its use. Neither are patents "licenses." The
> gummint doesn't own inventions, either. A patent is an agreement by the
> gummint that it will enforce your property rights to an invention for a
> certain period of time. After that you're on your own.
After a period of time, the property rights are dissolved. That is the
concept behind a patent. And it should also apply to land.
>> Those who "invest" their labor in finding a resource should have a
>> valid claim on the use of the resource (a form of land patent granted
>> by the state). And in a just society such patents should be honored
>> but not in perpetuity. Land patents should be dissolved after 50 years
>> or upon death of the original patent holder whichever is longer.
>
> You *could* do something like that. But there is an economic reason for
> limiting the duration of patents which does not apply to land or many
> other tangible goods. That is that the enforcement costs become
> prohibitive for inventions after a few years, as they are modified,
> combined with other inventions, and stimulate the appearance of clones
> and functionally equivalent devices. It becomes very difficult to
> determine what portion of the value of a product is due to the patented
> device. Most patented inventions also have a fairly short "shelf life,"
> i.e., they become less valuable over time, until finally they are
> obsolete. Hence enforcement costs constantly increase to protect values
> that constantly decline. That is not the case with land.
Nice dodge. The question that arises is: Why have the patents and the
enforcements in the first place? The answer to those questions will yield
the fact that these moral contracts are not economically perverse and in
fact will tend to increase the amount of good "stuff".
> Other tangible goods also become obsolete, of course. But enforcement
> costs there tend to be self-limiting. If someone steals the rusty
> pushmower from my garage, I'll not bother calling the cops. Indeed, I'll
> be glad someone has rid me of it.
Yes. The value of physical capital and technological inventions erodes
with time.
>> At
>> that point "discovery" should have no actual claim on the land any
>> longer. Privatization of a natural resource in perpetuity is
>> economically perverse.
>
> Why is that? "Perverse" in what sense, for what reason? What makes it
> more perverse than ownership in perpetuity of a house, or a painting? Or
> should titles to those be temporary also?
The reasons are primarily based on the reality that all things other than
land and collectibles deteriorate in value over time, and all things
other than NATURALLY OCCURRING things must be created by labor. It makes
sense to provide enforcement of ownership rights (rights of disposition
as opposed to simple use) to those things that have actual cost; those
things that must be created by labor. Even if real capital is owned by a
group or in common the ownership is necessary to its creation in that
people do not work for free. There must be a return to labor or no labor
will be forthcoming. This need for ownership is also because the idea of
specialization and trade are absolutely dependent on this concept of
ownership. And there is no disagreement concerning the efficiency of
specialization and trade. But none of this applies to land. The land is
naturally occurring and is not a product of labor. So ownership is
totally unnecessary to the realization of land. While ownership of land
forms a barrier to best use of the resource, there is no actual benefit.
>>> Of course values and costs are tied together.
>
>> Not unless you want to subscribe to Labor Theory of Value.
>
> I said or implied nothing about labor. It might lead *you* to subscribe
> to that theory, but that is because you refuse to recognize anything but
> labor as a cost.
That is because there is no other cost.
>>> The cost of a good is what one must give up to obtain it.
>
>> True.
>
> Which may be something other than labor. Correct?
True. But when we look a little deeper we find that what is being given
up is either labor itself, or something which is owned that can be used
to "command" or to avoid labor. Such things as dollars or gold or a car
I will swap for some other thing. All of these things other than labor
itself are a store of value and for the most part also a store of
labor. That does not mean that value and labor are the same thing. But
it is nonetheless true that items that I will trade for other items are
stores of value (and stores of labor if I am trading something other than
land rights or other government granted privilege) because they can be
used to command the labor of others or diminish the labor of the owner.
but this is not always the case. People are willing to trade for very
bizarre reasons and they see value in things that most would not. Cost
and value are two different concepts.
>>> What he will be willing to give up
>>> depends both upon the value he places on the good to be acquired, and
>>> on the thing to be given up.
>
>> (s)he may have to give up nothing to acquire the desired state or
>> object. There may be no costs at all. Yet (S)he may value the
>> acquisition greatly. Ergo, there is no fixed relationship between cost
>> and value.
>
> Entirely right in that case. There is only a relationship when one
> *must* give up something to obtain a desired good. Where there *is* a
> cost, then there will be a relationship between the value of the
> "cost-good" and the acquired good, namely, Vg > Vc.
Yet what is being given up may have no cost. It may have been granted as
a title or inherited or it may have fallen from the sky or it might be a
title to a naturally occurring resource. And in that case "value" is
being traded for value. The "value" is most likely measured as the labor
that could have been commanded by the object in a market, or the labor
that could be saved by use of the object. That such is true in most
cases does not mean it is true in all cases. And that is why the LTV is
in error. It may be that some person is willing to trade a new car for
an autographed picture of Jesus. But we don't construct economic systems
around such non economic transactions.
>>> Natural goods "as is" have no costs *because they have no value*.
>>
>> BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!
>
> You disagree? If so, what is that value? How did you determine it? What
> prices do minerals on Mars bring in the market?
With price per barrel of $140, estimated oil in the ANWR and the OCS
would have paid the national debt of the United States. To say that this
oil has no value because it has not yet been developed is ridiculous.
And while there will be costs/labor associated with the development of
these resources, the resources themselves are a gift of nature. In the
current mode of stupidity the US government sells the rights to explore
and drill for oil even though there may not even be any oil. As such the
oil obviously has value a long time before any labor is applied and
before anyone "brings the oil into the economy".
>> BWHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!! Please
>> run right out and "bring us some land into the economy". I am not
>> speaking of improvements here. Bring us some totally new acreage.
>
> You seem to be promoting a practical difficulty to a philosophical one.
No! I am promoting reality.
> But suppose someone sends a robotic spacecraft to a well-chosen
> asteroid, diverts its present orbit so that it becomes a new Moon in
> near-Earth orbit, and proceeds to lease space on that asteroid for
> companies that need vacuum and zero-G for various manufacturing
> processes. Or for a telescope that would be larger and easier to
> maintain than the Hubble. Or maybe even a weekend getaway for a fatcat
> who can afford a ticket on a private orbital shuttle a few times a year.
Then you would not have a naturally occurring resource. You would have a
commodity produced by labor.
>> While it may be true that the value (s)he places on what (s)he gives up
>> must be less than the value (s)he places on the thing of or condition
>> acquired, there is no "rule" by which that difference can be
>> calculated.
>
> Absolutely right. That is because the values of both are subjective,
> determinable only by the parties to the transaction. There is a rule,
> however, the one I just gave above. For both parties Vg > Vc.
Nope. The 'c' is not really relevant to the trade. The proper
expression is perceived value of the object one wished to own -
"Preceived Value of object or labor or condition Desired" (Pvd) and the
perceived value of whatever is currently owned and to be given up "The
present value of ownership" (Pvo). The cost of the items is not relevant
to the trade.
Pvd > Pvo
>> A very nice and long winded dissertation without any real relevance. I
>> have allowed that discovery has cost and value. I have given discovery
>> its due. Do not, therefore, attempt to conflate it with development or
>> production past its actual cost and reasonable profit.
>
> What is a "reasonable profit"?
Good point. There may not be such a thing in your world. But there is
such a thing in classical economics and in marxian economics and most
economics before the marginalists. Profit is by definition derived from
the __USE__ of capital stock. And Interest is derived from the letting
of capital stock. Interest is like land rent but it is a fee paid for
the use of capital stock. And when money was a commodity (gold) then
money and capital stock were considered to be equivalent. They were not
considered to be the same thing, but a fee collected for the use of money
or a fee collected for the use of implements was, in economics, called
interest. The word "rent" was totally owned by land rent.
This will tell you what capital is and what profit is in _real_ economics:
http://www.greatervoice.org/essays/TheBerryPatch.php
There is much to be said about this little parable. And in some cases it
glosses over cost and value in order to concentrate on the proper
definition of "capital" and "profit". Without a market (other humans)
there is no "rent" and no "interest". Neoclassical nincompoop economics
and marginalists seek to do away with these distinctions in order to wrap
"privilege" and "monopoly" and barriers to entry all in a cocoon of
"profit" or "interest".
What isn't really featured in the story is that "wages" are the return to
labor and in the story the labor is applied to land to create these
wages. The berries could also be called commodities if there was someone
with which to trade. And wages, like profit, and value and cost exist in
the absence of any market or mirginalist claptrap.
So the answer to the question concerning "reasonable profit" is simply
the return to the use of the "capital" until the "capital" wears out.
And because land, when properly used, or not used at all, will never wear
out and will probably naturally improve if left alone, and because land
is not "produced", it is rational to refer to the return or advantage in
its use as something distinct from "profit'. It is also rational to
impose place some sort of fixed term on the rights to use it. Because in
the absence of such a fixed term, land ownership becomes a barrier to
productive use.
>> Investing land discovery with a perpetual patent is economically
>> perverse -- just plain stupid.
>
> You'll need to spell out the reason(s) it is "perverse" or "stupid."
> Those aren't very informative terms.
I did that just above but I will reiterate that land ownership prevents
the use of the land until the land owners is paid a toll. Where this is
acceptable with regard to capital, because capital requires an investment
(a cost -- labor), land does not and thus there is no reason to reward
the "ownership" of it. If ownership of capital is not permitted then
there will be far lass of it. So the ownership of produced goods, and
that includes capital, is NOT perverse in that the development
(production) of capital improves productivity. That is not true of land
because it is not something that is produced. So to allow ownership in
perpetuity interferes with use while providing no gain. The owner simply
steals the labor of others as a fee for using that which would have been
available and usable had the owner never existed.
>>> Huh? What do maps have to do with anything? You pay the person who
>>> introduces a good into the economy --- who makes it available for you
>>> and others to use, to benefit from, not someone who draws a picture of
>>> it (unless that's what you want, not the resource itself).
>
>> You, nor anyone else, is required to make known land available for use.
>> Land itself is not produced by labor.
>
> Which sense of "produces" are you using here? I think we've already
> agreed that the sense meaning "brought into physical existence" is
> irrelevant economically.
No. I can't imagine that I would ever agree with that. I saw you
screwing around with the word and trying to change its meaning but I
don't recall agreeing with it.
> It is neither necessary nor sufficient to
> transform many items into goods, and is irrelevant to the value of any
> goods.
WOW! That is nutty.
>> If I want to PAY someone
>> for granting me the exclusive use of some land it will be the
>> government that enforces the contracts that say I have the exclusive
>> use of the land for some period of time. Land owners are not needed or
>> desired in that relationship. Your granddaddy's land patent expired
>> long ago.
>
> They certainly are. You are merely proposing that the gummint become the
> land owner, empowered to "license" use of the land to others. Nothing
> wrong with that, provided the gummint has some legitimate claim to the
> land it is presuming to license. Which it doesn't, for most land.
We will disagree on this issue. Government is the people. There is no
such thing as a "government" that is not endorsed and recognized by the
people. And government exists to serve the people. I know that Our
representative government is not working very well at present. But there
is hope. Ownership does not even exist without government. Physical
possession is not ownership. Ownership is when you can walk away from
something and expect it to still be yours even though you are not
physically present. There are ways to create that sort of exclusive use
rights other than by ownership, but ownership serves very well with
regard to produced items.
> Land in inhabited territories cannot be unowned. Someone must have the
> power to decide who may use it and for what purposes, else it will be
> the object of constant warfare.
Rights of tenancy are actually different from ownership. I can rent a
building or an apartment or a section of land from the "owner" and my
right to use what I have rented in an appropriate fashion cannot be
justly impinged by anyone including the owner. To whom I pay the rent is
irrelevant and so long as the bids for the use of the item/land is free
and open then we have a true "free market". And in the event of
government administration without owners the use of the land would, in
fact, be restricted by zoning and such just as it is now. The "warfare"
seems to be done with money in a market.
> Same with any other valuable good. The
> only serious question is who has the more credible claim. You could
> offer the same proposal for houses, ships, factories --- whatever you
> thought it might be beneficial to confiscate.
Uh, No, I can't. Those things are the product of someones labor and that
is part of what yields a rightful claim to private ownership. Rightful
ownership comes into existence in the hands that produce it. Labor does
not create rightful private ownership in and of itself. But it is always
a part of what does create rightful ownership.
> BTW, my granddaddy did not have a license or a patent. He had a deed.
> The gummint could not issue licenses or patents because it did not own
> the land.
I _AM_ the government along with everyone else. And if _WE_ decide your
deed is nothing but a piece of paper then that is the way it will be.
That is not going to happen as far as I am concerned, and even if I
thought it would or should, I would not live long enough to see it.
That sort of change is probably generational.
>>> Huh? It hasn't "returned its profits" until there are no longer
>>> customers willing to buy it. Are you suggesting there is some
>>> arbitrary limit on the profits one may derive from a good (or
>>> proposing one)?
>
>> Is the depreciation period for commercial real estate arbitrary?
>
> Yes. The entire internal revenue code is arbitrary. Every deduction,
> exclusion, bracket, and loophole is there because some congresscritter
> thought he could win some votes by inserting it. Most real property does
> not depreciate.
Oh but it does, because it includes structures. They do not last forever
even though they may last for generations. I can't help but wonder how
long it will be before the Empire State Building will need to be
demolished simply because it is a threat to fall over and kill a bunch of
people. One theory concerning the WTC is that the demolition charges had
been set in the buildings a long time ago because the terrorists had
already tried to topple one into the other twice. And as they were
damaged there was a threat that they would fall over and kill a lot more
people than they did. So they were brought down.
Structures do not last forever as land does. Structures depreciate.
>> Do
>> you think that drug patents should be perpetual and everlasting? Both
>> of these would be economically perverse.
>
> No, for the reasons given above.
>
>>> It isn't? What's the difference? The 15th and 16th century explorers
>>> and Lewis and Clark, of course, were working for others, on contract,
>>> who subsequently cldaimed the resources discovered (the US gummint in
>>> the case of L&C).
>
>> Of course it is not the same. The resources are KNOWN to exist. And
>> the rights to those resources will be administered by the US
>> government. The oil companies are not currently granted the right to
>> take _MY_ oil, nor have they yet been commissioned by the US government
>> to DEVELOP these resources. Those regions are KNOWN and are not NEW
>> land that must be discovered.
>
> The Northwest was not "new land" either. It was certainly known to
> exist. Nor was the New World, for any of the explorers who followed
> Columbus. What was new at that point were the various resources
> available in those lands, each of which required discovery.
(snore)
>>> Most oil is discovered on private lands. The "standard" payment to the
>>> landowner --- his royalty --- is 1/8 the wellhead price.
>
>> I am in firm disagreement with that. But it is not politically
>> possible to change it in any real degree. And is not a worthwhile
>> discussion.
>
> Oil companies take title to the oil they produce on gummint lands, just
> as they do on private lands. The main difference is that they bid for
> exploration rights and the royalty to be paid. Private land owners could
> use the same procedure. But most royalties to the government hover
> around the industry standard. That is also the case with oil produced
> from state lands, as in Alaska. The state gets the royalties, typically
> also 12.5%.
>
> http://www.dog.dnr.state.ak.us/oil/programs/royalty/royalty.htm
I am aware of all this. It is boring and to continue to do the oil this
way is reeeeeeeeeeeeeeeeeeeeeeeeeeely stupid. I do not believe, for
instance, that the royalty paid for the Alaskan oil is high enough and I
also do not feel that it should be given to Alaskans. The oil is in the
US commons. It is not in the commons of Alaska because there is no such
thing as the commons of Alaska. I already paid for Alaska. My government
bought the whole damned state from Russia:
http://en.wikipedia.org/wiki/Alaska_purchase
The Alaskan National Wildlife Refuge is called that because it is
situated in Alaska. Not because the people that happen to live on land
that was duly purchased by the US government in Alaska have some sort of
ownership claim on it. The OCS is the same.
Sean
> On Thu, 30 Oct 2008 01:27:45 -0700, Publius wrote:
>
How the Markets Really Work
http://au.youtube.com/watch?v=SwRFoxgEcHc
Mr X
>
> No, just that all their land is stolen. There's a difference. In
> most cases the landowners have simply received the stolen land from
> government, without having to go to the trouble and risk of stealing
> it themselves.
>
> >What evidence do you have for that expansive claim?
>
> There is by definition no other way land can become private property.
"To prove a legal title to land one must trace it back to the man who
stole it." -- David Lloyd George
Fred Weiss
> On Thu, 30 Oct 2008 01:27:45 -0700, Publius wrote:
> >> If the demand exists the requisite labor will be expended.
>
> > Demand is only defined at a price.
>
> No. Demand exists independent of price. There may not be any trades.
> There may not be any production because the labor is too much. But the
> idea that price controls things has got to go.
Oh, and here I thought that "If the demand exists the requisite labor
will be expended". Wait. Who said that? Oh, right, it was you.
So, let's see if I understand this. If a Park Ave. penthouse costs
$10million, that will not control the demand. People will still clamor
for them, lining up around the block, $10million dollars in their
tight little fists ready to fork it over to get one.
Not only that, but millions of workers will suddenly appear to expend
the requisite labor to build such penthouses. Oh, but wait, maybe "the
labor is too much". Oh, but at the same time, price doesn't control
things. Even the price of labor? Or perhaps the price of real estate
on Park Avenue? But that's "got to go". Uh, huh.
Maybe you can tell us what life is like in the alternative universe in
which you reside.
Fred Weiss
Fred Weiss
> "To prove a legal title to land one must trace it back to the man who
> stole it." -- David Lloyd George
Stole it from whom? And from whom did he steal it?
Presumably from the turtles upon whose backs all property rests ad
infinitum.
Fred Weiss
Mark M.
> On Nov 1, 4:06 am, Mr X <imouttah...@mac.com> wrote:
>
>
>>"To prove a legal title to land one must trace it back to the man who
>>stole it." -- David Lloyd George
>
>
> Stole it from whom? And from whom did he steal it?
Common property as well as private property can be stolen. The person is a
thief who wrongly appropriates for himself exclusively something that is
rightfully common property. Since only labor can create rightful property,
land can never become rightful property. And although many land uses
require exclusive possession, such possession can never rightly be
considered absolute property. Possession of land must be conditional and
respect common right of use that every person enjoys by birth. For how
can we uphold the principle of equal freedom if that most essential freedom
to use the earth is made exclusive property?
Mark M.
Publius
news:16mdnczNV54zx5HU...@earthlink.com:
>> Stole it from whom? And from whom did he steal it?
> Common property as well as private property can be stolen.
It sure can.
> The person
> is a thief who wrongly appropriates for himself exclusively something
> that is rightfully common property.
Yikes, another "primordial common ownership" syncophant. This NG seems to
be a gathering place for them.
Just as common property, like individual property, can be stolen, so do
claims of common ownership require evidence, just as claims of individual
ownership, e.g. a deed, bill of sale, etc. What evidence do you have to
support your claim?
> Since only labor can create
> rightful property, land can never become rightful property.
Oh? What is the basis for that claim? Which systems of law accept that
principle? Which theories of property? Don't mention the theory of Henry
George, since he supplies no arguments for his assertion of a primodial
common ownership. It was as gratutitous when he declared it as when you do.
Are your kidneys your property? How much labor did you invest in
fabricating them?
> Possession of land
> must be conditional and respect common right of use that every person
> enjoys by birth.
Ah. "Rights enjoyed by birth." How did you establish that these, or any,
rights are present at birth? Take an X-ray? Microscopic examination?
Fred Weiss
> Fred Weiss wrote:
> > On Nov 1, 4:06 am, Mr X <imouttah...@mac.com> wrote:
>
> >>"To prove a legal title to land one must trace it back to the man who
> >>stole it." -- David Lloyd George
>
> > Stole it from whom? And from whom did he steal it?
> ... Possession of land must be conditional and
> respect common right of use that every person enjoys by birth. For how
> can we uphold the principle of equal freedom if that most essential freedom
> to use the earth is made exclusive property?
This is what's called "floating abstractions" without any concrete
connection to reality. What do you mean by "the principle of equal
freedom" or "freedom to use the earth"?
So, let's get concrete. If I'm working a farm does someone else have
the right - on the basis of "the principle of equal freedom" or
"freedom to use the earth" - to grab a piece of it and start working
it himself without my permission? Or for that matter a whole group,
leaving me with nothing but a small piece, perhaps not even large
enough to sustain myself? Theoretically, if "everybody" demanded a
piece, I'd be left with nothing but an infinitesimal amount.
Or, if I want to farm, do I need to get permission from "everybody"
and do they then allocate me a piece of land? And why me? How is it
decided?
In fact, it is clear, you are not describing freedom, but its exact
opposite. What you are advocating actually is total collectivization
and ultimately dictatorship - or perhaps even worse, nihilism, and the
total destruction of civilization.
Fred Weiss
Les Cargill
>
> Yikes, another "primordial common ownership" syncophant. This NG seems to
> be a gathering place for them.
>
Just how primordial is it?
<snip>
--
Les Cargill
Les Cargill
> On Nov 1, 9:42 am, "Mark M." <m...@ztech.com> wrote:
>> Fred Weiss wrote:
>>> On Nov 1, 4:06 am, Mr X <imouttah...@mac.com> wrote:
>>>> "To prove a legal title to land one must trace it back to the man who
>>>> stole it." -- David Lloyd George
>>> Stole it from whom? And from whom did he steal it?
>
>> ... Possession of land must be conditional and
>> respect common right of use that every person enjoys by birth. For how
>> can we uphold the principle of equal freedom if that most essential freedom
>> to use the earth is made exclusive property?
>
> This is what's called "floating abstractions" without any concrete
> connection to reality. What do you mean by "the principle of equal
> freedom" or "freedom to use the earth"?
>
> So, let's get concrete. If I'm working a farm does someone else have
> the right - on the basis of "the principle of equal freedom" or
> "freedom to use the earth" - to grab a piece of it and start working
> it himself without my permission? Or for that matter a whole group,
> leaving me with nothing but a small piece, perhaps not even large
> enough to sustain myself? Theoretically, if "everybody" demanded a
> piece, I'd be left with nothing but an infinitesimal amount.
>
What's missing is: through what messaging system do we know what
"everybody" wants? If we ask them, what they say with words
will be quite different from what their actions pronounce.
Humbly, the very best we can to do deduce intent as we speak
is to see where the money goes. *That* is where their mouth is.
So the person who uses the land to make the most money wins.
The problem is that a person can camp on land and not use it,
and still see gains. "How much gain" is controversial. Especially
this year...
> Or, if I want to farm, do I need to get permission from "everybody"
> and do they then allocate me a piece of land? And why me? How is it
> decided?
>
We have that now, don't we? You have a legal document which - in
essence - establishes that "we" agree to help defend your right
to the property.
Even absolute perpetual title to land exists in a social
framework.
> In fact, it is clear, you are not describing freedom, but its exact
> opposite. What you are advocating actually is total collectivization
> and ultimately dictatorship - or perhaps even worse, nihilism, and the
> total destruction of civilization.
>
> Fred Weiss
>
It's hard to say that it's nihilistic. Only if you ( as I do,
but it's not for everybody) think that all Positivism leads
necessarily to nihilism, along the Weimar path. For the
great justification for common ownership of land is usually
Spencer's Statics, Chapter X.
Hmmmm.... well, I would personally rather see land taxed than
labor, because that would help make more efficient the markets
for labor. But that's likely arbitrary - I suspect that people
don't really want to work, and I'd like to see it subsidized.
After all, the income tax has few direct supporters....
As we're seeing quite clearly, the fraction of our economy which
is about land use is quite large. Even a relatively small number
of mortgage failures has led to a big ole bear market, sucking
equities and bonds into the well. So nihilisms all
around...
--
Les Cargill
Publius
news:490ca9c3$0$17060$9a6e...@unlimited.newshosting.com:
>> Yikes, another "primordial common ownership" syncophant. This NG
>> seems to be a gathering place for them.
> Just how primordial is it?
>
> http://oll.libertyfund.org/index.php?option=com_staticxt&staticfile=sho
> w.php%3Ftitle=273&layout=html#chapter_6258
Oh, the primordial common ownership dogma is far older than Spencer. It was
assumed by Locke and many of his predecessors. It is, in fact, biblical ---
God created the Earth and gave it to Man for his home.
The God Theory at least provides a proper title chain. God is the orginal
owner of the Earth, being its creator. He then conveyed it to mankind, in
common, as a gift.
Unfortunately, that title chain has a very weak first link.
There is no basis for any claim that the Earth as whole was ever owned by
anyone --- any individual or any collective. It was entirely unowned, *res
nullius*, until particular individuals took possession of various portions
of it and thereby established titled to those portions, just as they did
for berries gathered or rabbits bagged. Just as asteroids in the asteroid
belt will be until someone grabs one and begins a mining operation thereon.
Anyone who asserts a primordial common ownership of the Earth is either
spouting religious dogma or gratuitous nonsense.
Bret Cahill
> >>pilfer somebody else's?
> > I do. It is then pilfered from me by landowners who did not, repeat,
> > _not_ create any wealth, but merely charge me a fee for not violating
> > my rights.
>
> Well, no. That is what gummints do.
Despotic gummints that act as landlords, i. e., George III.
Bret
Michael Coburn
The problem that most of us sane people run into is in our use of the
word "own" as a shorthand and a convenience when discussing the issues
with people who have no other basis for discussion. It is this initial
framing that then leads to a difficult pass where issues become difficult
to address. The concept of land tenure and limited exclusive use is not
necessarily all wrapped up in an ownership enchilada. It is that Publius
has based his entire view of morality, ethics, and the physical cosmos on
this concrete block foundation of ownership. And then, when that concept
is revealed to be a function of government, it crumbles into pieces. How
and what ownership actually is and how it comes into being is not cast in
stone (or concrete). It is a societal concept and it must comport itself
with due regard for the morality dictated by the vast universal
majority. It happens that land ownership, like slavery, has been
supported by the majority. And just like slavery it is going to change.
Not because of primordial whatever, but because the society advances and
becomes more intelligent and is better able to determine what is _BEST_.
And then the society redefines righteousness. The universal majority can
only be wrong in retrospect.
Michael Coburn
> On Nov 1, 9:42 am, "Mark M." <m...@ztech.com> wrote:
>> Fred Weiss wrote:
>> > On Nov 1, 4:06 am, Mr X <imouttah...@mac.com> wrote:
>>
>> >>"To prove a legal title to land one must trace it back to the man who
>> >>stole it." -- David Lloyd George
>>
>> > Stole it from whom? And from whom did he steal it?
>
>> ... Possession of land must be conditional and respect common right of
>> use that every person enjoys by birth. For how can we uphold the
>> principle of equal freedom if that most essential freedom to use the
>> earth is made exclusive property?
>
> This is what's called "floating abstractions" without any concrete
> connection to reality. What do you mean by "the principle of equal
> freedom" or "freedom to use the earth"?
>
> So, let's get concrete. If I'm working a farm does someone else have the
> right - on the basis of "the principle of equal freedom" or "freedom to
> use the earth" - to grab a piece of it and start working it himself
> without my permission?
That depends on whether the democratically elected state has allocated
the tenant rights to you in a free market.
> Or for that matter a whole group, leaving me with
> nothing but a small piece, perhaps not even large enough to sustain
> myself? Theoretically, if "everybody" demanded a piece, I'd be left with
> nothing but an infinitesimal amount.
Not if you paid for the use of it in a free market and were allocated the
right to exclusive use on that basis. Government's obligation to enforce
your rights to exclusive use for the lease period are no less that that
which would exist based on "ownership".
> Or, if I want to farm, do I need to get permission from "everybody" and
> do they then allocate me a piece of land? And why me? How is it decided?
A free market for land use will exist. And in that market people bid for
the exclusive rights of use over a term (and the term varies depending on
the use). Government does not set the price.
> In fact, it is clear, you are not describing freedom, but its exact
> opposite.
And it is obvious that you are a liar.
> What you are advocating actually is total collectivization and
> ultimately dictatorship - or perhaps even worse, nihilism, and the total
> destruction of civilization.
>
> Fred Weiss
That is only true if you are an idiot and choose to misuse the proceeds
of the land rents to create the crap you seem to worship. You and the
moronic idiots like you that must have a "Big Brother" authoritarian
pyramid to run the society would probably figure out a way to screw this
up. "Hellova job, Brownie."
Michael Coburn
> On Nov 1, 12:24 am, Michael Coburn <mik...@verizon.net> wrote:
>> On Thu, 30 Oct 2008 01:27:45 -0700, Publius wrote:
>
>> >> If the demand exists the requisite labor will be expended.
>>
>> > Demand is only defined at a price.
>>
>> No. Demand exists independent of price. There may not be any trades.
>> There may not be any production because the labor is too much. But the
>> idea that price controls things has got to go.
>
> Oh, and here I thought that "If the demand exists the requisite labor
> will be expended". Wait. Who said that? Oh, right, it was you.
>
> So, let's see if I understand this. If a Park Ave. penthouse costs
> $10million, that will not control the demand. People will still clamor
> for them, lining up around the block, $10million dollars in their tight
> little fists ready to fork it over to get one.
I have no reason to debate someone that has no basis for his arguments,
Fred. That would be you. The simple answer, Fred, is that you _DON't_
understand it and do not have the intellectual honesty required to ever
ever understand it.
Les Cargill
So what if "God" in this case is a metaphor, one that does not have to
be taken literally?
--
Les Cargill
Publius
> So what if "God" in this case is a metaphor, one that does not have to
> be taken literally?
It has to be taken literally if the title chain vased on it is to be taken
literally. You can't derive actuals from hypotheticals.
Les Cargill
"The common weal" is also a metaphor. You can most certainly
derive concrete results form abstract concepts.
The $DEITY macro is one of the general "rightness" of
an action, as if to say "if there were a God, surely
He would support this." We have an engine in our thought
that sees this without a detailed map.
If we're limited to what can be proven, we won't get very far.
Take antebellum slavery as an example - there was no clear
*legal* structure which made is repugnant. Any random person
could disagree as to its morality, depending on which starting
assumptions were in use. Given the science of the day, the
non-humanity of slaves was a legitimate (if highly dubious)
claim. It could not be rejected cleanly.
Yet today, nobody can argue for it successfully. Why is that?
Because there's a 50,000 foot view that makes it clear that it's
highly immoral. Sure, we have science to help, but there were
people whose vision presaw what we see by a century or more.
--
Les Cargill
Publius
>> Anyone who asserts a primordial common ownership of the Earth is
>> either spouting religious dogma or gratuitous nonsense.
> The problem that most of us sane people run into is in our use of the
> word "own" as a shorthand and a convenience when discussing the issues
> with people who have no other basis for discussion. It is this
> initial framing that then leads to a difficult pass where issues
> become difficult to address. The concept of land tenure and limited
> exclusive use is not necessarily all wrapped up in an ownership
> enchilada. It is that Publius has based his entire view of morality,
> ethics, and the physical cosmos on this concrete block foundation of
> ownership. And then, when that concept is revealed to be a function
> of government, it crumbles into pieces.
Mistaken in several respects. The concepts of ownership, property, and
rights are certainly not dependent upon government, or defined or justified
by government. They precede government, and indeed justify the institution
of government. ("Governments are instituted among men to preserve and
protect their rights." --Jefferson; "The great and chief end, therefore, of
men's uniting into commonwealths, and putting themselves under government,
is the preservation of their property." --Locke). Governments neither
define nor create property; rights and property exist prior to any
government, both historically and logically. Governments are organized to
protect rights and property which already exist, and have no other
legitimate function. When governments presume to define what shall count as
property or and dictate the assignment of property titles they violate
their *raison d'etre*, surrender their legitimacy, and are ripe for
overthrow.
Nor are ownership or property fundamental "in Publius's view", either. The
concepts of rights and property are defined by moral theory, whose
"fundamental principle" is, "Everyone ought always to act so that good can
be maximized, and evil minimized, for everyone."
Humans are autonomous moral agents with disjoint systems of ends who find
themselves in social settings, i.e., among other agents with whom they may
interact. Thus the good to be maximized resides in many different systems
of ends, one attached to each agent. In such a setting, for the good to
maximized for all of them, each must restrict his pursuit of good to those
things he can acquire without thereby inposing losses on others. Each
agent's pursuit of the good must respect the Pareto principle. The concepts
of rights and property constrain what any agent may take to enhance his own
welfare and well-being: he may take anything he desires, within his grasp,
as long as he does not thereby impose a loss on anyone else, by taking
something already taken by someone else who has acquired it without
violating this rule. Rights and property define what is "off-limits" to new
takings by others. Unless those limits are respected, the "fundamental
principle" cannot be satisfied.
> It is a societal concept and it must comport itself with
> due regard for the morality dictated by the vast universal majority.
Hardly. The "morality dictated by the vast universal majority" is about as
likely to be valid as would be theories of cosmology, biology or economics
dictated by the "vast universal majority." The vast universal majority are
believers in gods, astrology, magic, alien abductions, and all manner of
incohernet political and moral doctrines. They are no more qualified to
pronounce on moral issues than they are to do brain surgery.
Sean
> I have no reason to debate someone that has no basis for his arguments,
> Fred. That would be you. The simple answer, Fred, is that you _DON't_
> understand it and do not have the intellectual honesty required to ever
> ever understand it.
>
Exactly.
But always leave the door slightly adjar for a miracle to occur. But untill
that actually occurs, back to "exactly". :)
Fred Weiss
Or, in other words, you don't have an answer.
Fred Weiss
Publius
>> Demand is only defined at a price.
> No. Demand exists independent of price. There may not be any trades.
> There may not be any production because the labor is too much. But
> the idea that price controls things has got to go.
I think you're confusing "desire" with "demand." There must be a desire
for the good before there will be any demand, at any price. But the
*demand* is the quantity which will be consumed at a given price.
There is also the abstract notion of "absolute demand," as Adam Smith
defined it, i.e., the quantity which would be consumed if the good were
free. But that is irrelevant, economically.
> Then we have firmly established that price and value are not the same.
I thought we'd established that some time back.
> And that prices are a slave of demand and not costs. Supply side
> economics is a crock of crap.
The value of a good to an agent sets the *upper bound* to the market
price. The cost to supply the good sets the *lower bound*. The selling
price will fall somewhere between those two bounds.
>>> You must hold a government
>>> license to the use of the location or you are SOL. The closest
>>> concept I can think of is a patent.
>> You mean by "license" that if you don't pay taxes the gummint will
>> confiscate your property?
> No. What I am stressing is that "ownership" regarding physical
> alienable items is a societal concept enforced by a government.
"Ownership" is certainly a social concept, as are all concepts
expressible in language, and it is indeed enforced by government ---
when the government is doing its job. But those facts do not consitute a
"license." A license is a permission, and it implies an owner ---
someone with authority to grant the permission. For most property that
will not be the gummint. Of course, be sure not to confuse "authority"
with "threats." Any thug with a gun can make threats, but he has no
authority.
>> That is not a license; it is a penalty for
>> breach of an implied contract. They will sell the property to recover
>> the taxes owed. Any excess above the sale and costs goes to you, just
>> as with a bank foreclosure. The gummint does not own the property,
>> and therefore cannot license its use. Neither are patents "licenses."
>> The gummint doesn't own inventions, either. A patent is an agreement
>> by the gummint that it will enforce your property rights to an
>> invention for a certain period of time. After that you're on your
>> own.
> After a period of time, the property rights are dissolved. That is
> the concept behind a patent. And it should also apply to land.
Well, as I mentioned, there is a reason for limiting patent enforcement
which does not apply to various other classes of goods. Why "should"
enforcement be limited for the latter?
Here's a *gedankenexperiment*: Suppose there is no gummint, and property
owners contract with private insurance/security services to protect
their rights. The insurance company would set premiums depending upon
the anticipated enforcement costs. As time goes on, those costs for
protection of patent rights would grow, and thus so would the premiums
the owner had to pay. Over the same period of time the value of the
patent would decline, as it was gradually supplanted in the market by
newer technologies. Eventually the patent holder would decide that the
protection was no longer cost-effective. Would the same thing happen to
his policy for protecting his land?
> Nice dodge. The question that arises is: Why have the patents and
> the enforcements in the first place? The answer to those questions
> will yield the fact that these moral contracts are not economically
> perverse and in fact will tend to increase the amount of good "stuff".
Yes, that is an important consequence of patents (and of protecting all
property rights). But the incentive effects diminish with time also,
along with the value of the patent. Most of the earnings from the patent
will occur in the first 20 years or so.
>> Why is that? "Perverse" in what sense, for what reason? What makes it
>> more perverse than ownership in perpetuity of a house, or a painting?
>> Or should titles to those be temporary also?
> The reasons are primarily based on the reality that all things other
> than land and collectibles deteriorate in value over time, and all
> things other than NATURALLY OCCURRING things must be created by labor.
There is no relationship between those two factors. The value of some
manmade things persist over time (the "collectibles" you mention, and
well-built buildings, furniture, etc.), and the value of some natural
goods decline over time (whale oil, many plants formerly used to make
vegetable dyes, even land in many areas). Whether, and how much, labor
is invested in a good has nothing to so with its economic durability.
> It makes sense to provide enforcement of ownership rights (rights of
> disposition as opposed to simple use) to those things that have actual
> cost; those things that must be created by labor.
That "sense" escapes me. I thought we'd already established that
production costs have nothing to do with value. It would seem that
protection of property rights should turn on the *value* of the goods in
question, not their production cost. Moreover, we've also established (I
think) that most natural goods also have production costs, in the second
sense of "production" earlier defined.
You keep wanting to endow the role of labor in bringing a good into
physical existence with some special significance, to "sanctify"
it. But no such special treatment is warranted economically.
>>>> The cost of a good is what one must give up to obtain it.
>>> True.
>> Which may be something other than labor. Correct?
> True. But when we look a little deeper we find that what is being
> given up is either labor itself, or something which is owned that can
> be used to "command" or to avoid labor.
Well, if you broaden "labor" in that way, you trivialize your argument
by transforming it into a tautology. Labor is fungible; like money, it
can be exchanged for almost any good. My dentist may agree to treat me
for five years in exchange for my first edition of *Moby Dick*, or give
me a free cleaning in exchange for the unusual and pretty shell I found
on the beach. I.e., any good may "command" labor. But it may also
"command" any other thing someone is willing to trade for it.
>> Entirely right in that case. There is only a relationship when one
>> *must* give up something to obtain a desired good. Where there *is* a
>> cost, then there will be a relationship between the value of the
>> "cost-good" and the acquired good, namely, Vg > Vc.
>
> Yet what is being given up may have no cost. It may have been granted
> as a title or inherited or it may have fallen from the sky or it might
> be a title to a naturally occurring resource.
That something is inherited does not entail that it had no cost. It may
be without cost to the new owner, but it may well have involved costs to
previous owners. Same with most natural goods. There will have been
costs incurred by someone in discovering most of them and bringing them
to market.
> It may be that some person is
> willing to trade a new car for an autographed picture of Jesus. But we
> don't construct economic systems around such non economic
> transactions.
Why is that a noneconomic transaction? It may be a strange one, but any
transaction involving goods valued by the parties is an economic
transaction.
>> You disagree? If so, what is that value? How did you determine it?
>> What prices do minerals on Mars bring in the market?
> With price per barrel of $140, estimated oil in the ANWR and the OCS
> would have paid the national debt of the United States.
"Would have" is the crucial phrase. "Would haves" and "could haves" do
not count in the market. Presumed oil deposits will not pay any debts
until they become available for use.
> To say that
> this oil has no value because it has not yet been developed is
> ridiculous.
*Undiscovered*, not "undeveloped." It will have a *use* if and when it
is discovered. But until then it has no *value*. That is a simple
empirical observation. No one is buying or selling it.
> And while there will be costs/labor associated with the
> development of these resources, the resources themselves are a gift of
> nature. In the current mode of stupidity the US government sells the
> rights to explore and drill for oil even though there may not even be
> any oil. As such the oil obviously has value a long time before any
> labor is applied and before anyone "brings the oil into the economy".
No. Lease payments are nominal --- perhaps $2-5 per acre per year, for
10 years, and are intended to compensate for other uses foreclosed while
the exploration is underway. Since most of those lands have few
alternative uses, annual lease payments are minimal. The government
receives no substantial revenue until oil begins flowing.
and What has value is the information
>> But suppose someone sends a robotic spacecraft to a well-chosen
>> asteroid, diverts its present orbit so that it becomes a new Moon in
>> near-Earth orbit, and proceeds to lease space on that asteroid for
>> companies that need vacuum and zero-G for various manufacturing
>> processes. Or for a telescope that would be larger and easier to
>> maintain than the Hubble. Or maybe even a weekend getaway for a
>> fatcat who can afford a ticket on a private orbital shuttle a few
>> times a year.
> Then you would not have a naturally occurring resource. You would
> have a commodity produced by labor.
Huh? How does the role of labor in bringing the asteroid into the
economy differ from that required to bring gold or oil or diamonds or a
hitherto unknown and uninhabited island into the economy?
>> Absolutely right. That is because the values of both are subjective,
>> determinable only by the parties to the transaction. There is a rule,
>> however, the one I just gave above. For both parties Vg > Vc.
> Nope. The 'c' is not really relevant to the trade. The proper
> expression is perceived value of the object one wished to own -
> "Preceived Value of object or labor or condition Desired" (Pvd) and
> the perceived value of whatever is currently owned and to be given up
> "The present value of ownership" (Pvo). The cost of the items is not
> relevant to the trade.
The Pvo *is* the cost of the Pvd, for the current buyer. Previous costs
to previous owners are irrelevant to the current transaction. So is the
composition of those previous costs, if any.
You are trying to confer (as I said above) a "special status" on goods
which had a labor cost at some time in their economic history. But that
entire history is irrelevant to an item's status as an economic good in
the current market, or its current value in that market. There is
nothing special about that history, and it is entirely ignored in any
current trades.
>> What is a "reasonable profit"?
> Good point. There may not be such a thing in your world. But there
> is such a thing in classical economics and in marxian economics and
> most economics before the marginalists.
In classical economics a "reasonable profit" is one which compares in
magnitude with that which the owner of the asset could earn by investing
it elsewhere. It represents a lower, not an upper, limit to the returns
expected from the asset. I won't bother with marxian economics, since it
is pseudoscience.
[ . . .]
> So the answer to the question concerning "reasonable profit" is simply
> the return to the use of the "capital" until the "capital" wears out.
> And because land, when properly used, or not used at all, will never
> wear out and will probably naturally improve if left alone, and
> because land is not "produced", it is rational to refer to the return
> or advantage in its use as something distinct from "profit'. It is
> also rational to impose place some sort of fixed term on the rights to
> use it. Because in the absence of such a fixed term, land ownership
> becomes a barrier to productive use.
Nowhere in there was an answer as to what is a "reasonable profit."
BTW, many manmade things (German castles, paintings by Picasso, the Hope
diamond, et al) will not wear out either, with reasonable care.
>> You'll need to spell out the reason(s) it is "perverse" or "stupid."
>> Those aren't very informative terms.
> I did that just above but I will reiterate that land ownership
> prevents the use of the land until the land owners is paid a toll.
> Where this is acceptable with regard to capital, because capital
> requires an investment (a cost -- labor), land does not and thus
> there is no reason to reward the "ownership" of it.
Neither do Picasso paintings and German castles.
But your use of the term "reward" reveals what is going on here. You
think of payments to persons for use of their property (including the
use of their bodies and skills in the case of labor) as "rewards" for .
. . what?
Well, rewards for their contributions to the "common good," or the
"public interest." But that is not what we pay anyone for. There is no
"common good," and if there were, it would not determine the prices
charged or paid for any good. We pay others for things *we* regard as
good, and to which they have legitimate titles, or for the temporary use
of them, because that is what we must do if we expect them to yield the
goods we want. The only other alternatives are creating or discovering
equivalent goods ourselves, or stealing them. The first would be highly
inefficient, and second highly immoral and quickly destructive of the
basic terms of social cooperation.
We pay landowners for the use of their land for the same reason we pay
others for the use of any asset of theirs, including their labor. We pay
them because they have legitmate titles to those assets, all of which
are based on the same principle of ownership.
History has produced rationalizations for expropriating, or
"nationalizing," or otherwise confiscating, every class and variety of
property you can name. Governments and their flaks and apologists
through the 18th century spun ingenious arguments to justify
confiscating labor (slavery), Marxists spun elaborate sophisms to
justify confiscating industrial property, Georgists advance specious
arguments to justify confiscating land. Today the most popular target is
intellectual property. Everybody wants a free lunch, and are ever
attentive to politicians who promise to deliver them and ideologues who
assure them their rapacity is justifiable.
> If ownership of
> capital is not permitted then there will be far lass of it. So the
> ownership of produced goods, and that includes capital, is NOT
> perverse in that the development (production) of capital improves
> productivity.
That would hold for any goods whose supply can no longer be increased.
We could probably steal them with impunity, insofar as immediate adverse
effects on supply. But you can be sure that no one would bother
producing or investing in or exploring for goods whose supplies might
thus become limited. No likelihood of asteroids being dragged into Earth
orbit, or anyone investing in an enchanting painting after the artist is
dead.
>> Which sense of "produces" are you using here? I think we've already
>> agreed that the sense meaning "brought into physical existence" is
>> irrelevant economically.
> No. I can't imagine that I would ever agree with that. I saw you
> screwing around with the word and trying to change its meaning but I
> don't recall agreeing with it.
I thought you had agreed that the costs incurred in bringing a good to
market were irrelevant to the status of the item as an economic good, or
to its value to consumers. We pay people who introduce goods into the
market, thus making them available for our use. We pay them based on the
subjective value of that good to us. We don't care what the seller may
have invested to acquire that good. Did you not agree with that?
>> They certainly are. You are merely proposing that the gummint become
>> the land owner, empowered to "license" use of the land to others.
>> Nothing wrong with that, provided the gummint has some legitimate
>> claim to the land it is presuming to license. Which it doesn't, for
>> most land.
> We will disagree on this issue. Government is the people. There is
> no such thing as a "government" that is not endorsed and recognized by
> the people.
"The people" have no *a priori* claim to land either, either
individually or collectively.
> And government exists to serve the people.
Yes. It does that by protecting the rights of all of them, not by
stealing from some in order to deliver free lunches to others, depending
upon who can muster the most votes.
> Rights of tenancy are actually different from ownership. I can rent a
> building or an apartment or a section of land from the "owner" and my
> right to use what I have rented in an appropriate fashion cannot be
> justly impinged by anyone including the owner.
Yes.
> To whom I pay the rent
> is irrelevant and so long as the bids for the use of the item/land is
> free and open then we have a true "free market".
Yes.
> And in the event of
> government administration without owners the use of the land would, in
> fact, be restricted by zoning and such just as it is now. The
> "warfare" seems to be done with money in a market.
True.
Now you just have to decide who is entitled to the rent that asset might
yield. But first you'll need some principle upon which to base such
decisions.
>> Same with any other valuable good. The
>> only serious question is who has the more credible claim. You could
>> offer the same proposal for houses, ships, factories --- whatever you
>> thought it might be beneficial to confiscate.
> Uh, No, I can't. Those things are the product of someones labor and
> that is part of what yields a rightful claim to private ownership.
Perhaps you can explain how labor makes a claim of ownership
"rightful." You inherit a first edition of *Moby Dick*. Or perhaps you
find an interesting piece of driftwood on the beach. I want your book,
or the driftwood. I make a careful plan to steal them, and invest a fair
amount of labor in carrying out that plan --- much more labor than you
invested in acquiring them. Does my claim trump yours?
But you did say that labor is only a part of what makes a rightful
claim. What else is necessary?
> I _AM_ the government along with everyone else. And if _WE_ decide
> your deed is nothing but a piece of paper then that is the way it will
> be.
Of course. Might makes right; my gang is bigger than yours. Certainly
common enough historically, but not terribly persuasive from a moral
point of view. Or very promising from an economic point of view.
> I am aware of all this. It is boring and to continue to do the oil
> this way is reeeeeeeeeeeeeeeeeeeeeeeeeeely stupid. I do not believe,
> for instance, that the royalty paid for the Alaskan oil is high enough
> and I also do not feel that it should be given to Alaskans. The oil
> is in the US commons. It is not in the commons of Alaska because
> there is no such thing as the commons of Alaska. I already paid for
> Alaska. My government bought the whole damned state from Russia:
>
> http://en.wikipedia.org/wiki/Alaska_purchase
This would probably justify a new thread, but the US government did not
purchase a fee simple title to Alaska. Nor to Louisiana earlier. It
merely bought sovereignty over those territories, i.e., the right to
govern them in place of similar claims by other nations. It bought that
right with the view to opening those territories to settlement and
development. The lands of Louisiana and Alaska became the property of
their settlers. Indeed, a fair amount of that land, particularly in
Louisiana, had already been claimed by various persons --- Indian tribes
and both French and American settlers. None of those titles were
disturbed by the purchase; the settlers merely became subject to US
rather than French law.
The US could not have bought the land from France or Russia, because
neither of those gummints had any valid claim to it themselves. It
bought sovereignty only.
Publius
>> It has to be taken literally if the title chain based on it is to be
>> taken literally. You can't derive actuals from hypotheticals.
> "The common weal" is also a metaphor. You can most certainly
> derive concrete results form abstract concepts.
I assume by "commonweal" you mean the "common good," or perhaps the "social
contract." Those are both fictions, of course. There is no good common to
all persons in large, civilized societies, and certainly no "social
contract."
What would be an example of an concrete result derived from an abstract
concept? Not sure what you have in mind here.
> The $DEITY macro is one of the general "rightness" of
> an action, as if to say "if there were a God, surely
> He would support this." We have an engine in our thought
> that sees this without a detailed map.
God then becomes a hypothetical construct, like the social contract. But
what any of us will "see" will depend upon our own conception of the diety
and the moral premises from which it is constructed. So any moral
conclusions derived from that conception will be circular.
Property titles (to any kind of property) are based on consistent and
empirically verifiable criteria. We can't derive those criteria, much less
observe that they've been satisfied, from the hypothetical acts of
imaginary beings, unless we build them into the hypothesis to begin with.
> If we're limited to what can be proven, we won't get very far.
> Take antebellum slavery as an example - there was no clear
> *legal* structure which made is repugnant. Any random person
> could disagree as to its morality, depending on which starting
> assumptions were in use. Given the science of the day, the
> non-humanity of slaves was a legitimate (if highly dubious)
> claim. It could not be rejected cleanly.
There were, in fact, sound moral arguments against slavery, which had not
been made until the previous century. That they managed to persuade enough
people to result in its abolition was a matter of historical accident.
The soundness of moral theories is judged by the same criteria as any other
theories, i.e., the premises must be true and the derivations logically
valid.