It's clear I know nothing about economics.

[ArcticStones]

Quote: Originally Posted by styrafome Translation: The world has lost 40% of its artificially inflated speculative bubble wealth that it assumed was real and was trying to actually live off of, until they discovered it wasn't real after all, but they had already committed to living off of it. D'oh!

First a confession: It’s probably clear that I know nothing about economics...

...that said, I think you hit the nail on the head, Styrafome. IMHO this is a huge part of the truth. Unfortunately, without a clear (and suitably just) answer to the obvious "who is going to bear the losses?" (Did anyone say major shareholders of banks? The world’s hedge funds and their stakeholders? The key players behind investment banks?) -- what we are left with is a lack of containment, and the buck largely being passed to taxpayers and various vulnerable groups.

Example 1: Warren Buffet purchased 10% of Goldman Sachs. About the same time, the US government injected twice as much Taxpayers’ Investments (bailout money), but got guarantees/assets worth about a quarter as much as Mr Buffet. Anyone see something fundamentally wrong with this picture?

Example 2: The Federal Reserve has injected two trillion dollars (that’s 2,000,000,000,000!) into financial institutions et.al. That makes the initial $ 350 billion bailout pale by comparison. Yet the Fed won’t even tell anyone how that money is spent, or what assets/guarantees they have secured on behalf of US Taxpayers! (Has anyone heard the private banks that have vested interests/controls in the inner workings of the Federal Reserve chipping in a contribution?)

I am sure that Mr George Soros or Mr Nouriel Roubini can explain everything and repair my ignorance. After all, they saw this coming.

Personally I don’t care whether my house is worth $ 100 or $ 1,000,000. Since I intend to live in it, not sell it, the value is of only theoretical interest (and barely that), and I am (fortunately) in no real danger of foreclosure.

-- ArcticStones

[cwtnospam]

These two facts follow each other:

1. Nothing is worth anything unless people are willing to pay for it.
2. People aren't willing to pay for anything when they're not making money!

Perhaps it was real wealth that we think wasn't real, because people were being paid up until the beginning of crisis. The reality is that shrinking wages finally caught up to people, who are now unwilling to pay the asking price of corporate products. This has caused corporations to react in their usual short sighted manner: laying off workers, who naturally react by becoming even less willing to pay the asking prices, and the whole thing falls in on itself.

Really.

[tw]

Quote: Originally Posted by Woodsman ...In my view, there is one central human relationship, on which everything else is a fugal variation, namely what we might call master and man or patron and client. The terms of service differ wildly, and not at all in a linear fashion, so that it may have been more fun to be a medieval Muslim or even Southern house slave than a free industrial worker in Dickens' day. It's not the label that is decisive, it's the small print. Kto-kovo, as Lenin said: who does what to whom.

I think that's too clinical, though I can't disagree with it entirely. to my mind, the central human relationship is loyalty (which can be given to a person or a concept or an ideal; solidified in contracts, laws, or oaths; given freely or demanded at the point of a sword) which ultimately means that one accepts that everything will work out better if one works in tandem with another rather than for one's own ends. all power is loyalty of one form or another in action. the problem that medieval serfs, southern slaves, mamluks, and the urban proletariat all faced is that loyalty was demanded of them but hardly ever returned. the less that loyalty is returned, the more a relationship like that becomes one of pure force, and the more stress it undergoes socially and politically.

Quote: Going back to time-travellers a moment, it's worth remembering that the property-qualification franchise existed in part because it was thought that people who were in service to another -- drawing a salary, as we say now -- could not act independently of their boss. All the more before the invention of the secret ballot. So a traveller from the 18th century might opine that corporate wage-slaves ought not have the vote.

eh, no 'might be' about it. there was a notable school of thought early in the US that thought suffrage should only go to property owners (and historically that's the way democracy worked all the way back to the Greeks). the argument, if I remember correctly, was that only people with property had a real stake in the doings of the government, and so only they could be trusted to make correct decisions. even though we have universal suffrage in the US now for some things(and some of the later marxists argued that that was little more than a distraction), it's still the case that political offices are given almost exclusively to the wealthy.

this is, incidentally, one of the original differences between Democrats and Republicans ('res publica': concern for the public good, administered by an elite group; 'demos kratia': rule by the people itself). language is a fascinating thing.

[tw]

Quote: Originally Posted by aehurst Clearly, a benevolent dictator is a more efficient form of government.... but, I wouldn't vote for the guy.

I would, but only for target practice (heh heh heh...).

[cwtnospam]

Quote: Originally Posted by tw this is, incidentally, one of the original differences between Democrats and Republicans ('res publica': concern for the public good, administered by an elite group; 'demos kratia': rule by the people itself). language is a fascinating thing.

Which helps to explain how we got where we are. The interests of the elite are in shipping US jobs overseas, which affords them higher profits in the short term, until US wages drop and third world wages rise. In that light, a significant economic downturn is inevitable for all but the elite.

[tw]

Quote: Originally Posted by eValuone How did The Renaissance emerge? What political, philosophical, economic conditions enabled it? How does it compare to what we 'think' we see happening now; especially R's. demise? Was R. better-worse than now? How? Any clues to helping us with our current issues? (We are not experts on R., but reading about it, it appears as a 'better' time than we have now.)

believe me, you wouldn't like the Renaissance. smallpox and the remnants of bubonic plague, bathing twice a year, chamber-pots getting emptied into the streets... Nice for the Medici's, maybe, but not so much for the other 999/1000's of humanity.

what happened in the Renaissance (and yes, before then) is the same thing that always happens at an always accelerating pace: a wave of 'civilizing' forces pushing out against a 'barbarous' world and leaving behind a taste for something better. it happened with the Roman empire (and with the Egyptians and Assyrians and Babylonians before them) - they conquered large expanses, and everywhere they conquered they brought new ideas and new technologies and a new sense of what's desirable in life at the same time as they brought new ideas and things back into the civilized center. when the empire fell apart the ideas stayed. trade and colonialism in the second millenium did the same thing. it inculcated a taste for quality of life and civility that started with the noble classes and trickled down to the wealthy classes and (eventually) the rest of us. there were two main changes, if you're looking for something specific:

• wealth became more mobile, lessening the need to conquer and possess territory. conquering territory mean that you need to move largish numbers of people there and set up communities, requiring infrastructure, military protection, and other expenses, while large percentages of the people there are involved in maintaining the community, rather than whatever you want from the territory. with a colony, though, you have individual farmers working the land with slaves or indentured servants, and then shipping off the products for cash - almost no overhead.
• warfare became more costly and less productive. natural consequence of the increase in the quality (and thus expense) of armaments and the huge distances that the military had to operate over.

this slowly shifted political/social power from the aristocracy/nobility (whose raison d'ętre was historically as a military arm of the state) towards the bourgeois (who were traders and manufacturers). that broadened the economic base and brought a new level of wealth into towns (since the bourgeoisie started to demand creature comforts and entertainments for themselves).

[eValuone]

All,

I was so ignorant about Renaissance as an idea, I didn't realize there were quite a few of them. Woodsman put me right, and now I am gradually coming up to speed.

I think this thread exemplifies why and how we're going to find our way out of this mess. You are all speaking and writing as individuals. You are cooperating among us as individuals. None of you is attempting to gain control.

That is what our whole world needs NOW and for many futurings. (my opinion)

I contributed that list of five simple questions which cwtnospam answered succinctly.

But I worry about what we 'really' mean when we say 'the people.' I want us to see 'the people' as a loosely coupled group which acts like those of you who are participating in this thread. None of us is sovereign other. Nor are we sovereign any group. So none of us is slave of other. I agree, this is an ideal virtual 'envelope.' It illustrates what "individual free will, scope-limited in a vaster context of countless other individual free wills" means to me.

Another issue is, what do we mean by 'democracy.' Tw's analysis of original Greek tells a much differing story than what we actually DO today. Today's USA 'democracy' is a dichotomy of winners and losers. Notice how different that is to what this small forum exhibits in its behaviors.

My view is that we need more of this kind of discussion.

I also believe we need vast changes in how we perceive and actualize what we mean by 'the people,' 'society,' and 'democracy.'

Respectfully,

eValuone.

[ArcticStones]

Quote: Originally Posted by eValuone My view is that we need more of this kind of discussion. I also believe we need vast changes in how we perceive and actualize what we mean by 'the people,' 'society,' and 'democracy.'

I do believe this sort of sincere discussion is precisely what Obama and his team were fostering at change.gov, and are presently nurturing at whitehouse.gov. Mind you, I am not making a partisan statement here, but I do believe those efforts are very unique, indeed, on such a large scale.

-- ArcticStones

[tw]

Quote: Originally Posted by eValuone But I worry about what we 'really' mean when we say 'the people.' I want us to see 'the people' as a loosely coupled group which acts like those of you who are participating in this thread. None of us is sovereign other. Nor are we sovereign any group. So none of us is slave of other. I agree, this is an ideal virtual 'envelope.' It illustrates what "individual free will, scope-limited in a vaster context of countless other individual free wills" means to me. Another issue is, what do we mean by 'democracy.' Tw's analysis of original Greek tells a much differing story than what we actually DO today. Today's USA 'democracy' is a dichotomy of winners and losers. Notice how different that is to what this small forum exhibits in its behaviors.

difficult questions, both. 'the people' is an inherently schizoid concept, since it insists on groups of people who are not part of 'the people' (e.g. illegal immigrants) in the same breath that it tries to be all-inclusive and universalistic. and democracy is an idea which is insanely difficult to make sense out of: partly political, partly sociological, partly religious, and built on assumptions which are almost entirely self-contradictory. it's amazing the mess works as well as it does.

[tw]

Quote: Originally Posted by ArcticStones I do believe this sort of sincere discussion is precisely what Obama and his team were fostering at change.gov, and are presently nurturing at whitehouse.gov. Mind you, I am not making a partisan statement here, but I do believe those efforts are very unique, indeed, on such a large scale. -- ArcticStones

with you there, bro...

[Woodsman]

Quote: Originally Posted by aehurst Wonder how Marx would explain the loss of 40 percent of the world's wealth, with the loss being suffered by those who had the wealth, not the working folk? Must be a conspiracy of the proletariat, right?

Been thinking about this for a few days. Certainly there have been rich people who have lost some of their wealth without sharing the guilt for the meltdown; to mention just one example, Spielberg had some money placed with Bernie Madoff. There must be many millions like him, all the way down to small investors whose stock is now worthless. To date, not many bank depositors have lost their shirts in the same way -- although "working folk" will soon have to spend their government-backed savings, if any, to make ends meet, having been made unemployed. Equally certainly, some of the wealth that disappeared was never really there in the first place, so it would be foolish to ask who got their hot little hands on it.

And yet I am profoundly uneasy with the implication, if it was meant to be one, that no rich people have gained. The meltdown makes no sense as a zero-sum game between "the rich" and "the poor"; but it makes all too much sense as a zero-sum game between some of the rich on the one side and everyone else, both rich and poor, on the other. Suppose that last year 10% of the people could be called rich, and 90% not. Suppose, when the dust settles, 1% of the people will be called rich, and 99% not. Cui bono? We might then view it as a civil war within the previous category of "the rich", most of whom are now suddenly ejected from that class. Who, then, has won this game of musical chairs? Who are the last men standing? I have a suspicion that they are not our friends.

[aehurst]

Quote: Originally Posted by Woodsman Been thinking about this for a few days. Certainly there have been rich people who have lost some of their wealth without sharing the guilt for the meltdown; to mention just one example, Spielberg had some money placed with Bernie Madoff. There must be many millions like him, all the way down to small investors whose stock is now worthless. To date, not many bank depositors have lost their shirts in the same way -- although "working folk" will soon have to spend their government-backed savings, if any, to make ends meet, having been made unemployed. Equally certainly, some of the wealth that disappeared was never really there in the first place, so it would be foolish to ask who got their hot little hands on it. ...

I think it is safe to say the overwhelming portion of lost wealth was lost by the rich.... rest of didn't have that much. Agree when the dust settles wealth is likely to be more concentrated than before... but possibly the remaining wealthy elite will not have as much as they had before.

In any case, explaining all this in terms of Marx philosophy and class warfare seems unlikely. Perhaps Forrest Gump had it right... "Stuff Happens!"

Clear I think there will be more poor than before. Clear, also, government will be more involved in business than before. And, the next generation will be helping to pay for our excesses. Not sure there is a winner in this.

Be interesting to watch how this develops as regard to the status of nations... which nations emerge from this stronger and which emerge weaker, as well as the relative economic strengths of the US, EU, China, and Asia. Are we due a period of protectionism as each nation strives to protect its citizens and their jobs?

[Woodsman]

Quote: Originally Posted by aehurst Agree when the dust settles wealth is likely to be more concentrated than before... but possibly the remaining wealthy elite will not have as much as they had before.

They won't care about that, as long as the rest of us are even poorer. Remember, it's not about having the money, it's about keeping score.

[eValuone]

All,

Like woodsman, I am unsure... but isn't that a modern description of intelligence? Ever read Shufflebrain?

Only economics I understand is checkbook accounting. I never spend more $ than I have (except for house; which I payoff as quickly as possible), and i avoid short term credit like a plague.

I also believe that reality is a great provider. Look at birds, bees, and critters. They're doing quite well. Do they fathom humankind's economics? Some fable of it?

Woodsman probably senses that better than any of us.

If you have a chance, read chapter 13 of Mae-wan Ho's 'the rainbow and the worm.' She writes about a new kind of sociology which classicists have, till recently, rejected. See what you think.

I keep coming back to sociology, for some deeper almost unconscious reasonings.

This BIG change we are in may have a tad to do with that...

With respect,

eValuone.

[NovaScotian]

Depends too on how long back you evaluate too. On a one-year basis, the value of my portfolio is down 40%, but on a longer term (i.e. since I bought them) it's not nearly that bad. Further, earnings on my stocks have exceeded expectations over that span, so I don't consider myself a big loser -- I only lose if I sell.

[Woodsman]

Quote: Originally Posted by NovaScotian Further, earnings on my stocks have exceeded expectations over that span, so I don't consider myself a big loser -- I only lose if I sell.

For decades I had been scratching my head over people who tell me joyously that their houses have risen in value by x%. I always asked them, if you sell up and buy a bigger house, has that not risen in price by x% as well? You only benefit if what you want to do is sell your house and buy a boat to go round the world in (assuming boat prices have remained the same), or take the cowl. No one ever understood my point. I think it was some deep-seated monkey thing; their house was worth x% more, so they felt that they were worth x% more, even though their place in the pecking order was in fact unchanged.

As Stones said the other day, if you want to keep living in your house, it doesn't matter what happens to the selling price.

[ArcticStones]

Quote: Originally Posted by aehurst In any case, explaining all this in terms of Marx philosophy and class warfare seems unlikely. Perhaps Forrest Gump had it right... "Stuff Happens!"

That’s right up there with: “Wall Street got drunk.”

[cwtnospam]

Quote: Originally Posted by aehurst In any case, explaining all this in terms of Marx philosophy and class warfare seems unlikely.

Wow! Google just a little...
http://murray.senate.gov/news.cfm?id=248342
http://www.commondreams.org/views04/0714-04.htm
http://bobgeiger.blogspot.com/2005/1...al-aid-to.html
http://wonkroom.thinkprogress.org/20...nhofe-economy/

We've had eight years of intense class warfare, not that the Rich weren't doing their best to ruin us all since the Reagan years.

[Woodsman]

Quote: Originally Posted by cwtnospam We've had eight years of intense class warfare, not that the Rich weren't doing their best to ruin us all since the Reagan years.

It's only called "class war" when we do it back.

[cwtnospam]

Quote: Originally Posted by Woodsman It's only called "class war" when we do it back.

Oh. I guess until then we're just getting our butts kicked.