4 ms·

The new ideological divide

telemachos 16y ago
Sidenote: where can I find the person who came up with the "docking bar" idea for websites (that hideous JavaScript thing at the bottom of your viewport). I need to hurt that person.
- hga 16y ago
  It's there, at least visually, even if you have Javascript turned off with NoScript (Firefox). And, yeah, it's very annoying.
hga 16y ago
"Economies do not grow because consumers spend; consumers spend because economies grow.... Investment capital comes from savings, and when governments borrow, savings are diverted from private investment. While it is possible for governments to invest as well, it is much more likely that the money will be spent on entitlements or "invested" in projects that may be politically advantageous but economically useless. Any money spent by governments is not available to the private sector to invest...." And he didn't even mention how following the "Stimulators" for two decades has ruined Japan.
- jtbigwoo 16y ago
  Japan's high savings rate meant that banks had huge amounts of money to lend. The banks threw lending standards out the window because they had so much cash to lend. When the central bank raised interest rates, the bottom fell out. Here's the important part, though. Because of the cozy relationships between banks and big industrial firms, the banks reacted by making _more_ bad loans to prop up failing firms. Plus, the government raised consumption taxes which fell disproportionately on the lower classes. The tied-up capital combined with the rising taxes on the people who spend the highest percentage of their income hurt a lot more than government spending on infrastructure. Here's my worry about the U.S.: 1. The home buying incentives/modifications are just an excuse to keep trying to re-inflate the housing market much like the Japanese banks kept lending money. 2. Proposed cuts to social security and medicare will hurt the economy by affecting those who spend the highest percentage of their income.
jtbigwoo 16y ago
This OP suffers from the same delusion as a lot of financial professionals. The "Investment capital" that he talks about mostly goes to buy and sell stocks and bonds. These are not real capital investments, but wagers on future prices. I bought $5000 of Google stock last year. To say that the $5000 did anything to help Google is foolish. I bought someone's bet and now he has $5000 more while I have $5000 less. He may have invested it in something useful (buying goods or services) but more likely he used it to make another wager. No true value was created, though the brokers and money managers (like the OP) take their cut. On the other hand, if I had purchased government bonds, the bond money would have been injected much more broadly into the economy via capital spending or entitlements. Don't pretend that money that doesn't go to government bonds would go to building bridges. Should or national savings rate be higher? Yes. Should we move toward a balanced budget? Yes. Should we try to fix these things while on the edge of a double-dip recession? Most certainly not.
- hga 16y ago
  "I bought $5000 of Google stock last year." And obviously the people from who you bought it burned that 5K in a bonfire.... An illiquid financial system helps no one (well, no one good).
  - jtbigwoo 16y ago
    I'm not saying that $5000 didn't go anywhere... About one percent of it was eaten by fees and the rest probably went to make another wager. It almost certainly did not go into anything resembling capital investment as the OP suggests. I'm not attacking the market system, merely pointing out that the post-IPO "capital" market for a stock does not produce any capital investment but is rather a means for trading wagers on the performance of the underlying company. Real capital investment is mostly financed by bonds (including government bonds, which the OP appears to dislike.)

Sidenote: where can I find the person who came up with the "docking bar" idea for websites (that hideous JavaScript thing at the bottom of your viewport). I need to hurt that person.

hga 16y ago
It's there, at least visually, even if you have Javascript turned off with NoScript (Firefox). And, yeah, it's very annoying.

hga 16y ago

"Economies do not grow because consumers spend; consumers spend because economies grow.... Investment capital comes from savings, and when governments borrow, savings are diverted from private investment. While it is possible for governments to invest as well, it is much more likely that the money will be spent on entitlements or "invested" in projects that may be politically advantageous but economically useless. Any money spent by governments is not available to the private sector to invest...." And he didn't even mention how following the "Stimulators" for two decades has ruined Japan.

jtbigwoo 16y ago
Japan's high savings rate meant that banks had huge amounts of money to lend. The banks threw lending standards out the window because they had so much cash to lend. When the central bank raised interest rates, the bottom fell out. Here's the important part, though. Because of the cozy relationships between banks and big industrial firms, the banks reacted by making _more_ bad loans to prop up failing firms. Plus, the government raised consumption taxes which fell disproportionately on the lower classes. The tied-up capital combined with the rising taxes on the people who spend the highest percentage of their income hurt a lot more than government spending on infrastructure. Here's my worry about the U.S.: 1. The home buying incentives/modifications are just an excuse to keep trying to re-inflate the housing market much like the Japanese banks kept lending money. 2. Proposed cuts to social security and medicare will hurt the economy by affecting those who spend the highest percentage of their income.

jtbigwoo 16y ago

This OP suffers from the same delusion as a lot of financial professionals. The "Investment capital" that he talks about mostly goes to buy and sell stocks and bonds. These are not real capital investments, but wagers on future prices. I bought $5000 of Google stock last year. To say that the $5000 did anything to help Google is foolish. I bought someone's bet and now he has $5000 more while I have $5000 less. He may have invested it in something useful (buying goods or services) but more likely he used it to make another wager. No true value was created, though the brokers and money managers (like the OP) take their cut. On the other hand, if I had purchased government bonds, the bond money would have been injected much more broadly into the economy via capital spending or entitlements. Don't pretend that money that doesn't go to government bonds would go to building bridges. Should or national savings rate be higher? Yes. Should we move toward a balanced budget? Yes. Should we try to fix these things while on the edge of a double-dip recession? Most certainly not.

hga 16y ago
"I bought $5000 of Google stock last year." And obviously the people from who you bought it burned that 5K in a bonfire.... An illiquid financial system helps no one (well, no one good).
- jtbigwoo 16y ago
  I'm not saying that $5000 didn't go anywhere... About one percent of it was eaten by fees and the rest probably went to make another wager. It almost certainly did not go into anything resembling capital investment as the OP suggests. I'm not attacking the market system, merely pointing out that the post-IPO "capital" market for a stock does not produce any capital investment but is rather a means for trading wagers on the performance of the underlying company. Real capital investment is mostly financed by bonds (including government bonds, which the OP appears to dislike.)