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  1. #11
    Order Now! pure_mercury's Avatar
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    Quote Originally Posted by avolkiteshvara View Post
    Do they have a bad track record?
    Their track record is spotty. They miscalculated early in the Great Depression, the late-'70s, and the past decade. They raised rates too quickly in the late-'90s followed by lowering them too quickly and too deeply in the early-'00s.


    So the Fed doesn't have all the info to predict inflation, but you are going to let us know when hyperinflation hits. Why can't humans have enough knowledge to make decisions on adjustment of interest rates?
    Humans NEVER have as much information as they'd like when it comes to economic decisions. In the market, this lack of complete knowledge is what creates risks that enable economic profit. However, when it comes to governmental and quasi-governmental "expert" decisions, the economic profit (and risk) is not there. You have groups of people making decisions for the economy AS A WHOLE with imperfect knowledge. Usually, this is not a major problem in our system, but it can be, as in the examples I listed above. It's far worse in a true command economy, like the old Soviet Union. Their inability to calculate prices doomed their system, because economic decisions were left to near-omnipotent political operatives with political motives.


    Have you taken any college courses in Econ?
    I know I have, can't speak for Lateralus.
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  2. #12
    Senior Member avolkiteshvara's Avatar
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    Quote Originally Posted by pure_mercury View Post
    Their track record is spotty. They miscalculated early in the Great Depression, the late-'70s, and the past decade. They raised rates too quickly in the late-'90s followed by lowering them too quickly and too deeply in the early-'00s.




    Humans NEVER have as much information as they'd like when it comes to economic decisions. In the market, this lack of complete knowledge is what creates risks that enable economic profit. However, when it comes to governmental and quasi-governmental "expert" decisions, the economic profit (and risk) is not there. You have groups of people making decisions for the economy AS A WHOLE with imperfect knowledge. Usually, this is not a major problem in our system, but it can be, as in the examples I listed above. It's far worse in a true command economy, like the old Soviet Union. Their inability to calculate prices doomed their system, because economic decisions were left to near-omnipotent political operatives with political motives.



    I know I have, can't speak for Lateralus.
    In the late 70s we needed high interest rates to curb inflation. Late 1990s, not aware of major mishaps but seeing how the tech buble burst in 2000s, low rate might've just accelerated it.

    True that greenspan kept rates low for to long after the tech bubble. There was some weird shit going on with him and the Bush Admin though.


    But when you say the Fed has a bad track record, the question that comes up is.........compared to what?

    Do we ever have enough complete info to make a sound 100% decision.

    These criticisms just sound like sound like part of a conservative ideology isn't significantly impacted by economic downturn.

    Edit:

    Actually, come to think of it, our latest crisis wasn't so much about interest rates as it was about deregulation. The infrastructure just wasn't there to handle low interest rates.

  3. #13
    ^He pronks, too! Magic Poriferan's Avatar
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    Economists also had lots of sunny news for a long while before this huge crisis. I've come to largely ignore their opinions, rain or shine.
    Go to sleep, iguana.


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  4. #14
    Order Now! pure_mercury's Avatar
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    Quote Originally Posted by avolkiteshvara View Post
    In the late 70s we needed high interest rates to curb inflation. Late 1990s, not aware of major mishaps but seeing how the tech buble burst in 2000s, low rate might've just accelerated it.
    We also needed some deregulation to open up inflexible labor markets and barriers to entry in several industries. Jimmy Carter actual began that process, and it sped up under Reagan. Stagflation put the lie to some of the Keynesian postwar "mainstream" economic theory. Some austerity measures were necessary. If only Reagan hadn't increased the budget deficit so much.


    True that greenspan kept rates low for to long after the tech bubble. There was some weird shit going on with him and the Bush Admin though.
    But not the Clinton Administration? I mean, the dot-com bubble burst before Bush was even elected, and this process had already begun. You can't put the blame on one administration or the other.


    But when you say the Fed has a bad track record, the question that comes up is.........compared to what?
    The market setting interest rates? Jon Stewart brought this up to Alan Greenspan when he interviewed him.


    Do we ever have enough complete info to make a sound 100% decision.
    No, but the market mechanisms for punishing individuals who make poor economic decisions is not there when it comes to the government setting fiscal and monetary policy. Most Americans don't even understand the concept, so they can't vote people in or out accordingly, so the process is very removed.


    These criticisms just sound like sound like part of a conservative ideology isn't significantly impacted by economic downturn.
    I don't understand. Were these two sentences edited together accidentally?


    Edit:

    Actually, come to think of it, our latest crisis wasn't so much about interest rates as it was about deregulation. The infrastructure just wasn't there to handle low interest rates.
    There are a lot of things that caused our downturn. I think "lack of oversight" is a more accurate term than "deregulation," since the past two presidential administrations actually were not big on deregulation. The classic economic issues came into play here: greed, ignorant borrowers, risky lenders, instability in prices, poor government oversight, inflationary monetary policy. It was a perfect storm of stupid.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  5. #15
    Junior Member armyrebel4's Avatar
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    Cool

    Pure, you got that right.

  6. #16
    Senior Member durentu's Avatar
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    I don't give any weight to surveys or polls really. In the end it doesn't do anything. It's nice for validation, but not really indicative of sound metrics.

    I'm also very suspicious of turnover news like this. The reasons for the economy 'leveling out' aren't explained. I really think it's the bail outs that we've had before. The money injected before are having an effect and the best it can do it level things out. Buffet also suggested another bail out plan recently which is scary to me. It'll just increase the future tax burden.

    I'm not smart enough or informed enough to understand the entire economic landscape nor do I have the time. However, my main concern is whether or not all this spending is good debt or bad debt.

    good debt = borrowing to make and deliver a product or service. financing for a business prospect and investing etc.

    bad debt = borrowing for consumption.


    ultimately it comes down to the people. Will we take that money and go better ourselves and the country by making and delivering goods and services that are of value: put simply, to help each other through our abilities? Or will we take that money and spend it on consumables as an emotional escape like electronics and vacations?

    In that article, some of the things being done make sense to me, and others through the libertarian perspective. While current times are heavily influenced by keynes and kant, I would feel much better if we went to aristotle and von mises. That's just me.

    In the mean time, I'll do my part and keep an eye out for opportunities to help people in exchange for something I'd like.

    Few things I'd consider and likely do

    1. computer repair for psychology apprentorship
    2. web page programming for my car repairs
    3. cooking/baking for farming/aquaponics apprentorship
    4. research assistance for electronics parts
    5. systems design for 4 day work week to explore creative inventing in a lab.

    6. Any other ways I can use my knowledge and abilities to bring smiles to people. (drugs and sexual favors don't count)

    Just need to adapt while things are being destroyed all around us, for this is the forestep to creation.

  7. #17
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    Quote Originally Posted by avolkiteshvara View Post

    These criticisms just sound like sound like part of a conservative ideology isn't significantly impacted by economic downturn.

    Edit:

    Actually, come to think of it, our latest crisis wasn't so much about interest rates as it was about deregulation. The infrastructure just wasn't there to handle low interest rates.
    EXACTLY.

  8. #18
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    Quote Originally Posted by Magic Poriferan View Post
    Economists also had lots of sunny news for a long while before this huge crisis. I've come to largely ignore their opinions, rain or shine.
    Thank god someone one your side of the political aisle finally admits it. One step back from the alternate universe everyone seems to be looking at these days...

  9. #19
    Senior Member avolkiteshvara's Avatar
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    Quote Originally Posted by pure_mercury View Post
    We also needed some deregulation to open up inflexible labor markets and barriers to entry in several industries. Jimmy Carter actual began that process, and it sped up under Reagan. Stagflation put the lie to some of the Keynesian postwar "mainstream" economic theory. Some austerity measures were necessary. If only Reagan hadn't increased the budget deficit so much.




    But not the Clinton Administration? I mean, the dot-com bubble burst before Bush was even elected, and this process had already begun. You can't put the blame on one administration or the other.




    The market setting interest rates? Jon Stewart brought this up to Alan Greenspan when he interviewed him.




    No, but the market mechanisms for punishing individuals who make poor economic decisions is not there when it comes to the government setting fiscal and monetary policy. Most Americans don't even understand the concept, so they can't vote people in or out accordingly, so the process is very removed.




    I don't understand. Were these two sentences edited together accidentally?




    There are a lot of things that caused our downturn. I think "lack of oversight" is a more accurate term than "deregulation," since the past two presidential administrations actually were not big on deregulation. The classic economic issues came into play here: greed, ignorant borrowers, risky lenders, instability in prices, poor government oversight, inflationary monetary policy. It was a perfect storm of stupid.
    Sounds like you've done some homework. Although I not really sure what your advocating or arguing.

    I don't really care to play the partisan game.

    I am not sure what you mean about about Fed setting rates to market. Are you talking about Fed Funds rate, transfer rate? Are we talking short term or long term? The Fed influences market rates. The market doesn't necessarily correct itself.

    I agree that people need to feel the consequences of their actions. But our latest crisis was a situation with very little options: bail out banks(not punishing speculatory execs) vs. let chaos reign in a financial industry totally broke(punishing reckless execs).

    Last point seemed like semantics.

    In closing my response is:

    Meca Leca High Meca Hiney Ho

  10. #20
    Senior Member avolkiteshvara's Avatar
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    Quote Originally Posted by Magic Poriferan View Post
    Economists also had lots of sunny news for a long while before this huge crisis. I've come to largely ignore their opinions, rain or shine.
    Not all economist said this. It was mainly the ones employed by the financial industry.

    I remember hearing some English economist on BBC back in 2005 predicting this. Paul Krugman was talking about this way before it happened. You just have to know where to look girlfriend.

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