Hear, hear. The freedom to vote with your feet is one of the most important characteristics of the American experiment.
Among all voting methods it is uniquely effective and accessible - you get a large roster of fifty 'candidates', and the cost of moving to another state is much lower than the cost of buying an election.
When power is ceded from state to federal level, diminishing the diversity of candidate states, an important form of democracy is curtailed.
Quite. Who cares whether the NYT revised the article? The more salient criticism is that the article is a deeply lazy and tendentious exercise in using insinuation to push a predetermined narrative.
It is no surprise that Treasury made a profit on its investments in troubled companies, since the fact of investing in them effectively rigged the market in their favor: If the government declares that it will not allow a company to fail, the company’s borrowing costs are reduced and it now has a competitive advantage over companies that do not qualify for government intervention.
Of course the qualifications for this special treatment were: being very big, being politically well-connected, and having taken stupid risks. So every well-run, medium sized bank that didn’t have an army of lobbyists got screwed. And now we see that our favorites have prospered and declare “profit!” while ignoring the red ink for everyone else in the economy.
It's not just that they boosted the credibility of the banks.
The "toxic assets" that TARP bought weren't as bad as people feared. But the market wasn't buying them because nobody knew their true value. Everyone lost faith in the ratings agencies so it was chaos.
Small banks benefited from this as well. It stabilized the market for mortgage securities, which small banks had large exposure to. It solved the liquidity crunch so the banks could stay open.
If the big banks fail, it would take the small ones with them. It would also take a lot of good businesses with it. The whole economy runs on lines of credit.
The market would have bought them, at one point or another, exactly because there was value there (either at the time or eventually that realization would have been made, just as it had been so many times throughout US history that didn't require a program like TARP).
That process would have bankrupted nearly every major bank. Buying the toxic assets was an extreme bailout for the banks, that were carrying trillions in liabilities that suddenly went under. Most of the majors were completely insolvent.
I'm sorry but you are wrong. The market wasn't buying anything, period. Trying to fall back on the 'as it had been so many times throughout US History' is also wrong, as History, specifically the great depression, has shown us: no. At that time, there were no willing buyers (of toxic assets or banks otherwise), and if things progressed there would be no willing buyers.
Tarp both directly and indirectly included the autos. Directly, because the auto bailout was funded under tarp, and indirectly because the way cars are sold - through loans, was about to be a broken process. if you remember, companies were no longer processing orders of auto parts companies unless they were paying in cash, for fear they might go under. The same situation happened in the banks. if the autos had gone, just that alone would have added another 2 million to unemployment in a month. Ford, the healthiest of the autos would have gone under too - as the companies that made GM and Christler's parts also made theirs. This alone would have destroyed the world economy for decades, let alone the financials all going kaput all at once.
there were aspects of TARP that could have been implemented better, such as stipulations on c suite bonnuses, but overall TARP was needed or else we would be in a really bad place right now.
No, I'm correct. The market always buys value, and historically always has. The sole question is price.
There were in fact willing buyers after the great depression. You're admitting I'm right by pointing out the great depression: all of those assets were eventually purchased by the market, that's a tremendous example of what I'm talking about. The only thing you can say is: it took too long, but that's merely an opinion. Besides, the government not only caused the great depression, but then made it much worse. I'd argue the market would have corrected dramatically faster had the government & Fed not screwed things up so massively.
The problem in this case was the market price would have bankrupted the banks that were sitting on worthless loans. And the price deterioration in the housing market from the sinking toxic assets would have wiped out trillions in wealth for the middle class.
You may have ended your counterfactual story too soon. It's hardly a triviality that it would have destroyed trillions of perceived middle class wealth. Such a perceptual shift changes the characteristics of consumer demand in a way that would have massive worldwide impact. Not only would American businesses have suffered (many fatally), and dramatically reduced investment, but American debt-financed consumer demand is one of our biggest exports, and would have precipitated even more disastrous global readjustments. This is the kind of thing that causes loss of life (through revolutions and wars, if not simple starvation) in poorer countries and regions.
The market can't buy value if everyone believes everyone else believes that the value isn't there. (Actually you can go any number of layers of belief; what you need is shared knowledge, in the sense logicians use the term.)
Everyone in the market is trying to guess what everyone else in the market will do, who are also trying to guess what the market is doing. Once you crash, you don't just need sentiment-of-value to improve, or even sentiment-of-sentiment-of-value. You need sentiment-of-sentiment-of-sentiment...etc.
So, you can get grid-lock. Which is why you need the government to step in.
I think the Keynesian beauty contest is less relevant for structured products. If others don't share the same view of the underlying collateral you may not be able to sell them in the near future. But if the collateral performance meets your more optimistic viewpoint, you will be compensated and eventually the bond will be paid off. The securities aren't like equities with some some arbitrary value associated with them that can only be captured through sale to another party (excluding dividends, buyouts, etc).
There were probably a lot of structural issues that prevented many of the large players to purchases these assets though (mostly liquidity). This is probably the justification the Federal Reserve used to purchase said assets.
In principle I agree. It remains to be seen how much moral hazard this little excursion into the loan markets by the federal government creates.
One program that doesn't really get much attention in the media (maybe because it was more nuanced and complicated?) was the TALF program [1]. I did a summer internship in 2009 with the Federal Reserve Bank in New York and it really seemed like that program was their primary concern because it was much more directed at the private loan market with targeted loans at "normal" spreads (whatever that meant at the time...) To date, I guess, they've made ~$173m [2]. The design of TALF was wayyy different than TARP, both in scale and objective. At the time I was working on drilling down on the demographic data of who, exactly, was applying for TALF loans. Really interesting stuff.
Not sure we'll be able to actually understand the ramifications for a while.
Although I agree with you for the most part, companies such as Capital One or Discover who did not have intervention grew much faster and took much more of the market than other banks. Further, Ford did exceptionally well when the other automakers were having trouble and I was thoroughly impressed.
What's important is the amount of money relative to the size of the institution. Discover and Capital One were a faction of the size of WF + Citi. In 2008, WF had $1.2 Trillion in assets[1], Discover has $78bn today (had trouble hunting down the '08 #).
That's interesting, because there is a very fine line to walk between destroying the competition by distorting the market and deciding that the state shouldn't let a company die. At least the U.S. got out of all this pure capitalist makeup. We can now talk about what we allow in competitive markets.
Yea, now we can't stomp around and espouse how Capitalism
doesn't need government oversite--Period! Personally, there's a
part of me that wanted the banks to fail; and see what arose
from the ashes, but that's another story. (Some banks like
Jamie Dimon's bank didn't need or want the money). I think
what bothered me about the whole process is the
economy is better for some people--people who have assets, or have skills that are currently in vogue. The average dude just getting by, and relying on interest from their cd(because they can't afford to speculate anywhere in life)
was not given a party gift in this recovery. There were a
lot of smaller banks who weren't in trouble. They weren't
in trouble because they were located in the right communities, and were very consertative. Meaning they only
lent to people with a lot of equity(sure bets), gave very little interest on any financial instrument, always charged fees for eveything, counted on the fact that a lot of people
just drop their money in the bank and never touch it, but
are Very nice, and remember your birthday--Hello Bank of Marin. I think Obama foresaw the future and figured the only lasting gift he could give to the middle class and the poor was access to the health care system--even though they
(the Republicicans) insisted on bringing in private Insurance companies?
Bank failures are endemic, regular, and predictable. 2008 was a slightly warped replay of many earlier events. (Who remembers Savings and Loan in the 80s?)
It would have been possible to restore confidence in other ways. Traditionally, good assets are collected into good banks, and bad assets are dumped into bad banks. The bad banks get thrown under a bus, and the good banks get full government backing until trust is restored. It's a tried and tested formula that has worked in other countries.
What TARP didn't solve was the endemic corruption and criminality that caused 2008. (Remember how some banks launched foreclosure farms that rubber-stamped property seizures - and sometimes stole property that didn't even have an outstanding loan?)
Unfortunately the corruption goes all the way to the Fed and the Congress, so a full restoration of Glass-Steagall, and jail time for the main perps, was never going to happen.
A few billion in 'profit' sounds like a lot, but it's a drop in the ocean compared to the incredible destruction and loss of economic potential caused by the persistent fraud, aversion to adult supervision, and deep-seated social irresponsibility endemic at all levels of the financial industries.
The US wasn't in purely capitalistic makeup to begin with. The US hasn't been a Capitalist country for a century. it hasn't even been a mixed economy for 40 or 50 years. America in 1890 was a Capitalist country.
The US is a hyper regulated, highly taxed welfare state. The US economy carries more regulations per capita than any other country on earth, and it passes more new regulations per year than anyone else.
You can't call a country in which the total government system extracts 40% of the economy - effectively a government system larger than the entire economy of Japan - a Capitalist country. It's not even close.
Nor can you call the world's largest welfare state, with the largest entitlement programs, a Capitalist country.
Where's the Capitalism? Capitalism requires, at a minimum, very low taxation, few economic regulations, strong protections on property rights, low friction for trade, and very little government intervention into the economy. The US has almost the opposite of that and has for a very long time.
> Capitalism requires, at a minimum, very low taxation, few economic regulations, strong protections on property rights, low friction for trade, and very little government intervention into the economy. The US has almost the opposite of that and has for a very long time.
Ahem. Your lack of perspective is painful. May I recommend [1], which ranks countries by both tax burden and government spending as a percentage of GDP. The US is in 60th place in terms of relative tax burden, and 46th place in terms of relative GDP expenditure. Of particular note: please look at the countries ranked below the US in either measure, and tell me which of those both fit your definition of "capitalism" and are places you'd actually want to live.
You can only say that US is "a hyper regulated, highly taxed welfare state" if your baseline of comparison is some wholly delusional Libertarian-land. No such place exists. In the real world of developed nations, keeping civilisation functioning requires both taxation and spending. By that measure, the US is relatively lowly-taxed, and miserably ineffectual at delivering a welfare state.
People have different definitions of what capitalism is, but they all share one characteristic: it's an absolute description, not one that depends on your policies relative to other countries.
Pointing out that the US has a more capitalistic economic than other countries currently enjoy is largely irrelevant in deciding whether or not it can be called capitalistic.
Libertarian land doesn't exist? You're openly admitting I'm right that the US isn't a highly Capitalist nation, and you're attempting to mock me for being right, hilariously. The US a century ago was a very low regulation, very low taxation, very high Capitalism country. Hong Kong at times has also come very close to qualifying for libertarian land.
As I noted the government's take of the economy is ~40%. That alone automatically disqualifies the US as a Capitalist nation. You can't have a government system that large and still pretend the US is a low regulation, low tax, small government, Capitalist system.
The countries you're comparing the US to, proves my point further: the US is under no circumstances a capitalist country. It's not even close. Comparing the US to middling, poorly run welfare states (the vast majority of all countries), is exactly what I'm talking about.
I never said the US had the worst tax burden. I never said the US government system extracted the highest % of GDP. I said the US was blatantly not a Capitalist country because of how large those figures are. I'm right, all those other countries you're comparing the US to are not highly Capitalist countries either.
Show me the tax burden as a % of GDP for the US in 1890 or 1910, or the government expenditures as a % of GDP for the same era. And I'll show you a Capitalist system.
You want an example of a low figure country I'd like to live in? Sure, Singapore, from your wiki list: 13% tax burden of GDP, and 17% govt expenditures of GDP. No coincidence they've enjoyed one of the greatest booms in world history.
I've been nothing but nice here, and I've been mocked, derided, and called names for it. For debating something as simple and non-emotional as economics, and I supposedly live up to some negative stereotype.
1) I'm not a libertarian.
2) I didn't argue anything inflammatory or negative. I've said nothing mean, at all. I said a highly capitalist country can't have high taxation, a large government, and high regulations. I'm absolutely correct about that. By definition, that cannot be a very capitalist nation.
"Unfortunately, as a result of my work, several more Linux storage developers came out publicly in favor of harassment and assault."
I really would like links to these public statements. I'm not a fan of shaming, but if people are advocating violence, some finger-pointing would be entirely appropriate.
Will you volunteer to filter my social media and email for rape threats, and compensate me for the lifetime earnings loss that is the result of naming someone who controls whether my code gets merged or whether I get invited to the top Linux invite-only summits? I've learned not to name names unless I'm ready to face the consequences of speaking out to protect other people.
It seems like you are also selling something. And the price, which you do not mention, is the curtailment of free speech, a steep price to pay for the privilege of having my delicate eyes protected from what those bad salesmen are selling.
"Well, you are aware that the roads were built for cars right?"
Unless you're referring only to freeways, that's a nice bit of revisionism. Especially in any city older than 100 years, the streets were built to carry trolleys, horses, carriages, omnibuses, and a variety of vehicles just as slow as bicycles. And cycles continue to be legal to ride on those roads. So you're managing to be both historically and legally wrong.
"I'm going to go out to my local bike trails and ... throw handfuls of thumbtacks in front of all the bikers"
I don't live in a city, and very little development where I live is older than 20 years old.
While cycles are legal on the roads, keeping with traffic is also a legal requirement in every state in the U.S. for any person on the road. But because bikes, they don't get ticketed and prosecuted for impeding the flow of traffic.
Look it up yourself. Your local state law should be online. Every single state in the U.S. requires road users to not impede the flow of traffic. That's why you can get a ticket for driving to slow.
21202. (a) Any person operating a bicycle upon a roadway at a speed
less than the normal speed of traffic moving in the same direction
at that time shall ride as close as practicable to the right-hand
curb or edge of the roadway except under any of the following
situations:
(1) When overtaking and passing another bicycle or vehicle
proceeding in the same direction.
(2) When preparing for a left turn at an intersection or into a
private road or driveway.
(3) When reasonably necessary to avoid conditions (including, but
not limited to, fixed or moving objects, vehicles, bicycles,
pedestrians, animals, surface hazards, or substandard width lanes)
that make it unsafe to continue along the right-hand curb or edge,
subject to the provisions of Section 21656. For purposes of this
section, a "substandard width lane" is a lane that is too narrow for
a bicycle and a vehicle to travel safely side by side within the
lane.
(4) When approaching a place where a right turn is authorized.
(b) Any person operating a bicycle upon a roadway of a highway,
which highway carries traffic in one direction only and has two or
more marked traffic lanes, may ride as near the left-hand curb or
edge of that roadway as practicable.
Nope. Keep searching. You found the law that allows bikes to share the road with cars. Now find the laws that I'm talking about. Off the top of my head for CA, 21202, 21654, 22400, and a few others.
Bikes have responsibilities as well, not just unlimited privilege.
As an aside, I'd like to object to this rhetorical technique. "You haven't found the thing that proves me right, therefore I am right" should not be permitted in arguments.
For the record, I don't think your intent was malicious, just calling attention to something I see a bit and don't like.
Yeah, there's been some good stuff in these threads, and some less good stuff. Tryin' to nudge everyone in the direction of the former - myself included. Thanks :)
The wikipedia page says nothing about minimum speeds.
21202 and 21654 explicitly list restrictions that must be followed when traveling at "less than the normal speed of traffic". This suggests to me that doing so is legal. By the way, 21202 is exactly what I quoted to you, so it's kind of funny that you would repeat it back to me.
22400 deals with impeding traffic, "unless it's necessary for the safe operation" of the vehicle. I don't know who determines what is necessary for safe operation, but travelling at a speed achievable by humans is certainly necessary for the operation of bicycles, and bicycles are explicitly granted permission to use roads.
I certainly don't see any clear legal requirements in general to maintain any specific minimum speed limit.
No I think he's right. At least around where I live (well, used to live, I'm in Korea at the moment), cyclists are not supposed to ride on roads that disrupt traffic or don't have a sufficient shoulder to pull off onto to let vehicles pass.
By contrast in Korea, they're not supposed to use roads at all and you'll find everything from bikes to scooters sharing sidewalks with people on foot. But bikes aren't real common here anyways with the small apartments and all.
edit actually I was curious and looked it up for Korea. Turns out according to Article 2(17)(a) of the 도로교통법 (road laws), bikes are classified as motor vehicles and have all the same rights and responsibilities as a motor vehicle.
Weird because I almost never see them out in traffic, but usually up on sidewalks or on "bike-only" roads.
ehhh...You're probably right. I dunno about CA law.
looking up the conversation, recursive and you seem kind of hung up on this wording "unless it's necessary for the safe operation" which I would interpret as meaning not just speed but actual safety. Of course it's not safe (or possible) to operate a bike at 100 kph. But I personally also don't feel safe clinging to the right most bit of a lane with a dropoff inches away while vehicles whizz around me.
I try not to ride on roads with poor bike safety without having to consult the law, but it seems like that phrase basically enshrines what I already do. If it's a fast road with no shoulder, I really try hard no find a path that doesn't take me on it. Yeah, sometimes you can't avoid it. But I'm not going to get upset with somebody who would rather not be driving their car in the same lane as me. I don't want to be in the lane with them either!
"But I personally also don't feel safe clinging to the right most bit of a lane with a dropoff inches away while vehicles whizz around me."
Right, I have no compunction taking the lane when the shoulder gets dangerous. Safety is always the concern. Note, for instance, that one of the specific times you're told you don't have to stay right (21202a4 - https://www.dmv.ca.gov/pubs/vctop/d11/vc21202.html) is when a car might try to make a right turn through you (a frequent way for cyclists to get hit).
> This ride-to-the-right provision does not apply when operating in a lane that is too narrow for a bicycle to travel safely side-by-side with another vehicle within the lane.
> A bicyclist riding at the speed of traffic can operate in any lane, just as any other vehicle can..Where there is not a bike lane, a bicyclist may also use the shoulder of the roadway.
> Bicycles may not be ridden in the travel lanes of any roadway where the posted maximum speed limit is more than 50 miles an hour; however, bicycles may be operated on the shoulder of these roadways.
So it seems to me that if I ever go back to MD, I can take over the entire lane if I'm keeping up with traffic (which for me means speeds < 20mph at full blast). Between about 20mph and 50 I can also take it over if there's no safe shoulder or other place for me to ride. Above 50 I can only ride on an available shoulder, if there's no shoulder I can't go on the road at all.
Maybe that's what I was thinking of. Either way I don't like to get out in front of cars, except maybe in the local neighborhood on residential streets where they're not supposed to be exceeding 15mph anyways.
The horror - horror! - of rich people having more stuff than poor people is not alleviated by preventing prices from rising in times of scarcity - rich people can just pay others to stand in line for them.
Equity of distribution doesn't strike me a particularly good metric for dealing with emergencies anyway since it's easily maximized by not letting anyone have anything, which is essentially what 'gouging' bans achieve.
The more positions are elected, the more power the majority have to impose upon minorities.
It is well known that pure democracy does not invariably promote liberal society, which is why the Founders of the US Constitution specifically rejected majoritarianism.
And yet we call systems that are ruled by very small minorities "dictatorships" so it's not something you can optimize in one direction, as it's one thing to protect minorities and something else for minorities to order everyone else around.
I have not seen any clear indication that the Founders collectively had anything against majorities per se, though, or even that they were trying to promote a liberal society (at least for any modern meaning of that word), as they simply required super-majority rules for more fundamental changes (e.g. changes to the Constitution) and seem to me more concerned that a minority of people in power could not do everything on their own, though I think there was some debate on that between the Federalists and those opposed to them.
The 'tyranny of the majority' issue is not really one that concerned the founders of the U.S. as much as people think, particularly not while they were drafting the Constitution.
They were more worried that if you give everyone the right to vote, they would rationally vote in their own best interests in the short term, choosing to seize all property held by the landowners.
I also don't know that it's all that "well known that pure democracy does not invariably promote liberal society." There weren't then and aren't now many examples of pure democracy. Hell, at the time there weren't all that many examples of Republics.
Among all voting methods it is uniquely effective and accessible - you get a large roster of fifty 'candidates', and the cost of moving to another state is much lower than the cost of buying an election.
When power is ceded from state to federal level, diminishing the diversity of candidate states, an important form of democracy is curtailed.