.... no. Short sightedness does not bring misery to the people making the decisions, it brings misery to those with no input into the process. Short sightedness brings great rewards to those actually in charge, hence my original objection.
The argument against truly free markets has 3 main points.
1. Somehow people stop acting towards their best interest and accept wages that are below what they could bargain for. Examples would be Foxconn campus, Pullman towns, etc.
2. People will begin hoarding wealth just to hoard wealth, spending it would release the wealth back into the economy, but they simply will hoard without spending, causing deflation and painful price adjustments.
3. Gold - truly free markets cannot have a government imposed currency. Free market currency is bad - see #2 about hoarding.
Seriously?
Yes, seriously. Which managers which ran their companies like idiots were rewarded except by government bailouts?
The entire financial bubble was basically business management acting for short term profits at enormous long term risk. Even if the government hadn't bailed out those institutions, those running them had already reaped enormous profits.
Isn't this because bad loans were guaranteed by the government?
Nope. It is the overwhelming opinion of economists, policy analysis bodies the world over, etc, etc, that US government intervention in the mortgage market was not the cause of the housing bubble/financial crisis.
Even if that were the case however, these executives still enormously profited from short term actions that eventually made their companies insolvent. It's exactly the evidence you asked for.
That's not at all what I've heard.
Yes, because the government provided the incentive to write bad loans with no regard for cost, or rather the disincentive to be prudent with lending standards.
Yes, because the government provided the incentive to write bad loans with no regard for cost, or rather the disincentive to be prudent with lending standards.
It's true, check it yourself. There is not a single credible analytic body I am aware of that endorses what you said. I mean it, not one. The idea that the government caused the mortgage meltdown is an opinion held almost exclusively by the right wing in America, and nowhere else.
While I feel the need once again to mention that such an analysis is not supported by credible economic bodies, the fact remains that regardless of what the market conditions were like, managers in those companies took actions to gain short term profits at the expense of long term viability. This is hardly the only example of this, but it just shows how short term profits can certainly drive long term destructive action.
I guess I'm having a hard time understanding. If I were running a bank, and had any experience running a company, it would be common sense to make prudent loans to trustworthy people, or else go out of business long term. UNLESS someone came along and told me "It's okay, lend as much as you want to anyone you want. We'll cover any losses."
I think I disagree because your assertion defies what I know to be common sense.
...then you're the first person I've heard make that claim.
I guess I'm having a hard time understanding. If I were running a bank, and had any experience running a company, it would be common sense to make prudent loans to trustworthy people, or else go out of business long term. UNLESS someone came along and told me "It's okay, lend as much as you want to anyone you want. We'll cover any losses."
I think I disagree because your assertion defies what I know to be common sense.
You're ignoring a huge part of the mortgage crisis: the banks packaging the loans and selling them off to investors.
There was serious asymmetry of information problems that led the primary seller to be able to sell the loan as prudent when it was anything but. It wasn't about "we'll cover any of the losses" it was about "we'll be able to guarantee our profit before any losses occur". It was basically a game of hot potato.
Then why did investors buy them if they knew they were garbage?
It's true, check it yourself. There is not a single credible analytic body I am aware of that endorses what you said. I mean it, not one. The idea that the government caused the mortgage meltdown is an opinion held almost exclusively by the right wing in America, and nowhere else.
While I feel the need once again to mention that such an analysis is not supported by credible economic bodies, the fact remains that regardless of what the market conditions were like, managers in those companies took actions to gain short term profits at the expense of long term viability. This is hardly the only example of this, but it just shows how short term profits can certainly drive long term destructive action.
Analysis by the G20, the bipartisan Financial Crisis Inquiry Commission, the independent Congressional Research Service, the Federal Reserve, etc, etc. have all concluded as such. (there are lots more)
That simply wasn't the situation prior to the mortgage crisis, and the idea that banks were making these loans due to the fact that they believed their losses would be picked up by the government later does not have support in the historical record. Furthermore, the compensation of those in the banks making these loans was not tied in any way to the long term performance of their banks.
It might have been foolish for the bank as the whole to engage in this behavior, but it was not foolish at all for the individual members to behave that way, which was pretty much my whole point from the beginning.
When you bundle it enough, and rebundle it repeatedly on each sale, even the person selling it does not know exactly what they are selling anymore.
Very few knew the ins and outs, and right now most of them are keeping deathly quiet about it.
...then you're the first person I've heard make that claim.
I guess I'm having a hard time understanding. If I were running a bank, and had any experience running a company, it would be common sense to make prudent loans to trustworthy people, or else go out of business long term. UNLESS someone came along and told me "It's okay, lend as much as you want to anyone you want. We'll cover any losses."
I think I disagree because your assertion defies what I know to be common sense.
Aging population is the only thing worse than overpopulation. Don't believe the bullshit of Earth's resources running out, it can support way more human beings than it does.
If you let the population age, assuming the current social services structure, you won't have anyone to support the elderly and their social benefits.
The problem is poor families that make more children than they can support; making kids that you can't afford educate or take care of, which live no better life themselves, is destructive to society. There should be zero child benefits, certainly not such that encourage people to having children.
There should be a penalty for those making children while on welfare. But the the country needs the population to constantly grow, never contract.
Carrots are no good without sticks though. Without sticks, you run out of carrots (unsustainable).