patrick.net

darlag says

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

sounds like he answered your own question.

But they can punish a government that tries.

darlag says

So what flipped him to the Keynesian darkside?

He never flipped, he was a double agent for Mommy:

His actions and words made it quite clear, he intended to subvert the machine from inside. Great job Uncle Al!

Yep. covered here:
From Gold Bug Randian to the Maestro

http://smaulgld.com/negative-interest-rates-and-janet-yellen/

free markets is great concept, but in practice do they even exist ? maybe on small scale but government regulations have severely limited free enterprise.

Greenscam always was a believer in the gold standard even as he was busy devaluating the dollar.

Vaticanus says

free markets is great concept, but in practice do they even exist ? maybe on small scale but government regulations have severely limited free enterprise.

Do perfect man exist? Of course not. That does not mean better man should avoided in favor of scums.

sbh says

Reality says

Government spending outbids the market voices of laid off workers and those still working alike, making them poor

They are made poor because they have been laid off or paid slave wages. Circle back around and insert the government wherever you need in order to demonize it.

Only violent coercion, usually due to government enforcement, can result in slave wages. For example: the de jure slavery system of the south depended on government enforced slave return laws; the de facto sex slavery today in many European countries (and the US) depends on government enforcement against illegal immigrants without government papers.

Markets where the worker is free to work for someone else (i.e. not assigned to work at a particular location like in a socialist economy), and the worker is free to sell his/her labor directly to customers, all talks of "slave wage" is meaningless hyperbole.

Reality says

Both Greenspan and Bernanke were loose for the banksters but tight on the rest of the population. Bernanke handed out billions to the banksters but was tightening money supply during 2008-2009.

"She's my daughter" SMACK! "She's my sister" Whack! "She's my daughter AND my sister" SMACK ........"SQUIRREL!" "SQUIRREL!" "SQUIRREL!"

Is that noise coming from your bedroom? Stop projecting your own wannabe fascist "purity" "structure" nonsense.

bgamall4 says

I don't think he was either. And the statement above about his connection to Ayn Rand is strong. The lie about the article is that Greenspan helped complete bank deregulation, which was supported by UK Libertarians who supported Thatcherism. Greenspan was a Thatcher follower. He deregulated, allowed liar loans, and protected the banks by keeping interest rates low, so they would not go under.

Of course, by low interest rates he hollowed out main street, destroying the middle class. Austrians always end up helping the Uber rich.

Ayn Rand was not an Austrian economist at all. The center piece of Randian philosophy is "Objectivism," which is exactly the opposite of the central tenet of Austrian Economics: value being subjective.

Austrians were very critical of Greenspan even when the mainstream media was praising the "Maestro." In fact, Austrians were among the earliest critics of Greenspan policies.

sbh says

Only violent coercion, usually due to government enforcement, can result in slave wages.

Bullshit: only in your sociopathy. I never read your examples, they are as insane as you are.

In other words, you prefer to rave like an upset 3yr old.

bgamall4 says

Reality says

Ayn Rand was not an Austrian economist at all. The center piece of Randian philosophy is "Objectivism," which is exactly the opposite of the central tenet of Austrian Economics: value being subjective.

I don't buy that. Mises Institute has adopted Ayn Rand. Mises taught both Rand and Rothbard. Rand believed in self interest and deregulated banksters believed the same thing. And libertarians believed in the same thing.

And it was always supposed to help society. Yeah, right.

Self interest, and calculations based on that, is the very basis of practically all schools of Economics and Game Theory.

Philosophical systems based on apriori rejection of self-interest are usually called theology.

bgamall4 says

Bernanke has proven to be loose money for the rich and austerity for everyone else. That is reality, Reality.

Glad you agree. Every central bank chief put in place by the political process is bound to act in that way. All men are driven by self-interest in the long run. Power corrupts. Therefore, in order to eradicate or reduce corruption, the solution is to eradicate or reduce (monopolistic) power.

sbh says

Reality says

In other words, you prefer to rave like an upset 3yr old.

Of course those are your words because you have nothing left to say except "projection" and "fascist". Here's a tip: there are no fascists on pat.net, you simpleton, they are all in your alleged mind, tormenting you. When you ejaculate the impotent term "projection" you're just flailing incompetently at you own anxieties, doing the Austrian peepee dance. Everything else you say is the equivalent of shrieking "SQUIRREL!".

Now, shriek out something formless and stupid.

You are projecting your limp impotence again whenever you focus on spewing forth content-free diatribes. You choose to ignore concrete substances and examples in what I presented precisely because you are impotent. You only wish you could have something to ejaculate.

bgamall4 says

Reality says

Self interest, and calculations based on that, is the very basis of practically all schools of Economics and Game Theory.

The invisible hand of self interest is limited to libertarianism alone. That invisible hand is supposed to weave goodness into the greater society.

"Invisible hand" was a term invented by Adam Smith. Libertarianism came too late to claim that term. Invisible hand is what makes the society functional. Nobody told you how to put on your clothes this morning. Nobody was ordered to bring you breakfast . . . unless you are in a jail.

But deregulation of the banksters, is like pulling the referees from a basketball game. The libertarians are too stupid and blinded to figure that simple lesson out.

The referees were cheer-leading the adjustable rate mortgages (Greenspan the top referee encouraging Americans to take on ARMs during Congressional Hearing in 2005-06) and not seeing any problem as late as in 2008 (Bernanke the top referee testifying at Congressional Hearing).

The whole "referee model" is wrong:

1. Nobody alive can be disinterested in the society; would you let one of the team's coaches to be the referee for the game that the team is playing?

2. Would you let a blind man be the referee in a baseball game?

bgamall4 says

Reality says

All men are driven by self-interest in the long run. Power corrupts.

How come the libertarians can't learn that simple lesson?

Libertarians learned that lesson quite well. That's why they advocate less power concentration.

“Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process.” -Alan Greenspan

Hypocrite! Loose monetary policy enables the confiscation of wealth UPWARDS! Money trickled up under Greenspan not down. Austrians are all about making Richie Rich even richer, with the hand-waving religious belief that somehow this will inevitably result in "all boats rising". And of course the ends justifies the means, so if you have to become Fed chairman to enable Utopia and mumble a lot so be it. The fact that it never works escapes them.

They called it the Greenspan Put, because they knew no matter what, Uncle Al was on the side of Finance & Bankers and would make sure they were taken care of. Why? It's about Al's religious belief that FIRE can do no wrong, and the best thing Big Gubmint can do is sit on it's hands and never take away the punchbowl no matter how rowdy the party is.

Did he ever admit culpability in any of this? NOOOOPE!

"Bernanke handed out billions to the banksters but was tightening money supply during 2008-2009."

I'm no expert here -- quite the opposite -- but what I think happened after Lehman is the Fed and Treasury intervened to put $800B in the banks, literally 'tiding them over' the coming crash of 2009.

http://research.stlouisfed.org/fred2/series/EXCSRESNS

is excess deposits the banks had at the Fed, a cash cushion they had to liquidate loans from, instead of telling their depositors they didn't have their money any more, Casey Serin took it, talk to him.

There were a few consumer banks that failed in 2008 -- IndyMac and Wamu were the mains one I guess. Citibank, Wells Fargo, and Bank of America were next.

Yes it is bullshit that they were saved and everyone else swept out to sea. But that's what TBTF gives you, and TBTF was created by free-market lunatics like Greenspan who have had their heads up their asses for a very long time.

Reality says

Libertarians learned that lesson quite well. That's why they advocate less power concentration.

Even though their principles would have the consequence of private mafias:

http:/s.randi.org/showthread.php?t=136113

spydah_hh says

Greenspan created the stock market bubble and the housing bubble with loose monetary policies

loose monetary policies certainly contributed to the housing BOOM of 2002-2003.

The BUBBLE of 2004-2007 was created by suicide lending empowering real estate professionals at all levels -- real estate agents and brokers picking up strings of properties with no cash up front, and cash-out refinancing to recapitalize their growing empire, millions (?) of other specuvestor types buying properties with liar loans, mortgage fraud at all levels, etc etc.

It was the unregulated 1920s all over again, and conservatives who set up the system and watched it go off the rails contrary to their religion were left to watch it all fall down in 2008-2009.

Reduced Regulatory Burden

Determined to cut red tape and reduce regulatory burden are (l to r), OTS Director James Gilleran, Jim McLaughlin of the American Bankers Association, Harry Doherty of America�s Community Bankers, FDIC Vice Chairman John Reich and Ken Guenther of the Independent Community Bankers of America. On June 3, 2003 under the leadership of FDIC�s Vice Chairman John Reich, the federal thrift and bank regulatory agencies launched a cooperative, three-year effort to review all of their regulations (129 in all) that impose some burden on the industry. The purpose of the review, which is mandated by the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA), is to identify and eliminate any regulatory requirements that are outdated, unnecessary or unduly burdensome.

http://www.fdic.gov/about/strategic/report/2003annualreport/intro_insurance.html

"That's why they advocate less power concentration."

wealth is power, and this is the central contradiction in (right-) libertarianism -- right-libertarianism is the worship of wealth concentration.

I have yet to hear a right-libertarian say globalism, walmart, or

http://research.stlouisfed.org/fred2/series/CP/

is bad for our society. Their programming doesn't allow them to.

"privilege" from the latin is 'private' 'law', and that's what libertarians want.

and the only way you get privilege (in libertopia) is by purchasing it, just like all kleptocracies.

'privilege' in the corrupted soviet economy was awarded through Party connections, but now in Russia they've basically evolved into oligarchic libertarianism, a plutocracy that owns the natural wealth and physical plant of the country with the populace left with nothing.

I'd like to think libertarianism would work in the real word when combined with Georgism -- they call that geolibertarianism. But libertarianism without Georgism is certainly a short trip to plutocracy, he who has the gold makes the rules.

This is why rich mofos like Scaife and the Kochs fund libertarian message centers like Cato,

http://www.sourcewatch.org/index.php/Cato_Institute

big money has a happy time in libertopia.

Bellingham Bill says

Yes it is bullshit that they were saved and everyone else swept out to sea. But that's what TBTF gives you, and TBTF was created by free-market lunatics like Greenspan who have had their heads up their asses for a very long time.

The concept of TBTF is a joke on the believers of big government. There is no such thing as TBTF. Bear Sterns failed, Lehman failedd, and the final cost clearing their derivative portfolio was quite minimal as most positions were mutually off-setting despite the huge nominal values.

TBTF was an artificial concept concocted by the big government interventionists. 90-99% of American callers to their representatives and senators were "free market fanatics" who refused to recognize the TBTF concept and wanted the lousy bankster institutions swept out to see by the free market.

bgamall4 says

Reality says

"Invisible hand" was a term invented by Adam Smith. Libertarianism came too late to claim that term. Invisible hand is what makes the society functional. Nobody told you how to put on your clothes this morning. Nobody was ordered to bring you breakfast . . . unless you are in a jail.

Wrong. The libertarians claim Adam Smith. Invisible hand is one of the foundations of libertarian thought. Invisible hand did not make society function in the housing bubble and crash. It almost destroyed society.

1. The society is not destroyed. You are still living in it

2. Does market make mistakes sometimes? of course it does, just like you the human being make mistakes. Just like every single government official as human beings make mistakes. Do you want to those mistakes enshrined by the strong arms of gun barrels? If you do, then love your big government. If on the other hand, you believe each individual has the right to point out that the Emperor has no clothes on, then you are a free market advocate.

3. Unless you woke up in a jail, and a jail house slave laborer brought you breakfast, the invisible hand of the market place was what fed you this morning.

bgamall4 says

He was never a referee. He was a libertarian who believed in deregulation. We never had referees when Greenspan was holding interest rates low and blowing bubbles. The regulators were not permitted to do their jobs when Greenspan was in charge.

Of course he was the referee: he decided how much money was worth; i.e. the interest rate.

For you to use the argument that regulators didn't do their jobs and therefore we should not regulate, because a libertarian was over them, is just plain evil, Reality.

The regulator regulated how much interest rate was. The regulator agreed with most politicians that ARM was a good deal for Americans. Do you suppose they should have been given more power to force Americans into taking ARMs? Your implicit assumption that regulators have all the correct information and know future consequences of their actions is simply wrong.

sbh says

Imagine what we could look forward to in the austrian bizarro world. Toyota could produce untold numbers of death dealing cars, but if the price was low enough we would just have to wait for the marketplace to sort out the pricing power of death due to sudden acceleration. And, the private courts, owned by whomever, would put their stamp on it as well. Joe Camel would be up there with Ronald McDonald in the school-age kids' pantheon of social heroes. Lung cancer in middle school is merely the price of freedom. Hell, why shouldn't Budweiser be part of school lunches? Let the free market speak!

The free market speak would be no robbing of parents to run school lunch program at all, so taxpayers do not subsidize Pink Slime fed to precocious school aged children like they have been doing.

The government costume apparently did not save the cop from driving the loaner Lexus to triple digits speed with a stuck throttle, eventually to the death of his entire family. Now tell us, how exactly how he had known the Toyota/Lexus problem apriori just because he was a government official? Why was he suicidal after magically knowing such facts? Apparently the man, despite being a traffic cop for many years, did not even know to shift the car into neutral; nor did the 911 operators on the other end of the phone call. So much for bureaucratic omniscience. They literally didn't know enough to save their own lives!

sbh says

Reality says

The free market speak would be no robbing of parents to run school lunch program at all

Right, the grubby little urchins could hold fist fights each day in the dirt lot to see who had the strongest pricing power. That's the only pure way to determine who deserves to eat an austrian lunch. Better to eat with your knuckles than to pay a moment of taxation. Everybody knows that.

Utter nonsense. You are looking at a government run monopoly that takes money from parents, and spend most of the money on the bureaucracy itself instead of on the actual food, so now the kids have to eat Pink Slime for lunch . . . yet all you can think of is the government monopoly being the only possible supplier of food. Do you live in a jail or something? Do you think jail food (where Pink Slime also have a larger than usual share) is better than food that normal people buy from competitive vendors outside the jail?

Reality says

The regulator agreed with most politicians that ARM was a good deal for Americans. Do you suppose they should have been given more power to force Americans into taking ARMs?

Let me understand this. Regulators are bad and should be abolished because they allowed banks to make arm's instead of regulating arm's or not allowing arm's. So you are saying that there should have been more regulation and regulators failed because they didn't regulate enough. That's "logic" worthy of the captain.

Reality says

so now the kids have to eat Pink Slime for lunch

The option still exists to pack a lunch. Obviously a lot of parents are perfectly ok with pink slime. They voted with their wallets on the issue, so why are you the mighty oz saying they are wrong.

bob2356 says

Reality says

The regulator agreed with most politicians that ARM was a good deal for Americans. Do you suppose they should have been given more power to force Americans into taking ARMs?

Let me understand this. Regulators are bad and should be abolished because they allowed banks to make arm's instead of regulating arm's or not allowing arm's. So you are saying that there should have been more regulation and regulators failed because they didn't regulate enough. That's "logic" worthy of the captain.

You are making the mistaken assumption that regulators would see ARMs as a bad thing in a bubble therefore curtail it. The reality was that the regulators encouraged ARMs during the peak of the bubble! They thought it was great and more cost-effective than fixed rate mortgages!

If they had more regulatory powers, they would have used that regulatory power to encourage more ARMs at the expense of other forms of capital allocation.

bob2356 says

Reality says

so now the kids have to eat Pink Slime for lunch

The option still exists to pack a lunch. Obviously a lot of parents are perfectly ok with pink slime. They voted with their wallets on the issue, so why are you the mighty oz saying they are wrong.

They were forced to make that choice because much of the content of their wallet has already been stolen by the bureaucracy that runs school lunch (which spends more money on the bureaucrats than on food), the public schools themselves, and myriads of even worse forms of big government expenditures.

Reality says

They were forced to make that choice because much of the content of their wallet has already been stolen by the bureaucracy that runs school lunch (which spends more money on the bureaucrats than on food), the public schools themselves, and myriads of even worse forms of big government expenditures.

Horseshit.

bob2356 says

Reality says

They were forced to make that choice because much of the content of their wallet has already been stolen by the bureaucracy that runs school lunch (which spends more money on the bureaucrats than on food), the public schools themselves, and myriads of even worse forms of big government expenditures.

Horseshit.

I see, another big government type running out of arguments. Thank you for the honest admission.

Reality says

You are making the mistaken assumption that regulators would see ARMs as a bad thing in a bubble therefore curtail it. The reality was that the regulators encouraged ARMs during the peak of the bubble

They encouraged it? Pray tell how/ So those evil regulators "encouraged" arm's and the banks were forced to hand them out to people totally unqualified to pay them back? Those poor helpless banks making billions of dollars against their will. My heart goes to them.

Please feel free to continue on this line of "logic". I haven't had this good a laugh in months.

Reality says

bob2356 says

Reality says

They were forced to make that choice because much of the content of their wallet has already been stolen by the bureaucracy that runs school lunch (which spends more money on the bureaucrats than on food), the public schools themselves, and myriads of even worse forms of big government expenditures.

Horseshit.

I see, another big government type running out of arguments. Thank you for the honest admission.

Horseshit is horseshit, there is no need whatsoever for argument. The problem is you actually believe it.

Reality says

The worth of money, i.e. opportunity cost of money, refers to interest rate.

Expected Future value of money\current value of money = opportunity cost of money = risk free interest rate = inflation rate.

sbh says

yet all you can think of is the government monopoly being the only possible supplier of food.

No, no. The little buggers can buy their own food from unlicensed street venders when they head to school after a shift in the mines. Or better yet, they could just eat the scraps off the floor of the meat packing plant that hires them at age 7.

Would you send your kids to jobs like that if you had better choice? Don't even get me started on the price of street vending license and how that cost gets extracted from consumers to feed a few bureaucratic fat cats

They should have enough scratch to bargain for immunization shots peddled on the streets by unlicensed snake oil salesmen. If it doesn't work out and they die, that's just the social market clearing.

So now instead the snake oil salesmen are given by the government the license to kill: as immunization shot manufacturers are immunized from law suits when the kids die or suffer from Autism due to undead virus or mercury poisoning. BTW, your kids can't even go to school without taking the shots from the snake oil salesmen! That's the reality of your social engineering.

All of this is better than paying one cent of tax. Everybody knows that.

You can see taxes as a new age "indulgence sales" to obviate your own personal responsibility, or you can see it as a scam just like the "indulgence sales."

bob2356 says

Reality says

You are making the mistaken assumption that regulators would see ARMs as a bad thing in a bubble therefore curtail it. The reality was that the regulators encouraged ARMs during the peak of the bubble

They encouraged it? Pray tell how/ So those evil regulators "encouraged" arm's and the banks were forced to hand them out to people totally unqualified to pay them back? Those poor helpless banks making billions of dollars against their will. My heart goes to them.

Please feel free to continue on this line of "logic". I haven't had this good a laugh in months.

You are changing the topic. I was talking about the regulators literally encouraged ARMs at the peak of the market when the rates were at multi-decade lows.

As for encouraging handing out loans to people who were unqualified, that came with double barrel of policies:

1. affirmative action in loan making

2. making "lender of last resort" safety net available to big financial institutions when their loan portfolio go bad.

control point says

Reality says

The worth of money, i.e. opportunity cost of money, refers to interest rate.

Expected Future value of money\current value of money = opportunity cost of money = risk free interest rate = inflation rate.

Mostly correct, with the addition of time value.

Reality says

Mostly correct, with the addition of time value.

Expected future value of money is dependent on time value.

control point says

Reality says

Mostly correct, with the addition of time value.

Expected future value of money is dependent on time value.

I was thinking of time value as in rewarding the patience of waiting. It's a small point.

I think the article was ok, but did not give a reason for Greenspan's change to the dark side.

I think the real reason was that since 1997 he has been thinking with the little head.