151–160 of 207 posts
So how does an ordinary citizen become aware of 'these systems' and begin to participate in 'them'?
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Money is a medium of exchange, unit of account, and store of value. Those are the only requirements for money.
> Those are the only requirements for money. Obviously they are not. The requirement that it should be difficult to duplicate is essential.
Limiting us to gold also exposes us to massive economic swings, due to the limited ability to control how much or how little we all agree exists. I always hear people talk about how we 'print money' when we need it but NO ONE mentions that we also take money OUT of the economy all of the time.
Terrible writing. I'll sum it up: hard working people in the bottom half of the "top 1%" are not evil power-brokers but the most successful professionals. You have to look at the top 0.5 or top 0.1% (I'd argue that even 0.1% is generous) before engaging "the corridors of power", which consists of financial and real estate elites as well as contractors exploiting corrupt government officials. Is this news? A more inte…
Actually, by the traditional definition, they were still middle class, as higher classes were defined by more than just money (royalty, political position, etc.)
Paul Graham goes into detail on this very issue in his "Mind the Gap" essay: http://paulgraham.com/gap.html
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The self-dealing by the banks since 2008 has been almost wholly underwritten by the Fed and the Treasury. Beyond TARP there are myriad guarantees, lending programs, and regulatory exemptions, all designed to provide the banks with greater profit and allowing them to offload risk, usually to the Fed or the taxpayer. Indeed, if you look closely, much of the "profit" in the banking system today is coming from banks borr…
This, more or less. Most of the profit in the banking industry comes from being able to take on massive risk, while simultaneously being cushioned from that risk by the government. Risky positions and derivatives are extremely profitable, but for most people -- those without guaranteed bailouts, or cushy borrowing rates -- the risk is too great. For investment banks, as we've seen, the risk is minimal to nonexistant…
Politicians sold people stuff like fannie mae and people voted for it by electing them. And I guess voting in favour of such things is inevitable when not all voters are taxpayers. An extreme solution might be limiting votes to people who are paying taxes. This seems logical but is obviously politically impossible.
It makes perfect sense that most people in the top 0.1% are associated with the financial and banking industries if you know how banks work. Banks, and the Federal Reserve, create new money. They give this money to themselves, and then loan it out. This is as bad as, and effectively equivalent to, counterfeiting. Creating new money, i.e. counterfeiting, i.e. inflation, does not create new wealth. It merely changes th…
This misses the point of the article, which is that many in the top 0.1% got there from some form of self-dealing. His argument is that they are profiting from their position in the economy rather than from the value they add. And by position, he doesn't mean nearness to the money press. I think he means nearness to the center of wealth and power, which at the moment happens to be the financial industry. > This is wh…
PS: A close friend of mine overheard a conversation that was basically "My husband only made 80 million last year, what happens if my social circle finds out?". Her friend actually understood how terrible this was, why her friend was sobbing, and was vary sympathetic. When you are close enough to overhear those in power but don't the goodies there is a lot of pressure to seek it out. However, a family of 4 living off of 42k/year without heath insurance can feel the same way to a 250k combined income. Which IMO muddles the debate.
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If there is only $100 in the economy, I can still owe you $105. To pay it back, I could start working for you and be paid $1 per hour. Now everytime you pay me $1, I would pay you back this dollar until my debt is zero. In the real-world, with more than two persons, it would look more like this: I pay you back some amount of the debt, you spend this money and it propagates through the economy, until some part of it r…
So you are saying the money pool expands at the rate in which the Federal Reserve spends money, and contracts at the rate it loans money?
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> Those are the only requirements for money. Obviously they are not. The requirement that it should be difficult to duplicate is essential.
Not really. Gold is held as a standard, but I would argue that gold itself is nothing more than another form of fiat. Why is gold worth anything? Because we all agree that it is. How much gold is there? Whatever is reported by the governments who hold it. There's no way to check. There are ways to guess, but it's just a shiny metal that we all agree is worth exchange. Limiting us to gold also exposes us to massive ec…
True to some extent, but it does have more intrinsic value than paper currency. 1) It's rare enough that small amounts can be used to trade, but common enough that lots of people can have some. 2) It is pretty (subjective, but agreed-upon across many cultures). 3) It is chemically stable - doesn't rust or tarnish - so if you have 5oz today, you'll still have 5oz 10 years from now.
Reasons like these were explored on a Planet Money podcast, and they concluded that gold isn't an arbitrary choice; if you could pick any element from the periodic table to use for money, gold is the logical choice.
http://www.npr.org/blogs/money/2011/02/07/131363098/the-tues...
Terrible writing. I'll sum it up: hard working people in the bottom half of the "top 1%" are not evil power-brokers but the most successful professionals. You have to look at the top 0.5 or top 0.1% (I'd argue that even 0.1% is generous) before engaging "the corridors of power", which consists of financial and real estate elites as well as contractors exploiting corrupt government officials. Is this news? A more inte…
Who are you including under the term "liberal intellectual"? Are you including folks like Martin Feldstein (Harvard), Larry Summers (ex Harvard), Robert Rubin (Harvard BoD) and Robert Schiller (Yale)? If so, I'd argue those academia-associated liberals are every bit part of the problem. Even further-to-the-left intellectuals like Krugman have their salaries mainly funded by donations from wealthy bankers, and they offered very little criticism of the financial sector before 2008.
Earlier quoted context omitted.
This, more or less. Most of the profit in the banking industry comes from being able to take on massive risk, while simultaneously being cushioned from that risk by the government. Risky positions and derivatives are extremely profitable, but for most people -- those without guaranteed bailouts, or cushy borrowing rates -- the risk is too great. For investment banks, as we've seen, the risk is minimal to nonexistant…
I'd like to add that responsibility for banks providing loans backed by the taxpayer ultimately falls on voters. This is what fannie mae/sallie mae etc are all about. Disconnecting access to credit from the ability to repay it inevitably results in loans that will default. Politicians sold people stuff like fannie mae and people voted for it by electing them. And I guess voting in favour of such things is inevitable…
I get the premise of this logic, i.e., that poor people don't pay taxes and therefore don't care about spending taxpayer dollars. I've seen it presented hundreds of times. But I think, in all honesty, that such a theory is giving the poor too much credit. It assumes that the poor are making conscious decisions based on rational evaluations of their economic incentives. I'm not convinced they think that way. Furthermore, I'm not convinced that they're even informed enough to know what they're doing when they vote on such things.
Some of the blame lies on the voters for voting without understanding, sure. But the politicians -- many of whom are paid for by lobbies -- bear greater responsibility for selling bullshit to underinformed voters, and for coucing the bullshit in emotionally manipulative ways.
Why the fuck does he consider CEOs and others who sell their companies to be "directly connected to the finance industry?" To that extent, a cashier at wal-mart is directly connected to the finance industry because she helps a traded corporation make revenue.
As far as I can tell he equates making money from the sale of stock rather than from salary with being part of the finance industry. I stopped reading when I realized that.
The more bullish is the market - the better for him, and for the whole ecosystem of financial institutions that serve him. In this sense he is a part of the financial industry and shares the general systemic risk (though, of course, this varies in individual cases and portfolios)
His position is no different than hers - the enriched with stocks ex-wife of an investment banker after the divorce (also a kind of exit strategy, btw).