Reddit reviews Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse
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A hardcover book, 194 pagesPUBISHER; Regnery Pubishing, 1edition (February 9,2009)Language: EnglishISBN;10-1596985872
Welcome noob! Please read these books in this order, each are available for free in pdf or eBook, just right click and save:
Once you’re done with those, I’d suggest purchasing the following books:
Afterwards, if you have any questions about monopolies, consider the resources in this thread. Enjoy! If you need further reading suggestions let me know.
Well, there's a lot of shit the government does, but it looks like you're most interested in the defense and regulation portions. Robert Murphy does very well on the topic and cleared it up for me when I was discovering anarcho-capitalism, but if you're looking for something to read on the topic, his book Chaos Theory is basically the same thing as the lecture.
The housing bubble was caused by The Federal Reserve lowering its interest rates, making easy money that made banks say "hey, we have more money to loan out to make money on," and by definition the only people to loan out to were those with the riskiest intentions: Building housing and hedging stocks. If I recall correctly, this is Tom Woods' lecture on the matter, and he also has a book on the matter.
Meltdown By Thomas Woods is what you are looking for in regard to the causes of the collapse.
His later book, Rollback outlines the solutions.
This doesn't make any sense to me. If there is more capital, that means larger projects can be invested in. Roads, high speed rail, moon colonies, what have you. Speculation or investment can occur at any level of capital, and there's no reason to have more of one than the other.
People keep trying to make the point that speculation causes bubbles, but I don't buy it. People are always speculating, but bubbles only occur when that speculation is pointed in a systematic direction. There are so many investors with so many different ideas that there's no reason for a systematic unification of investment, unless there is some significant outside force operating on the market. There is a strong argument that the federal reserve system provided that outside force for each of our bubbles.
1.) Answers will vary depending on what "wing" of libertarianism someone adheres to. I'll just focus on two.
Minarchists (Ron Paul/Gary Johnson types) would argue some level of taxation is necessary to maintain an exponentially smaller government than exists now. This vision of government would operate essentially only defense, courts, and police. Minarchists will generally argue for a simplistic consumption tax or flat tax of some sort. Some argue for limited tariffs instead so our citizens are not directly taxed at any point. Their approach is debated internally, but united in that the net taxation would be dramatically reduced. In this world, government continues to collect revenue and spend it on its very limited endeavors - not much has changed besides the scale of collections and operations.
Anarcho-capitalists (Rothbard types) would say that you cannot be logically consistent in arguing the inefficiency of government and moral issue of taxation, which minarchists do argue, and then still accept its role in society. These types will argue for a peaceful transition to an entirely pure market based economy via the privatization of all government services. They point that government services already have private equivalents which are always more efficient: Fedex/UPS vs USPS, government schools vs. private schools, privately operated toll roads, private airport security (which is already the norm in some other developed countries), private binding arbitration, etc. This includes regulatory bodies: NSF and Underwriters Laboratories are real examples of private sector regulators where companies pay to have their products evaluated and approved based on their objective third party standards. So, to answer your question: in their world, government doesn't operate at all and instead all interaction is through voluntary contracts in the market.
Minarchists are usually somewhat sympathetic to the anarcho-capitalism view, but will say it is fantasy because the general populace already views government as a wholly benevolent entity. Personally, I generally believe in anarcho-capitalism and do believe government as we know it is obsolete and unnecessary in the modern world. In the 20th century capitalism brought us a previously unfathomable increase in the standard of living while the institution of government meanwhile slaughtered hundreds of millions in the name of communism, World War I and II, etc. But, off my soap box for now.
2.) This is hard to answer concisely, so I'll instead recommend three books.
The first is FDR: New Deal or Raw Deal. It reviews objective data to argue that FDR & friends were not the godsent savior of the world that government schools teach. The, very oversimplified, conclusion of this book is that FDR terrorized the market with incredibly arbitrary and tyrannical intrusions during his tenure and prolonged what could have been a comparatively simple market correction into the "Great Depression" as we know it. After his death, it argues, the market was returned to a state of normalcy and we were given the incredible boom that followed the end of World War II. If you're really interested in the topic, I suggest giving it a read. It's rather dry, but very interesting since it goes against everything we're taught.
The second book is to review how the government, via the Federal Reserve, intrudes into the economy by manipulating interest rates and thus exacerbating the natural cyclical nature of the market. The Austrian School of Economics, the economic theory that is most often associated with all of libertarianism, argues this is where the Great Depression and, more recently, Great Recession, came from. An easy introduction to this topic is End the Fed. Its, very oversimplified, conclusion is that the Federal Reserve artificially stimulates demand by fixing interest rates below what they would be in an untainted market. This then leads to overconsumption (the bubble) in a whatever area of the economy the government decides is politically fashionable to push at the time.
The third book is to bring in a modern context about the government's role in the 2008 crisis: Meltdown. It applies the Austrian Economic view onto the most modern economic crisis. It's writing style is much more interesting than the first two books I offered and, frankly, it's just more interesting since it happened in our lifetime. The principles can also be applied to the Great Depression and it also references the mistakes made in dealing with it as well since we basically followed the same path. Its, very oversimplified, conclusion is that the government is wholly responsible for the 2008 crisis by setting up an environment that incentivized overconsumption. By violating basic economic laws, it argues, the government created a situation that was doomed to fail and nothing could have stopped it from all crashing down.
3.) To be logically consistent, yes. Heavily regulating economic activities will inevitably spill over into regulating social activities. As a small example, the IRS selectively targeted conservative groups because of their views and sought to destroy them. By having this economic intrusion into the market (the entirety of the IRS as an institution), the government attempted to purge these groups of their basic human right to self-expression.
4.) I do not believe in it. Simply by being born in a physical location does not enslave you into what a former generation believed was your "role" in society. As a small example, you are in no way morally obligated to pay for the inactivity of senior citizens through Social Security (or whatever similar program your country has if you are outside of the US). To say that you are because FDR & friends, before you were ever born, decided to deploy Social Security as a cash grab is sheer nonsense. You are not a slave to some ivory tower politician(s)'s whimsical views on what your "lawful role" in society is supposed to be.
edit: formatting, oops.
That's what happens when you have central banks destroying our currency.
There's a transfer of wealth from middle class/poor to wealthy. How? The money we use reflects our productivity. As they counterfeit our money (i.e. print out of thin air), our money loses value (since there are more of it chasing the same amount of goods).
So where does that stolen value goes to? Well, in order to artificially lower interest rates, central banks print money. Then they lend the money to banks at 0% who then lend it back to us at 5%. So as our money loses value, that lost value gets transferred (it is theft) to the banks.
I'm a hardcore capitalist but central banks and money printing are destroying our standards of living.
The best and easiest to read book on the subject is: Meltdown
Paul's position has that the market will regulate itself and that the government is there to enforce contracts and punish anyone who commits fraud.
I'll explain it in my own words about banks since I'm not sure if Paul would agree with me 100%. So here's the deal: if you open a bank account and deposit money in it, the bank is 100% obligated to allow you to withdraw your money on demand. If they are unable to return customers' money, the bank has broken the contract and has basically committed an act of fraud. It might be given say a 30 day period (I'm just making this up as an example) to come up with the money, and if not, the owners of the bank would be punished - personally I'd like to see life in prison or the death penalty for such incidents b/c ruining peoples' financial lives is equivalent to ruining their lives, so ruining the bankers' lives by giving them life in prison or taking away their lives is fair punishment (you can disagree, that's my personal view).
In a libertarian world, the market would regulate itself: bankers want to make money and they don't want to be thrown in jail. You don't need regulators watching over the bankers b/c bankers would police themselves in fear of being thrown in jail - it would be a whole lot nicer to live free and make money instead. But wait - why did the banks take the big risks and not police themselves and cause a financial meltdown? They had incentive NOT to do so provided by the government. Back in the year 2000 I believe there was a front page headline on the Financial Times talking about the "Greenspan Put". Let me copy a passage from Ron Paul's friend Tom Woods who wrote in his book Meltdown:
>Analysts have called this the "Greenspan put," what the Financial Times describes as the views that "when markets unravel, count on the Federal Reserve and its chairman Alan Greenspan (eventually) to come to the rescue." The Times reported in 2000, in the wake of the dot-com boom, an increasing concern that the Greenspan put was injecting into the economy "a destructive tendency toward excessively risky investment supported by hopes that the Fed will help if things go bad." "All the insane dot-com investment we've seen, all this destruction of capital, all the crazy excesses of the past few years wouldn't have happened without the easy credit accomodated by the Fed," added financial consultant Michael Belkin.
>Try letting a few major firms - yes, even the financial sector, where we superstitiously believe no failures can be allowed - actually go bankrupt for a change. Make perfectly clear once and for all that there will be no bailouts, no looting of the public, on behalf of any firm, period. That would do more to jolt the financial sector into being sensible and cautious instead of reckless and irresponsible than all the regulatory tinkering in the world
Did the bankers get bailed out? Yes. Did anyone get thrown in jail? No. That is exactly the opposite of what would happen in a Ron Paul world - in fact he did talk about in this debate how fraud was committed and no one went to jail.
I'm part of the underemployed and for now work part time at a moving & storage company. What would happen if you entrusted your household items to movers or to a storage house and they "lost" them? They would be liable to compensate you or be punished. Do you see a wave a movers and storehouses committing fraud? I don't. Yes there will be criminals, but there will always be criminals. You could defend your goods (or money in the case of a bank) by purchasing insurance. BTW, there are several first-world countries that don't have the equivalent of an FDIC.
Hopefully now you're starting to understand Paul's hatred of the Fed. For more information, see my essay on how the richest bankers of the world were responsible for creating the Fed, see Eliot Spitzer's outstanding article Fed Dread that describes how the bankers are still in charge today, and scroll down to the section 'economic renegade' in my other essay for more info on Ron Paul and the Fed.
So why did banks go bust before the days of the Fed? An article covering that is on my 'to do' list, but the short answer is that government gave them a license to commit fraud. Instead of saying "you're going to jail if you can't return depositors' money", it was more like "well its okay if you only keep 20% of depositors money on hand and if there's a run on the bank and customers demand 100% of their deposits, we'll that's just the way it is but you won't go to jail so long as you followed the letter of the law").
"[bailouts are] the most basic function of the Federal Reserve. It was why it was founded" - Paul Volcker
I'll bite.
First and foremost, there are many different breeds of libertarians (or people that call themselves libertarians). For instance, Glenn Beck has even used the word to describe himself as such--however, I don't think many libertarians really take him seriously on that claim.
More seriously, libertarians tend to be divided into two camps: those that want small government providing basic protection of individual rights (called minarchy) and those that want no government at all (usually labeled as anarcho-capitalists, voluntaryists, agorists, etc.). I consider myself a voluntaryist, which in addition to being an anarcho-capitalist, also qualifies me as someone who does not wish to participate in electoral politics and views it as an approach that really cannot help--and also means that I only prefer voluntary means through which to achieve a voluntary society.
To make matters more complicated, the anarchists of us have two different ways to speak of a free market: a David Friedman approach which concentrates on how free markets solve problems more efficiently than States, and a more deontological approach made famous by Murray Rothbard. Usually, you'll see us taking both angles--sometimes it helps to show how a free market is ipso facto better than a State, and sometimes it's better to show that we have the ethical high ground. (And some of us can be absolute in this sense--some might even recognize a failing of a free market but say that it still doesn't justify violating the ethics of libertarianism.)
There is, however a hurdle that needs to be jumped, I think, to truly grasp the libertarian position: familiarization with Austrian Economics. Austrian Economics is usually regarded as a fringe school of economics, and not taken seriously--it is taught in only a few of the colleges around the United States. In spite of that, Austrian business cycle theory, which puts the blame on fractional reserve banking, and specifically, the Federal Reserve, for the ebb and flow of today's marketplace, has proven itself time and time again. Frederick Hayek, the pioneer of this theory (and a winner of a Nobel Prize because of it), predicted the 1929 stock market crash, and more recently, Peter Schiff used it to predict the current recession. (It also explains bubbles that have inflated and popped in the past, when applied.) The best layman's explanation and the theory's real world applications that I can give you is the recent book Meltdown by Thomas Woods. It's not too long and does a great job at explaining Austrian business cycle theory.
There are many differences between Austrian Economics and the more mainstream schools, but I highlighted Austrian business cycle theory because that is the really important one. To emphasize this even more, I can say that if I could change one thing about the current State (sans abolishing it), it would be to abolish the Federal Reserve by establishing a free market currency. Unhesitatingly.
I personally arrived to my conclusion through a deontological perspective, and later familiarized myself with how free markets can provide services that most people widely regard as services that only States can provide. The deontological perspective essentially leads up to the non-aggression principle (NAP): aggression, which is defined as the initiation of physical force, the threat of such, or fraud upon persons or their property, is inherently illegitimate. (I can hammer out the details of the NAP's justification if you like, but I've chosen to omit it here in the interest of brevity.) The most important thing to realize about the NAP is that it is proportional: if you violate my property, I don't have the right to kill you (i.e., the idea that I can shoot a little boy that trespasses onto my yard to collect his baseball). As once I have quelled your aggression, any further aggression on my part is an over-abundance, and therefore an initiation of aggression--and that is illegitimate.
So with this in light, you can see that libertarians (at least, my style, anyway) are a bit of a mix: we simultaneously believe that libertarianism is the only ethical stance consistent with the idea of liberty, and its natural conclusion, a free market, is an inherently better solution to the problem of "infinite wants" and "scare resources" then centralized control through a State. That is, the State is both illegitimate and inefficient.
So the key to the free market, or capitalism, is to understand its most fundamental truth: two individuals voluntarily committing a transaction. What does it mean to commit a transaction? It means that I am giving you X in return for Y because I value Y more than X, AND because you value X more than Y. It's a win-win scenario, and not zero-sum: we both get something we desire.
For example, if my toilet is clogged, and despite my best attempts, I cannot unclog it, I probably need to call a professional. When the plummer comes over, he tells me that it will be $100 to fix my toilet. Immediately, his actions indicate, "I value $100 more than the value of my services as a plummer." When I agree to his proposal, my action indicates, "I value your services as a plummer more than I value $100." At this most basic level, we can see the Subjective Theory of Value in action brilliantly. That is, things don't have intrinsic value, only the value that each individual assigns.
Now, with that background, I think I can answer your questions:
(Wow, I went over the character limit for comments... yikes...)
A violation of the rights of the person being taken from.
Put simply, Anarcho-Capitalism is based on the common understanding of private property and the rejection of the idea that anyone, particularly the government, can legitimately override these property rights for any reason. Ancaps may abbreviate this as "The non-aggression principle", understanding 'aggression' to be "violations of person or property."
For a complete treatment of the crash from an ancap perspective see the book Meltdown.
It's not a problem, or to the degree that it is, economics puts a check on it.
Yes. By institutions that society does not treat as having the legitimate authority to violate rights. E.g. The agents of the State murder innocent people and get away with it. Private security agents, in the rare circumstances where they do murder someone, are much more likely to be held accountable. The State collects taxes and people accept it, while the Mafia collects 'protection money' and everyone knows it's a racket.
Taking briefly from wikipedia
> Woods argues that government intervention in the form of support for housing and excessive monetary expansion caused the current crisis.
Banks did not need money lent to them, they were running a con where they could assemble a pile of garbage, and if it was big enough, it would be rubber stamped as AAA and sold for an instantaneous profit, turn around and do it again. This con would have worked without the federal reserve, freddy/frannie, or any other boogiemen the media is trotting out to spin the issue from a failure of the right.
But at least the 1 star discussion on amazon does look interesting though.
https://www.amazon.com/Meltdown-Free-Market-Collapsed-Government-Bailouts/product-reviews/1596985879/ref=cm_cr_dp_d_hist_1?ie=UTF8&filterByStar=one_star&reviewerType=avp_only_reviews#reviews-filter-bar
Meltdown and Nullification by Tom Woods.
Road to Serfdom by F.A. Hayek
These eras of bank runs also coincided with the 2nd national bank and the Greenback, also known as central economic planning. You'll find state interventionism goes hand in hand with the panics of the 19th century.
Ironically, we've had more periods of economic volatility with the Fed, the supposed regulators of the banking system.
^ A good read on this topic can be found here, in Ch. 5:
http://www.amazon.com/Meltdown-Free-Market-Collapsed-Government-Bailouts/dp/1596985879
You can be a bank and not operate on the fractional reserve model, but that would mean making solid loans and being frugal with your depositors money.
If it's fraudulent for me to lend you more funds then I have then the same principle ought to apply to banks, the law is not moral if it is not consistent.
It sounds to me like you're definition of "deregulation" is government-granted corporate privilege.
The Gulf: B.P. had a liability cap at $75 million. This is an artificially-imposed government-granted privilege. Actual damages are running in the 10's or 100's of billions. Under an actual libertarian system, damage to private property requires legal restitution. Full liability would be imposed, and oil companies would have to factor the added risk factor into their policies. This makes oil spills very expensive (think of all the class-action law-suits), and therefore the incentive to avoid them far greater. It's easy to pay off inspectors, but it's not so easy to cover up an oil spill.
I could go on if you'd like...
The Economy: This is quite complicated of course, but I'd like to suggest that you read Meltdown by Thomas Woods, if you want to understand the libertarian point-of-view on the subject.
It's certainly worth taking into account that throughout the lead-up to the economic collapse, members of the Austrian school of economics (closely associated with libertarianism) such as Peter Schiff, Thomas Woods, Ron Paul, etc., were all predicting an imminent housing bubble collapse. All the while, members of the Keynesian school (more commonly associate with liberal/statist theorists) such as Ben Bernanke and Paul Krugman were convinced that the bubble either didn't exist or wasn't a problem.
The reasons that the Austrian theorists gave for predicting that the housing boom was a bubble, and that it was ready to collapse (which turned out to come true), were several fold: First, the government created moral hazard (incentivizing risky behavior) in the housing market by A) subsidizing housing lenders and borrowers, creating a falsely inflated market B) putting pressure on banks to lend to lower-income, higher-risk borrowers in the name of 'equal opportunity', and C) rewarding risky behavior through bailouts.
And if you're going to try to blame libertarians for Bush's "cut taxes, but put spending on steroids" policy... well... I hope you understand why that's wildly off base.
If any of that is what you call deregulation, then I assure you, no true libertarian is for "deregulation".
I could add more to this subject if you're interested...
Ecuador: I don't know much about Ecuador, but here's what you said:
>Texaco came in, took what they wanted, and polluted the region beyond repair, destroying lives and property with impunity.
Again, libertarianism puts the protection of property rights above all else (as we believe the right to self-ownership is the primary property, and all else is an extension of that, etc.). A true "libertarian paradise" (as you put it) would protect the property rights of those who were harmed by the work of Texaco.
>Now that the courts there have found them guilty and ordered damages, Texaco, now merged into Chevron has simply declared the court ruling invalid.
I don't see how a corporation ignoring a just court ruling really makes a case against the theory of libertarianism. We're not against the rule of law, if that's what you're implying. Most libertarian minarchists would say that the courts ought to have had enough power to force restitution from Texaco or its new owners. Those of us who are anarcho-capitalists would make the argument that introducing market competition into the law-enforcement industry would solve the problem of inefficient government law enforcement (but that's a whole other topic).
>If you care about liberty, you should be at least as worried about this type of corporate tyranny as you are government tyranny.
I certainly am, this sounds like an outrageous affront to liberty. Corporate aggression is no less egregious than government aggression. I will admit that some libertarians can tend to seem blind to this fact, but that no more discredits the ideology than does a liberal who seems to think that government can do no wrong.
You should read up on the "Austrian theory of the business cycle". One book that might be a good starting point (and particularly relevant to our current era) is Meltdown.
First off, understand that the people who are handling TARP control the message coming from the economic world. They've controlled it for years, so it's unlikely you're going to hear anything other than what a great decision was made and how great they're doing.
One chart or one article won't convince you of anything because you are hearing "green shoots" 24/7 from the media. It's their job, they're owned by (about 6) large corporations who depend on the public continuing to buy stuff. If the public perception of the economy begins to darken then the things will get messy very fast. We need people to spend money to keep the economy rolling.
So.. . you have massive amounts of influence telling you that what they did was aok.. it won't be easy for you to see another side to the story. Here's my suggestion on how to understand what went wrong and why the "solution" that has been used will only hurt in the long run:
either watch these videos
or
read this book
>The reason we need a government is to regulate and control those who absolutely require it. If you did not figure that in 2008.
If you think greed and a lack of regulation caused the crash in 2008, you have not been paying attention.
The crash was caused BY government regulation.
Everyone is greedy. The whole point of capitalism is to channel greed into productive uses.
Government is the one that redirects it into disaster and gets in the way of the normal market forces that punish those who are not serving the greater good. Think about it:
The market reacts rationally to the dot-com slump by reducing spending to replenish savings (government also had a leading hand in the dot-com bubble but that's a separate discussion). Savings rates reached a 17-year high. Alan Greenspan decides that saving money is destructive because consumer spending supposedly drives economic prosperity and we need more consumer spending to get out of the dot-com slump. So he pushes interest rates down quarter after quarter. Government makes mortgage interest (a result of spending) a tax deduction while taxing interest on savings and capital gains, furthering the century-long goal of America's central economic planners of punishing savings and rewarding spending, which they wrongly view as the "engine" of economic growth. They ensure anyone trying to save dollars loses out via inflation, pushing even the more conservative savers and investors to jump back into the economy despite being uncomfortable with their capital levels. Fannie and Freddie make it possible for virtually ANYONE to get a home mortgage.
Who's irresponsible? The banks who make financial trades based on the government's rules, or the government who makes the crazy rules that are not based in reality and are ACTIVELY TARGETED at doing things that don't lead to a REAL healthy economy (like making sure investment comes from capital instead of debt, making sure overvalued assets are allowed to correct, allowing bad investors to lose their capital)?
The problem is you say you want "more" regulation -- you have to realize that Fannie, Freddie, Community Reinvestment Act, the FDIC, the Federal Reserve, these are ALL regulations. And if you think the problem is we didn't have ENOUGH regulations, I'm honestly afraid of what would have happened if we had any more regulations like those.
If you want to read a great book that challenges your view of who's fault the 2008 crash was, check out Tom Woods' very accessible book "Meltdown". Seriously, you'll thank me later.
Just read this:
http://jim.com/econ/
This is the famous "Economics in One Lesson" by Henry Hazlitt. It is still the best introduction to economics that exists, and it's easy to understand.
If you're interested in more, you can try this:
http://www.amazon.com/Meltdown-Free-Market-Collapsed-Government-Bailouts/dp/1596985879
which is also easy to understand. Or this:
http://mises.org/books/mespm.pdf
which is a more systematic treatise.
He appears on TV, which I don't watch, and in Youtube videos, which I watch four times a year. So I mostly don't care about him. However:
So I think he must have some other good points. You're welcome to post questions like "Hey Libertarians, Glenn Beck proposed/opposed X. What do you think about that?"
Try this if you really want to know what went on and why we aren't going to "recover" from this "recession" but are heading into another collapse.
http://www.amazon.com/Meltdown-Free-Market-Collapsed-Government-Bailouts/dp/1596985879/ref=sr_1_1?s=books&ie=UTF8&qid=1371881724&sr=1-1&keywords=meltdown+tom+woods
Anything by Peter Schiff is also a great read.
I wouldn't recommend Paul Krugman myself, though you might want to read him and then compare what he says to something like this,
http://www.amazon.com/How-Economy-Grows-Why-Crashes/dp/047052670X/ref=sr_1_5?s=books&ie=UTF8&qid=1371881329&sr=1-5&keywords=peter+schiff
by Peter Schiff.
The Law - http://www.amazon.com/gp/product/1936594315/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1936594315
Economics in one lesson - http://www.amazon.com/gp/product/0517548232/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0517548232
That which is seen and is not seen - http://www.amazon.com/gp/product/1453857508/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1453857508
Our enemy, the state - http://www.amazon.com/gp/product/B001E28SUM/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=B001E28SUM
How capitalism save america - http://www.amazon.com/gp/product/1400083311/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1400083311
New Deal or Raw Deal - http://www.amazon.com/gp/product/1416592377/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1416592377
Lessons for the Young Economist - http://www.amazon.com/gp/product/1933550880/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1933550880
For a New Liberty - http://www.amazon.com/gp/product/1610162641/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1610162641
What Has Government Done to Our Money? - http://www.amazon.com/gp/product/146997178X/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=146997178X
America's Great Depression - http://www.amazon.com/gp/product/146793481X/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=146793481X
Defending the Undefendable - http://www.amazon.com/gp/product/1933550171/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1933550171
Metldown - http://www.amazon.com/gp/product/1596985879/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1596985879
The Real Lincoln - http://www.amazon.com/gp/product/0761526463/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0761526463
The Road to Serfdom - http://www.amazon.com/gp/product/0226320553/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0226320553
Capitalism and Freedom - http://www.amazon.com/gp/product/0226264211/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0226264211
Radicals for Capitalism - http://www.amazon.com/gp/product/1586485725/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1586485725
Production Versus Plunder - http://www.amazon.com/gp/product/0979987717/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0979987717
Atlas Shrugged - http://www.amazon.com/gp/product/0452011876/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0452011876
The Myth of the Rational Voter - http://www.amazon.co.uk/gp/product/0691138737/ref=as_li_ss_tl?ie=UTF8&tag=thmariwi-21&linkCode=as2&camp=1634&creative=19450&creativeASIN=0691138737
Foutainhead - http://www.amazon.com/gp/product/0452273331/ref=as_li_ss_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=0452273331&linkCode=as2&tag=thmariwi-20
Anthem - http://www.amazon.com/gp/product/0452281253/ref=as_li_ss_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=0452281253&linkCode=as2&tag=thmariwi-20
There are of course more books, but this should last you a few years!
You should all check out Meltdown by Tom Woods. He thoroughly shows how the fault lies with the incentives the government set for banks, new legal requirements, and the Federal Reserve. Blaming the 2008 crash on greed is like blaming an airplane crash in gravity.
See here:
http://mises.org/story/3128
http://www.amazon.com/Meltdown-Free-Market-Collapsed-Government-Bailouts/dp/1596985879
http://mises.org/story/3165
http://www.youtube.com/watch?v=2I0QN-FYkpw
The Austrians predicted the boom-bust perfectly, just as they always have.
Meltdown by Tom Woods.
https://www.amazon.com/Meltdown-Free-Market-Collapsed-Government-Bailouts/dp/1596985879
Read a few pages of the book he's talking about here. I'm sure there are also articles about it like this one.
Ouch, tough, man. It's always a delicate balance between living in your own bubble (http://econlog.econlib.org/archives/2012/03/my_beautiful_bu.html) and making compromises to expand your circle of friends.
As to how to argue more easily, see
http://voluntaryistreader.wordpress.com/2012/12/22/success-socratic-style/
This will allow you to exploit the weaknesses in your opponent's arguments more easily.
As to the actual topics mentioned, here's what I have:
http://www.brookings.edu/~/media/research/files/papers/2006/9/monetarypolicy%20winston/20061003
http://thelibertyhq.org/learn/index.php?articleID=257&parentID=32
Working conditions are just another condition of employment besides wages, and is set by supply and demand. Furthermore, about OSHA - see the book linked in #1. It shows that OSHA has had no statistically significant impact on safety. You could also try http://www.cato.org/sites/cato.org/files/serials/files/cato-handbook-policymakers/1999/9/hb106-34.pdf
On occupational licensing and other licensing, see
http://econjwatch.org/articles/occupational-licensing-scant-treatment-in-labor-texts
http://econlog.econlib.org/archives/2013/06/your_sort_is_pr.html
http://t.co/WQKpPYM8Kw
As well as the book in #1. Summary of all of the above: licensing is useless at best.
After that, try http://www.amazon.com/The-Triumph-Conservatism-Reinterpretation-1900-1916/dp/0029166500
The above book is written by a socialist historian who actually argues that competition was alive and kicking during the Guilded Age, and that it was the big corporations which asked government for more regulations to control competition.
Also, point out that the actually bad robber barons got big through help from the government.
See http://www.tomwoods.com/blog/deregulation-caused-the-financial-crisis/
and http://www.tomwoods.com/blog/did-deregulation-cause-the-financial-crisis/
More about education: http://thelibertyhq.org/learn/index.php?listID=9
If you want to see the Socratic Method in action, check out this convo of mine:
http://libertyhq.freeforums.org/socratic-method-in-action-t477.html
But once again, I highly recommend reading my article linked in #1. It's a super helpful debate tactic.
Edit: Screw automatic fixing of numbering.
This Book is what got me started studying Austrian Economics. It covered the financial crash and why.
The very short and simple answer is that the Federal Reverse is the primary cause of the boom-bust cycle that constantly plagues our economy. The cycle is also sometimes called the "business cycle", bubbles and busts, downturns etc.
The Federal Reserve is the reason we had a housing bubble in 2007 and a dotcom bubble in the early 2000s. It's also the reason we had the Great Depression!
The Federal Reserve causes the business cycle when it artificially lowers the interest rate below what it would have be on the market, which in turn sends the wrong signals to entrepreneurs and investors and causes them to make bad investments (i.e. "malinvestment"). That's a bare bones explanation. You can find more information at the links below. It's a very interesting topic.
A short and simple introduction on the cause of the business cycle: http://mises.org/daily/606
An entertaining speech on the topic: http://www.youtube.com/watch?v=qJzXEsmZP0w
This is a great book on the topic that explains the matter in a way that is very easy to understand: http://www.amazon.com/Meltdown-Free-Market-Collapsed-Government-Bailouts/dp/1596985879
A more advance explanation: http://mises.org/tradcycl/econdepr.asp
I disagree with Keynesian economics as well as your assessment of history.
This book gives a good explanation of how I believe the economic collapse occurred.
> Yet the bankers just keep doing it again and again. They do it with and without central banks.
Fractional reserve should be prosecutable as fraud. Having said that, banks would be much more responsible if they faced a risk of going out of business. The occasional bankruns of the late 19th century, did not significantly impede the surging prosperity of the gilded age. They were a good thing -- just like when a crappy restaurant goes out of business.
> > but your own devotion to Keynesianism fails to live up to the standards by which you judge the Austrian School.
> I fail to see how. Keynesianism doesn't pretend to be deductive logic.
It seems to me that Keynesians are able to put numbers around little things. Unemployment, inflations (both of which are heavily manipulated). They have graphs and charts and look very much like their distant colleagues in the hard sciences. The play empiricism, but all the big things and important decisions are made by pure deduction, just like the Austrians. For example:
We need a central bank.
We need to bailout company/industry X
The economy can be centrally steared by manipulating the reserve rate in a positive way.
We need to force people to use their state's currency.
The liquidity trap occurs when there's a shortage of money circulating.
The free market is inherently unstable.
Crashes are caused by animal spirits / the bursting of asset bubbles.
> > it just restructures production for long-term projects.
> That directly contradicts the concept of "flight to liquidity".
Not a contradiction. A flight to liquidity can mean a flight to savings and checking accounts. That's money ready for lending.
> If savers were making long term investments, we wouldn't have a problem.
Ugh. Right now, you Keynesians think we need long-term investment, and your policies are creating an illusion of savings by lowering the interest rate to zero. In actuality, there are almost no savings. People need to work, busy consumer goods, and save (or not -- it's up to them). Keynesian policies have pushed a lot of land labor and capital into long-term projects at a time when people are thinking about the short term.
Your statement presumes a "correct" way for savers to be investing. The only correct way is one which is in harmony with the level of savings, and the market signal which creates that harmony -- the interest rate -- is centrally controlled and, for the moment, pushed to near-zero, creating an illusion of savings which don't really exist.
> How do you know? [regarding consciousness] . . . There is no evidence that the human brain consists of anything but physical processes
Because physics cannot even entertain (much less provide answers for) simple questions like what do you want to do? When there's meaningful progress on the Turing test, I'll reconsider.
> if you really believe it is such a great thing and will work well in the real world, go find a small country and convince them to adopt pure Austrianism. . . . Honestly, I'd write a letter … to advocate giving you guys an island in the Pacific ocean to test your system.
Liberty is a threat to the gov't. Allowing it would mean exposure of their fraud.
I'd love to, and I think about it often. Small states have many advantages over large ones. There's a theoretical project by Friedman's grandson which involves a nation consisting of floating barges.
> Even the anarcho-capitalist advocates say that there must be private militaries that are hired by insurance companies (which is really all a state is) to protect their customers. Overall, the idea that violence is magically going to disappear is very naive.
No one says violence is going to go away. A state is not a hired insurance company, because the client does not the right to walk away. The service of security is not subject to market pressure. The state unilaterally decides both the nature of security (invading Afghanistan, Iraq, Libya, bombing Somalia and Yemen, TSA, full body scanners), and the cost of security. This is the difference.
> for placing the extreme long term conservation of value for mattress stuffers
It is not just mattress stuffers. Huge quantities of wealth are transferred from people in general to whomever is closest to the place where new money enters the economy. Even Keynes admits this:
"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens."
And I think you're full of shit for trying to muddy the waters on the ethic argument I raised. The dollar is backed by force. Voilence will be used against Americans who attempt to work around the dollar system. Yes, violence has been used before in history. No, this doesn't justify today's.
> gold
You were comparing the dollar's 97% loss in value to the instability of gold. That dog don't hunt.
> As I said, the 1921 recession ended when the fed cut rates.
I'm going to look more deeply into this. It seemed that the 29 crash happened when they stopped their easy money policies. Do you think we can get out of today's easy money without a catastrophe?
>
> Please stop calling an increase in the money supply inflation... just say "an increase in the money supply".
No.
> voluntarily decided it likes fractional reserve banking. In 400 years or so of modern banking, full reserve banking simply hasn't emerged.
Not true. It's contradicted by the video you posted. Government enshrined and protected the fractional reserve system.
> That era was a miserable failure.
Not true at all. Yes, lots of banks went out of business. (It is good when bad companies go out of business). But it was a time of sky-rocketting prosperity.
Your baromoter is laughable. When banks go out of business this is bad. When today's commercial banks survive for a long time, this is good. Dark world. How much wealth has to be taken to give irresponsible banks a long life?
> So which is it? Do you support free banking or gold? A gold standard (at least in the form that the US and most other countries had in its past) is mandated from a central government, by the way.
Free banking gets my vote, though either one would be huge, mind-blowing progress. I'll mention again that fractional reserve banking should be prosecutable as fraud instead of enshrined by law.
> Except it has been done successfully that way for long periods of time. You shouldn't get your ethics confused with your evidence. You might not like central banking, but to say that it can't work is absurd given how successful the US economy was under the periods with central banks.
Typical of your positivist and keynesian approach, whenever you connect two data points you jump for joy. Can we likewise conclude that the Soviet system worked because it brought electrification, had zero unemployment and a growing GDP?
You know, Keynesian economist and Nobel Prize winner Paul Samuelson predicted into the late 1980's that the soviet union, the fucking soviet union!!!!! would outpace the US economically. He asked whether their surging economy didn't make the political oppression (43-62 million killed) worth while. But it's the Austrians who are cruel. Right?
Also, not all the evidence supports you. The biggest depression in American history. The only time there has been wide-spread malnutrition in the US. A 97% drop in purchasing power.
> I believe the burden of proof is on you if you want to make claims about government failure. You haven't done that with the CRA or with any other program.
The long history of bailouts are facts. What proving do they need?
Also:
FACT: In 2008, CRA loans accounted for just 7% of Bank of America's total mortgage lending, but 29% of its losses on home loans. Also, banks with the highest CRA ratings tend to have the lowest safety and soundness ratings.
FICTION: Only 6% of subprime loans were originated by banks subject to the CRA, so the vast majority of risky lending was not tied to the law.
FACT: Among other things, the figure does not count the trillions of dollars in CRA "commitments" that WaMu, BofA, JPMorgan Chase, Citibank, Wells Fargo and other large banks pledged to radical inner-city groups like Acorn, Greenlining and Neighborhood Assistance Corp. of America (NACA) after they used the public comment process to protest bank merger applications on CRA grounds.
[Earlier this week I noted that I had changed my mind on the Community Reinvestment Act. Contrary to my initial conclusion, the evidence is overwhelming that the CRA played a significant role in creating lax lending standards that fueled the housing bubble. Once I realized this, I had to abandon my suspicion that the anti-CRA case was a figment of the rhetoric of Republicans attempting to distract attention from their own role in the mortgage mess.]http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6#ixzz1RTwfW5or)
Prior to 1995, such subprime home loans constituted less than 2% of new home loans, but by 2000 they were over 9% of new home loans, and by 2008 they were 20% of new home loans. To make matters worse, Freddie Mac and Fannie Mae began to buy and/or guarantee more and more of these risky subprime loans.
If you want more opinions supporting my view, look here,
here, here.
Life got busy again and i lost track of what was happening in terms of books. You said you read Ron Paul's book, so i thought i might throw out some of the books i enjoyed.
Henry Dent
George Soros
Tom Wood & Ron Paul
They're outdated, but provided some good economic thought behind what has happened and their forecasts. Tom Wood's and Ron Paul's book was interesting, but i'm not sure how relevant it ever was. At best, it served as a warning. Don't get me wrong, i'm a fan of Ron Paul, but the system will never remove the Federal Reserve. Also looks like there's some updated editions out too.
I'm looking at new books as we speak.
This is the best book on the subject. A must read. https://www.amazon.com/Meltdown-Free-Market-Collapsed-Government-Bailouts/dp/1596985879
In short, it sure as hell wasn't the free market.
According to this clown, the government is never wrong! He should read this book.
Great Depression > https://mises.org/library/americas-great-depression
Great Recession > https://www.amazon.com/Meltdown-Free-Market-Collapsed-Government-Bailouts/dp/1596985879
Ron Paul predicts the housing crisis... in 2001
https://m.youtube.com/watch?v=kFd8YluIVG4
Tom Woods has a great book called Meltdown that speaks to this issue. Basically the finance industry is the most regulated industry there is with like 100+ agencies that are specifically to regulate them. To suggest that just a few more regulations or even another regulatory agency would have meant the difference between the crash and not is just intellectually dishonest. Plus, as /u/t3nk3n mentioned, Glass-Steagall is only tangentially related to the kind of risks taken by these banks and investment groups. Now that's not to say that the banks didn't take wild risks, but you have to look at the guarantees and insurances provided by govt that enable high risk activity.
Do a Google search for "myth of deregulation" and do some reading.