So if I'm reading you right, you're saying that the shareholders are stupid enough to appoint or look to appoint a 'poor' CEO due to their focus on short-term gains, and also design their contracts? The problem I have with this argument though is that many shareholders are companies, or big investors, who will stand to make or lose huge sums of money, and hence will be highly unlikely to be stupid (since it'd be in their interests to pay a tiny proportion of that on hiring a few experts who aren't stupid). Meanwhile with the CEO argument I agree there is the problem of intertwining the aims of the CEO with those of the shareholders which is one of the biggest problems with designing an optimal contract for them. However it's fairly easy to do this better in some cases, such as my suggestion before to introduce time restrictions on shares+options - if a CEO only gets bonuses for doing well that are tied in with the companies long-term performance, then it means by looking for a quick buck now, they don't actually benefit much at all, while if they take the best long-term course, they can maximise their own benefit (and in turn the shareholders). Of course you also run into issues with the directors ending up risk-averse themselves when the shareholders might want them to be risk neutral, but I'm not fully convinced by the argument that the cause for this was stupidity on the part of so many shareholders (in so many different institutions). I would agree with you however that in the event of such stupidity the best thing to do is usually to let the institution fail, since propping it up can not only prove costly, but also encourage such behaviour again.

On to other issues:

And compared to the average person in the US (or any country!) that is well above average, and hence not a pittance.

There likely is such a point! If you increase taxes to 100%, people aren't going to bother working. If you increase them to say 99% then you'll have a ton of people moving to a different country to work, while people probably won't be bothered to work much past subsidence either. Hence you'll likely suffer poor revenues (but more than nothing). Decrease taxes some more and again you'll likely see an increase in incomes. Suddenly you hit a point where the increase in total income isn't enough to outweigh the decrease in the % of income you're receiving in taxes, and hence tax cuts cause a fall in income. Now based on the data available it seems fair to say that the current level of taxes are below that point, so cutting taxes for everyone won't cause the extreme of increasing income (although there might still be the possibility that targetted tax cuts on particular groups/demographics could). However you will still have the increase in total income outweighing some of the impact of the tax cut, meaning the 'face cost' of the tax cut will be higher than the real cost after taking this into account, and the reverse with tax increases (that is, say that you're a ruler of an area, and people are earning $100m with taxes at 40% of income. If you increase taxes to 50%, it's highly likely that total $100m will fall, hence although you might think the increase to 50% will increase your revenue from $40m to 50m, it will only increase it to some of that way (since some people won't work as hard, and others might just leave for a neighbouring area with nicer taxes).

Anyway looks like the bailouts gone through. I was shocked when it was rejected the first time (mainly because everyone seemed to think it was a done deal), but possibly slightly dissapointed it's gone through now, especially after hearing some of the bizarre concessions made to try and convince some people to switch their votes. Maybe it will work out for the best, maybe it won't. I just hope that the government does it's utmost to make sure it doesn't have a repeat of the problem now that it's effectively encouraged it by bailing out all those institutions who have failed.

I can't read everything in all the pages (I would if I could) but has anyone talked about the what FDR did with removing our Gold standard? Or Nixon removing our Silver Stander. How about Community Reinvestment Act signed in 1977 by carter or in 2006 when clinton made it worse.  How about what greenspan did in 2001 lower in the federal funds rate, and in 2002 lowered it again?

Starting with FDR you could see over how long of a time period politions have been screwing up the economey.  Its going to take years maybe even longer then it took to screw it up to fix it. 

The goverment I feel takes most of the blame, followed by the states and the fact at the citizen level people have a problem spending.  The goverement needs to stop trying to help because they are onlying making things worse.  We has citizens need to stop our spending problem.  If the goverment wants to help then set as back on the gold and silver standards, and remove the CRA.  Don't base your loans on whever a person is on the good or bad side of the that line, but rather have some kind of formula to deside.  Say how much you make, what do you want, and how much is it going to cost.  Then base your loan of that.

Some one that knows more about this then me try to chime in. 

Pschoak I just noticed your pst above about Carter.  LOL

Hey guys, I got an idea.  From my point of view, the stockmarket looks like if the capital gains tax were ended, Wall Street would be the biggest legal casino in the world.

What if the tax code was changed so that anyone who made money on the market would have to fill out an IRS gambling income form. That way, the winners would be taxed on their winnings according to what their payout was with no way out of it.  I wonder if the market would stabilize so that people are not making so much of a risky bet.  I know that I would tend to make safer investments so as not to be hit with such a huge lump tax sum.  I suppose there would always be someone who just couldn't resist the temptation of a huge payout and so would still take the larger risks in hope of the larger gain.  For some, the risk of loss is not as important as the high of gain, so the money would still flow.

What are your thoughts on that?

Um, John Sherman and Benjamin Harrison were Republicans governing pretty much at the height of the first GOP peak in the late 19th. Hardly "liberals," if you insist on using that outdated, distracting, worthless pair of dueling vacant adjectives. It isn't really a matter of L vs. C, but in-power vs. out-of-power. When you're in power, there are immense pressures to reshape gov't to suit the needs of your associates while hopefully doing well by "the people" or at least avoiding popular ill will.

Here you're at least on historically reasonable ground for using the L-C language. I agree that there's an appearance of cognitive dissonance, but the full situation really depends on how you care to run your cost-benefit analysis. IMO, the postal monopoly and the currency monopoly both worked out well for a long while (not as sure about currency these days).

But when you start getting into smaller public monopolies, like the Port Authority of New York and New Jersey (yes, I know they have a few minor competitors, but they are at least roughly like a "Microsoft" of shipping and water crossings in the NY area), things do indeed get messy. The Port Authority was ineed established by "liberals" (who called themselves progressives, even back then). Their idea of trying to insulate long-term infrastructure projects from the travails of corrupt politics was a good one. But like many good ideas, it turned out to have its own problems in the long run, effectively isolating the Authority from public opinion as well as public corruption.

"We" aren't. We're just very messy about how we disagree over what should be regulated and how. Only a modest minority seriously support an end to everything like our food standards, building standards, emissions standards, etc.

The short answer is "1980s political rhetoric combined with Ronald Reagan's strong popularity." The longer answer begins with the fact that these days most US folks ranting about "liberals" or "conservatives" are just ducking the specifics of why they disagree with someone. We have majorities who want English to be our official language, but leaders who use the language well and tackle complicated subjects are often regarded with susupicion. It's far easier to call names and duck questions.

It goes back to our founding. The dominant faction back then (Federalists) were deeply committed to their vision of a free society (market) and they had just finished a long, hard fight to separate from a parliamentary monarchy that happily used soverign power to make and break whole sectors of their economy. Fast forward to the early mid-20th, and you have the Red Scare and Cold War, which together did a whole lot to make the word "socialism" pretty much equal to "evil" in many minds. Despite having gone hard against the Nazis and the fascist Japanese in WWII, we somehow never gained widespread understanding that authoritarianism is the real enemy. Instead, many of us are prepared to freak out about the notion of building or own national health care system because "it's socialism."

Hence my use of liberals as opposed to democrats, not to be confused with classical liberalism, which is the opposite of neo-liberalism.  People who expand government power and restrict the economy to "protect" the little guys are liberals.  As written, the bill isn't that bad either, as implemented it's been horrific unfortunately.

I call bullshit.

First, the postal monopoly.  Craptastic failure since inception.  It's inefficient, operating at a deficit that is often in the billions, delivering things late, delivering things to the wrong address, losing them entirely...  Oddly enough, we have direct, irrefutable evidence of what happens when that monopoly is lifted.  Before UPS and FedEx went mainstream, how long did it take for the postal carrier to ship standard packages around Christmas, a month?  How long now, five days?  USPS priority generally arrives in three days or less and is cheaper than the UPS and FedEx alternatives on light or small packages.  The entity is obviously capable of fast delivery and competition, yet letter delivery is still horribly slow.  A shining beacon of what not to do, create a government protected monopoly that doesn't need to compete and doesn't even need to survive on it's own.  We didn't start with one either.  Private companies did it for the first half a century, and still had involvement in intra city mail delivery for quite a while after.  That they had to be killed by making it illegal shows how effective the USPS has been.

Second, currency.  We originally started without a monopoly. Gotta love the idea of carrying around 20 different kinds of money eh?  I'll admit, this one is probably a necessary evil.  But it is an evil.  Since nationalizing the currency, there has been one problem after another.  The biggest were the seasonal bank runs, farmers go to withdraw their accounts from last years harvest to pay for this years planting, poof, no money in the bank.  Brilliant huh? 

The first national banking system lead to a collapse of government funds thanks to no power over a central currency, they dissolved the bank. 

The second banking system led to a collapse of the bank.  They learned from the first time and used bonds to back government debt to protect against fluctuation.  Unfortunately, as debt grew, so did the money supply, massive inflation.  The War of 1812 was expensive apparently.  Hello panic of 1819, they dissolved the bank.  Monopoly, no monopoly... not a lot of difference.

So we drop the banking monopoly, again.  All hail the free banking system.  If you've ever seen the inflation rates... omfg.  Absolutely hilarious.  Note, when creating a free banking system, either go with no rules, or reasonable rules.  When you go with stupid rules, people tend to do stupid instead of sensible.

At this point, we finally get around to nationalizing the currency.  This brought about the previously mentioned liquidity problems that lead to seasonal bank runs.  Bloody brilliant.  It did last a whopping fifty years before it fucked up enough that they were forced to replace it though.  So from a duration perspective, it was better than the previous.

This of course brings us to the Federal Reserve Bank, the most recent attempt, an entity created because currency was inelastic and unresponsive to market changes and completely lacked the ability to keep liquidity in the markets.  Since creation, we've suffered one Great Depression that makes all the previous panics seem like trivial nuisances.  Numerous other bubbles since of course, but none quite so impressive, although the current one will make it look like a tea party if it keeps going.  Then of course, there were the massive inflation rates of the 70's, wasn't that wonderful?  All the flaws the previous systems suffered, all rolled into one.

Each banking system has failed in turn, and we've had half a dozen of them.  The nationalized versus competetive banking systems haven't been particularly tilted in direction of nationalizing, and the nationalization of currency isn't much better.  With a good board and chairman, the Federal Reserve doesn't do too badly, but with a bad one it can be catastrophic.  The motivation to create debt bubbles is a serious flaw.

Perfection is the only guard against corruption, the root of why government is never any good.  We will never design the perfect system, thus corruption will always destroy it.  It's the simplistic beauty of an actual free market.  Corruption itself is simply another force for good.  Not that we have one, they keep bailing the fuckers out.

When a company becomes corrupted by greed, that greed creates inefficiency and destroys it.  I'm not talking about CEO's taking home billion dollar pay packages either.  Unions extorting companies for absurd pay grades and preventing modernization are equally to blame in the auto industry.  The other factor isn't the management pay either, it's the get everyone one philosophy behind the crappy vehicles they keep making.  Management pay is a trivial problem when a corrupted company kills itself, just like how much the Senators pay themselves to fuck us over is a trivial problem with Congress.

Edit: Jonnan, you fail at life.

Comparing presidents by "objective" measures without regard for reality is just as idiotic as your mythical presentation on conservatives.  Carter's effects are long lasting, we're in one of his aftershocks right now.  The S&L crisis was the first one, both are blowback from his wealth redistribution via bank loans in the CRA of 1977, made catastrophic by Clinton's changes, may congress rot for letting that one through.  The Carter presidency is directly responsible for both mortgage market failures by setting up the GSE's in such an assinine function.  Without such idiocy, the deregulation would never have resulted in either.  You can't collapse a banking system by defaulting on 20% down loans unless the entire world goes to hell for completely unrelated reasons and no one ever buys a house again. No Carter idiocy, no Reagan recessions from them.

You'll note that under Clinton, Reaganomics were followed for much of it thanks to a certain House Speaker actually living up to campaign promises and forcing votes in the House.  If he'd kept his mouth in check and been less petty he'd probably still be Speaker.  They even got welfare and NAFTA through, hardly a liberal administration even if Clinton did try with that godawful healthcare plan and his idiotic changes to the housing and mortgage systems.  Yeah, I'm giving Clinton credit on conservative issues.  Bush just put the nail in his coffin with this idiotic bailout as being left of Stupid.

So I guess I got nowhere by suggesting that we stop the name-calling and try to do a better job communicating?

Seriously, I'm pretty tired of this from my friends, much less folks I consider political enemies. If we want to restore civility, much less productivity, to public discourse, we've just *got* to kick the liberal-conservative claptrap out of the conversation. At their best, the adjectives are gross oversimplifications. At their worst, they are guaranteed to disable an otherwise engaged mind by evoking some ephemeral Great Enemy, who, in the immortal words of Pogo, "is us."

Let me try to invoke the spirit of that sadly neglected OT thread on saying good things about "other candidates."

If I had to guess, I'd say that Jonnan and I have similar voting patterns while psychoak and I might have almost always cancelled each other's votes if we lived in the same district. Jonnan vexed me seriously when he tried to contrast 'deluded conservatives' with 'reality.' (I'm a recovering postmodernist; reality is there, but we can only deal with it through consensus.) psychoak also seems at times too married to his economic dogma and far too ferocious in his word choice for my taste. And I'd fight to a metaphorical death to keep both of them in the civic discourse because at least it is clear that they care very much and try to think their way through things, not just react to shiny labels or nasty slurs.

Hey - don't accuse me of not buying into shiny labels! Didn't you know that when Obama is elected the skies will open , a choir of angels will sing, and all overweight computer political geeks will be accosted on the streets by gorgeous women with high IQ's wearing old Star Trek/Buck Rogers/Flash Gordon outfits!

It's on the web, it must be true man!

IT'S ALL TRUE MAN! I WANT IT TO BE TRUE!

Okay, I don't care so much about the sky and the angels, but the last part is 100% TRUE!!!!!

Jonnan

What humor?

Jonnan

Serious converts to democracy need to figure out that people are still morons even after you let them vote for who's going to be the moron in charge.  The difference between a monarchy and a democracy isn't the quality of leadership, just who's to blame for putting them there.  When things go to hell, the population has only itself to blame, as opposed to genetics.  Which is why liberals will rot in hell before accepting that the mortgage problem is their fault.

One word, ACORN.

How's this "conservative?" Seems like straight-up anarchist talk to me. I used to say pretty similar things, and I still have a strong basic distaste for state power that's probably the main reason I'm trying to understand your take better than I think I do.

The basic point of my conversion was when I accepted both a notion that on the whole, over time, most people tend to be decent to one another *and* that we're still primitive enough that some groups will organize to use violence against others. Because I believe large human populations tend to produce gangs, mafias, and armed corporations, I want to have the biggest, baddest gangs (militaries and police departments) all beholden to democratic governments.