NationStates Jolt Archive

I've been getting the feeling lately that we're approaching a massive market collapse. The most recent incident in this disturbing trend was the 200 point jump in the Dow yesterday which was a result of the Fed announcing that it was going to lower interest rates.

Why would the fed lower interest rates, thus increasing the money supply, when we're experiencing increasing inflation, and a decrease in the real value of our currency? Does anyone else see this as an attempt to temporarily buoy the market in hopes of delaying an inevitable crash and recession? Am I making monsters out of shadows in the mist?

I think that you have a point.
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The problem is that its still too hard for banks to get credit. Ideally the Fed would want to raise the benchmark interest rate to slow down inflation but if they do that banks are going to find it even harder to get credit. Either way, a recession could be on the cards - or at least a very lean couple of years of economic growth.

Yea, I think there's going to be a market crash too. Because the housing market busted, and the lending market busted, the government stands to lose $6 million in taxes. Also, not that much money going into the economy because people are losing jobs due to outsourcing. We really should be finding a way to make the US market strong again, like it once was.

Thank God I'm going into a profession that can't be outsourced or is affected by the market. As long as there are disabled people out there, and people hurting themselves and need rehabilitation, I'll have a job. :D

aren't market predictions just self fulfilling prophesies though?

I predict huge economic booms around the world and in a way that creates total equality regardless of class sex or national

aren't market predictions just self fulfilling prophesies though?

I predict huge economic booms around the world and in a way that creates total equality regardless of class sex or national

I think the only way that works if everyone believes that. ;)

I think the only way that works if everyone believes that. ;)

just like Santa Clause :D

just like Santa Clause :D

Or Heaven, as Cartman pointed out in the Ladder to Heaven Episode. :D

Well, mainly due to the fact that they feel the risk of a recession is high enough that it's worth risking increased inflation to counteract it. In my opinion, this is the right move; really, inflation isn't bleeding outside of food and energy, and wages have kept up with overall inflation despite the rise in these two components over the past few years. By and large, the risks to economic growth are greater than the risk posed by accelerated inflation, and it's a wise move to focus on counteracting the first even if it comes at the risk of some additional inflation down the line.

A recession is always worse than higher inflation, and generally has been (with exceptions, of course...but we're not going to see hyperinflation or anything like that). This is especially noteworthy when we consider the fact that inflation today is still below its historical average and really isn't very high, especially with the low level of unemployment and strong growth we've seen in the past few years. Compared to previous periods of elevated inflation, this one is really tame.

The main risk now is the housing/credit markets, and those have to be preserved first through stimulative monetary policy (now, I personally support a set of monetary rules, but now isn't exactly the time to move from an active monetary policy to a passive one). Inflation can be dealt with once stable growth is assured.

I predict huge economic booms around the world and in a way that creates total equality regardless of class sex or nationality
That prediction, too, would result in a collapse of the economy that is propped up by underpaid manual labourers.

No bad thing, of course. I welcome such a crash. People need reminding that money is just numbers, and products are just things; a total economic meltdown would do just that.

No bad thing, of course. I welcome such a crash. People need reminding that money is just numbers, and products are just things; a total economic meltdown would do just that.

Well, I think they'd still want money and things when they're freezing cold, unemployed, and starving...money and things are a tad bit more important than just trivial nothings. Well, they are if you want a better life than working yourself to the bone as a subsistence farmer or hunter-gatherer, that is.

Well, I think they'd still want money and things when they're freezing cold, unemployed, and starving...
See, this's the thing: The provision of employment, heating, food, and so on only depend on economics in as much as we institutionalise them to do so. We live in a world where we could, in theory, nationalise and regulate all of our essential services such as food provision, electricity supply, transport, housing etc. and happily provide them at zero cost to the consumer (presuming the state employs everyone, the provision of goods and services can replace the payment of wages). The collapse of trade would force this to occur in order to maintain living standards, and actually, I think you'd find this would be of great benefit in the long run.

See, this's the thing: The provision of employment, heating, food, and so on only depend on economics in as much as we institutionalise them to do so. We live in a world where we could, in theory, nationalise and regulate all of our essential services such as food provision, electricity supply, transport, housing etc. and happily provide them at zero cost to the consumer (presuming the state employs everyone, the provision of goods and services can replace the payment of wages). The collapse of trade would force this to occur in order to maintain living standards, and actually, I think you'd find this would be of great benefit in the long run.

No, it wouldn't...aside from the fact that those systems cost money to run (unless you want to try to create some barter system, which would mean an exchange schedule consisting of untold millions of items all requiring a double coincidence of wants to work), making everything free would simply encourage massive waste and inevitable shortages, reducing economic efficiency and the real living standards of the population. I mean, free gas or electricity is great, but if you need to wait in line for four hours to get a few gallons or have your power cut off for half the day...that actually sucks. I'd rather pay $10/gallon for as much as I can afford than get a few gallons free and waste my time trying to get it.

Of course, the Soviets did something like this and in the end it ended up doing nothing but delaying their economic development and keeping everybody in a state of mediocre semi-poverty for decades while the country poured its wealth in to the military. And even this system was supported by the market; if the Soviets hadn't implemented a market system in their economy and relied on external ones for currency, they'd have collapsed a lot earlier than they did. The market exists because it is the best model for our current economic situation...if there is a better system, it'll displace the current one in due time without the need for a global economic collapse.

No, it wouldn't...aside from the fact that those systems cost money to run...
The obvious point being that they wouldn't, because anything they might possibly need to spend in running it would be spent on things of zero cost themselves.

...making everything free would simply encourage massive waste and inevitable shortages, reducing economic efficiency and the real living standards of the population.
This is why you collectivise (if nationalise feels like it goes too far for you), rather than impose upon, industry. The central management of resources, where one can move them from where they are in abundance to where they are in shortage, and where one can monitor and restrict pathological abuse cases, is an immense efficiency boost from a utility perspective when compared with our current model of "distribute according to the weighting of what our clients are prepared to spend".

I mean, free gas or electricity is great, but if you need to wait in line for four hours to get a few gallons or have your power cut off for half the day...that actually sucks.
Again, thanks to the collectivisation rather than replacement of industry, the existing infrastructure would be largely unchanged. The delays and power cuts would be no worse than at present, even improving with technological advances.

The thing is, in order to maintain our economy, we produce an awful lot of complete garbage. Seriously. Junk food, crap toys, electrical gadgets, "medication" (diet products, self-help books) etc. If individual materialism collapses, we can put the mechanical effort and physical resources that otherwise went into these things into more useful endeavours, such as, say, improving fuel delivery or electricity generation.

Of course, the Soviets did something like this...
I'm casually throwing aside the Soviet Russian experiment because what I'm proposing isn't Marxism. If you want a more accurate slur, it's closer to the monopolised state capitalism of the Fascists, though of course the more militaristic components don't feature (which Russia fell prey to also). Not that I'm at all proud of that, since the Fascists were generally a loathesome bunch, but their ideas of far-right economy seem spot on, and if we could combine this with social liberalism, and deal with the problem of price-fixing by ironically fixing the price at nullity, we'd be really on to something.

The obvious point being that they wouldn't, because anything they might possibly need to spend in running it would be spent on things of zero cost themselves.

Presumably that also involves paying the people who produce these things nothing as well. Which begs the question, why would anyone want to do an everyday job that carries no reward?

Presumably that also involves paying the people who produce these things nothing as well. Which begs the question, why would anyone want to do an everyday job that carries no reward

They do it now, with free distribution it'd be better.

I feel an impending sense of doom.

Nothing serious.

Rolling squid;13252668']They do it now, with free distribution it'd be better.

How many people do you know who work for no financial reward?

I think he's trying to say get rid of money all together.:confused: While I find it to be a nice dream I have to say no. Sounds too much like communism to me and we all know how that turned out, (looks at Russia and N. korea.)

Presumably that also involves paying the people who produce these things nothing as well. Which begs the question, why would anyone want to do an everyday job that carries no reward?
This is an interesting point. However, part of our contempt for such jobs (I suspect) comes from the fact that we as people are greatly frustrated by the sheer proportion of our time that we spend in our role as a worker.

I would thus like to suggest something that might seem a little weird in solution of the problem: Massive downsizing.

Think about it. We can probably at the minute mechanise our manufacturing processes to the extent that we can reduce the total number of man-hours required for the same output by half, but the reason we don't is partly because everyone needs a job that can make them enough money to make a living. If everyone's living is secured then you can simply employ everyone at half-time. If, through technological innovation, we can reduce this yet further, then you might find that the people who do end up doing "everyday jobs" actually spend a comparatively small amount of time doing this job.

If the commitment is, say, 7 hours a week to secure a life of comfort, I think most people (if not everyone) would be willing to do that simply out of respect for their providers. That leaves the rest of their time to pursue the more artistic, intellectual, social and creative pursuits of the human condition.

I think he's trying to say get rid of money all together.:confused: While I find it to be a nice dream I have to say no. Sounds too much like communism to me and we all know how that turned out, (looks at Russia and N. korea.)
I suppose you could contend it's a form of communism, but it's a communism that is an evolution from corporate capitalism rather than trying to replace it through revolution or imposition, which is why I think it'd be appropriate in transition from a post-crash capitalism to some sort of workable system of making a living.

Still, 's just an idea. I guess I don't really want an economic crash, since it would be a painful thing to live through, but I do want to see an improvement in the way our world works in terms of earning a living, since our current model is certainly not long-term sustainable.

I've been getting the feeling lately that we're approaching a massive market collapse. The most recent incident in this disturbing trend was the 200 point jump in the Dow yesterday which was a result of the Fed announcing that it was going to lower interest rates.

Why would the fed lower interest rates, thus increasing the money supply, when we're experiencing increasing inflation, and a decrease in the real value of our currency? Does anyone else see this as an attempt to temporarily buoy the market in hopes of delaying an inevitable crash and recession? Am I making monsters out of shadows in the mist?

Sort of. A fall could happen, but this interest rate crap needs to stop. We just need to wait out the storm and the banks should pay for giving bad loans. Although as far as I'm concerned, the collapse has already occurred: all my stocks in the "Stock Market Game" fell, even though they were good ideas. My group will probably lose at this point. :(

I really don't give a shit what the market will be at next month, I'm more concerned about where it will be in about 15 years. I have no worries.

This is an interesting point. However, part of our contempt for such jobs (I suspect) comes from the fact that we as people are greatly frustrated by the sheer proportion of our time that we spend in our role as a worker.

I would thus like to suggest something that might seem a little weird in solution of the problem: Massive downsizing.

Think about it. We can probably at the minute mechanise our manufacturing processes to the extent that we can reduce the total number of man-hours required for the same output by half, but the reason we don't is partly because everyone needs a job that can make them enough money to make a living. If everyone's living is secured then you can simply employ everyone at half-time. If, through technological innovation, we can reduce this yet further, then you might find that the people who do end up doing "everyday jobs" actually spend a comparatively small amount of time doing this job.

If the commitment is, say, 7 hours a week to secure a life of comfort, I think most people (if not everyone) would be willing to do that simply out of respect for their providers. That leaves the rest of their time to pursue the more artistic, intellectual, social and creative pursuits of the human condition.

LOL. Every time I see someone argue this it always boils down to one thing - they want to control what people consumer - meaning they want to control people - ie - it is a power grab and nothing more.

There are so many fallacious arguments in this it is almost impossible to name them all - but I'll start with a few;

1) The assumption that everyone will have not only the same needs - but the same wants. People don't. Not even close.

2) The assumption that people won't barter to enhance their lifestyle. They always have - they always will. Currency was developed because it is better than barter. With currency you end up with a market - and market forces. Black market or otherwise.

3) That a large organization will be efficient. It never is.

4) That a large organization will do what everyone wants. It won't - see #1

5) That people will not act in their own best interest.

6) That the interestes of 'the community' will always be perceived as more important than the interests of the individual. they seldom are.

7) People are not frustrated by the proportion of time they work. Most successful people work more hours than full time wage earners every week - even though they could get away with much less.

8) 7 hours a week isn't even enough time to complete your morning bowel movement, shower and other hygine stuff. Don't be stupid.

A collapse of any sort is entirely unlikely.

I really don't give a shit what the market will be at next month, I'm more concerned about where it will be in about 15 years. I have no worries.

And I'm not concerned at all, at least for now. Accountants are still going to be needed regardless of where the market's at; the main concern would be my retirement savings, but I'm going to be working for a damn long time so there'll be plenty of time for a rebound. No retirement at 65 for me...

1) The assumption that everyone will have not only the same needs - but the same wants. People don't. Not even close.
I have made no such assumption. The absence of money does not imply the absence of choice.

2) The assumption that people won't barter to enhance their lifestyle. They always have - they always will. Currency was developed because it is better than barter. With currency you end up with a market - and market forces. Black market or otherwise.
This assumption isn't either necessary or a problem. You don't need to barter when you're given everything you could possibly need or want for free, but there's no reason to stop you doing so.

5) That people will not act in their own best interest.
I have made no such assumption. It is simply the case that it will be in their own best interest to join in, for the reason given above.

3) That a large organization will be efficient. It never is.
I've made this point before: Large organisations are capable of much more efficiency than isolated agents because they can deal with the fragmentation of resources; a problem that no disorganised system can even understand.

4) That a large organization will do what everyone wants. It won't - see #1
Aha. You've spotted the need for the trick.

The organisation needs to be structured to combine the knowledge of its professional heads while at the same time being representative of the whole of its membership. How can this be done? We draft an organisational constitution that outlines the commitments of the organisation's head to its members (and disciplinary and replacement procedures when this is broken), then split the decision making body into two groups: the organisationally appointed board of directors and the elected regional representatives (Proportionally representative, of course). Although the directors are the ones that decide what course of action the organisation would adopt (thus ensuring efficiency), it must pass a filter of approval from the elected body (with varying degrees of approval required for certain categories of action) in order to be committed to. Similarly, the elected body will have the ability to raise to the board an issue to be ruled on.

However, given that essentially people are left to their own devices with access to whatever resources they need (to a point), it shouldn't be very often that organisation-wide rulings need to be made anyway.

6) That the interestes of 'the community' will always be perceived as more important than the interests of the individual. they seldom are.
This is tackled as part of point 4.

7) People are not frustrated by the proportion of time they work. Most successful people work more hours than full time wage earners every week - even though they could get away with much less.
Most "successful" people do what they enjoy. I do not intend to stop them. If they're fulfilling a social role in doing what they enjoy, they'd even not have to take on any other jobs.

8) 7 hours a week isn't even enough time to complete your morning bowel movement, shower and other hygine stuff. Don't be stupid.
Did you understand my point? Try rereading it. If anything, 7 hours could be an overestimate, bearing in mind that there is an enormous human resource available to distribute for each "job".

I've made this point before: Large organisations are capable of much more efficiency than isolated agents because they can deal with the fragmentation of resources; a problem that no disorganised system can even understand.

Hardly. The bigger an organization gets, the less efficient it becomes; the amount of red tape, bureaucratic stonewalling and internecine rivalries between different groups begins to slow things down.

In fact, many of the most efficient systems are derived from disorder; the behavior of many eusocial organisms,such as ants or termites, appear random, but they are ultimately linked in a highly efficient swarm intelligence that actually optimizes resource production and consumption. Spontaneous order emerging from chaotic systems is a pretty important concept that solidly defends a system based upon the interactions of individuals each seeking to optimize their own condition rather than through coercive collective decisionmaking.

Hardly. The bigger an organization gets, the less efficient it becomes; the amount of red tape, bureaucratic stonewalling and internecine rivalries between different groups begins to slow things down.

In fact, many of the most efficient systems are derived from disorder; the behavior of many eusocial organisms,such as ants or termites, appear random, but they are ultimately linked in a highly efficient swarm intelligence that actually optimizes resource production and consumption. Spontaneous order emerging from chaotic systems is a pretty important concept that solidly defends a system based upon the interactions of individuals each seeking to optimize their own condition rather than through coercive collective decisionmaking.
(Taking a quick break after this. I'm running low on sleep. Keep heckling me - I'm enjoying it, and I'll start again in the morning!)

You're talking about Emergent Behaviour. I know all about that. It's a fundamental building block on my views about Religious Experience in society, which I've aired a few times on NSG. But I don't see why you think the large institution necessarily violates this principle, or why its occurrence means we should leave people to their own devices. On the first, heirarchical organisations, too, can exploit the principle of Emergence in the creation of complex and efficient systems, as the Human Body provides an apt example for. On the second, Emergence cannot occur unless there is interaction and protocol shared between the members of a group, and it would seem as though in order to allow the most effective system possible, we would need to provide an environment that encourages dialogue and codependence between agents rather than that operates by leaving each other alone and hoping this will passively result in the most effective outcome.

In any case, who said anything about coercion? The organisation wouldn't be making any of your decisions for you, since all it controls is what it makes and how much it gives you, and it would be obliged constitutionally to adhere to at least some minimum quantity for comfort.

I realize this topic has gone off on a tangent. but I would like to say that I too foresee a downturn/collapse, this is because a couple weeks ago I noticed the DOW was going up and down by 300 points a day. This always seems to be a portent for something worse coming. However, I'd think the energy market would be a good thing to get into. Of course I have no idea what I'm talking about and only ever took HS economics. Also, Banks are dumb, thinking they can get away with lending all willie nilly to anybody who shows up, I thought this might happen all along... sigh.

The thing is, in order to maintain our economy, we produce an awful lot of complete garbage. Seriously. Junk food, crap toys, electrical gadgets, "medication" (diet products, self-help books) etc. If individual materialism collapses, we can put the mechanical effort and physical resources that otherwise went into these things into more useful endeavours, such as, say, improving fuel delivery or electricity generation.



Well that "coplete garbage" is garbage only in your opinion. And in opinion of some others (including me), but it is not the waste but it is produced because people demand it.

If you (or some institution) would decide what people want. It would not (did not) never work. As Mystic Sceptic says, people would engage in black market/barter transactions to get what they want and establish money (maybe in form of cigarettes) and we would be back again just with larger inefficiency (in form of huge employee stealing and complete lack of motivation to work (doesn't matter whether 7 hours or 70.)).


Example (modernized from real life in usrs): You say that electrical gadgets are this complete garbage that should not be produced. But person who likes them (I know some of my friends are electronic gadget geeks) will try to get them. He will in this example ask guy who works in factory which produces electric gadgets to get them more. There would be reported larger "production loss" and electrical gadget geek will get his toys (flashes, ubses, gigabyte memory sticks all this gadgeting) and maybe he worked in cigarette factory and in return he would provide his friend with big pile of cigarettes.

People will try to achieve more, earn more than they neighbour, fulfill their wishes/wants. It does not matter if some institutional body will tell them that it is not neccessary for healthy sustainable lifestyle.

They will break down the system, if they don't get their junk food.
"1990: On January 31, the first Soviet McDonald's opens, in Moscow. [..snip..], and is extremely popular, with waiting lines of several hours common in its early days "http://en.wikipedia.org/wiki/History_of_McDonald's
:)

I have made no such assumption. The absence of money does not imply the absence of choice.
I see - so your economy will be run by Santa Claus?

This assumption isn't either necessary or a problem. You don't need to barter when you're given everything you could possibly need or want for free, but there's no reason to stop you doing so.
I want a bicycle, an electronic battleship game, a pony...



I have made no such assumption. It is simply the case that it will be in their own best interest to join in, for the reason given above.
... Rock-em Sock-em Robots, a swingset, easy-bake oven...


I've made this point before: Large organisations are capable of much more efficiency than isolated agents because they can deal with the fragmentation of resources; a problem that no disorganised system can even understand.
apprently the terms 'point of diminishing returns' and 'diworsification' (not misspelled) mean nothing to you...


Aha. You've spotted the need for the trick.

The organisation needs to be structured to combine the knowledge of its professional heads while at the same time being representative of the whole of its membership. How can this be done? We draft an organisational constitution that outlines the commitments of the organisation's head to its members (and disciplinary and replacement procedures when this is broken), then split the decision making body into two groups: the organisationally appointed board of directors and the elected regional representatives (Proportionally representative, of course). Although the directors are the ones that decide what course of action the organisation would adopt (thus ensuring efficiency), it must pass a filter of approval from the elected body (with varying degrees of approval required for certain categories of action) in order to be committed to. Similarly, the elected body will have the ability to raise to the board an issue to be ruled on. [/quote]

and you consider that eficient??!??! Try coaching a sports team like that and see how well they do in the playoffs. oooh -wait - it'll take more than seven hours a week just to figure out what to do next week. Hmmm...


However, given that essentially people are left to their own devices with access to whatever resources they need (to a point), it shouldn't be very often that organisation-wide rulings need to be made anyway.

to a point? I thought you said people got whatever they wanted! Who is setting limits!!! Who decides what I get? I thought I was free! I want my money back!

This is tackled as part of point 4.
If by tackled you mean completely pointless fantasizing about the nature of managing people then OK.


Most "successful" people do what they enjoy. I do not intend to stop them. If they're fulfilling a social role in doing what they enjoy, they'd even not have to take on any other jobs.
So then you are saying that people who are unsuccessfull don't enjoy their work? Don't enjoy working? Hmmm- wonder why they are unsuccessful?


Did you understand my point? Try rereading it. If anything, 7 hours could be an overestimate, bearing in mind that there is an enormous human resource available to distribute for each "job".
If by point you mean demonstrating that you have no experience ever managing people or any productive enterprize then yes - you did a brilliant job.

I am always amazed at the willfull ignorance of people who seem to actually believe that human behavior can be compartmentalized into such tidy cubbies.

You say seven hours and actually believe it - what are you - thirteen?

Unless you actually think drug addicts will quit drugs, abusive husbands will stop being abusive, rapists will stop attacking, etc. then you will require police. Which requires courts. Which requires prisons. Believing any of these could exist on 7/hr weeks is so asinine I have no idea how you can actually take yourself serious.

That is only one little sliver of civil society. As you can see it is not nearly so simple as your foggy little Santa-dream. Next year you need to take a class in economics and learn the difference between economics and freedom. Some day you will learn that freedom is not free stuff. Not even close.