NationStates Jolt Archive

This is a series of posts split off from a debate about student fees in Australian universities.

It is now an economic debate of some sort; I think it's about market regulation.

-- Ardchoille, NS moderator.

http://www.theaustralian.news.com.au/story/0,,24637387-25192,00.html

Her you go and the article also gives a few other reasons not yet mentioned on this thread as to why this is a bad idea.

That is a cute link. It's an opinion piece, neither news nor analysis.

Who's it written by? Andrew Norton is research fellow at the Centre for Independent Studies.

What is the Centre for Independent Studies? The Centre favours a "free enterprise economy and a free society under limited government where individuals can prosper and fully develop their talents".[citation needed] Many CIS scholars, such as Andrew Norton, are self-described classical liberals. As classical liberalism is often critical of government intervention in the economy and personal life, the Centre does not accept government funding out of principle. Instead, the CIS is funded by private sector donations from individuals, companies and charitable trusts.

CIS scholars are often in conflict with other think tanks and welfare bodies, particularly those it considers centrist and left-wing, such as the The Australia Institute, the Social Policy Research Centre at the University of New South Wales, the Society of St Vincent de Paul, the Smith Family and the Australian Council of Social Service. The CIS has criticised the Society of St Vincent de Paul's research on the state of welfare in Australia.

Link (http://en.wikipedia.org/wiki/Centre_for_Independent_Studies#Philosophy)

I wouldn't pay that mob the slightest attention. They are completely biased in their outlook: a typical right wing think tank that starts off with a position and then tries to justify it. The sort of mob that has been gleefully pushing the world into the crisis we now find ourselves. Their day is over; they are yesterday's heroes; they should be ignored.

Note also their contempt for charitable and welfare organisations.

One part of the opinion piece is correct. He says that in 2009 spending on universities will fall by 1%. But only if you take one year in isolation. Budget forecasts for spending on higher education are as follows:

2007-8 $6.3 billion
2008-9 $6.0 billion
2009-10 $7.0 billion
2010-11 $7.0 billion
2011-12 $7.4 billion

Source: a highly critical article on education spending sourcing the budget papers (http://www.aeufederal.org.au/Publications/TATT/Win08p8-10.pdf)

A group like the CIS wouldn't let the facts get in the way of a propaganda piece.

I wouldn't pay that mob the slightest attention. They are completely biased in their outlook: a typical right wing think tank that starts off with a position and then tries to justify it. The sort of mob that has been gleefully pushing the world into the crisis we now find ourselves. Their day is over; they are yesterday's heroes; they should be ignored.
Have you ever had that dream where you want to talk to someone and your voice doesn't work, and nobody can hear a thing you say?

http://forums.jolt.co.uk/showthread.php?t=567315
http://forums.jolt.co.uk/showthread.php?t=568130

Have you ever had that dream where you want to talk to someone and your voice doesn't work, and nobody can hear a thing you say?..

The freemarketeers are in their bunkers. Their world is collapsing around them. General Greenspan has admitted defeat and deserted them.

They sit with their fingers in their ears and chant, "This is not happening. I'm not listening."

The world has changed.

George will be sitting in the dustbin of history on January the 20th along with Herbert Hoover.

But there will be new Georges to come and New Herberts and New....Leonsteins???

NL you don't have to defend the indefensible. The American public stopped believing in it so why should you?

George will be sitting in the dustbin of history on January the 20th along with Herbert Hoover.

But there will be new Georges to come and New Herberts and New....Leonsteins???

NL you don't have to defend the indefensible. The American public stopped believing in it so why should you?

Well that's not true. Most yankees still have a fear of Communism so strong it affects their ability to see any change to free market capitalism as anything other than the Rapture.

Plus, you'll recall our dear PM said, just yesterday in Washington D.C., that this wasn't the end of free market capitalism. This iss the end of stupidly regulated free market economics. Regulation is getting smarter, not more.

Wow, I feel like Lapse or NL now. It's strange... otherly.

Well whatever lip service politicians pay to the Holy Free market, it WILL be transformed for fear of a worldwide economic collapse. The markets have shown how they can run up a debt many times bigger than a country's GNP and what happens when the debt bubble bursts.

The unthinkable - what if the rest of the world called America's bluff?

Have you ever had that dream where you want to talk to someone and your voice doesn't work, and nobody can hear a thing you say?

http://forums.jolt.co.uk/showthread.php?t=567315
http://forums.jolt.co.uk/showthread.php?t=568130
Don't waste your energy NL. They'll just ignore what you say, and continue rambling about how their opinion is right, and how the Free market is dead, and other such opinions. (Yet denying that they're opinions)

You just can't resist a flame can you CM?

Quit chucking beer-cans, you two. -- Ardchoille

The freemarketeers are in their bunkers.
I'm not.

Their world is collapsing around them.
Mine isn't. And considering that my career will be in investment banking, that's gotta mean something. The only threat to the system comes from governments. Equity markets will recover, most banks will take the losses and move on, debt markets will unfreeze (or have done so already), economies will start growing again. Hell, even US house prices will hit a bottom at some point, at which you'll even see a limited return of RMBS.

What is collapsing is a grand delusion that has been around for the past 10 years or so, just as in every other financial crisis before and in the future.

General Greenspan has admitted defeat and deserted them.
Wait a minute, if you get to associate everything I say and do with Greenspan, can I pick some random on the left to link to you?

The world has changed.
The only thing that has really changed is the talk coming from governments. That's unfortunate, because so far there hasn't really been one that has demonstrated a sufficient understanding of what happened and what might be done to fix it, and right now it's easy for politicians (particularly those on the left) to fall into a groupthink situation that ends up giving too many departments too many things to do with basically no idea of how to achieve them.

But look, have your five years or so of "yay, state control" public opinion. Enjoy it while it lasts, just try not to leave too much of a mess.

NL you don't have to defend the indefensible. The American public stopped believing in it so why should you?
My mind isn't a democracy.

The one thing I can see is that virtually nobody makes an effort to back these "the market is dead" tirades. Xenophobialand did, as you would expect from someone like him, but not on the basis of actual laws or government actions, but popular myths and attitudes. I think it was Muravyets who pointed out the relaxation of leverage rules for investment banks, but that wasn't really a decision to remove any regulation, but simply a redrawing of some rules to account for what was believed to be superior mechanisms for regulators to work with. Hence why that didn't come from the "free-market" Bush administration, but from the EU. Lacadaemon (though he wasn't making an anti-market point) alluded to changes in rules regarding securitisation - which were from the early 90s, IIRC.

That's the quality of the argument for how deregulation and free market economics caused this crash. It is not a strong argument and I think I am more than justified in questioning it, especially when people suggest less free market economics (and a lot of people call for this on a broad base, rather than just in the finance sector) is the way we should be going now to prevent future crises. You can call me blinded by ideology if you want, but I think if you sit back for a minute and look at this from an academic perspective, or even one of simply wanting to understand or prevent financial disruptions, you can also see where I'm coming from here.

Wow, I feel like Lapse or NL now. It's strange... otherly.

:confused:

I don't believe the 2008 crisis is about the end of free markets. What I do believe is that rampaging economic liberalism has had its day.

Governments will now take more care in the duty that we have entrusted in them - moderate the free market so that it serves the public. Democracy is the only tool we have to control the NLs of the world.

Governments will now take more care in the duty that we have entrusted in them - moderate the free market so that it serves the public..

Uhuh, are you saying that western democracies don't have a moderated free market? There has always been massive state intervention in the market realistically, even in the US. What's needed is smarter oversight from people who know what they are doing, and not from populist politicians. Not just more bureaucracy for the sake of more bureaucracy.

Uhuh, are you saying that western democracies don't have a moderated free market? There has always been massive state intervention in the market realistically, even in the US. What's needed is smarter oversight from people who know what they are doing, and not from populist politicians. Not just more bureaucracy for the sake of more bureaucracy.

I'm happy Ardchoille started a new thread but the OP has been taken out of its original context. Sure, it was a rant, but it was in response to a misleading post.

You are right, of course, but I think it is fair to say that the 2008 crisis has been created by the explosion of unsustainable private debt. Governments, under the prevailing attitudes - basically free market - accepted that the markets would self-correct. The free market has reacted but in a completely toxic way. The disaster in the financial sector will likely spread into the "real" economy in due course. If so, it will cause considerable problems.

I'm happy Ardchoille started a new thread but the OP has been taken out of its original context. Sure, it was a rant, but it was in response to a misleading post.

You are right, of course, but I think it is fair to say that the 2008 crisis has been created by the explosion of unsustainable private debt. Governments, under the prevailing attitudes - basically free market - accepted that the markets would self-correct. The free market has reacted but in a completely toxic way. The disaster in the financial sector will likely spread into the "real" economy in due course. If so, it will cause considerable problems.

Any economists out there can correct me if I'm wrong on this, but I'm pretty sure that what's happening right now is that self-correction everyone thought would happen. It's just happening in a way not many people expected. Yes, better regulation is needed, so that people can try to minimise the damage, but the free-market's here to stay, and I for one am fairly happy with that.

...Yes, better regulation is needed...

I think that this is a good starting point. Some suggestions:

1. Closer supervision of the lending practices of credit organisations.

2. Closer supervision of corporate executives, especially to encourage corporations to take a longer view of investment rather than seeking short term profits at the expense of long term viability.

3. Creation of government owned savings bodies.

4. (More) compulsory employer superannuation contributions.

5. More international supervision of monetary systems: we can't let the bad financial policies of one country jeopardise the entire planet.

6. Greater environmental sanctions and rewards for organisations including governments and corporations.

I'm sure people can think of more.

Free market? Gone? HAHAHAHAHAHAHAHAHAHA no.

Obviously Feudalism is the answer...now get back to your turnip farms, you peasants!

I don't believe the 2008 crisis is about the end of free markets. What I do believe is that rampaging economic liberalism has had its day.

I'd say we don't really operate under economic liberalism, although there are strong elements of it, to say its rampaging might be a bit much. In 5-10 years people who have changed their minds will do so again, either due to another crash or a stagnating economy.

Governments will now take more care in the duty that we have entrusted in them - moderate the free market so that it serves the public. Democracy is the only tool we have to control the NLs of the world.

why do you want to control people? and what does that have to do with democracy as opposed to any other system of government?

socialism isn't the boogie man and 'free' markets aren't the holy grail. marxist procustianism isn't the holy grail either, but that's also not socialism either.

the holy grail is to put BOTH makiavellianism AND procustianism behind us and instead concentrate on making infrastructure and its tecnologies environmentally sustainable, while reducing excess human population by NONdraconian means.

the only NONdraconian means of population i know of is to lower ALL human fertility accross the board without bias or exception, and that means NOT starting with cultures which are already at minimal levels for their perpetuation.

only by continuing putting trying to impress each other and intimidate each other and so on, ahead of getting along with each other, ahead of finding ways for everyone to have some probability of gratification and nearly complete likelyhood of survival, will we bring about our own extinction.

the world is going to evolve around us whether we want it to or not. what we experience individually has little to do with what we each individually deserve, and everything to do with the kind of incentives we all of us togather create.

reality may not be fair on an individual level, but it can be managable IF we practice enough universal consideration.

(as for 'free market' being "gone", that's not entirely as much of a no as it might supperfiscially appear. you don't HAVE a free market if corporate and other large enterprises, including financial ones, arn't also free to fail. i think giving these dinosaurs transfusions from the living poor isn't helping or saving anyone, other then a few mafia dons and their equivelant in so call legitimat corporate enterprise.

what we need are tangable infrastructure, managed not to maximize astronomical sybolic so called gain for a few, but to actually maximize their usefulness AS infrastructure. and a whole lot of people could be put back to work rebuilding that infrastructure to more environmentally sustainable specifications)

I don't believe the 2008 crisis is about the end of free markets. What I do believe is that rampaging economic liberalism has had its day.
For a few years. Neither the benefits of free markets, nor the costs of regulating them go away. People are taking a look at the flipside of these things right now, and given that they're always likely to attach the greatest weight to the things most obvious to them (like politicians having a field day blaming everyone but their own regulators and regulations), you're probably right. Running a "hands off" campaign with regards to the regulation of finance is not going to win any elections over the next few years. I'm not so sure however that properly socialist politicians (ie advocating state ownership and control of major industries etc) will really get a bigger mandate. Neither Americans nor Australians are suddenly going to turn their backs on private enterprise.

Governments will now take more care in the duty that we have entrusted in them - moderate the free market so that it serves the public. Democracy is the only tool we have to control the NLs of the world.
Another poster, Kilobugya, once said something similar about me: that "people like me" needed to be chained (his words, IIRC), so we wouldn't cause damage to society. I suppose it's better when you say it, because if I were to quote "Atlas Shrugged", people wouldn't take it seriously.

And if anyone has ever wondered why I'm not on the left anymore, and why I simply can't accept living in even a libertarian socialism, that sentence there is the answer.

1. Closer supervision of the lending practices of credit organisations.
Certainly. Makes for better RMBS too.

2. Closer supervision of corporate executives, especially to encourage corporations to take a longer view of investment rather than seeking short term profits at the expense of long term viability.
Sounds good, but I'd suggest you probably don't really know what you'd do about this in practice. Or what is being done already.

3. Creation of government owned savings bodies.
You mean, like these (http://en.wikipedia.org/wiki/Government_bond)?

4. (More) compulsory employer superannuation contributions.
You want to combat bubbles in asset markets by pumping more money into those markets? And at the same time make it more expensive to employ people, while we're heading for a recession?

5. More international supervision of monetary systems: we can't let the bad financial policies of one country jeopardise the entire planet.
There's plenty of international supervision, there just isn't much in terms of internationally binding rules. That's because governments like to play a prisoner's dilemma game, and are too stupid to take a step back. Look closely at the G20 summit, and tell me what will come out of it.

6. Greater environmental sanctions and rewards for organisations including governments and corporations.
Always gotta add the green one. But seriously, that one has nothing to do with the crisis, does it?

I'm sure people can think of more.
I'm sure people can. But there is a difference between sensible responses to a problem in the system, and pork barrelling the shit out of such responses by adding baggage that has nothing to do with anything.

But seriously, that one has nothing to do with the crisis, does it?

seriously that one has almost EVERYTHING to do with it.
that and the just plain irresponsibility of makiavellianism to begin with.

i don't aggree that a free market economy is any kind of holy grail,
but i do aggree that if bussiness are not allowed to fail, you just plain ain't got one.

seriously that one has almost EVERYTHING to do with it.
Companies not going out of their way to be green caused the financial crisis?