The failure of Capitalism, Our Current Financial Crisis and How One Man Predicted It Years Ago

The Boston Globe recently did a piece on capitalism and why it’s inherently flawed. Before you call me Socialist and click away, please read on as I explain how one economist predicted our current financial crisis more than forty years ago as a result of his insights regarding the problems inherent in the American economy.

Hyman Minsky, a macroeconomist who died over a decade ago predicted our current financial crisis. When did he have this revalation? Roughly the 1960s. He believed that modern finance policies are the very mechanisms that “created the illusion of stability while simultaneously crating the conditions for an inevitable and dramatic collapse.

He argued that capitalism, as a whole, is inherently flawed. Minsky argued that the American economy was not the self-correcting machine that many of his contemporaries thought. “Far from trending toward some magical state of equilibrium, capitalism would inevitably do the opposite. It would lurch over a cliff.”

He explained the pattern that he recognized. Following the Great Depression, everybody, consumers and businesses alike, was being very conservative. Loans were not given out unless you were highly qualified and repayment of loans was the highest priority. However, as the years progressed and the Depression became more and more of a distant memory, people were steeped in prosperity and forgot the problems they faced. Borrowing became easier to do and it gave rise to the kind of speculative lending and trading practices that you saw just a couple of years ago. Despite his warnings throughout the 60’s, 70s, 80’s and even into the 90’s (just before his death), this house of cards continued to build until it hit an unsustainable peak.

The system collapsed under its own weight and this is where we find ourselves today. Although some of Minsky’s solutions for recovering from this death-spiral have been put into place by Bernanke and the Obama Administration, many of his solutions were considered too “socialist” for this current political climate.

This is a fascinating article and I highly encourage you to read it. It can be found here.

Posted via email from Kevin’s Ramblings

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The failure of Capitalism, Our Current Financial Crisis and How One Man Predicted It Years Ago

The Boston Globe recently did a piece on capitalism and why it’s inherently flawed. Before you call me Socialist and click away, please read on as I explain how one economist predicted our current financial crisis more than forty years ago as a result of his insights regarding the problems inherent in the American economy.

Hyman Minsky, a macroeconomist who died over a decade ago predicted our current financial crisis. When did he have this revalation? Roughly the 1960s. He believed that modern finance policies are the very mechanisms that “created the illusion of stability while simultaneously crating the conditions for an inevitable and dramatic collapse.

He argued that capitalism, as a whole, is inherently flawed. Minsky argued that the American economy was not the self-correcting machine that many of his contemporaries thought. “Far from trending toward some magical state of equilibrium, capitalism would inevitably do the opposite. It would lurch over a cliff.”

He explained the pattern that he recognized. Following the Great Depression, everybody, consumers and businesses alike, was being very conservative. Loans were not given out unless you were highly qualified and repayment of loans was the highest priority. However, as the years progressed and the Depression became more and more of a distant memory, people were steeped in prosperity and forgot the problems they faced. Borrowing became easier to do and it gave rise to the kind of speculative lending and trading practices that you saw just a couple of years ago. Despite his warnings throughout the 60’s, 70s, 80’s and even into the 90’s (just before his death), this house of cards continued to build until it hit an unsustainable peak.

The system collapsed under its own weight and this is where we find ourselves today. Although some of Minsky’s solutions for recovering from this death-spiral have been put into place by Bernanke and the Obama Administration, many of his solutions were considered too “socialist” for this current political climate.

This is a fascinating article and I highly encourage you to read it. It can be found here.

Posted via email from Kevin’s Ramblings

Russia yields to Obama Star Wars U-turn – Scotsman.com News

Check out this website I found at news.scotsman.com

Obama’s decision to change the plans regarding the Missile Defense Shield that was originally supposed to be deployed in Poland (with tracking systems in Chech Republic) was a very welcome change of direction by the Russian Government, which always thought these missiles were being put in place as a threat to them as opposed to defense against Iranian ambitions.

In response to this new development, the Russian government is planning to scrap its own plans to deploy counter-measures near the border of Poland.

I see the potential for a course-correction in relations between the US and Russia. There’s much to be worked out. The US is pressuring Russia to support Sanctions against Iran because of their unwillingness to stop their nuclear program. However, Russia is reluctant to go along with such plans because of the depth of their trade relations with Iran.

Russia has not yet given any signals that it’s ready to go along with these sanctions, but I believe there’s reason for optimism in light of this new information.

Posted via web from Kevin’s Ramblings

Missile shield and the state of politics in this nation

A thought occurred to me today as I was listening to a Newshour podcast. They were discussing the fact that President Obama is killing GW Bush’s plans for the Missile Shield in Poland and Czech Republic and replacing it with a new program that he feels more effectively addresses the immediate threat posed by the Iran missile program.

 They had two guests on the program, as they often do. One of them agrees with the new plan and the other thinks the change is a mistake. This post isn’t really about the defensive system itself, so I’ll only recap briefly.

 Essentially, the President’s position is that the old system was being designed to defend against ICBM threats posed by Iran. The assertion is that this Iranian ICBM program is moving more slowly than estimates indicated, but that short and medium range missile tests are progressing more quickly. Furthermore, the missile shield dreamt up by the former President has never been developed and has never been demonstrated to be feasible. So, President Obama is proposing a program that will more effectively defend against these short and medium range missile attacks which are considered far more imminent. The proponent suggested that the old system was a system that didn’t work going up against a threat that didn’t exist.

 The opponents of the plan think the President is giving in to Russian pressure and, in the process, leaving US interests and allies in eastern Europe vulnerable to attack.

 I tend to think that re-aligning our strategic assets to meet the needs as they exist today instead of trying to anticipate a need 15 years out with technology that has never been shown to work with any reliability is a far more pragmatic approach. And this doesn’t even begin to account for the goodwill gained from major players in the region by stopping a program that, since its inception, has been very unpopular to all involved.

 Here’s what I thought was interesting. One camp is sitting here telling us the recent changes are a big mistake for the reasons outlined above. The other camp is trying to convince us that this new plan is the only sensible option. We, the viewers and listeners, the voting public, are left in the middle trying to figure out who to believe. All the while, we have the President and his staff sitting in their offices laughing at how utterly naive we all are. They clearly have a plan, but no one outside his circle knows what it is. We’re all left to grope in the dark while he looks on from on high.

 I’m generally a left leaning person and have supported our President in most regards. I’m not suggesting that this situation is unique to Barack Obama, our current President. This little dance would be occurring no matter who was President and it happens for all issues, not just this missile shield.

 I don’t see a solution to this. Despite all the noble claims of transparency, there are just some things that the government will not allow to be public, and I’m sure the real reasons for this change are among them. Furthermore, unless we make ourselves experts on the dynamics of eastern European affairs and United States Foreign Policy, we can’t hope to figure this out for ourselves.

 So who do we trust, mainstream media? They presumably have the experts who can help sort out some of these details, but they’re so biased toward their political alignments that we’re still left trying to interpret the findings of our ‘independent’ sources.

 I don’t think there’s an easy answer.

Posted via email from Kevin’s Ramblings

The Dentist

Cute Joke I got from a friend.

A man goes to see an oral surgeon to have a tooth pulled.

The Dentist pulls out a freezing needle to give the man a shot. (it used to be called Novocain, but I think it’s no longer that).

“No way! No needles! I hate needles,” the patient said.

The Dentist starts to hook up nitrous oxide (laughing gas), and again the man objects. “I can’t do the gas thing. Just the thought of wearing the gas mask is suffocating me!”

The Dentist appears frustrated, but not quite ready to surrender. He asks his patient if he has any objection to taking a pill.

“No objection!” the patient says. “I’m totally fine with pills.”

“Great,” says the Dentist, who leaves and returns with a tablet in his hand.

“Here,” says the Dentist, “pour yourself a cup of water and take this Viagra tablet.”

The patient says, “Wow, Doctor! I had no idea that Viagra works as a pain killer.”

“It actually doesn’t,” replies the Dentist. “But, it will give you something to hold onto when I pull your tooth.”

Posted via email from Kevin’s Ramblings

Followup to Congressman Joe Wilson’s juvenile outburst

Rep. Wilson is the incumbent in SC up for reelection next year and is being challenged by Rob Miller. Since the time of his little “You lie” outburst from yesterday, Rob Miller’s campaign has received over $250,000 in campaign contributions from people who were outraged by Wilson’s antics. I think this is, perhaps, one of the most expensive tantrums in the history of American politics.

Rob Miller’s campaign site can be found here where you can see some of the damage, and contribute if you’re so inclined. I don’t live in SC, but i think this is hysterical. It’s a great example of Congress answering to the people.

Posted via email from Kevin’s Ramblings

What happens when you act like a child on the floor of the House of Representatives

Congressman Joe Wilson (R-SC) felt it necessary to scream “You Lie” (or something like that) to the President during his Joint Session Speech tonight. Does he have the right to do so? I don’t know. I guess so. But he also has to expect that he’s gonna get called out for acting like a douche bag. Check out this image and read the informational paragraph. I’m sure it’s been pulled by now, but a friend was able to grab a screenshot before it got pulled.

Doesn’t the President of the United States deserve some respect even if you disagree with his policies? Apparently, the GOP doesn’t think so. It’s ironic that the adults that President Obama addressed were his audience yesterday. Yes, the school kids. Shame on you, Congressman Wilson.

Posted via email from Kevin’s Ramblings

Some thoughts on the Lori Drew cyberbullying case that lead to the death of Megan Meier

I'm listening to Buzz Out Loud Ep. 1054 and one of the topics is about the Terms of Service (TOS) that users must agree to when accessing most websites these days. They're specifically referring to MySpace because there was a court case brought against Lori Drew alleging violation of the TOS. Here is an ArsTechnica article that provides more background on the case, but essentially this woman impersonated her daughter on MySpace and taunted her daughter's friend until that person committed suicide. The problem is, there's no law on the books that properly deals with a situation like this. Since they had no way to charge her for causing the death of this other person, they tried to nail her for a TOS violation. Specifically, they tried to charge her with illegal access to the systems.

The judge threw out the case stating that, although Drew's actions were reprehensible, simply logging in as her daughter or creating a fake account doesn't constitute "unauthorized access." The hosts of the podcast agreed with this decision and I think I also agree.  TOS violations should not, in themselves, be criminal offenses, misdemeanor or otherwise. If there's been a violation, then the site owner has to right to boot the user accused of the violation and even file a civil suit if appropriate, but criminal charges should be saved for people who are really breaking the law. As unjust as this particular case appears to be, if they can't charge her with causing the death of Megan Meier through murder, manslaughter, or whatever, they shouldn't be twisting other parts of the system into knots trying to find other ways.

So the bottom line is this woman caused the death of another person through her actions and it appears that she's going to get away with it. Our legal system was created hundreds of years ago and is not equipped to handle many situations that are created by the advancements in technology that we've enjoyed in recent years. Trying to shoehorn these cases, which could never have been anticipated by our founding fathers, is what allows worthless individuals like this to avoid punishment for such unspeakable crimes.

Of course, in fairness, I do have to make one other point.  Although this was a tragic story and I hope this haunts Lori Drew for the rest of her life, I have to question the emotional stability of Megan Meier in the first place. I'm not saying I know what she went through, because I don't, but I've seen bullying and harassment first-hand. I have a good idea what it looks like. I have to wonder if harassment of this nature is sufficient to cause an otherwise stable individual to commit suicide. Did Megan already have emotional issues that made her particularly vulnerable and susceptible to this kind of abuse? I'm not letting Drew off the hook. I think she's a despicable human being for attacking a 13 year old in this way. I'm just not sure if 1. murder was the intent, and 2. if the suicide was 100% Lori Drew's doing.

Posted via email from Kevin’s Ramblings