ActBlue, the Daily Kos, and the Democratic Party

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ActBlue, the Daily Kos, and the Democratic Party

Postby lesliesage » Mon Sep 14, 2009 4:44 pm UTC

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Ixtellor » Mon Sep 14, 2009 5:20 pm UTC

lesliesage wrote:he's protective of American jobs and opposes trade legislation like CAFTA (boring, I know)


I hope he wins and beats Joe.
But...

Opposing free trade agreement = not believing in competitive advantage = not believing in modern economic theory.
Tariffs destroy one job to save another, and usually in an industry in which another nation is vastly superior, and we misallocate resources to something we suck at, instead of something we have an advantage at.

I know exactly why Dems are pro-protectionism, but its an example of sacraficing whats right in favor of what gets votes. (See Calling Obama a socialist/nazi)

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Garm » Mon Sep 14, 2009 5:33 pm UTC

But small donations like this by individuals will be the downfall of our democracy.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby frezik » Mon Sep 14, 2009 5:39 pm UTC

Ixtellor wrote:Opposing free trade agreement = not believing in competitive advantage = not believing in modern economic theory.
Tariffs destroy one job to save another, and usually in an industry in which another nation is vastly superior, and we misallocate resources to something we suck at, instead of something we have an advantage at.


The trick is that the US has an absolute advantage in terms of agriculture due to having already invested in the most important farming technologies, starting with government money during WWII and continuing with farming subsidies. Because of this, America produces many times the amount of food it actually needs--probably enough to feed the world, if only a better worldwide distribution network was in place.

Even if you remove the subsidies, you're still dealing with a lot of infrastructure that wasn't originally built out using the free market in the first place. Opening up that trade would tank the agriculture industry in those countries, just like it already has for Mexico under NAFTA.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby lesliesage » Mon Sep 14, 2009 6:06 pm UTC

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Garm » Mon Sep 14, 2009 6:14 pm UTC

I was being extremely sarcastic. I was echoing conservative concerns about ActBlue. I just think it's funny how so often they want to take the individual out of democracy. I've donated through ActBlue several times to different candidates. Love that site.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby lesliesage » Mon Sep 14, 2009 6:27 pm UTC

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Vaniver » Mon Sep 14, 2009 6:34 pm UTC

lesliesage wrote:You could make the case that it's in people's long-term interest to support American industry and their neighbor's jobs with their consumer choices, but this is obviously too abstract for Americans (except for Michiganians- no one drives a foreign car there) so you might as well just sell the patriotic nationalism.
It is another amusing twist of reality that the side more associated with the phrase 'global citizen' is the side less associated with free trade. Think globally, and buy American.


As for the actual subject, I think that organizations like this are good for making our geographic system something more of a national system like lesliesage points out. I still think campaign finance laws are horribly designed- if a large group of individuals can donate a large amount of funds to one candidate, why can't another large group of individuals? Or a single individual? It would be a lot nicer if Congress made no law abridging the freedom of speech.*

*What do political donations buy, if not the ability to talk to people?
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Garm » Mon Sep 14, 2009 6:51 pm UTC

Vaniver wrote:
lesliesage wrote:You could make the case that it's in people's long-term interest to support American industry and their neighbor's jobs with their consumer choices, but this is obviously too abstract for Americans (except for Michiganians- no one drives a foreign car there) so you might as well just sell the patriotic nationalism.
It is another amusing twist of reality that the side more associated with the phrase 'global citizen' is the side less associated with free trade. Think globally, and buy American.


As for the actual subject, I think that organizations like this are good for making our geographic system something more of a national system like lesliesage points out. I still think campaign finance laws are horribly designed- if a large group of individuals can donate a large amount of funds to one candidate, why can't another large group of individuals? Or a single individual? It would be a lot nicer if Congress made no law abridging the freedom of speech.*

*What do political donations buy, if not the ability to talk to people?


I might be okay with what I think you're saying (that is to remove most if not all of the campaign finance laws restricting the amount that an individual can give to a candidate) if we remove the rights of an individual from corporations.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby lesliesage » Mon Sep 14, 2009 7:00 pm UTC

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby frezik » Mon Sep 14, 2009 8:16 pm UTC

lesliesage wrote:Frezik- how do we end US agricultural subsidies? They'll be the death of us.


The thing is, there's a good reason why any country should be interested in making at least a little more food than it needs: in the event of war, it's not dependent on imports. You'll always have luxury goods being imported, of course, but it's a good idea to be able make all your citizens' nutritional needs plus the extra needs for soldiers, even if it comes in the form of a frozen tofu burrito thing.

The free market, left to itself, would be highly efficient as long as there aren't any drastic changes to the marketplace. It tends not to have enough redundancy in order to handle things like wars and large natural disasters. For instance, grocery stores run out of food within a day or two if they're not getting regular shipments. Government subsidies help inflate demand, allowing at least part of the infrastructure to be better than it typically needs to be.

That said, the US has gone way beyond even that, and can pretty much kill any competition for grains worldwide. The only ideas I can offer is to back the subsidies down slowly. Good luck on that. The corn lobby in the US is a powerful one.

More generally, I have a problem with people who say "That's just the way the free market works", when in fact there was all sorts of government involvement behind the scenes, or where the free market has demonstratively failed in some way.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby A. Akbar » Tue Sep 15, 2009 12:37 am UTC

It still confuses me that the republicans are red. Very odd.

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby lesliesage » Tue Sep 15, 2009 1:09 am UTC

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Jahoclave » Tue Sep 15, 2009 1:45 am UTC

Do you ever get the feeling that the Republican Party is a Fox News reality show where the contestants are competing for their very own show on Fox News.

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Ixtellor » Tue Sep 15, 2009 12:39 pm UTC

frezik wrote:The free market, left to itself, would be highly efficient


Only in the long run. In the short run, producers seeking profits would engage in massive overproduction and ineffect destroy their own industry. (See Great Depression, See Mortgage Companies)

I don't know about the dynamic and motivations in prior centuries of free markets, but in todays world there are lots of people who will knowingly and willingly destroy their company for fast easy money, generally in the millions if not hundreds of millions.

Jahoclave wrote:Do you ever get the feeling that the Republican Party is a Fox News reality show where the contestants are competing for their very own show on Fox News.


No. I think they have too large of a radical minority, but that minority is not representative of most Republicans, particularly behind closed doors.
The most interesting political thing going on today, IMHO, is the war within the Republican party between intellectuals and the Sarah Palins(AKA the morons). Your describing the moron crowd and ignoring the intellectuals of the party.

lesliesage wrote:Frezik- how do we end US agricultural subsidies? They'll be the death of us.


It will have to be a natural death resulting from small farmers voluntarily leaving the industry. When there are only large corporations left farming, people will turn against them. But as long as you can "help out the small farmer" subsidies are here to stay. If you want some hope, it is extremely common in farming States like Nebraska, Kansas, and Iowa to instruct their high school graduates to leave the state and seek opportunity elsewhere. I know first hand that many High Schools are telling their graduates to get out of the State if they want a future.

Other than that, I don't see them ever ending. Between log rolling, iron triangles, national defense requirements, and large voting blocs, it just not in the cards.

Ixtellor

P.S. On futher ponderance, subsides will never end. Too many voters are related to agriculture.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby clintonius » Tue Sep 15, 2009 3:23 pm UTC

lesliesage wrote:opposes trade legislation like CAFTA (boring, I know)

Mind your tongue! This is the single least boring topic in all of political economy. To me, at least.

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Vaniver » Tue Sep 15, 2009 6:10 pm UTC

Only in the long run. In the short run, producers seeking profits would engage in massive overproduction and ineffect destroy their own industry. (See Great Depression, See Mortgage Companies)
Because both of those examples are entirely the free market left to itself.

Both of those are warning examples against letting politicians muck with the things they don't understand.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby lesliesage » Tue Sep 15, 2009 6:32 pm UTC

Vaniver wrote:
In the short run, producers seeking profits would engage in massive overproduction and ineffect destroy their own industry.
Because both of those examples are entirely the free market left to itself.
Greenspan said it best when he admitted to overestimating a company's ability to work toward its own long term interest. Economics was originally based on the idea that people make rational decisions in their own interest (buy the larger shampoo for a cheaper price/quantity) though the poorer people are, the less they do that. They had to change economic theory to deal with irrationality. Why should corporate hive minds somehow magically act in their best interests? And why should even that somehow work out to the highest standard of living possible for a society of x rescources? Where's the rule that says small gov't is egalitarian? If you think a pretty market is better than a smaller income gap, then fine, we've got nothing to argue about. But my self-serving morals take me elsewhere.

Finance companies could have easily put in place incentives for employees working toward long-term growth, not short term reward. They didn't. The fact is, we have to have a system based on human beings having no foresight and astonishingly short memories.


EDIT: here's an interesting history of corporations from -- while we're on the subject -- the DailyKos.

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Vaniver » Tue Sep 15, 2009 7:14 pm UTC

lesliesage wrote:Greenspan said it best when he admitted to overestimating a company's ability to work toward its own long term interest. Economics was originally based on the idea that people make rational decisions in their own interest (buy the larger shampoo for a cheaper price/quantity) though the poorer people are, the less they do that. They had to change economic theory to deal with irrationality. Why should corporate hive minds somehow magically act in their best interests? And why should even that somehow work out to the highest standard of living possible for a society of x rescources? Where's the rule that says small gov't is egalitarian? If you think a pretty market is better than a smaller income gap, then fine, we've got nothing to argue about. But my self-serving morals take me elsewhere.

Finance companies could have easily put in place incentives for employees working toward long-term growth, not short term reward. They didn't. The fact is, we have to have a system based on human beings having no foresight and astonishingly short memories.
I'll respond with a tangent of sorts.

Why is The Selfish Gene titled like that? Because evolution happens on the level of genes. Likewise, incentives happen on the level of rational actors. Greenspan's mistake was thinking about corporations rather than individuals in a corporation. Consider the impact of turnover on individual decision-making. If you're going to stick with a corporation for twenty years, you act differently than if you're going to stick with a corporation for two years.

So, Greenspan made a mistake. But that doesn't mean the incentive structure is wrong- it means people like Greenspan should have less control, and more humility.

lesliesage wrote:EDIT: here's an interesting history of corporations from -- while we're on the subject -- the DailyKos.
A quick read of it suggests it's mostly wrong. The British East India Company had exclusive control over America? People worked four days a week, at most, doing mostly subsistence agriculture?
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby lesliesage » Tue Sep 15, 2009 7:20 pm UTC

Vaniver wrote:So, Greenspan made a mistake. But that doesn't mean the incentive structure is wrong- it means people like Greenspan should have less control, and more humility.
I think it does mean that the incentive structure is wrong, because they had no incentive or ability to keep people in the company for 20 years, and that there should have been more regulation of self-interested parties who can affect the rest of the world so profoundly. Greenspan was saying, "I didn't think I needed to exert much control." He was humble. He thought they could do it themselves. The answer isn't, "if Greenspan isn't smart enough to do it, then it can't be done."

And... umm... I don't see what you're arguing with about history there.

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Silas » Wed Sep 16, 2009 3:21 am UTC

I'm a little worried about ActBlue. In the last election (2008), I was registered in the Virginia 5th- the congressional race was between Virgil Goode (incumbent; R) and Tom Periello (D). Short story (for the forum crowd): Virgil Goode was an embarrassment to Southside and a waste of space in the Congress. Periello, though, suffered- badly, as I saw it play out- from the perception that he was backed primarily by donors in New York (which was true until local fundraising caught up around the time of the convention).

Now, I'm not exactly a good ol' boy, but that was a real tripping block. (I had a different favorite for the nomination because of it.) And what should have been a slam dunk- a relatively young, articulate local boy, riding Obama's popularity, against a sulphurous fossil- turned out to be a bitterly contested fight between an unpalatable local institution and a well-funded carpetbagger (even though Periello had lived in Ivy his entire life), that came down to two recounts and a three-digit margin.

Virgil Goode was never in danger of winning my vote, but if I'd been less disgusted with the incumbent, Periello's northern connections could easily have sold me off of him. It's pretty insulting to have outsiders trying to tip the scales in local politics like that.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Garm » Wed Sep 16, 2009 3:37 am UTC

I'm willing to bet that Mr. Goode was courting out of state corporate donors. Or contributions from monied folks who are sympathetic to the conservative cause. It's a knife that cuts both ways. The Dems just have a huge jump on things like internet donations.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Silas » Wed Sep 16, 2009 3:56 am UTC

That's probably true enough in reality. But perception matters. And highly-visible things like ActBlue cement the Democratic party's reputation in places like the Virginia 5th as the instrument of wealthy outsiders who neither know nor care about local interests and sensibilities.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Diadem » Wed Sep 16, 2009 11:01 am UTC

lesliesage wrote:Economics was originally based on the idea that people make rational decisions in their own interest (buy the larger shampoo for a cheaper price/quantity) though the poorer people are, the less they do that.

If there is a causal link between being poor and making bad financial decisions, shouldn't it be the other way around?

They had to change economic theory to deal with irrationality. Why should corporate hive minds somehow magically act in their best interests?

Well the shit we're in now kind of shows that they have been acting in their best interests. And that they have been doing this very effectively. They made billions. Sure they destroyed the very companies they were working for, and indeed our economy itself, but they certainly made a lot of money off it. You can't accuse them of stupidity or ineffectiveness.

And why should even that somehow work out to the highest standard of living possible for a society of x rescources?

That's where things go wrong, don't do? Because it doesn't.

Intelligent self-interest only leads to the best outcome for everyone in a situation where there is a fierce competition, and the consumers are reasonably aware of what is going on. Because in such a situation things like 'offering a good price' and 'not fucking people over' are rewarded.

Those conditions will never be met in governments or mega-corporations. But that does not mean that the idea of a free market is wrong. Just that it has limits.

And of course government has always been involving itself with the market. There's never been a truly free market. So we don't know what it would look like. We can only speculate. Personally I'd be very curious to see how it would work. I think we should take a small country somewhere and implement it and see what happens. It's the scientific thing to do :P
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby netcrusher88 » Wed Sep 16, 2009 12:16 pm UTC

Diadem wrote:
lesliesage wrote:Economics was originally based on the idea that people make rational decisions in their own interest (buy the larger shampoo for a cheaper price/quantity) though the poorer people are, the less they do that.
If there is a causal link between being poor and making bad financial decisions, shouldn't it be the other way around?
That's a generally debatable point; there are a lot of reasons other than bad financial decisions for being poor, especially in this economy and in a country where 62% of bankruptcies are caused by medical costs which usually aren't something you have a choice about. However, the specific type of bad decisions that lesliesage referenced - choosing to buy a smaller quantity with a higher unit price but a lower total price (10 oz of shampoo for $1) instead of a larger quantity with a lower unit price but a higher total price (30 oz of shampoo for $2, or everything at Costco) - are likely to be a result of being poor. When you only have $50 for a week it certainly seems better to spend it on a week's worth of three meals instead of a month's worth of breakfast, even if that means it'll cost you more in the long run - and indeed that may be the best choice, even though it's not economically sound.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Angua » Wed Sep 16, 2009 12:28 pm UTC

netcrusher88 wrote:
Diadem wrote:
lesliesage wrote:Economics was originally based on the idea that people make rational decisions in their own interest (buy the larger shampoo for a cheaper price/quantity) though the poorer people are, the less they do that.
If there is a causal link between being poor and making bad financial decisions, shouldn't it be the other way around?
That's a generally debatable point; there are a lot of reasons other than bad financial decisions for being poor, especially in this economy and in a country where 62% of bankruptcies are caused by medical costs which usually aren't something you have a choice about. However, the specific type of bad decisions that lesliesage referenced - choosing to buy a smaller quantity with a higher unit price but a lower total price (10 oz of shampoo for $1) instead of a larger quantity with a lower unit price but a higher total price (30 oz of shampoo for $2, or everything at Costco) - are likely to be a result of being poor. When you only have $50 for a week it certainly seems better to spend it on a week's worth of three meals instead of a month's worth of breakfast, even if that means it'll cost you more in the long run - and indeed that may be the best choice, even though it's not economically sound.
Or to put it another way, the Vimes Boot Theory of socio-economic unfairness - the poor have to pay more for repeated buying products of low quality (in this example thin boots) for a lower price, but will have to rebuy them more often. The rich can afford to pay ten times more at once for something that will last practically forever and so after a couple of rebuys for the poor they will have ended up spending more and STILL have an inferior product (or wet feet if sticking to the boots).
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Ixtellor » Wed Sep 16, 2009 1:21 pm UTC

Diadem wrote:If there is a causal link between being poor and making bad financial decisions, shouldn't it be the other way around?


1. Bad decision can make you poor, but being poor doesn't mean you made bad decisions.
2. Being rich doesn't mean you make good decisions. (See Paris Hilton, Bernie Madoff)

Diadem wrote:Sure they destroyed the very companies they were working for, and indeed our economy itself, but they certainly made a lot of money off it. You can't accuse them of stupidity or ineffectiveness


But the free market argument is that the companies will be prosperous and will always make good decisions to increase profits. We saw exactly the opposite at AIG. AIG was making horrible decisions. There were probably only 3-5 people in the entire company that actually knew what was really going on. (I have heard as few as 1 person, but find it hard to believe). Those billions you say they made... well AIG employees were investing in their own worthless liquidity protection and asset protection programs, so it is my understanding everyone of them lost money. Sure they might have a few million left, but the bulk of the heads of AIG were tied up in their own company, and this is totaly true for the people in the London financial branch.

And Adam Smith, doesn't suggest people will sabatoge their own company and nation for short term profits. Free marketers argue that long term health and growth of a company will always be the primary objective, when we know that to be patently false.

Diadem wrote:Intelligent self-interest only leads to the best outcome for everyone in a situation where there is a fierce competition


Intelligent self interest also leads to murder and corruption, and I would hardly qualify that as the "best outcome" for everyone.

Free market libertarianism sounds great in theory, but never pans out in practice. Want to see 100% free markets, look at Somalia in the early 90's. Same thing always happens when you remove government regulation from the forumla... people with guns take over.

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Crius » Wed Sep 16, 2009 5:21 pm UTC

Ixtellor wrote:
Diadem wrote:If there is a causal link between being poor and making bad financial decisions, shouldn't it be the other way around?


1. Bad decision can make you poor, but being poor doesn't mean you made bad decisions.
2. Being rich doesn't mean you make good decisions. (See Paris Hilton, Bernie Madoff)


I'd say it probably has more to do more with financial stability more than income. Good finanical decisions won't typically raise your paycheck, but will be a big factor in determining whether you're living paycheck-to-paycheck or not.

But the free market argument is that the companies will be prosperous and will always make good decisions to increase profits. We saw exactly the opposite at AIG. AIG was making horrible decisions. There were probably only 3-5 people in the entire company that actually knew what was really going on. (I have heard as few as 1 person, but find it hard to believe). Those billions you say they made... well AIG employees were investing in their own worthless liquidity protection and asset protection programs, so it is my understanding everyone of them lost money. Sure they might have a few million left, but the bulk of the heads of AIG were tied up in their own company, and this is totaly true for the people in the London financial branch.

And Adam Smith, doesn't suggest people will sabatoge their own company and nation for short term profits. Free marketers argue that long term health and growth of a company will always be the primary objective, when we know that to be patently false.


Emphasis mine. Advocates of the free market will say that that good decisions are rewarded and bad decisions will be punished, like the company going out of business, like AIG did... oh wait.

You can argue that an individual can put his or her own short-term interests ahead of the long-term interests of the company, but it's in the interest of the rest of the individuals in the rest company to stop him or her, unless they're planning on bailing at the same time.

Intelligent self interest also leads to murder and corruption, and I would hardly qualify that as the "best outcome" for everyone.

Free market libertarianismAnarchy sounds great in theory, but never pans out in practice. Want to see 100% free markets, look at Somalia in the early 90's. Same thing always happens when you remove government regulation from the forumla... people with guns take over.


Fixed. Somalia is hardly representative of what capitalism advocates.

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Dauric » Wed Sep 16, 2009 5:42 pm UTC

Crius wrote:
Emphasis mine. Advocates of the free market will say that that good decisions are rewarded and bad decisions will be punished, like the company going out of business, like AIG did... oh wait.

You can argue that an individual can put his or her own short-term interests ahead of the long-term interests of the company, but it's in the interest of the rest of the individuals in the rest company to stop him or her, unless they're planning on bailing at the same time.

Problem is that companies no-longer have the kind of loyalty to their employees that engenders employees being loyal to them. Nowadays -everyone- is constantly looking at the classified or running daily Monster.com searches just to keep an eye on what is out there, either as a better opportunity, or in case the company goes through layoffs. Everyone's always planning on bailing, and most corporate bureaucracies make it so that bailing is easier than trying to stop the dimwit that's making a lot of short-term gains at the expense of the company's future. Even the CEOs plan to jump-ship before they've even been hired by demanding their "Golden Parachute" severance plans.

Free market libertarianismAnarchy sounds great in theory, but never pans out in practice. Want to see 100% free markets, look at Somalia in the early 90's. Same thing always happens when you remove government regulation from the forumla... people with guns take over.


Fixed. Somalia is hardly representative of what capitalism advocates.


Problem is there's an extreme (and popular) Financial Conservatism that claims any regulation is an affront to capitalism and they propose bills and vote with that ideology. Unfortunately these people sound terribly rational in comparison to the Social Conservatives, and gain support on that basis.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Ixtellor » Wed Sep 16, 2009 7:45 pm UTC

Crius wrote:I'd say it probably has more to do more with financial stability more than income. Good finanical decisions won't typically raise your paycheck, but will be a big factor in determining whether you're living paycheck-to-paycheck or not.


Nope. #1 cause of bankruptcy is medical emergency. (See Cancer) You can't make good decisions about getting or not getting cancer.
Anyway, Obviously good decisions can only help your odds, and bad decisions can only hurt your odds, but there are still lots of factors outside your control. (See Chinese kids working for $4/day)

Crius wrote:Emphasis mine. Advocates of the free market will say that that good decisions are rewarded and bad decisions will be punished, like the company going out of business, like AIG did... oh wait.


Depends on which kind of 'free marketeer' you are talking about. There are the Republican variety who think free market = economy always grows. And there are libertarins who think free market = free, even if it has horrible consequences.

If AIG went bankrupt, you would be stabbing your neighbor right now for a days food and trying to figure out how to avoid the roving rape/murder squads. (But thats another argument)


Crius wrote:Somalia is hardly representative of what capitalism advocates.


Whose idea of capitalism? For an AnCap world, it would probably look exactly like Somalia, and they would argue you to death that there version of capitalism is the true one.


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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby netcrusher88 » Wed Sep 16, 2009 10:11 pm UTC

Crius wrote:Advocates of the free market will say that that good decisions are rewarded and bad decisions will be punished, like the company going out of business, like AIG did... oh wait.
Had AIG gone out of business, the people running the show would still have made bank. There's still no negative feedback for the people making bad decisions - and, for them, I guess they aren't bad decisions.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Dauric » Wed Sep 16, 2009 10:18 pm UTC

netcrusher88 wrote:
Crius wrote:Advocates of the free market will say that that good decisions are rewarded and bad decisions will be punished, like the company going out of business, like AIG did... oh wait.
Had AIG gone out of business, the people running the show would still have made bank. There's still no negative feedback for the people making bad decisions - and, for them, I guess they aren't bad decisions.


And thus the failure of anarchic Free Market Capitalism is exposed by the example.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Diadem » Wed Sep 16, 2009 10:34 pm UTC

Dauric wrote:
netcrusher88 wrote:
Crius wrote:Advocates of the free market will say that that good decisions are rewarded and bad decisions will be punished, like the company going out of business, like AIG did... oh wait.
Had AIG gone out of business, the people running the show would still have made bank. There's still no negative feedback for the people making bad decisions - and, for them, I guess they aren't bad decisions.


And thus the failure of anarchic Free Market Capitalism is exposed by the example.

If by 'free market' you mean 'government involvement on every level', then yes. If you have a sane definition of free market, then no.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby netcrusher88 » Wed Sep 16, 2009 10:40 pm UTC

Diadem wrote:
Dauric wrote:
netcrusher88 wrote:
Crius wrote:Advocates of the free market will say that that good decisions are rewarded and bad decisions will be punished, like the company going out of business, like AIG did... oh wait.
Had AIG gone out of business, the people running the show would still have made bank. There's still no negative feedback for the people making bad decisions - and, for them, I guess they aren't bad decisions.

And thus the failure of anarchic Free Market Capitalism is exposed by the example.

If by 'free market' you mean 'government involvement on every level', then yes. If you have a sane definition of free market, then no.

Sans government intervention there is still no negative feedback on the people making the decisions - they still would have made bank, but AIG would have crumbled (sending shock waves through the insurance system - and I don't mean just health) instead of continuing to exist. And the execs that cashed out on its good years could have gone hunting for another company to drive into the ground at their leisure.

Strike two.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Diadem » Wed Sep 16, 2009 11:48 pm UTC

netcrusher88 wrote:
Diadem wrote:
Dauric wrote:And thus the failure of anarchic Free Market Capitalism is exposed by the example.
If by 'free market' you mean 'government involvement on every level', then yes. If you have a sane definition of free market, then no.
Sans government intervention there is still no negative feedback on the people making the decisions - they still would have made bank, but AIG would have crumbled (sending shock waves through the insurance system - and I don't mean just health) instead of continuing to exist. And the execs that cashed out on its good years could have gone hunting for another company to drive into the ground at their leisure.

Not if they are personally accountable for their company's demise. Which in a truly free market economy they would be. Mind you, I'm not advocating a libertarian utopia here. I am merely stating that you can't say that a truly free market does not work based on an example from a market that is clearly not free.

I'm not an anarchist. Government is necessary, and some government control of the economy is necessary, as well as intervention on behalf of the common good (education, military, infrastructure, health care, etc). But there are fundamental problems with the way our economy is set up right now, that can be laid directly at the feet of government intervention, or government enforced rules.

The fundamental problem is that when a company makes money, the owners get to keep the cash, but when it loses money, the owners can just say "Oh, well, this company is its own judicial entity. I'm not personally responsible for the losses". That is Wrong.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby netcrusher88 » Thu Sep 17, 2009 3:01 am UTC

Diadem wrote:
netcrusher88 wrote:
Diadem wrote:
Dauric wrote:And thus the failure of anarchic Free Market Capitalism is exposed by the example.
If by 'free market' you mean 'government involvement on every level', then yes. If you have a sane definition of free market, then no.
Sans government intervention there is still no negative feedback on the people making the decisions - they still would have made bank, but AIG would have crumbled (sending shock waves through the insurance system - and I don't mean just health) instead of continuing to exist. And the execs that cashed out on its good years could have gone hunting for another company to drive into the ground at their leisure.

Not if they are personally accountable for their company's demise. Which in a truly free market economy they would be. Mind you, I'm not advocating a libertarian utopia here. I am merely stating that you can't say that a truly free market does not work based on an example from a market that is clearly not free.

I'm not an anarchist. Government is necessary, and some government control of the economy is necessary, as well as intervention on behalf of the common good (education, military, infrastructure, health care, etc). But there are fundamental problems with the way our economy is set up right now, that can be laid directly at the feet of government intervention, or government enforced rules.

The fundamental problem is that when a company makes money, the owners get to keep the cash, but when it loses money, the owners can just say "Oh, well, this company is its own judicial entity. I'm not personally responsible for the losses". That is Wrong.

What then when we are dealing with publicly held companies where there are thousands of owners? And anyway it's not the owners that are in general the problem - the owners don't run the show (day to day) in most companies, the executives do, although they may hold a substantial amount of stock (though not a controlling interest). There is absolutely nothing in a truly free market from doing exactly what I described and we have witnessed - run a company into the ground but do it without anyone noticing by turning high profits on schemes that can't possibly work in the long run (and nobody notices because they're getting such high profits with the execs in question at the helm), then jump ship when it starts to sink and go to another company that will hire you because you turned such high profits. But you only have to go rinse and repeat with another company if you really want to, since you convinced the first that you were so important to them that they needed to give you all kinds of incentives, an obscene salary, and a severance package worth far, far more than most people have any hope of making in their entire lifetimes (the oft-referenced golden parachute).

Nothing in a truly free market presents this kind of self-serving fuck-the-future behavior, at least in part because people are greedy - already some of the same activities that brought the world economy to its knees not two years ago are being started again in the name of obscene profits.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Crius » Thu Sep 17, 2009 5:50 pm UTC

Ixtellor wrote:Nope. #1 cause of bankruptcy is medical emergency. (See Cancer) You can't make good decisions about getting or not getting cancer.
Anyway, Obviously good decisions can only help your odds, and bad decisions can only hurt your odds, but there are still lots of factors outside your control. (See Chinese kids working for $4/day)


You'll note I said "big factor", not "only factor".

Depends on which kind of 'free marketeer' you are talking about. There are the Republican variety who think free market = economy always grows. And there are libertarins who think free market = free, even if it has horrible consequences.

If AIG went bankrupt, you would be stabbing your neighbor right now for a days food and trying to figure out how to avoid the roving rape/murder squads. (But thats another argument)


No, I don't know of any "free marketeer" who believes the business cycle doesn't exist in a free market. Also, do you mean "free market = good", not "free market = free" (which is just a tautology)? Libertarians generally don't believe the free market has horrible consequenses, so I'm not sure where you're going with this.

I also disagree that AIG failing would bring down the government and cause anarchy.

Whose idea of capitalism? For an AnCap world, it would probably look exactly like Somalia, and they would argue you to death that there version of capitalism is the true one.


If you want to attack AnarchoCapitalism, then specify it. Anarchy is not what's generally meant when someone says "free markets".

netcrusher88 wrote:Had AIG gone out of business, the people running the show would still have made bank. There's still no negative feedback for the people making bad decisions - and, for them, I guess they aren't bad decisions.


I'm not sure where you're getting this assertation. AIG stock would be worthless if the company went out of business, and executives tend to be heavily vested in the company. Golden parachute clauses in their contracts probably wouldn't be a big priority in bankruptcy proceedings either (do they generally even apply when a company goes bankrupt?). Unless you mean the salaries they recieved before the company went under, then, yes, they would keep those.

I don't think the "loot the company" attitude is nearly as prevalent as you make it out to be. Sure, there's some people who destroy the company for short-term stock gain, but by large it's not a common practice. (also, note those people's job prospects nowadays as well).

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Ixtellor » Fri Sep 18, 2009 1:22 pm UTC

Crius wrote:Also, do you mean "free market = good", not "free market = free" (which is just a tautology)? Libertarians generally don't believe the free market has horrible consequenses, so I'm not sure where you're going with this.


I don't know what libertarian sites you frequent, but there are a number of them, whose #1 motivation is freedom.
So when you present them with facts about what happens in under regulated, or unregulated (see Somalia) markets, they generally answer "That is ok. No one said it would be utopia, just that it would be the most freedom".
There are your moral libertarians. They think government = coersion = immoral. (See Non Aggression Pact)

Crius wrote:I also disagree that AIG failing would bring down the government and cause anarchy.


I won't go that far, but...

AIG was into liquidity and asset protection.

Your grandmother's 401K, your 403B, your banks CD's, your stock portfolio, your banks investments, your bosses investments were all invested in what seemed like safe, consistant, high yield bundles of asset backed mortgages, even if they didn't know it. (There are some regional banks that avoided this, but every single major bank and lots of regional banks in the nation was heavily vested).

So even though you thought your 403b was safely vested in the "titan mutual fund" and had nothing to do with mortgages in california, you were mostly likely wrong. Because many of the successful funds were buying into the mortgage bundles. They seemed 100% full proof. Because even if they market goes down, the liquidity and default protections would kick in. It was a free money enterprise that lasted for a long long time.

So when the markets crashed they way they did, and AIG was going to default on their liabilities, that meant that your 401K, your grandmas savings, and everyone else was going to take a large hit.

When Bernake went to George W. Bush and said, the economy is going to collapse if you don't do something.. its because the economy was going to collapse. Does FDIC have enough money to simultaneously cover over half the nation banks defaulting? No.

In reality, they might have tinkered with banking regulation and lowered capital ratios to allows for every bank to carry 100x liabilites to assets, but I don't know if that would have solved the problem.

But if they let AIG fail ,which was the only entity in the universe that allowed you bank to maintain its capital ratios, that would have meant all the banks fail. (not literally all, but the vast majority).

Ixtellor

P.S. I have tried to explain the financial collapse in layman's terms many times and this one looks like the least successful, but I am out of time to redo it. Hopefully it made enough sense. Bad investment = can't meet capital ratios = all banks fail = you and everyone you know loses all their savings = no one is feeding grandma = walmart and every large company in America can't repay their commerical paper = all companies fail = The Road Warrior.
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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Heisenberg » Fri Sep 18, 2009 3:27 pm UTC

Ixtellor wrote:I don't know what libertarian sites you frequent, but there are a number of them, whose #1 motivation is freedom.
So when you present them with facts about what happens in under regulated, or unregulated (see Somalia) markets, they generally answer "That is ok. No one said it would be utopia, just that it would be the most freedom".
There are your moral libertarians. They think government = coersion = immoral. (See Non Aggression Pact)
That's what a crazy idealistic libertarian would say. However, we generally call those people anarchists. Libertarianism is holding the value of freedom as the most important. It does not mean it is the only value and most libertarians agree that some government and regulation is necessary to preserve stability. Libertarians are not crazy idealists who want America to be like Somalia.
Ixtellor wrote:But if they let AIG fail ,which was the only entity in the universe that allowed you bank to maintain its capital ratios, that would have meant all the banks fail. (not literally all, but the vast majority).

I disagree. You're right that AIG wouldn't have been there to insure my 401k, and people might have lost a lot of savings and retirement, but it's still a bit of a jump to total bank collapse and Road Warrior. We were a lot closer to that when the Commercial Paper Market froze up. Honestly, I think now that we're past it, everyone's going to look back and exaggerate how bad the situation was.

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Re: ActBlue, the Daily Kos, and the Democratic Party

Postby Ixtellor » Fri Sep 18, 2009 4:24 pm UTC

Heisenberg wrote:I disagree. You're right that AIG wouldn't have been there to insure my 401k, and people might have lost a lot of savings and retirement, but it's still a bit of a jump to total bank collapse and Road Warrior. We were a lot closer to that when the Commercial Paper Market froze up. Honestly, I think now that we're past it, everyone's going to look back and exaggerate how bad the situation was.
.


1) I am a realist, I don't think Road Warrior would have happened, but I know/knew it was going to take something unprecedented and monsterous. Today we call that the Bail outs. It was far larger in scope than the 80's S&L bailouts, and came, for sure, at a worse time.

2) The ABCP markets froze because the assets were worthless, because they were all(er... lots) based on subprime and adjustable rate mortgages. There is a 100% correlation between AIG and ABCP. The banks provided the credit default protection as well as acting as the conduit, only to then go take out a VERY smart insurance policy with AIG. So if the bailouts had not happened, what would have happened to all those loans based on worthless assets?

You have legally binding agreements in which party B has no chance of upholding. (Asset protection) And party A is EVERYONE who has savings. (Obviously some regional investors, bankers, and smaller funds were not involved.)

I'll wager you could play the 6 degrees of Kevin Bacon and find out every investment in the nation was tied to AIG, except it would take like 2-3 degrees, with all the large institutions being 1 degree.

I was being hyperbolic suggesting it would be Road Warrior, but there was no choice in massive massive government intervention. (Keynesian theory wins again!!!)

How would the free market react to the failure of AIG?

The most frustrating thing about this whole episode is the large numbwer of people who think they weren't involved.
"Just let the banks fail!" = let my savings disappear.

Ixtellor

P.S. Another solution was sell all of our banks to Saudis, Chinese, and other foreign investors,although I am not confident they had the cash reserves to meet the capital ratios required for such a lifevest.
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