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About C.W.

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  • Website URL http://krazyeconomy.blogspot.com
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  • Gender Male
  • Interests Objectivism, economics, music, classical music, opera, art, history - ancient Greek, Renaissance, Enlightenment, Science, 15C through 19C.
  1. A discussion of the adjusting period

    I don't disagree with what you wrote. I think that our beginning question would have to be, "Under what circumstances would we have the opportunity to change things?" I don't think that we would have the opportunity if we didn't have significant support. Or perhaps the pain that was occurring already was greater than our changes could bring. Either way, a pro-capitalist program would need things to be quite a bit different than today. I don't know how fast that could occur. The country seems to be waking up faster than I would have thought. But, since few people actually know what capitalism or freedom is, we are some ways from being in a position to change anything. As much as details matter, once the economy is freed, I don't think that we have any idea as to what will happen or how fast. Even for us, it is hard to get out of our mind that there must be some sort of control or we must promise certain things, etc. No one, I mean really, no one has a clue what will result. Just in the same way the "information age" could not have been foreseen, we have no idea what a truely capitalistic America will look like. We can say that it will be wonderful, prosperous, creative, surprising, and lots of other good adjectives. That's it. Given that in the best of circumstances the support that a pro-freedom party, if you will, will be relatively thin, consisting of intellectual leaders, I think that the quicker things are done, the better. Dragging the changes out over time just gives us a greater chance of running into problems, especially since dragging things out would mean continuing many statist institutions, and our people just won't be good at that, plus, there would be a number of holdovers who would like to ruin our efforts. I am all in favor of fast and clean.
  2. A discussion of the adjusting period

    Hey, I hope that I didn't off dicussion. I thing that this topic is interesting, and good fun. I mean, having to solve these problems is what we are working for.
  3. A discussion of the adjusting period

    Okay, more detail. But, how can we know? I mean, given a release from regulation, excessive taxes, and uncertainty, how fast can your normal capitalist respond? Personally, I think that things will happen very fast, much faster than the probable critics would allow. The biggest problem I think would be all of those ex-government workers who don't know how to work or think. We might have to have some sort of special deal for them. How about a reservation in a former national forest? I think that jobs, real, productive, profitable jobs can be created more rapidly than anyone can imagine in today's political/economic environment. The U.S. has enormous capacity and creativity and willingness to work. Yes, prices will fall, people will be unemployed, and so on. But, soon people will realized that things are a lot better than they expected and that their efforts are worth a lot. This will not be like the change in Russia or even China, because many of our people know how to think and act freely. We have less to learn than a former communist society would. Many corporate executives who's job was to court government would have problems, but again, we should not worry about them. As I see it here are the different groups or sets of things to consider: The aid recipients who cannot be expected to find new work: elderly or disabled (veterans are a different category). We announce that after a certain point in time, no more people will be taken under these programs. Maybe a 5 year window. Regulations on the federal level for all industries would be killed as quickly as possible. Regulatory agencies dissolved without delay or warning. I suppose that we would have control of the states, and the same thing would be happening there. Federal taxes on all things would be cut to the level necessary to carry the necessary activities of government. Over time other sources of revenue would need to be found. I think that the cost of these government activities would decrease as free enterprise flourishes and offers some ideas as to how to make these activities more efficient. The attitude now is let the taxpayer pay and let's have a good time. That would probably change with the culture. As I said in my blog, I think that the assets the federal gov has will cover the debt. those assets may also cover the costs of social security and medicare until those programs can die. Can't tell until then. Medicare is a major issue. It will take some original thinking to make it work within a free society. As it is now it is a major source for inflation and has completely distorted the medical sector of the economy. There will be new rules, etc. This one could be tough. All business welfare would be cut as soon as possible. I think that immediate change is best and people will have to come up with solutions. In practice, there may be some delay. I don't know if each law would have to be repealed or if one bill could kill them all, but the faster the better. If there is a case for some sort of gradualism it will have to be very strong. Doing it gradually will probably bring its own distortions. Past deep recessions that have been allowed to recover without much government interference have taken only six to twelve months. Thomas J. DiLorenzo, in How Capitalism Saved America says that after WWII, when government spending dove and millions of young men returned from war, the economy recovered quickly in 1946 and 1947 (much to the consternation of the Democrats, etc.). The point is that given the chance the U.S. economy can function and function well.
  4. A discussion of the adjusting period

    Is it only an industrialized country that you want to study? I mean, the greatest transition might be the change from a foreign controlled, mercantilist oriented colony to a free independent capitalistic country in the late 18C: the U.S.A. What issues do you think should be considered in this discussion. The only one that I have seen is the question of individuals who have put money into the system and now depend upon it, e.g., people on social security or Medicare. Things like unemployment and state subsidized companies are better left entirely to the markets, just as if they were the result of a boom and needed their bust. In our country, it would take a while just to take apart or void all of those laws. A place to start might be Ayn Rand's own comments. I wrote my own "Flight of Fancy" last year. It might have some thoughts that you find of use.
  5. "Meltdown" by Thomas Woods

    At least you didn't call me a monetarist! If you read this, or know what he is saying, let me know your opinion.
  6. "Meltdown" by Thomas Woods

    I have finished reading Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse and highly recommend it. I would say that without understanding the material in this book you do not know why we are in the mess we are in economically and why the recovery is as slow as it is and will be. I have reviewed the book here. I found the book because a friend mentioned that Yaron Brooke had recommended it. There are many good reasons to read the book. It is fairly well written. It provides more than enough detail and documentation. It gives you a good idea of the theoretical basis of his analysis, which is grounded in von Mises and the Austrians. One thing, however, several times I have written in this forum about the Fed’s actions, especially its credit expansion, as being very significant and bad for the economy. Maybe my writing isn’t very clear as few seem to understand or agree. One person even suggested that I was a monetarist. Woods emphasizes that the Austrians consider the government expansion of credit to be the beginning of the business cycle. I think that understanding capitalism in detail is important for it supporters. This is a good book to begin learning about the economics of capitalism.
  7. Government Involvement in "Confidence"

    I don't think that "confidence in the economy" would matter under real circumstances. But, in the warpped view we see in Washington and elsewhere, "confidence" is necessary for consumers to spend freely, and thus "drive" the economy. Hmmm. Maybe, if you were an investor, a capitalist, in a free economy and it looked like the government might do something stupid, you might not invest. But it wouldn't be the economy in which you didn't have confidence. You would have confidence in the stupidity of the government. Today, we need confidence in everything, the economy, the financial system, the banks, the garbage collection, the street lights. Apparently, we can't act without the confidence that our government protectors provide us. I am trying to read In Fed we Trust (it is really hard to read this crap). It is so great to know how much a hero Bernanke is. Let us all say a word of prayer of thanks for our hero! I have also recently read Meltdown by Woods. I want to write up something for the Forum and I am working on a review. This book is worth reading. It was recommended by Yaron Brooke. Just to round out my post, I have been a crazy reading man, being in the middle of How Capitalism Saved America. It is also worth reading for the history. His approch is to address issues, i.e., monoply or antitrust in our history. So far it is good.
  8. [italics in original] There is no proving definitions. The defining characteristic is selected by observation. The entire process is one of observing, identifying, integrating, and differentiating. The focus is always on the existents/units and their characteristics. The inductively derived definitin differentiates the existents subsumed by the concept from other existents, and integrates the concept, and thus its referrents, with wider concepts. Deduction plays no role. Even the organization of concepts into propositions is derived from observation and the truthfulness of the proposition is determined by its relation to the facts of reality.
  9. No. I have offered my responses before and you rejected them, deductively. As I said in that other thread, there is a gulf. This subject does seem to interest you so maybe you will find an opportunity to read articles and listen to lectures from the Objectivists who have worked in this area, Dr. Leonard Peikoff and Dr. Harry Binwanger. I also think that a close reading of the TIOE would reveal a difference between your view of definitions and what AR wrote.
  10. James Grant in WSJ

    I agree. I would add that Bernanke deserves lots of credit for causing the mortgage mess in the first place. The low interest rates in the years preceding the meltdown encouraged the lending mania. He fed (pun intended) the credit machine all the made up money it wanted. Now, he refuses to take any responsibility and prides himself on bailing us out. Talk about self-delusion!
  11. The Future of Capitalism

    This isn't the future of capitalism but business and business organization and decision-making. There is lots of money in business management. No one foresaw John D. Rockefeller or the great businessmen of the last half of the 19C. As long as you have capitalism, that is, freedom, who knows what great ideas will come forth, especially about business organization. It is probably not today’s book writers, especially those who have gone to today's universities. Look at the doom-sayers when Japan was held up as the model of achievement in the 80’s. It is a good thing that businessmen ignored them.
  12. Gold strategy

  13. Gold strategy

    Well that wasn't the biggest help. How about this, there is a lot of talk about a gold bubble. Every "bubble" that I have read about has a significant level of credit financing. My impression at this point is that there is little borrowed money supporting the gold price. What do you think?
  14. Gold strategy

    rtg24, am I doing this right? A tonne, or a metric ton is 1000 kilograms or 2.204 lbs. There are 12 Troy oz. in a lb. So a metric ton is 26.448 Troy Oz., at today's price of, say $1200 a Troy oz., is $31,737.60? To sell 400 tonnes yields $12.7 M?
  15. Gold strategy

    After an admitted quick search I don't find how much gold China bought in the last year. Do you have a number? One source suggested they haven't bought anything since the low $900s. If that is so then what sectors have pushed gold to over $1200? The Tudor letter says that etf's are the sixth largest holder, which would be like the hedge funds and add some significant volitility problems. I suspect that even the Chinese central bankers will be hesitant to continue buying as gold gets more and more expensive. I don't think that they want to see those prices until after they have made their purchases. The Tudor letter appendix certainly offered some interesting stuff. I do get a little uncomfortable when a market analysis gets so technical. There is a tendency to forget that markets are very fluid. As the letter points out at the beginning, gold is not like anyother market. You have to have a very clear idea as to why you are in it. If you are trying to make profits, especially in the short term, you are in a very risky situation. I have my own ideas how I might approach that market which do not entail trying to guess the direction but just try to take advantage of the volitility without hitting for the fenses. (As I say, they are just ideas and untested.) I think that the risk in the gold market because of the ignorance of the "investor" is larger than the equity market. If, however, it is pure defense against our government and what it is doing to the dollar that is your motivation, you ignore most of what Tudor has to say and focus on the Fed and the prospects of our government's obligations. Then you look at the willingness of the Fed to create money without accepting that they are doing so (their figures show the money supply going up over 15% in the last year). You look at Obama's willingness to spend. You look at the fact that any interest rate increace is going to put demands on the budget that they are not expecting. You look at Social Security drawing on tax revenue within a few years. You look at Medicare already drawing on tax revenue. You look at their combined drain being much larger than any part of today's federal budget. I think gold plays a big role in your self protection.