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Amazing. The more Gorr talks, the less sense he makes!

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@Chris

damn that gorr is regular commedian. Click on his name to get hours of endless enjoyment as you read through his posts. Here let me share this gem....

Gorr said
" I said many times and i repeat it for the last time that this system work up to 100%. It was written in the old bible more then 2009 years ago. Many retarded souls are writting unbelievables innepcies here. They are maybe looking for informations but when you got these informations then wake-up and stop always asking the same question about infinity and eternal life. Me i write about the car that im looking to buy. Don't put silly beliefs along my way of finding the car that i want to buy. Buy what you want, i don't mind but as for me i will buy only hho technology to replace my dodge neon 2005 5 speeds."'


OMGWTFBBQ! LMAO!!!!

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Excuse me, but it is a loan, meaning it needs to be paid back with interest. I do believe that is old fashion capitalistic investment, something Adam Smith would approve of.

Adam Smith considered it prudent for governments to invest in industries vital to their countries security, and evenm if necessary, to subsidize it. In Adam Smiths time, that meant shipbuilding and sailcloth making for the British navy. Today it means investing in industries that help wean us off of oil imported from hostile regimes, and this is one of the businesses that can do just that.

Better be more careful with your rants, Tim, or we might start mistaking you for Gorr!

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By the way, nothing is preventing Venture Capitalists from investing in these firms, and several already have.

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@Chris
Its not a loan if the go bankrupt and fail to pay it back. I have no reason to beleive that the Govt will ever see a dime of that money back and our grandchildren will be left with the tab.

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Money given with the expectation of repayment with interest is considered a loan even if bankruptcy prevents repayment, that is a risk any lender must accept. Of course, the lender must consider the risk to be acceptable or the loan would not be issued. In the event of bankruptcy, the lenders get in line with other creditors, and the bankruptcy court sells what assets are left and determines how much money each creditor gets, if any.

Of course, government lenders and taxmen are usually first in line for repayment in a bankruptcy.

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"the lender must consider the risk to be acceptable or the loan would not be issued."

exactly and herein lies the issue. No one will lend GM the money they need because the risk is too great. Banks who understand risk have said no. But congress who knows nothing about banking sees fit to "loan" billions to companies that are not credit worthy. This is a bailout and not a loan because the risk if too great and the chance of repayment is ZERO

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Tim said: "there is NO excuse for redistribution or destroying free market forces except keeping monopolies from forming!"

Oh really?

http://www.falmanac.com/2008/09/swill-milk.html
http://en.wikipedia.org/wiki/Enron
http://www.historyplace.com/unitedstates/childlabor/hughestown2.jpg

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http://en.wikipedia.org/wiki/Savings_and_loan_crisis
http://mostlywater.org/legal_drug_pushers_under_fire
http://www.rollingstone.com/politics/story/12840743/porks_dirty_secret_the_nations_top_hog_producer_is_also_one_of_americas_worst_polluters


And that's really just the tip of the iceberg. Really, if you understand that monopoly is a bad thing, and you recognize that monopolies tend to form in a free market left unchecked, then how can you possibly still think that the free market always produces positive results? Doublethink?

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Redistribution is what business is all about - A company provides goods or services to you, and gets some of your wealth as payment. You, in turn, provide some service or goods to others to gain your wealth. It's the same with government, it provides an array of services, and the taxes and fees you pay are payment for those services. When another business gets your money for payment, it can use that money to pay bills and employees, buy supplies, make contributions, or invest in whatever it wants to invest in. Why should the government be any different? As a citizen, thus a "shareholder" in the government, you can complain loudly if you feel it is a bad investment, or blow the whistle if you think some government spending is unwarranted or unethical or illegal - but please remember that there are other citizen shareholders who think this investment is a very good and wise one for the government to make.

Tim, I looked up some information on the "Community Reinvestment Act" on Wikipedia, and, just as I suspected, you're waaay off! The CRA was set up in 1977 to discourage the practice of "redlining" (refusing to loan based solely on location or ethnic makup) and to enforce provisions of the Equal Credit Opportunity Act which prohibited discrimination in lending on the basis of race, religion, national origin, sex, marital status, or age. The law does not require institutions to make high risk loans that may bring losses, and it emphasizes that CRA activities should be undertaken in a fiscally safe and sound manner. So, you see, there was no law requiring anyone to make bad loans, the CRA actually encouraged good lending practices, and several banks are financially sound precisely because they did not make high risk loans that went bad.

No, the credit crisis occured because the Republicans deregulated the banks, allowing them to make high risk loans that had previously been restricted or prohibited by banking regulations. Some bankers figured those high risk loans could be very profitable, real estate values were going up, so even if there was a forclosure the banks thought theyd get their money back and then some. Some buyers figured they could take a "interest only" loan for a few years, watch the value rise, then sell at a profit. These "low downpayment" or "no downpayment" loans drove a speculative bubble that artificially inflated the real estate market to far higher prices than were sustainable. Eventually, the faltering economy caused prices to drop a bit, which caused some of those "no down interest only" loaners to bail out, as they had no equity. That in turn drove prices down more, and the bubble burst, prices settled back to realistic figures, but all those foreclosures caused huge loan losses to those banks that made those high risk loans.

I don't care much for the Ludwig von Mises institute "Austrian School" of economics, its laissez faire attitude lead to the deregulation that allowed bad loan practices to flourish. Tim rightly denounced the Neo-conservatives, but for the wrong reasons. The "neocon" advisers to Bush jr. are for the most part followers of the Austrian school of economics, including Paul Wolfowitz and Richard Perle. Their "Iraq plan" was to have US companies sweep in with no government interference, they thought that would result in an economic boom that would swiftly rebuild Iraq. Didn't happen, they didn't realize that capitalism simply doesn't work without security, order, rule of law and regulation.

Tim, you've been listening to the wrong kind of people, the kind that think the banks should never loan money to those other kinds of people - the ones living in the wrong neighborhoods, the ones going to the wrong church, the ones in the wrong social circles, the ones with the wrong accent, the one with the wrong color...

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Tim, I notice you trashed Chris M for talking economics in a reasonable and civil manner, but you completely ignored my post, which left your argument looking like Swiss cheese. All of the links I posted lead to pages that discuss severe problems caused by unregulated markets:
The swill milk scandal in New York in the 1850s poisoned huge numbers of young children, much like today's melamine scandal in China.
Enron was a company that took advantage of foolish deregulation in both the California energy markets and the financial system, and their greed led to massive fraud that did severe damage to the economy.
Child laborers were a common sight in the 19th and early 20th centuries. These children worked over 10 hours a day in deplorable working conditions, and vast numbers of them died very early deaths (we're talking death at age 12 from black lung or getting crushed by machinery). You seem like the type of person who despises unions, Tim, but you ought to consider what the working world would be like today without the many improvements unions have won (banning child labor, improving working conditions, overtime pay, worker's compensation, etc).
The Savings and Loan crisis was the result of foolish deregulation of savings and loan institutions which resulted in their taking risks far beyond what was appropriate. In order to keep the economy from taking, the government was forced to step in and pay well over $100 billion to cover the losses incurred by foolish and in some cases fraudulent S&L practices. Sound familiar?
Pharmaceutical companies have taken to pushing drugs for conditions that don't exist and manipulating trial data to trick doctors into thinking the drugs work exceptionally well when they may be almost useless (or, in the case of antidepressants prescribed to young people, worse than useless, given the increased risk of suicide that can be caused by antidepressants).
Last but not least, hog farms have grown so large that the waste products generated are completely unmanageable. Agribusinesses store the waste products in giant "lagoons." When I say 'waste,' i meant not only excrement but also blood, guts, extra antibiotics, and God only knows what else, all of which combine to form a pinkish sludge that stinks so badly that property values are destroyed for miles around because everything smells like pig sh*t. As if ruined real estate markets and lagoons full of crap weren't bad enough, the lagoons inevitably leak, allowing a certain deadly microbe that thrives in these lagoons out into the water supply. Some workers at hog farms have severe brain damage caused by these microbes.

I didn't even bother to bring up the current banking crisis, but that's on the list as well. Every one of these instances is a case of free market forces being allowed to push in the wrong direction. The tainted milk scandals are caused by greedy businessmen trying to increase profits by watering down their milk. Enron was the result of the profit motive gone awry, as the company's executives were rewarded for taking massive risks and/or committing fraud (there was a lot going on inside Enron) that miraculously paid off due to the thriving economy (but then when the recession hit after 9/11, Enron's house of cards came crashing down). Child labor was cheaper than adult labor, and children were easier to exploit, so companies took advantage of these facts in order to make bigger profits (interestingly, union opposition to child labor wasn't really altruistic at all--they were simply sick of losing jobs to kids). Savings and Loans were simply doing what they had to do to make a profit--that is, take significant risk, because their business model was obsolete. Big Pharma just wants to sell as many pills as possible. And hog farmers are just trying to meet demand for pork.

Don't get me wrong--I cherish and respect the power of economic markets. But I think you've mischaracterized Keynesianism. Keynesians understand that the free market doesn't always do the right thing, and that constant, careful, and well-planned government regulation can ensure that the market always produces desirable results. In practice, of course, our country is ruled democratically, which means we have moronic people frequently picking moronic leaders to elect to Congress, so well-planned and careful never really happen. Meanwhile, power continually shifts between the left and the right, meaning regulation is anything but constant.

Still, I'd rather have less-than-ideal regulation than none at all. After all, the law against murder, for example, isn't really that different from economic regulations. People who kill other people generally aren't welcome in social gatherings, so murder is clearly not in anyone's self-interest. Should we therefore legalize murder? Of course not, because people who kill other people are rarely thinking rationally. And neither are people who, despite having millions in the bank, try to eke out every penny they can and damn the consequences. In addition, people in both cases do their level best to hide what they're doing, so enforcement of regulations is crucial to keeping things running smoothly.

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SteveCT,

I’m not going to debate EACH point because that could take volumes however, I like any follower of Austrian economics understand and agree that limited regulation is needed to keep monopolies (like the Fed or the Federal Gov’t) from taking over with unlimited power. Rule of LAW, not rule of the tyrant MAN!

It is the courts who protect the citizens by punishing those responsible to the atrocities you referred to. Unfortunately, today’s courts are clogged with the trial lawyer’s legal get rich quick lottery but “loser pays” and “limited damages” would help end the lottery winning’s lawyer split scam. (the bar monopoly would NEVER allow that!)

Anyway, please read the 10th Amendment to the Constitution for guidance regarding the form that regulation should take.

Leaving these things to the States would create 50 competitors fighting hard for corporate and private citizen tax base. This aggressive competition for OUR tax dollars would provide better and more diverse services and an environment for innovation to ALL at far lower gov't costs. Central planning does just the opposite.

Again, the Austrians are NOT anarchists, however the Keynesians ARE socialists and we all know what happened to the Soviets.

If you don’t like the supreme law (Constitution), then work within its framework to LEGALLY change it. Each congressman SWORE AN OATH of office to: “support and defend the Constitution of the United States against all enemies, foreign and domestic…” and can only “legally” adjust is as needed via its own provisions.

NEVER interpret or ignore parts of the law because they are not convenient to your political ends. Remember “equal protection and equal application of law”?

If we all acted like the president or congress and ignored or interpreted parts we didn’t’ like…

Well, then that IS anarchy!

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