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Real_Trouble -> RE: "Why the US is collapsing" (3/25/2008 9:45:26 PM)
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IP law is nonsense. Copyrights and Patents have simply run amok and it's going to end. It is de facto over, visit China - look at the internet. It was an embarrassing part of our legal system from the first.
I think there is a major difference between having IP laws and not having IP laws, and if we end up in a world without them, we've got a huge fucking problem on our hands. Part of the issue is that high end research science and progress costs so much money at this point that, without being assured of some kind of yield for pursuing it, it's a stupid industry. I mean, I can throw money off a bridge, too, if I just want to totally freaking waste it.
Lacking any kind of IP laws (this is not to say the ones we have are ideal, just that not having them at all is worse) is going to depress medical and technological research and innovation badly. Compare the rates of research and spending from the era directly before IP laws were fully ensconced to what came after and you will see what I'm talking about.
Now, that is personal opinion, but I think if we don't protect the value of idea innovation, we hurt the chances of it happening.
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What are the unintended consequences of a perfectly stable gold-based monetary system? That I'd like to hear, or better yet - proved.
This one is easy. Bernanke wrote quite a bit about the fiscal policy of the US and the Great Depression. I don't have the links handy, but I'm sure a bit of research could turn them up. The general summary is that when you most need the ability to expand your money supply (such as to prevent the bank failures that were rampant during the Great Depression to prevent further stress on the system, correlated bank failures, freezing of assets for individuals leading to economic devastation or durress, and the ability to consolidate or sell off distressed banks - which you cannot do when they go bankrupt and their assets are frozen) you will not have it! The country is having economic problems, the ability to expand the monetary reserve is not present, and it means that you invariably contract your money supply precisely at the time when contracting your money supply will do serious damage to your economy.
Bernanke's point, and we can see what he was talking about with the recent implosion of Bear Stearns, is that if you allow major banks to fail and do not provide some form of monetary expansion or liquidity in order to protect their creditors and depositors (ie - fuck the shareholders, they gambled and lost, but people who had deposited THIER money with Bear's commercial banking division shouldn't either lose it all or have it tied up for years in bankruptcy court because someone else fucked up, nor should their short term creditors get burned or they won't lend to others who need it), you create more problems than you had to begin with.
If Bear went down naked, for example, and a large body of hedge funds and asset management funds suddenly had all of their assets frozen, and thus also went bankrupt, and... (you can see where this chain goes, and it's precisely what happened with the bank failures in the Great Depression). All bad.
Like I said, I'm not for unlimited expansionist monetary policies; I think we've done ourselves some harm with that and should have taken our medicine in 2001 during the dot com burst rather than trying to loan our way out of it then. So don't take this as me being for unlimited printing of money; I'm not. But currently, when you have things like bank failures, you don't want to have your hands tied by an arbitrary standard and end up fiddling while Rome burns, so to speak.
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I think some people are missing the big point here: if the dollar is no longer the *ONLY* monetary system the world is trading in, then at best its going to become more and more marginalized over time. Maybe there would be nothing wrong with that in itself - except that the Euro is ascendant! So long term, we could really be screwed. And all the mercenaries it will take to protect our financial interests cannot be bought with dollars of decreasing value. Ain't gonna happen. And I sure as hell will not fight to protect the interests of the corporate elite.
The dollar never has been the only one. There is a somewhat naive view among Americans that this is the case, but America is hardly the only world banking center. Try talking to a London banker and telling him the dollar is the world currency, and good luck not getting punched in the fucking mouth. Point is, currencies wax and wane, and the Euro is justifiably strong right now.
But economic cycles come and go. Everyone is too hyped up at the top, and too depressed at the bottom. The dollar not being the de-facto only standard is not going to tank the entire US and demolish our nation; it would be naive to think that. Germany has withstood far worse, in fact (though they got the Nazis out of the bargain at one point).
A de-leveraging of US debt and decline in the value of the dollar is not all bad, either. We are overindebted, and the sooner that changes, the better. You don't want to hamstring your economy for a decade and a half (and still running) like Japan has. Secondly, a lower dollar means a smaller trade deficit (or even a trade surplus), because that turns around the import / export relationship.
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We may now be living in a world that has decided the U.S. simply doesn't matter as much as it used to. And that opinion will choke us to death.
No one else is going to drink the kool-aid with us because they are too busy buying Euros and protecting themselves against our foreseeable collapse.
Or we can just adjust, get our house in order, and hopefully go back to another big boom as a result of that. I do agree that the US is not the only major player now, and that many other countries are catching up, but I don't believe that is necessarily a bad thing, either. It's only a bad thing if you handle it by being stupid, but that can be said of many, many things...
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