Prior to his Come to Jesus Moment during the 2008 crash, Greenspan sounded certain that the banks would never engage in crazy ponzi lending or in widespread fraud because in his model of how the world worked, companies (and especially banks) engage in rationally beneficial activity to protect their shareholders, their reputation, and their long term viability as going concerns. The self-correcting free market fixes all.
In congressional testimony on October 23, 2008, Greenspan finally conceded error on regulation. TheNew York Timeswrote, "a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending...Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken"
Ayn Rand calls this philosophy "self-regulation." It appears that Greenspan used to share this philosophy.
I agree that Rand would not have supported Greenspan's constant interventions. My point was on the concept of self-regulation in an idealized view of capitalism, and what happened when that met the widespread banking frauds that took place during the housing bubble - well documented by our friend Bill Black.
These guys print our money. I think they need actual regulation, not "self-regulation."
To me, its not an issue if we are just talking about light fiction. Its more of a deal if your banking regulator follows its precepts to the point that the banks are allowed to do just about anything because of the belief that the free market will fix all.
And who knows, maybe the free market would have fixed all. Depositors would have been wiped out, banks all would have gone down, and we'd be deep in a massively deflationary depression. I suppose that would be a fix of sorts.
And that was my only point - apologies if it was made unclearly.
I, like most Canadians, feel for you and we are all doing what we can from a distance to help those impacted by the Fort Mac disaster. Without a doubt reality is setting in in a big way for people such as yourself. You and all the other affected people will need all the emotional resilience you can muster going forward. But you can take heart that you are in Alberta, a place where the "can do" mindset is legend. It is that mindset that will help people and businesses to re-build. You also have functioning governments at various levels who thus far have done pretty good in supporting people. I have no doubt that there will be adequate support for businesses as well, even if it means more deficit spending. To not help people like you get back in the game would be to exacerbate an already bad situation. Hang tight!
That is not to say that it will necessarily be the same as what it was pre-disaster, but perhaps this will afford the big players the opportunity to put more thought and time into the rebuilding of something even better, with proper strategic thinking to manage the growth, sustainability, environmental and ecological issues. I would hate to see the out of control economic train that has been Fort Mac and the rest of the oil patch get started up again…
Also take heart that there is still a level of trust and respect in our society that prevented things from getting far worse as things unfolded. To Chris's comment:
So I think that really speaks to the cultural capital and how much that plays out in a crisis or collapse. And when your culture has been ruined by corruption and lack of trust and every man for himself, I think things go bad, worse more quickly.
I totally concur with this sentiment, which indicates to me that we are, at least in this first world country, a long way off from a systemic collapse. We still have that level of cultural capital that prevents chaos such as what might have happened in other countries, and would have made the situation far worse than what it was. That gives some level of confidence about the future - for the near term anyway.
But that is not to say that we will not be exposed to localized disasters like this Fort Mac. Each of us has unique risks according to where we live. This podcast as well as the Fort Mac disaster has me revisiting my disaster preparedness planning. It is easy to let things slip a bit as the days go by. Seconds do count at times, and that go bag and any other preps have the potential to make a big difference in both outcomes and mindset.
Good luck to you PeakOilWorker. Know that there are lots of folks pulling for you and everyone else over there.
The book posits that initially among stone (iron, copper-age? not sure) age humans, there was only 'mutualism' (termed 'communism' in the book) among tribal members. People contributed as they could, people shared, people worked together - the group survived as a whole. Slackers, liars, thieves, sociopaths were not tolerated - they were cast out or killed.
The problem with our 'capitalist' system today is that there are no real consequences for the toxic behavior of the biggest and most powerful slackers, liars, sociopaths and thieves.
I agree. I think people get too hung up on the left vs. right argument – government control of markets (communism/ socialism) vs. private (capitalism). I think the real issue is whether the people actually control the policies and future of a country (democracy) or is it a few corrupt leaders manipulating things for their own enrichment, self gratitude and greed? That's the real issue: democracy vs. dictatorship. Today I think our countries are closer to dictatorship (oligarchy) than democracy, voting is just an entertaining circus to pacify the masses into believing that they don't live in dictatorships. As the saying goes, "if voting made any difference they wouldn't let you do it" which is why we are stuck with the absurd choice between Tweedle Dee and Tweedle Dumb, both incestuous second cousins of third aunts of the same inbred family.
Ultimately I don't think either socialism or capitalism works. For various reasons both devolve into single individuals or families controlling the masses which never ends well. In the case of capitalism, it requires perpetual growth which isn't possible and leads to cronyism and extreme wealth inequality. In socialism / communism, you get terribly inefficient allocation of resources, worker apathy and hopelessness in not being able to control their future and being forced to work for the state, and centralized control always ends in corruption.
All the isms out there have their followers because each attempts to solve some observed problem in society or economics. But often times the other problems they create as a result are just as bad as the ones they try to solve. And the world is way more complex than any single ism can encapsulate to the point of effectively organizing global societies. But believers in various isms conveniently look away from the problems with their particular isms; the human mind has a funny way of doing that, kind of like Chris' post the other day in the Silicon Valley story about how we selectively create our own memories to form our identity. In a similar way I believe (hey I'm doing it too) that we fill in the blanks about how the world works in order to conform to our own particular isms so as to create an understandable narrative about how the world works and how we as individuals fit into it.
Just like so many people falsely feel that the universe owes us an energy supply forever and ever, I think almost everyone falsely believes that there is an ism out there that will effectively organize society and economics fairly and sustainably into the future. I highly doubt that, especially when we are so overpopulated.
All of the -isms work great, in theory. If everything worked as designed they'd function admirably for much longer than they typically do before running into some other limit but they all fail long before then for the simple reason that they are all built with complete disregard for human nature. Every system tends to its own flavor of corruption until it collapses in upon itself and is reborn in another form that again eschews corruption and values honesty and integrity, for a time.
I think its time to get out Hayek's title, The Road to Serfdom, and have a read. My understanding, from this work is that when economic disparities become sufficiently large in developed societies, the tendency is to drift towards a totalitarian mode of governance in order to bring things into an orderly, functioning, PLANNED economy. Rights and freedoms become secondary issues. Any wonder that massive war games are in motion in Venezuela. If you plan on implementing martial law, you need soldiers on the ground.
Ukraine is in a loosing position. My eyes popped out in my local bookshop in Dublin - " 2017 War in Europe" by none other than Sir Richard Sherreff, former deputy Commander of Supreme Allied Headquarters Europe. A fictional work based on Putin grabbing the Baltic States! Sir Richard says he wants to alert the world to the danger. And by some miracle of instant interest in european defence matters - our tame national radio station RTE decides to interview the good general on prime time. Ahem, the new director general is former BBC! And we're supposed to be neutral. It just confirms all the voices saying the US is up to something seriously no good in Central Europe.
Putin is a bad, bad, man and good old Uncle Sam is coming to help us lazy people…again, and at great expense for which do the decent thing and put our hands in our pockets for some expensive US hardware.
We are concerned primarily with what the guess speaker has to say about "bugging-out" and his experiences in the former colonies in South America. Opps! (Did someone bring up colonialism? Put him on "the list").
As such the guest is an entrepreneur with a business model and not particularly credible as an interpreter of Latin American political history. As we here understand one must be careful in seeing the world through our own interests ie. confirmation bias. So when he presents leftist governments as corrupt by nature (or is that my ears) we must then wonder about reports coming out of Brazilia (with the fascist concept in mind):
"BRAZIL TODAY AWOKE to stunning news of secret, genuinely shocking conversations involving a key minister in Brazil’s newly installed government, which shine a bright light on the actual motives and participants driving the impeachment of the country’s democratically elected president, Dilma Rousseff. The transcripts were published by the country’s largest newspaper, Folha de São Paulo, and reveal secret conversations that took place in March, just weeks before the impeachment vote in the lower house was held. They show explicit plotting between the new planning minister (then-senator), Romero Jucá, and former oil executive Sergio Machado — both of whom are formal targets of the “Car Wash” corruption investigation — as they agree that removing Dilma is the only means for ending the corruption investigation. The conversations also include discussions of the important role played in Dilma’s removal by the most powerful national institutions, including — most importantly — Brazil’s military leaders."
Here is an interesting analysis of what happens to American presidents who push back on "whatever":
The Fates of American Presidents Who Challenged the Deep State (1963-1980) アメリカの深層国家に抗した大統領の運命(1963-1980)
Peter Dale Scott
October 20, 2014
Volume 12 | Issue 43 | Number 4
In the last decade it has become more and more obvious that we have in America today what the journalists Dana Priest and William Arkin have called
two governments: the one its citizens were familiar with, operated more or less in the open: the other a parallel top secret government whose parts had mushroomed in less than a decade into a gigantic, sprawling universe of its own, visible to only a carefully vetted cadre—and its entirety . . . visible only to God.1
Mark Cochrane hit the nail on the head about all of the "isms" out there in my opinion. However, one thing that often gets left out of any discussion about Rand is how you can live in a society that elevates the individual over all that must subsist without the massive energy subsidy of fossil fuels that allows each and every one of us to have the equivalent of hundreds of slaves working for us 24/7/365. So far as I see it, her "philosophy" is one that could only come about in and industrialized society, and when the subsidy undergirding that society melts away, it will resemble nothing more than mere flotsam and jetsam along the beach. But, I digress…
Dmitry Orlov's press is publishing a book that presents an alternative to all of this left vs. right rigamarole. It looks at Dunbar's number, and how to develop structures to better leverage that dynamic in modern life. I haven't read it yet (outside of the excerpts on Dmitry's site), but it looks like something to consider.
My goal was to get away from the oil patch completely by the time I was 45. Its looking more like 47 now. Heavy industry is the most ecologically harmful thing we've done to our little world, and I'm sad to be a part of it. But, changing my life isn't an overnight thing - responsibilities, and obligations take time to fulfill. And my lifestyle hasn't been a model of environmental sensitivity. Old habits die hard, and sometimes it's tough to pop ones head out of the sphincter of consumerism.
Dave,
My brother had a theory about why the US government functioned so well for so long. It was this:
Traditionally, we have seen certain structures come to power and rule a nation ON THEIR OWN. That is, the structure seized power from all others, and held a country in dictatorship.
His theory was that those structures are capable of warring for power, and therefore must be accomodated in a legitimate way, or they will overthrow the government and seize control in an illegitimate way.
Those powers, historically, were (excluding one): the power of the charismatic leader; the power of the gentry (the princes of a nation). The power of respected, wise counsel; the power of the masses.
There is one power that I didn’t mention, that overthrew many governments. Think of the Hansa league.
It is the power of money.
For this reason, my brother contends that our government, in recognizing almost all the traditional powers, did pretty well, and made itself fairly stable. But in missing one, money, it allowed ALL the others to be overthrown by that one.
For that reason, he has long suggested a third house of Congress, and one that should REPLACE the IRS.
In that house of Congress, the members are all citizens, who are named for a three year term to a seat that is auctioned off to the highest bidder. That house has the power to block any new law. It has complete power of veto. Now, once a citizen is named by the winner of the auction (foreign or natural or corporate… anyone can win aselong as they pay), then as long as the owner of that seat affirms the citizen, the citizen may vote in the third house. The winner cannot tell that citizen how to vote, and cannot change thir holder. They CAN vacate the seat, and it will then remain vacant until it is auctioned off three years later, one auction per week, 156 seats in the third house.
Since money likes investment and investment requires stability, It is to be expected that with the advent of the third house would make the government a LOT of money from the wealthiest investors. At the same time, it would curtail the power of Congress, and curtail the money spent on lobbyists.
Just something to chew on…e
I and others have been exploring options in Central and South America with an eye toward small scale agriculture opportunities and reprieve from Canadian winter. I don't mind the cold so much as the scarcity of fresh local produce.
Any input re Panama/Colombia (potential spillover from Venezuela?) or Peru/Chile would be appreciated.
yes, i would disagree with 3 of the above statements:
that capitalism is "rule" by capital. capitalism doesn't rule anyone, it has no dogma, it makes no demands upon you. let's not confuse capitalism with cronyism. unless you consider offering someone a financial incentive which they can voluntarily accept or reject, as "rule".
and, disagree with the claim that capitalism is contrary to the free market.
in fact, capitalism is synonymous with the free market.
capitalism gives space to engage in free and voluntary trade, with minimal or ideally no interference from those that employ force or coercion (i.e., government).
and disagree "that central banks are absolutely necessary for the binding of all governance to capital." not sure what your basis for saying this is, it makes no sense to me. central banks are absolutely unnecessary in any way, and are in fact downright destructive with their misguided policies. they are a plague upon humanity, and their main function is to oppress and enslave, to siphon wealth away from their victims (citizens).