Craig White wrote:
> On Sat, 2009-08-01 at 21:20 -0700, keith smith wrote:
>   
>> If you are referring to the courts that is one thing the government
>> needs to do.
>>
>> Water
>> Sewer
>> Trash pickup
>> Streets
>> Police
>> Fire 
>> Standing Army 
>> and one or two other things.
>>
>> Everything else needs to be removed from the government.
>>
>> Using the courts to resolve a dispute is differently from the
>> government providing for our business needs.
>>
>> Free enterprise.  Do you think as a small business owner I am afforded
>> any protection under the law.  Not happening.  Only the big guys get
>> help from the government.
>>
>> I really have to get a few things done so i will sing off for now.
>>
>>
>>     
In NH, we got our own water, sewage, and trash. Why is government
necessary for those things? Even roads maybe (though there are bigger
things to think about), many of the highways are tollways.
> Keep in mind I'm for small government and a free market.the problem is that free market has now proven to be a disaster. The
> current economic mess is a direct result of deregulating things like the
> banks, Wall Street, etc. While the John Galt logic sounded pretty good,
> it simply didn't work and the great Ayn Rand disciple, Greenspan got it
> all wrong. We are paying the consequences for this now and will be
> paying even more consequences as the next wave of home and commercial
> property foreclosures ramp up, unemployment starts to climb again and
> more and more people's unemployment benefits expire. Free market is a
> great concept that simply doesn't work because corporate interests are
> predatory and irresponsible.
>
> The acknowledgment that essential government services listed above
> justifies the role of government and you want to argue that it should do
> no more. There is much more government should be doing...but they have
> abrogated their responsibilities in things like consumer protection. 
>
> Government will always be a problem but no government is a worse problem
> considering the amount of people and the current trend of business
> practices.
I would examine the "free market" again. We are /not/ in a free market,
and haven't even been close to one for a while. We never deregulated
anything, indeed, the pages of regulation haven't decreased since Regan.
Greenspan turned out to be one of the biggest interventionists, only
outdone by Bernanke. You can't blame the mess on bankers, if they didn't
make those decisions someone else would have, and the outcome wouldn't
have been any different (in other words, it is a symptom, not a cause).
The problem stems from many central banks including our own Federal
reserve cutting interest rates from 2001-2004 by (essentially)
"printing" money. Since the housing market was one of the most regulated
(that is to say, there were government-enforced lending standards and
intervention my Fannie and Freddie), so people spent that new money on
houses before anything else (Oil too, because energy is closely tied to
the market), drove prices up, created a misallocation of capital
disproportionate with consumer demand, and we crashed when not enough
people could humanly gather the money to buy a new house at the price
they were at.

Too many people get mislead by the number on the money, ignore the
money, that isn't what an economy is about. It is about exchange and
production. It is impossible measure how much an economy satisfies
people's wants, some of their wants may not involve exchange with other
people (so-called autistic exchange, which cannot be measured). Every
dollar spent bailing out companies is a dollar that cannot be used to
make televisions cheaper, or is a dollar that cannot be used to buy
food. Every dollar borrowed by government is one that cannot be loaned
out to a private investor, and raises interest rates at that. Every
dollar printed by government is one that was not in turn made with any
productive effort valued by someone else, and raises prices for the
people who are honest, without getting any raise in their income to
compensate. If GM collapsed, who knows how many companies would have
wanted to buy their machinery to build electric cars cheaper, or invent
the next great mode of transportation. Just because GM collapses,
doesn't mean that the workers no longer are allowed to work, nor does it
mean that the capital has vanished into thin air. It all still exists,
to be re-allocated to a use /better/ and cheaper than cars (or
specifically better than GM cars, if purchased by another car company),
as judged by who who would value it the most (able to pay the most).
Recessions are created by debt and caused by a bad structure of capital.
We need to embrace failure, it lowers prices that allows us to pay off
debt and re-form the right kinds of capital that will satisfy our wants
more effectively then if we did not.

This is why I oppose any and all science, art, think tank, and
infrastructure funding. People allocate what they have to what they have
(goods, which here includes renting their labor), to the most urgent
needs first. If the only way an oil pipeline can be built is to force
people to pay for it, then they are losing out on something they desire
more. So how does infrastructure come about then? Conversion of capital.
Money saved in a bank is effectively, for the purposes of economics, the
same as the infrastructure (capital) itself, but time-delayed. (Interest
rates play in, being the rate at which people value something now over
something in the future.) People pool their savings in a bank, and the
more people who save, the more they intend to defer their consumption
until later. Since we have differed consumption, interest rates go down,
and this money can be loaned out - to buy capital that will be able to
produce the things people will want in the future. This is why Europe
was able to advance so much more than the rest of the world until the
industrial age, and especially the Native Americans who had /no/ pool of
capital, because it had a far more modern banking system. It is the
detail of why the Soviet Union failed (no savings, no capital). Only
when the savings pool is more than the cost of the capital can it be
undertaken, otherwise it will be a malinvestment and better spent on
other projects. This is a very difficult thing to grasp, it has taken me
much studying to even be able to explain this, hopefully it suffices. I
also want to note, this is why manipulating interest rates is a /very
bad idea/, because it encourages capital growth, like more houses or
factories for instance, when people don't have the savings to draw from
once they are manufactured - that is to say, people won't be able to
exchange for the new capital at the time of their maturity at the rate
that was expected when development began. This is why a bust follows an
artificial boom, almost like clockwork throughout history (though, the
same type of bust can also be caused without a boom by other things,
there is no difference between a bust caused by too much spending in
energy and a bust caused by a broken oil pipeline that forces people
dependent on oil out of business).

On topic, try a solar water heater. Solar anything. We haven't used
electric heating for the past two months and are saving about $50/mo
because of it. Take a look at what resources an economy has, in the case
of Arizona, there is have labor, some types of crops, copper and other
metals, and sun, and I know other things too. Phoenix especially is
funny because it is (I think) the first big city not built next to
water, usually you need transportation to be able to grow. Anyways, look
for things that use the resources around you. Things powered by solar
and simple electronic components (fasteners, wires and cables perhaps)
come to mind.

Austin Wright.

PS. If this is at all interesting consider reading /Man, Economy, and
State/.
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