Daily Digest

Daily Digest - May 5

Tuesday, May 5, 2009, 10:23 AM
  • China has 'canceled US credit card': lawmaker
  • Worries Rise on the Size of U.S. Debt
  • Expert: get out of western sovereign bonds (Video on page)
  • Gold off to the Races? Buffet Claims Inflation going...UP
  • WSJ: Banks Tighten Corporate Credit Lines
  • HomeOwner’s Equity: Less than 15%
  • Bogus Expert/Forecast Alert (Latest Column for the Huffington Post)
  • Dark Clouds Hanging Over Sunshine State?
  • A Conflict of Interest is Not a Conflict of Interest If It Involves Goldman
  • America's Banks 101 (H/T Mike Pilat, Video)
  • New Stress Trial Balloon Floated
  • World's major rivers 'drying up'

Economy

China has 'canceled US credit card': lawmaker

China, wary of the troubled US economy, has already "canceled America's credit card" by cutting down purchases of debt, a US congressman said Thursday.

Worries Rise on the Size of U.S. Debt

Then there is the concern that the interest the government must pay on its debt obligations may become unsustainable or weigh on future generations. The Congressional Budget Office expects interest payments to more than quadruple in the next decade as Washington borrows and spends, to $806 billion by 2019 from $172 billion next year.

“You’re just paying more and more interest and having to borrow more and more money to pay the interest,” said Charles S. Konigsberg, chief budget counsel for the Concord Coalition, which advocates lower deficits. “It diverts a tremendous amount of resources, of taxpayer dollars.”

Of course, no one is suggesting the United States will have problems paying the interest on its debt. On Wednesday, even as it announced its huge financing needs for the latest quarter, the Treasury said financial markets could accommodate the flood of new bonds. “We feel confident that we can address these large borrowing needs,” said Karthik Ramanathan, the Treasury’s acting assistant secretary for financial markets.

One worry, however, is that there are fewer eager lenders to buy all that American debt. Most of the world is in recession, and other nations have rising borrowing needs as well. As other nations’ surpluses turn to deficits, America will face competition in global financial markets for its borrowing needs. For the moment, the United States is actually benefiting from a flight to quality into Treasuries brought on by the global financial crisis, which helped reduce rates to record lows this winter. But the influx will not continue forever.

China has lent immense sums to the United States — about two-thirds of its central bank’s $1.95 trillion in foreign reserves is believed to be in United States securities — but it has begun to voice concerns about America’s financial health.

To calm nerves and fill the deficit hole, the government is getting creative. The Treasury is ramping up its auction calendar, holding more frequent sales of government debt and selling the debt in expanded amounts. It is now holding sales of its 30-year bond each month, up from four times annually.

It is also resuscitating previously discontinued bonds, such as the seven-year note and the three-year note, to try to mop up any available money all along the yield curve. There is even talk of issuing billions of dollars of a new 50-year bond, though the idea has not won official approval.

On a second front, the Treasury and the Federal Reserve are trying to bolster the mechanics of the market — to make sure every auction goes smoothly. With such enormous sums involved, every extra basis point on the interest rate the government pays could mean extra billions of dollars for the taxpayer. Earlier this year, when demand was hesitant at a Treasury auction and when a British bond auction went poorly, investors grew nervous that the government might struggle to sell its mountain of debt.

To avoid such an outcome and to keep borrowing costs low, the government is trying to expand the group of firms that bid at Treasury auctions. After the demise of such names as Lehman Brothers, the number of these firms, called primary dealers, has shrunk to 16, the smallest since this elite club was formed decades ago. Now the government is in discussions with smaller firms like Nomura and MF Global to persuade them to join.

Expert: get out of western sovereign bonds (Video on page) 

Martin Hennecke, a frequent guest on CNBC, is recommending that investors who have fled to cash and government bonds need to rethink that strategy. He sees inflation on the horizon and warns that western sovereign bonds will suffer as a result and sitting on cash will be throwing money away.

The crux of his thesis rests on the huge budget deficits now being run by western countries to reflate their economies. These deficits must be funded and the fear is they will simply be monetized through printing money a.k.a quantitative easing by western central banks. This policy used to ward of the potential of deflation gives the potential for lots of inflation down the line if the excess liquidity is not retracted.

While I agree that the renewed risk of inflation exists (the Q1 U.S. GDP report demonstrating this), I am skeptical whether inflation will be a problem for the immediate future. Nevertheless, his view that vigilance against getting trapped in depreciating assets once inflation reappears is well in-line with how I see things.

He recommends commodities and precious metals as a hedge. He also recommends staying away from export-dependent Asian shares. But, he does see “some good picks” in domestic Chinese shares and elsewhere in Asia.

Hennecke makes some interesting comments about the Dollar and the Yuan as reserve currencies. Have a look at the video below. 

Gold off to the Races? Buffet Claims Inflation going...UP

Gold may be "off to the races" if prices break resistance levels at $US950 to $US960 an ounce, according to Jeffrey Rhodes, a Dubai-based trader with International Assets Holding.

Prices may surpass $US1200 an ounce this year, more than the record $US1032.70 reached in March 2008, Rhodes said. Gold peaked at $US1006.29 this year on February 20. Gold’s support level is at about $US850 an ounce, he said. Support is where buy orders may be clustered and resistance is where there may be sell orders.

"A number that would get everyone very excited would be $US1005 an ounce," Rhodes said in an interview April 27.

Gold for immediate delivery has advanced for eight consecutive years, the longest winning streak since at least 1948. Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by gold, almost doubled in 12 months and overtook Switzerland as the world’s sixth-largest gold holding. Gold has gained 0.5% this year to $US886.55 an ounce at the close of trading May 1.

WSJ: Banks Tighten Corporate Credit Lines

From the WSJ: Banks Get Tougher on Credit Line Conditions

Banks are shortening the terms on lines of credit ... They are charging significantly higher fees for the lines of credit, known as revolvers. And instead of promising an interest rate determined mainly by the company's credit rating, banks will now charge more if the cost of insuring the company's debt against default is higher.

About 72% of the revolving credit facilities obtained by investment-grade companies in the first quarter of 2009 had 364-day maturities, or tenors, and no companies received five-year lines ... In the same period a year ago, 30% of the facilities were for 364 days and 41% had five-year maturities.

There are two key changes: the duration has been shortened, and the interest rate is based on the price of default insurance (as opposed to credit rating). Another snub of the ratings agencies!

Also on lending standards, the Fed's April Senior Loan Officer Survey on bank lending practices will probably be released this week.

HomeOwner’s Equity: Less than 15%

Interesting discussion on negative equity in this week’s Barron’s. Citing Stephanie Pomboy’s recent missive, Alan Abelson takes a closer look at some of the negative details around corporate profitability and homeowner equity.

When it comes to Homeowners Equity, the official data is misleading. Why? Pomboy notes the Fed data is accurate but misleading. It includes both the homes with mortgages and those owned free and clear.

Why is this significant? About a third of homes have no mortgages whatsoever. The unencumbered properties improve the homeowners equity data from the Fed’s Flow of Funds report. Add in 33% of homes with 100% equity and it skews the data. The total looks better.

before you say “So What?” co the following: We know that those homeowners that do not have mortgages — i.e., 100% equity — cannot default. So if we want to understand the potential further mischief real estate land can cause, it is the mortgaged properties we should be watching. Back out the third of home owners that have no mortgage — the 33% of homes with 100% equity — and the Fed’s measure of 43% net equity drops precipitously.

Thus, Pomboy’s assertion that it would be more informative to say that those homes with a mortgage have homeonwers equity of less than 15%.

Here’s the Barron’s excerpt:

“The complacent reaction among the investment cognoscenti is that the credit markets are wildly oversold. More likely, she sniffs, it has something to do with the fact that “an overwhelming portion of some $8 trillion in mortgage debt (or 80% of the total) is teetering on the edge of, or in some state of, negative equity.”

As to the Fed’s claim that the equity of homeowners as a group stands at 43%, she points out that what the Fed neglects to tell you is that roughly a third of them have their houses free and clear. Lo and behold, some basic arithmetic reveals that 67% of homeowners with mortgages have equity of less than 15%. That, Stephanie comments drily, suggests the “destruction priced into the credit markets hardly seems out of whack with potential reality.”

And while, thanks to “the transfer of toxic assets to taxpayers” and the magic of accounting legerdemain, the scarred financials to some significant extent may be spared further pain, the same, alas, can’t be said for the nonfinancial sector. Little recognized, she insists, is how much the extraordinary gains in domestic nonfinancial profits from the low in 2001 to the peak in 2006 — a stunning rise of 388% — owed to the housing bubble.”

Ouch . . .

Bogus Expert/Forecast Alert (Latest Column for the Huffington Post)

So much for being ahead of the curve! Aside from the fact that one of the worst downturns this century (which had been correctly anticipated by yours truly and other [mostly] non-economists) began only a month after ECRI discounted this possibility, it took a further three months for the "forecaster" to acknowledge what many ordinary Americans already knew was taking place (see "UPDATE 1-Leading Index Shows US Economy in Recession, ECRI Says").

My first question is: Why do ECRI's opinions about the future matter?

And my second question is: Is it any wonder that the mainstream media keeps losing credibility -- and its audience?

Dark Clouds Hanging Over Sunshine State?

Following up to my last post on systemic fraud at public pension funds, Sydney Freedburg sent me her latest article, Florida investment agency uses smoke, mirrors (added emphasis and notes are mine):

Front and center on its Web site, the agency that invests $118 billion for Floridians showcases its code of ethics: "It's all about … Trust — Performance — Integrity.''

Most people take that as an article of faith, that the state is investing money for retirees and others wisely. But when the agency has fielded inquiries, it has often been about obfuscation, omission and falsehood.

[Note: When you are hiding the truth, remember the three O's: Obfuscate, Obfuscate, Obfuscate!]

When a community college employee asked if his pension money was in risky securities sliding on Wall Street, the answer he got was misleading and false.

When a city official with $26 million invested with the state asked if the money was safe, the people who run the state fund brushed him off.

When another city official asked if a $425 million investment was safe, the agency gave an answer the city considered so misleading that it asked the FBI to investigate.

When the agency's employees privately fretted about losses and shaky investments, their bosses told retirees and state and local officials that everything was fine. They even misled the three people charged with oversight of the agency: the governor, the chief financial officer and the attorney general.

This picture emerges from a St. Petersburg Times review of thousands of e-mails and confidential memos, financial records, transcripts and other reports issued from late 2006 to 2009.

The documents reveal an agency, the State Board of Administration, that often clouds its public statements in complicated language and corporate speak that obscure the truth.

Pressed for answers, the agency's managers sometimes dodged or equivocated. Sometimes they offered assurances that were technically accurate but gave a distorted picture. Sometimes their responses were simply false.

The managers say that they never tried to deceive anyone but acknowledge that they need to be more open. Executive director Ash Williams said the agency offers free, one-on-one investment counseling and is working to improve its disclosure about investments that it makes with the taxpayers' money.

"We want to be as straightforward as we can,'' Williams said. "We're trying to disclose as much as we can in the spirit of openness.''

Tanya Beder, a risk-management expert who audited an SBA fund for the Legislature last year, agreed to review documents for the Times.

When it comes to disclosure, she said, she saw a continuation of the attitude that she found during her audit: Senior managers believe it is up to investors to ask rather than the duty of the agency to disclose.

"This attitude is troubling,'' Beder said. "It places a huge burden on investors to ask exactly the right question."

A Conflict of Interest is Not a Conflict of Interest If It Involves Goldman

The Federal Reserve Bank of New York shaped Washington's response to the financial crisis late last year, which buoyed Goldman Sachs Group Inc. and other Wall Street firms. Goldman received speedy approval to become a bank holding company in September and a $10 billion capital injection soon after.

During that time, the New York Fed's chairman, Stephen Friedman, sat on Goldman's board and had a large holding in Goldman stock, which because of Goldman's new status as a bank holding company was a violation of Federal Reserve policy.

The New York Fed asked for a waiver, which, after about 2½ months, the Fed granted. While it was weighing the request, Mr. Friedman bought 37,300 more Goldman shares in December. They've since risen $1.7 million in value.

Yves here. It's bad enough that Friedman owned Goldman shares while involved in policy discussions that would affect the bank. The fact that he went and bought more shares is breathtaking. Of course, this shows a huge deficiency in Fed procedures. Directors should be barred from trading stocks in any institution regulated by the Fed. While it is technically not inside information (you need to be an insider of the company in question, that is, have a fiduciary duty to its shareholders), it certainly raises the specter of trading on privileged information.

America's Banks 101 (H/T Mike Pilat, Video)

New Stress Trial Balloon Floated

I'd wait till Meredith Whitney weighs in.

Environment

World's major rivers 'drying up' 

Researchers from the US-based National Center for Atmospheric Research (NCAR) analysed data combined with computer models to assess flow in 925 rivers — nearly three quarters of the world's running water supply — between 1948 and 2004.

A third of these had registered a change in flow and most of them — including the Niger in West Africa, the Ganges in South Asia and the Yellow River in China — were dryer.

"Reduced run-off is increasing the pressure on freshwater resources in much of the world, especially with more demand for water as population increases. Freshwater being a vital resource, the downward trends are a great concern," said Aiguo Dai, a scientist at NCAR and lead author of the research.

Rivers are losing water for a variety of possible reasons, say the researchers, including the installation of dams and the use of water for agriculture. But in many cases the decrease in flow is because of climate change, which is altering rainfall patterns and increasing evaporation because of higher temperatures.

16 Comments

Mike Pilat's picture
Mike Pilat
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 929
Re: Daily Digest - May 5

I continue to be amazed that anyone can give a benefit of the doubt to some of the leaders of the FED and Goldman Sachs. The amount of "cooperation" going on between the two groups seems much more than appropriate. Motives have already been established as the above article indicates. Some people are catching on and linking to all sorts of articles and news events to expose the cozy relationship Goldman enjoys with the "independent" Federal Reserve and US Treasury. See here: http://www.goldmansachs666.com

We can call this democracy, we can call this freedom, we can call this government by the People. But we'd be fibbing to ourselves the same way we do with all the Spin Cycles that Chris has exposed lately. I can name my car "the Murcielago," but that doesn't make it one.

Public awareness and true understanding of the real issues that are defining this country are the only solution, in my opinion. Unfortunately, the Spin Cycle has stymied the minds of the masses.

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1323
America's banks 101 - Misses the point

The problem is yes, banks are a problem, but why were they able to become such a problem.  The quick and easy answer is to say not enough regulation, but the problem is much deeper than that.  It's the fact that we have an fiat money system that is politically controlled.  As long as that is the case, no amount of regulation/deregulation will matter.  Politically controlled money will result in malinvestment.

Just ask, how were these banks able to get the billions to run their gambling scheme?  The answer is loose credit by the Fed.  It's time to place the blame where it is due, the Fed.  

Unfortunantely, the federal government is going to quickly make the bank loses irrelevant as they print and spend enough to cover over all of it, and how will they do it, by saying we must have more and more regulation and thus more and more government employees that produce nothing.

Time to buy more gold and silver........

 

-- Rob

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Re: Daily Digest - May 5

"Altruism: The Moral Root of the Financial Crisis"

By surveying the government interventions that caused the latest turmoil and wealth destruction in housing and banking, this article will demonstrate that the current financial crisis was caused not by a return to free markets or pro-capitalist policies in the past decade, but by a tragic progression toward socialism. More importantly, it will demonstrate that altruism—the notion that being moral consists in sacrificing oneself for the needs of others—is the basis for this government intervention, and thus the root cause of the crisis."

http://www.capmag.com/article.asp?ID=5503

maveri's picture
maveri
Status: Silver Member (Offline)
Joined: Nov 20 2008
Posts: 159
Re: Daily Digest - May 5
Mike Pilat wrote:

...
 

Public awareness and true understanding of the real issues that are defining this country are the only solution, in my opinion. Unfortunately, the Spin Cycle has stymied the minds of the masses.

Too true.

I have only really started to have my eye's opened since late last year and when I started to say things about the coming mess at my work, I met the expected resistance.

I now have a couple of people liberated to think for themselves now but amazingly, the others just keep thinking that it's all going to come good soon. Many of those grab headlines with the slightest snippet of hope and come and shove it on my desk or say "What about this or that".

In Australia, we have a thing called 'The Future Fund' and one person keeps saying that we have billions in the future fund to look after us in the years ahead. I have taken a rough look at it in the past and note that a reasonable chunk is in shares etc and in infrastructure bla bla bla - the other day the person in question quoted the future fund again. This time I decided to put on my CM hat and do some digging and to my amazement, the future fund has actually been set up for the unfunded liabilities faced by the government in regards to some Public Servants and Defense personal - it's not for the general population at all - it's only been sold that way by saying it will benefit all Australians! They also claim it's only using money that's surplus - well, how does a government get a surplus? mainly from taxes etc - i.e. the people anyhow.
The fund is accessible in 2020, so, even if it was for the plebes, I and the person who keeps using it as their future hedge will miss out - it will be raised well and truly before we get a look at it.

The point I'm making is that there are all these things out there that we base assumptions upon and even argue over that are most likely false or deceptive on face value - one must dig deeper to uncover what's really behind it - and that takes time and effort - something a lot of people don't have a lot of anymore - something that they have left to to other 'experts' to do.

We have been told for many years that experts are required and that specialization is needed in everything. Most professions have created their own language around their industries too which just makes the whole knowledge transfer aspect even more difficult and exclusive.

The dumbing down of generations took years, the reversal of that process will takes years as well - information can be learnt easily, but wisdom takes years to foster. Information is not knowledge (hence my signature)...

:-)

wroth5's picture
wroth5
Status: Member (Offline)
Joined: Apr 16 2008
Posts: 21
Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - May 5

 http://www.youtube.com/watch?v=nf1FN91dwmA&feature=player_embedded

jpitre's picture
jpitre
Status: Gold Member (Offline)
Joined: Mar 3 2009
Posts: 366
Re: Daily Digest - May 5

 Hi All

Greg posted the following:


"Altruism: The Moral Root of the Financial Crisis"

By surveying the government interventions that caused the latest turmoil and wealth destruction in housing and banking, this article will demonstrate that the current financial crisis was caused not by a return to free markets or pro-capitalist policies in the past decade, but by a tragic progression toward socialism. More importantly, it will demonstrate that altruism—the notion that being moral consists in sacrificing oneself for the needs of others—is the basis for this government intervention, and thus the root cause of the crisis."

http://www.capmag.com/article.asp?ID=5503

 

I doubt that I could disagree more with the proposition that altruism is the root of our economic disaster that is currently unfolding.  It is my opinion  that runaway greed, dishonesty, incompetence and outright thievery on the part of  elite  corporate executives, politicians and government bureaucrats have brought  our world economy to its knees. The idea that altruism is bringing down our economic system is simply rubbish. The referenced article seems only to regurgitate some of the tired and misguided Ayn Rand ideology fitted to suit recent history (no intent to offend any Rand supporters listening, but that’s the way I see it)

I’m sure some “altruistic” loans were made in an effort to set right some of the past wrongs, however those are miniscule in comparison to the damage caused by the greed driven Wall Street types and their supporters pushing their derivatives and credit default swaps on the world so as to gain their undeserved bonuses and stock options.

I am a strong proponent of the free market system, however I also know that without appropriate regulation and personal responsibility on the part of all involved, people will fall under the thrall of the deadly sin of irresponsible greed that will dominate everything in its path including moral judgement.

I would that altruism were our problem.

 

Jim

fujisan's picture
fujisan
Status: Gold Member (Offline)
Joined: Nov 5 2008
Posts: 296
Re: Daily Digest - May 5

 Bankers’ Worry: Worst Is Yet To Come - Real Time Economics - WSJ

Quote:

New loans may be profitable, given how cheaply banks can borrow today. But many banks are still worrying about whether they’ll get paid back on old loans.

The latest Federal Reserve survey of senior loan officers finds very few shoots of green in that garden. The Fed asked senior loan officers: What is your bank’s outlook for delinquencies and charge-offs on existing loans of various sorts in 2009, assuming that “economic activity progresses in line with consensus forecasts?” Short answer: Gloomy. Or as the Fed put it: “A significant majority of banks reported that credit quality for all types of loans is likely to deteriorate over the year” — and that’s assuming the economy doesn’t take another turn for the worse.

The specifics:

Commercial and industrial loans: Of 52 banks responding, none said they expect improving quality, but seven said they expect delinquencies and charge offs to stabilize at current levels.
Commercial real-estate loans: Only 1 of 51 banks (the other doesn’t make such loans) sees improving quality, and three see quality stabilizing at current levels. Of the 47 who see a worsening picture, 13 expected a substantial deterioration in 2009.
Prime residential mortgages: Only 1 of 50 banks sees improving quality, and seven see quality stabilizing at current levels.
Subprime mortgages: No bank sees improving quality, and only two see quality stabilizing at current levels.
Home equity lines: No bank sees improving quality, though nine expect quality to stabilize around current levels.
Credit card loans: None of the 31 banks who make such loans expects improvement, and three expect stabilization.
Other consumer loans: Only one of 50 banks expects improvement, though 12 see loan quality stabilizing around current levels.

 

 

 

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3125
Re: Daily Digest - May 5

Jim

Thanks, I've been wondering if anyone on this site had the understanding to say what you have.  I can't believe Ayn Rand's nonsense is still being printed.

dcm's picture
dcm
Status: Silver Member (Offline)
Joined: Apr 14 2009
Posts: 205
Re: Daily Digest - May 5

I have to agree with Jim

 

This is from The Onion

Altruism Mocked

EUGENE, OR—Resident Mark Eisenfeld was taken to task by fellow citizens Tuesday for helping a lost and apparently senile elderly man find his way home. "Ooh, look at me, I'm gonna drop everything I'm doing to personally aid some old man I've never seen before," said freelance writer Eric Bergstrom, who was eating at a local diner when he saw Eisenfeld buy the confused man a cup of coffee and ask him where he lived. "Because, you know, it's not like there's cops or emergency workers trained to do that stuff. Must be nice having all that free time to be a big hero. What a stuck-up prick." As of press time, Eisenfeld's ulterior motive had not been determined.

lpowell23's picture
lpowell23
Status: Bronze Member (Offline)
Joined: Oct 17 2008
Posts: 27
Re: Daily Digest - May 5

Public awareness and true understanding of the real issues that are defining this country are the only solution, in my opinion. Unfortunately, the Spin Cycle has stymied the minds of the masses.

It seems the masses prefer the spin rather than the truth.

Nation Ready To Be Lied To About Economy Again

http://www.theonion.com/content/news/nation_ready_to_be_lied_to_about?utm_source=a-section

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Re: Daily Digest - May 5

"A sure sign of a genius is that all of the dunces are in a confederacy against them."

Frank Lloyd Wright

mcafeejs's picture
mcafeejs
Status: Bronze Member (Offline)
Joined: Sep 21 2008
Posts: 34
Re: Daily Digest - May 5

IMO, Ayn Rand's rants about altruism never lined up with her rationale on why altruism was evil in my readings of her works.  In order to address this gap I have resolved at a personal level that:

 

Altruism is a good ideal.   Fundamental to it is the fact that altruism is something you give, not something you take.  To demand altruism is tyrannical and contradictory to both the thought & definition of altruism.  People have a right to be altruistic, but not to force others to be so.  This explicit or often subtle social pressure to "demand" self sacrifice is tyrannical just as compassion and charity associated with alutruism is foundational to primate societies.  

The gap is that Ayn Rand said altruism is always bad whereas her justifications for that statement pointed to the "tyranny" of altruisic behavior in a society and not addressing the positive elements of altruism at a personal level of choice.

"I want your food" is tyrannical.  Altruism is bad.

"You look hungry and I can get by with this so you may have some of my food" is charity.  Altruism is good.

The whole debate of altruism though is a distraction from a more meaningful "actions" that would lead to creating more wealth (food).  i.e. Rather than than fighting over something like a plate of food, people should work together to make more plates of food.  I would think folks in Ayn Rands ideology would agree with that sentiment along with the Marxists, Smith's, and Freedman's, and religious followers of the world.

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Re: Daily Digest - May 5

“Altruism,” Roark tells the court, “is the doctrine which demands

that man live for others and place others above self”

http://hubcap.clemson.edu/~campber/altruismrandcomte.pdf

I realize that I will never change anyone's mind on this subject so this will be my last response in regards to it.

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3125
Re: Daily Digest - May 5

So, you're quoting Roark's notion of what altruism is?  I would suggest that is one of many misconceptions in Rand's works.

I think of altruism as doing the right thing because it's the right thing to do.

To paraphrase a quote I once heard from Rand when extolling the virtues of her particular notion of free market capitalism, you should find the filthiest smokestack you can, run up to it and kiss it.  While consistent with her philosophy, it is clearly wrong on so many levels that the mind boggles.

But, if that's your philosophy, enjoy.

doug

mcafeejs's picture
mcafeejs
Status: Bronze Member (Offline)
Joined: Sep 21 2008
Posts: 34
Re: Daily Digest - May 5

Greg I think that the mind changing needs to be reaching consensus on the understanding of the definition. 

Before I read Atlas Shrugged I never understood the tyrannical element of altruism within a society.  While I understood the "tyranny of the majority" argument in Federalist 51 by A. Hamilton I never associated it charity and definitely not altruism nor did I consider that the meaning of altruism at an individual level is fundamentally different than altruism at a societal level.  Most people, I submit, don't associate with the word altruism from the perspective of a receiver or society as a whole (with an over developed sense of entitlement) rather associating it with being an individual giver.  I was told "you should be altruistic" from someone who was altruistic.  I was not told "you should expect other people to be altruistic"  nor "expect society to be altruistic and give you a free lunch".

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments