Scenario: Implosion, Collapse, & Liberation

Login or register to post comments Last Post 5579 reads   31 posts
Viewing 10 posts - 21 through 30 (of 31 total)
  • Sun, Feb 08, 2009 - 06:31am

    #21

    caroline_culbert

    Status Gold Member (Offline)

    Joined: Oct 02 2008

    Posts: 254

    count placeholder0

    Re: The Blank Slate

[quote=SamLinder]Mike,

I have to agree with murfster on this one. While it sounds appealing to you that there be major reboot (because you have already removed yourself from the grid), the majority of us are in a different situation and it would not serve us well if society at large did a major reboot.

When I had my little house built (1600 sq. ft.) in 2003, I made a contract with the builder and my local bank. My ethics require me to pay the debt that was loaned to me in good faith. I don’t care what the rest of the banking industry is doing – I made a deal and, come hell or high water, I plan to honor it. It has nothing to do with whether "…there will actually be a working economy lying around…". As long as I can obtain the funds from somewhere, I will pay on my mortgage. Of course, if my bank went belly up, and there was no one left to pay the mortgage to, then that would be a different story.

When I lived in California in the 90’s, I was upside down on my mortgage for many years. It never once occurred to me during that time to walk away from my obligation and I am dismayed at the attitude in this country that seems to think it’s become an acceptable practice. BTW, in time my mortgage "righted itself" and I was able to sell my house at a small profit.

[/quote]

Sam, you are making the classic categorical imperative approach.  The classic example is one where a person follows his ethical inclination to never lie, yet, when he is approached by the Nazis and asked if he is hiding any Jews, should the man stand by his maxim?  I say no.

You are making an agreement under a shady deal.  It’s like saying… "Look, I made a deal to the Crack Dealer (while undercover) to pay him back the money he loaned me.  So I’m going to pay him back!"

I realize the above examples do not reflect perfect analogies but what people are trying to show you is that you are still that battered woman who will justify her husband’s blows by saying that "we made a deal at the alter: "for better or for worse". It’s definitely worse.

I do have to give you A LOT of credit to your amazing ethical or moral compass.  You are the kind of person that many should emulate.

 

  • Sun, Feb 08, 2009 - 07:17am

    #22
    AnOregonian

    AnOregonian

    Status Gold Member (Offline)

    Joined: Jul 10 2008

    Posts: 289

    count placeholder0

    Re: The Blank Slate

[quote=caroline_culbert]

[quote=SamLinder]Mike,

I have to agree with murfster on this one. While it sounds appealing to you that there be major reboot (because you have already removed yourself from the grid), the majority of us are in a different situation and it would not serve us well if society at large did a major reboot.

When I had my little house built (1600 sq. ft.) in 2003, I made a contract with the builder and my local bank. My ethics require me to pay the debt that was loaned to me in good faith. I don’t care what the rest of the banking industry is doing – I made a deal and, come hell or high water, I plan to honor it. It has nothing to do with whether "…there will actually be a working economy lying around…". As long as I can obtain the funds from somewhere, I will pay on my mortgage. Of course, if my bank went belly up, and there was no one left to pay the mortgage to, then that would be a different story.

When I lived in California in the 90’s, I was upside down on my mortgage for many years. It never once occurred to me during that time to walk away from my obligation and I am dismayed at the attitude in this country that seems to think it’s become an acceptable practice. BTW, in time my mortgage "righted itself" and I was able to sell my house at a small profit.

[/quote]

Sam, you are making the classic categorical imperative approach.  The classic example is one where a person follows his ethical inclination to never lie, yet, when he is approached by the Nazis and asked if he is hiding any Jews, should the man stand by his maxim?  I say no.

[/quote] 

In this specific case, I would also say no – although I think this is quite a different scenario than what we were discussing. It’s easy to be ethical when it hurts no one else – I would gladly toss my ethics right out the window if it was necessary to lie to protect the life of another innocent person.

You are making an agreement under a shady deal.  It’s like saying… "Look, I made a deal to the Crack Dealer (while undercover) to pay him back the money he loaned me.  So I’m going to pay him back!"

I realize the above examples do not reflect perfect analogies but what
people are trying to show you is that you are still that battered woman
who will justify her husband’s blows by saying that "we made a deal at
the alter: "for better or for worse". It’s definitely worse. 

Caroline, let’s be clear about the circumstances here. In 2003 I went to a mortgage broker and borrowed some money to buy a house from a builder. In return for my electronic stack of FRN’s, the builder relinquished a house to me. I now have possession of the property. The mortgage broker then turned around and sold my mortgage to a bank which took possession of my promise to pay. At this point, I have made a legal (and, to me, moral) compact with the bank. They allowed me to use their funds (even though we now know they were created out of thin air) for the next 15 years. In return, I promised to pay 5.5% interest on the money – a reasonable deal as far as I’m concerned. It’s been this way since I was born – why would I think there was anything wrong with it?

Now, what part of this compact conveys the impression that I’m a "battered woman" or that I’ve made a shady deal with a "Crack Dealer"? The bank is not abusing me. The bank did not lie to me. I am not unhappy with my agreement. (Maybe the bank doesn’t really love me – but I guess I can live with that. Wink) Just because you and I are dismayed with the realization that banks create money out of thin air doesn’t change the basic facts in play here.

Are you in agreement with DamnTheMatrix – that I, and all others that owe money to banks and other lending institutions, should just abrogate our agreements today and walk away? Not only would that destroy all faith in everyone’s word, it would also crash the financial system immediately. If you think we have problems now, I truly believe that DamnTheMatrix’s call to cancel all debt would make things even worse.

Please feel free to correct me if I have misunderstood any of your comments. I’m not always the sharpest pencil in the box – especially when it gets this late.  Surprised (Yawn!)

I do have to give you A LOT of credit to your amazing ethical or moral compass.  You are the kind of person that many should emulate.

Thank you. That means a lot. I hope I’ve been able to impart the same level of ethics into my kids – although I don’t think I’ve been as successful at that as I would like.  Undecided

  • Sun, Feb 08, 2009 - 07:36am

    #23

    caroline_culbert

    Status Gold Member (Offline)

    Joined: Oct 02 2008

    Posts: 254

    count placeholder0

    Re: Scenario: Implosion, Collapse, & Liberation

Yeah.. I’m not sure Sam.  I am not in the same boat.  Maybe that makes me more cowardly because I am more equivocated on the issue.  I don’t know what to do.  I just think that sometimes we may be enabling an inept system by believing we are doing the right thing. 

Maybe you are carrying out the pain longer than it need to be?  I mean, do you think we could just end the money system (as I see it is failing) and start fresh with something new?

  • Sun, Feb 08, 2009 - 01:51pm

    #24

    Damnthematrix

    Status Diamond Member (Offline)

    Joined: Aug 09 2008

    Posts: 1132

    count placeholder0

    Re: Scenario: Implosion, Collapse, & Liberation

Hmmmm  been thinking about this…  define amoral?  Isn’t the Matrix amoral?  I mean to say, enslaving people to do unsustainable jobs so they can afford to borrow fake money, to buy unsustainable toys so the world’s greediest people can become even more obcenely wealthy…  does sound moral to you Lisa.

Just wondering.  Serously.

Mike 

  • Sun, Feb 08, 2009 - 06:17pm

    #25
    AnOregonian

    AnOregonian

    Status Gold Member (Offline)

    Joined: Jul 10 2008

    Posts: 289

    count placeholder0

    Re: Scenario: Implosion, Collapse, & Liberation

[quote=caroline_culbert]

Yeah.. I’m not sure Sam.  I am not in the same boat.  Maybe that makes me more cowardly because I am more equivocated on the issue.  I don’t know what to do.  I just think that sometimes we may be enabling an inept system by believing we are doing the right thing. 

Maybe you are carrying out the pain longer than it need to be?  I mean, do you think we could just end the money system (as I see it is failing) and start fresh with something new?

[/quote]

Caroline,

You and I are not that far apart in our thinking. Like you, I don’t agree with the system as it currently exists. In fact I am in full agreement that the Fed should be abolished post-haste!

Maybe you are carrying out the pain longer than it need to be?

It’s not a pain – it’s a moral obligation to keep the promise that I made as long as the current system exists. If it ceases to exist, then the obligation is removed. Innocent

I mean, do you think we could just end the money system (as I see it is failing) and start fresh with something new? 

Yes – although you won’t find me at the tip of the spear. Foot in mouth

  • Sun, Feb 08, 2009 - 06:30pm

    #26
    AnOregonian

    AnOregonian

    Status Gold Member (Offline)

    Joined: Jul 10 2008

    Posts: 289

    count placeholder0

    Re: Scenario: Implosion, Collapse, & Liberation

[quote=Damnthematrix]

Hmmmm  been thinking about this…  define amoral?  Isn’t the Matrix amoral?  I mean to say, enslaving people to do unsustainable jobs so they can afford to borrow fake money, to buy unsustainable toys so the world’s greediest people can become even more obcenely wealthy…  does sound moral to you Lisa.

Just wondering.  Serously.

Mike 

[/quote]

Mike,

You are only partially right – the Matrix isn’t amoral (http://www.merriam-webster.com/dictionary/amoral), it is downright evil.

… enslaving people to do unsustainable jobs so they can afford to borrow fake money, to buy unsustainable toys …

Can’t agree with you here. Too many people borrowed money and racked up credit card debt to buy those "unsustainable toys" and no one twisted their arms in the process. The banks simply made the money available – but you can’t force someone to take on debt. For the record, I am credit-card debt free and have been for countless years. I carry a small mortgage and a car payment. No one made me take on that debt – I did it with eyes wide open. When I see the obscene consumption that takes place in this country (US), it doesn’t surprise me that the whole system has been a house of cards waiting to collapse!

  • Sun, Feb 08, 2009 - 09:33pm

    #27

    Damnthematrix

    Status Diamond Member (Offline)

    Joined: Aug 09 2008

    Posts: 1132

    count placeholder0

    Re: Scenario: Implosion, Collapse, & Liberation

No Sam, no one forced anyone to borrow more than they could afford, BUT the concept is constantly marketed to them, and here in Oz, it STILL IS!

We have one credit card between us, and the bank is constantly writing to us offering to up our (very low by any standards!) limit….  which of course we just chuck in the recycling bin.

But just imagine somone in some trouble, might be car problems, or worse, health problems, which they can’t afford.  Do you think they’d knock back the offer?  It wasn’t ‘forced on them’……  but it might as well have been.

Mike 

  • Sun, Feb 08, 2009 - 09:46pm

    #28

    Damnthematrix

    Status Diamond Member (Offline)

    Joined: Aug 09 2008

    Posts: 1132

    count placeholder0

    Re: Scenario: Implosion, Collapse, & Liberation

In fact, MARKETING/ADVERTISING is bordering on amoral as far as I’m concerned.  And I used to work in the industry until I could bear it no longer.

Nobody NEEDS a plasma screen TV, or a holiday to the Bahamas….  but these things are constantly flashed at you in different medias designed to make you feel uncool if you don’t participate in the Matrix.

Technology ensures that year after year, newer and better stuff with more buttons and functions comes along making the old stuff, which in most instances still works, redundant.  People throw away the most amazing stuff…..

In Japan, for instance, no one’s allowed to own a car for more than (I think) five years.  The taxes on old cars are so high that people replace them with new ones.  Some of these ‘old’ cars end up here in Australia (Japan and Australia are both right hand drive) and most of them don’t even have 40,000 miles on the clock…..

A friend of mine worked in Japan for a couple of years as a diesel mechanic on the snowfields.  EVERYTHING is so expensive in Japan he could not afford to set himself up, but someone suggested he go to the landfill tip…..  where he found a perfectly good motorbike (which he used for 2 years and took back to the tip when finished!) and everything else he needed in the way of furniture and white good and electronics.  The bike still had gas in it, he stood it up, and kick started it at his first attempt….

This happens because Japan has been in recession for soooo long it’s not funny.  The whole place runs on debt in an effort to keep the Matrix going (and in Japan, the concept of the Matrix applies better than anywhere else in the world). The Japanese might as well be forced to take debts, there’s no other way the place could operate….  consumption would just die altogether without debt, which is EXACTLY what is happening now that credit is hard to get.

Mike 

  • Sun, Feb 08, 2009 - 10:02pm

    #29
    AnOregonian

    AnOregonian

    Status Gold Member (Offline)

    Joined: Jul 10 2008

    Posts: 289

    count placeholder0

    Re: Scenario: Implosion, Collapse, & Liberation

[quote=Damnthematrix]

In fact, MARKETING/ADVERTISING is bordering on amoral as far as I’m concerned.  And I used to work in the industry until I could bear it no longer.

Nobody NEEDS a plasma screen TV, or a holiday to the Bahamas….  but these things are constantly flashed at you in different medias designed to make you feel uncool if you don’t participate in the Matrix.

Technology ensures that year after year, newer and better stuff with more buttons and functions comes along making the old stuff, which in most instances still works, redundant.  People throw away the most amazing stuff…..

In Japan, for instance, no one’s allowed to own a car for more than (I think) five years.  The taxes on old cars are so high that people replace them with new ones.  Some of these ‘old’ cars end up here in Australia (Japan and Australia are both right hand drive) and most of them don’t even have 40,000 miles on the clock…..

A friend of mine worked in Japan for a couple of years as a diesel mechanic on the snowfields.  EVERYTHING is so expensive in Japan he could not afford to set himself up, but someone suggested he go to the landfill tip…..  where he found a perfectly good motorbike (which he used for 2 years and took back to the tip when finished!) and everything else he needed in the way of furniture and white good and electronics.  The bike still had gas in it, he stood it up, and kick started it at his first attempt….

This happens because Japan has been in recession for soooo long it’s not funny.  The whole place runs on debt in an effort to keep the Matrix going (and in Japan, the concept of the Matrix applies better than anywhere else in the world). The Japanese might as well be forced to take debts, there’s no other way the place could operate….  consumption would just die altogether without debt, which is EXACTLY what is happening now that credit is hard to get.

Mike 

[/quote]

 

Hi Mike,

In fact, MARKETING/ADVERTISING is bordering on amoral

I think you would be more dead on if you said ‘immoral’. Wink

I don’t disagree with you Mike. I think this over-consumption is bad for all of us. As you noted in your previous post, we too toss (recycle) all the offers that come our way.

But just imagine someone in some trouble, might be car problems, or
worse, health problems, which they can’t afford.  Do you think they’d
knock back the offer?  It wasn’t ‘forced on them’……  but it might
as well have been. 

This is where "the devil is in the details". Credit can be a very useful tool when used wisely. I have previously taken short-term advantage of credit when times were tougher than they are now. However, I paid it back as rapidly as I could.

Those who are forced by circumstances beyond their control (health issues, loss of job, etc.) to depend on credit get my utmost sympathy. Most of them do not want to be in that trap, but are unable to get out of it.

The ones that I have no sympathy for are those who use credit to live way beyond their means when they don’t need to but still want the latest toy or gadget.

I must admit, I did find your Japan story to be interesting – what a strange world we live in!

  • Sun, Feb 08, 2009 - 10:19pm

    #30

    Damnthematrix

    Status Diamond Member (Offline)

    Joined: Aug 09 2008

    Posts: 1132

    count placeholder0

    An interesting challenge

 An interesting challenge

" Since, as you’ll see from the second
post above, I also doubt the possibility of causing inflation simply by
driving up M0, the second option is the only one that I expect will
work: at some point, to end this crisis, much of the debt is going to
have to be repudiated."

While I am an academic economist, I
don’t build nor believe in the type of econometric models that dominate
economics these days–generally so-called “New Keynesian” or “Dynamic
Stochastic General Equilibrium” models.

Instead I build nonlinear dynamic models
based on Minsky’s “Financial Instability Hypothesis”, and I have
started constructing a strictly monetary model of a pure credit economy.

My predictions based on these models are
qualitative rather than quantitative, but on the grounds of Minsky’s
extremely prescient hypothesis the sheer scale of private debt that has
been accumulated, and the abundant historical data on debt with which
we can review past economic performance in the light of Minsky’s
hypothesis, I have been arguing that this crisis is beyond bailouts.

Therefore while I think the bailouts are
better than doing nothing, ultimately I see them as futile. All they
will do is replace some private debt with even more public debt as has
happened in Japan (if the spending is debt-financed), or pump fiat
money into the economy only to see it disappear into debt repayment and
not reflate the economy if (as Bernanke is now doing with M0) the
helicopter approach is used.

To check my reasoning and qualitative predictions on this front, I proffer two models that are elucidated on posts on my blog http://www.debtdeflation.com/blogs:

http://www.debtdeflation.com/blogs/2008/11/26/parliamentary-library-vital-issues-seminar/

and

http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

The former includes a model of Minsky’s
Hypothesis built in the systems engineering program Vissim, which is
downloadable from the blog; the latter details a model of a pure credit
economy that undergoes a credit crunch, using the mathematics program
Mathcad.

The former can be downloaded and run;
the latter I only explain in the post, though there is a draft of a
forthcoming paper that details the mathematics of the model:

http://www.debtdeflation.com/blogs/wp-content/uploads/papers/NotKeenOnBailoutsFinal.pdf

Both models, which I’m now working on
integrating and extending, imply that there is no way out of this
crisis while we still in effect honour the debt that was run up during
this speculative bubble. We either have to inflate it out of existence,
or selectively abolish it.

Since, as you’ll see from the second
post above, I also doubt the possibility of causing inflation simply by
driving up M0, the second option is the only one that I expect will
work: at some point, to end this crisis, much of the debt is going to
have to be repudiated.

I’ll keep an eye on that blog entry to see what eventuates, and
whether any neoclassical economists submit their models for scrutiny.

Viewing 10 posts - 21 through 30 (of 31 total)

Login or Register to post comments