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Thursday's Hudson

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  • #31
    Re: Thursday's Hudson

    Originally posted by The Outback Oracle View Post
    C1ue...I drafted up a wow of a reply.well in my own opinion ...but it took me a bottle of white wine to do it and then I lost it!!!! So as Mccarthur said..."I shall return:"

    There is nothing more frustrating than to work half the night on a real BLAST to lose it by the single press on a button. I have done the same in the past. Now, yes, I can laugh about such, but I am quite sure that, at that precise moment, you were devastated. Such is life, Ho, Hum!

    My Grandfather, on arrival in Sydney, ~1840's discovered the last of the Prison ships, HMS Success had been scuppered to claim the insurance and he raised it back up, put it on display and that in turn led to his marrying a local girl who came along to borrow the bunting for her coming out ball. As a result, I have in my possession a copy of the first Blue Paper issued my the Australian Government on the subject of Penal Reform and have just sold the hand written manuscript of the first book ever written on the subject.

    My father helped the construction of the Brown Coal fuelled power station at Yallorne, and just to top it off, I have two brothers in Australia but I have never visited but I do have friends that visit every year to fly gliders. As they say, it is a very small world.

    Last edited by Chris Coles; 09-27-08, 04:07 AM. Reason: Spell check


    • #32
      Re: Thursday's Hudson

      Originally posted by Brooks Gracie View Post
      Who are these mythical "savers"? From my understanding of the bailout package, financial institutions and other FIRE economy middlemen are the only ones being bailed out of their self-induced situation. Banks, insurers, hedge funds and brokerage firms not savers--they are speculators using OPM to leverage their returns. They make riskier and riskier speculative bets in order to reward their executives when the speculation scheme works. If they were "savers" they would have alot of cash and liquid investments on their balance sheets.

      The "fresh start" idea is a good one. The Debt Slavery and Credit Card Protection Act of 2005 has made it nearly impossible for a worker to file for bankruptcy, unless he or she quits their job first (the earnings test was re-written to make most wage earners ineligible for debt discharge). And of course if you are debt-laden, you can't quit your job, which is why the Debt Slavery Act was enacted. Presto--you now have a totally stratified society which has ALWAYS led to economic ruin, whatever the empire involved.

      How can innovators even get started if they have to keep full time jobs to just to get by with little access to capital?
      At the start of the capitalist system, when there were individuals with money but no income from anything other than "Estates", someone came up with the idea of the Joint Stock Company whereby an innovator could find the means to employ ordinary people to do what were, at the time, extraordinary things. So it was the Joint Stock Company that underpinned the success of the capital based system. Sometime after that, Insurance became successful and from that starting point the income of the insurance companies became the new "Estates" which in turn had to be invested so that, when there were losses due to disasters, there was still something left in the pot to pay for the costs of the whole.

      These insurance companies became the Savings Institutions.

      But as anyone will easily see, there are limits to the potential to invest capital. The limit is set by the availability of innovation and innovators. (I must add a point well recognised by Japan recently when they ramped up the whole idea of teaching innovation in their schools). So from the outset, there was always a surplus of capital available in the coffers of the savings institutions.

      In these now distant times the surplus was put to good use by lending the surplus as working capital for the same companies that were first invested into using equity capital.

      I return to my previous post where I showed that money was always the result of the income of the innovator and the employees.

      It is this viewpoint that has become so distorted.

      I am an innovator. I hold patents in telecoms in the USA and Japan. I have a patent application in progress at this moment that has just been published GB 2 447 526 A so you can go and look at it. I am unfunded so in fact the full world rights have now been lost as I have been unable to fund the national phase applications which would certainly need something like 250,000 just for application and translation fees.

      I have a book about gravity that is unfunded, (I want to retain my own publishing company because I believe the book will help me establish a completely new publishing house), and again, no one will fund anything unless they can have complete control. I refuse to hand over complete control.

      So I can say with impunity, there is no source of funding for the individual inventor or innovator determined to remain free and in control of their own destiny at this time. The whole system has become completely distorted and is so far away from the original capital based joint stock company system as to be unrecognisable to anyone with a proper understanding of a free enterprise system in a free nation.

      You all live in a totally feudal monetarist system and I have set out my thinking about this in a recent post.

      Adventure and Essential Freedom The missing elements of a Rich Cultural Life in a Successful Economy

      The overall problem is of such magnitude that I do not see any chance of change coming from anyone within government simply because they all support the present system. Tell me of any single politician anywhere that has a handle on this subject?

      All credit to EJ and his belief that the change must come from innovation and I applaud him for sticking to his book about what to do next.

      There, now I have had a good old fashioned rant too.


      • #33
        Re: Thursday's Hudson

        Originally posted by The Outback Oracle
        C1ue...I drafted up a wow of a reply.well in my own opinion ...but it took me a bottle of white wine to do it and then I lost it!!!! So as Mccarthur said..."I shall return:"

        I hope the wine wasn't so that you could sink to my level...;)

        Either way, I do share your anger and outrage. I merely have it pointed at a different direction.

        I'll await the return of your inspiration...or another trip to the liquor cabinet...


        • #34
          Re: Thursday's Hudson

          We definitely need another Teddy Roosevelt right now, someone who is pro-capitalism, but insists on a FAIR capitalism, where a predatory few cannot exploit the rest, a capitalism that includes protections for workers and average citizens.

          Teddy Roosevelt was also a strong environmentalist, and during his administration, the system of national parks that we have today, was set up.

          The sad and scary part is that TR was never meant to be president. He was an activist governor of New York and stepping on the toes of a lot of vested interests there, so the NY Republicans bosses decided he should be "kicked upstairs", to get him out of the way and offered him vice-president on 1900 slate.

          McKinley, the presidential candidate running for re-election, had a lot in common with the free market fundamentalists of today. It was only his assasination in 1901 that gave TR his first term. By 1904, TR was hugely popular, and earned a second term.

          My opinion (and it's just my opinion), on today's candidates is that Obama has potential, but that he is a little too cautious to be a full-fledged TR and that McCain would be too captive to vested interests in the Republican Part to make an effective assault on free market fundamentalism (i.e., he'd be a McKinley).


          • #35
            Re: Thursday's Hudson

            See my reply to Lukester here


            • #36
              Re: Thursday's Hudson

              C!ue i am not trying to reopen a debate here, or kick this thread back into life. I am replying as a matter of courtesy. I apologise for the delay. i just could not gather enough energy to give what you wrote proper consideration. Whether i do so now is probably a moot point...Cheers

              Originally posted by c1ue View Post

              I've never said savings are bad. I myself have zero debt. I merely point out that the consequence of interest means the result of creating debt and starting a compound interest cycle.
              I'm in a little trouble trying to sort out what you are saying is cause and effect there. in my argument, contrary to what happens in the world now, you cannot have debt without first savings. So Interest is not the result of creating debt but of savings. i know it's a fine point but reasonably essential in my own view...which transcends all others!

              If, for example, usury was again banned as the Bible purportedly advocates - do you think it would affect your financial plan?
              I'm not personally a biblical man and while i had a fair bit of bible drummed into me as a youngun' I wouldn't care to debate its references to usury. 'Usury' in English has two meanings....the first is just plain interest and the second escessive interest. I'd worrry about what the Bible purpotedly said given the number of different interpretations there are aorund.
              Plan????What plan? Hell i never had one that hung true for more than a few weeks! The wheat was always a bag an acre short of what i planned...the sheep always cut a pound less wool, the cows never had quite enough calves, and the cattle never fattened fast enough. I was alwys behind and it has effected my psyche!!!;) Now, seriously, if i couldn't borrow money, my 'plan' , better probably described as an 'idea' would not have changed one iota.

              And by consequence - borrowing becoming extremely difficult - would the economic world as we know it be different?
              Tthe world would be very different but are we starting from here or rewinding the clock to some starting point back in time?....Perhaps you and i could write a book on the subject but I doubt i can address the problem here. Re 'world'...first do we mean our Anglo -Saxon world or all those other funny coloured blokes as well? If we are rewinding clocks,for ourselves, given the time all this crap has been going on...i doubt materially we would be any worse off without credit than we are now. i'd guess however we would be less 'materialistic', we would have little debt and i'd guess a muich better society

              The world back in the 'no usury' days was one where upward mobility was only via literal stealing or plunder. Because it was impossible to borrow money, which in turn meant that those with money only gave up their economic power through coercive means.
              Actually, I have been going to China for some 20 odd years. So i have seen people grow through hard work and saving. I have seen lives change. i have seen a world change. So I don't think you are exactly correct. I guess it depends on the 'system' Mind you it helped a lot of you were a Colonel or above in the army!!!!


              The first 3 reasons above are exactly what Hudson has been saying:

              1) Property taxes are skewed low to free up cash flow for asset price inflation
              2) Income taxes are skewed negative for 'commercial property' to bias investment towards commercial property and simultaneously benefit commercial property ownership
              3) The above 2 items bias the economy towards FIRE institutions

              So you're really agreeing with Hudson's view here?

              But you still didn't answer the 2nd part of my question: Now that we've had 35+ years of FIRE over-emphasis on real estate - would a similar strategy based on saving money to buy property work going forward?
              [COLOR="Blue"]No i don't think so for the next few long as the tax system is skewed towards owning 'property' then it will pay to own it. If you'd saved over the last few years buying a bit of property in due course is likely to pay handsomely. Everything overshoots!!!

              Or saving money to gain interest payments?
              You know my opinions here...saving gives you capital. In the next few years, the price of this credit binge or 'money for nothing' cult has to be paid...those who have savings will win...for the first damned time in how many years....20? 30? 70? otherwise savers get screwed![

              Or in other words, can the past 5% real estate vs. 3% GDP growth continue for another 35 years with all of its attendant FIRE activities?
              We both know the answer....'it's time'....mind you i have been saying that for a few years!:confused:

              Hudson's view is the 'government' - presumably Congress - will decide. That only government is in the position to divine the correct path towards a better future as well as mobilize the population and resources to do so.

              In my opinion, I think Hudson is over-optimistic on the human component of said government.

              From my own perusal of history (NOT study!), the United States has teetered on this precipice a number of times.

              The first time was in the beginning: the states' rights vs. the national government led by the banker, Alexander Hamilton. In that instance, the banker won but it could be said that the harm was relatively small since unity was important for survival and the economy was not dependent on banking. But the precedent of national imperative over states' imperative, and by inference over the individual's imperative, was set.

              The second time was the Civil War. Again, a reprise of the states' rights vs. the national government - or at least the tyranny of the majority. Again the states' rights were run roughshod.

              The third time was the Industrial Revolution post WWII. This time, in the person of Teddy Roosevelt, there was push back. Teddy, then his socialist familial descendant FDR, both pushed back the power of bankers and big capital in government.

              But Theodore Roosevelt is the one who really bucked the trend: fought against a rising tide which he did not have to, unlike FDR.

              Of course WW I and WW II were such that the United States was given a monstrous leg up in the economies of the world; it is this huge advantage which has postponed the reckoning until now.

              I don't see anyone who might, as Teddy did, buck the trend to fix the problem.

              The problem is bad enough that an FDR might again arise, but of course where then is the WW II advantage? Ah we need a 'Philosopher king' a benevolent dictator....the nearest i have seen in my lifetime was Lee Kwan Yew in Singapore. Singapore clearly has benefited from his rule.

              The 'tumbriling' and the ownership of the knitting is not at all my concern; I'm not going to get 'tumbriled' nor am I lining up for my share of the knitting.
              Hm..maybe i'm too old and you miss the is an old saying based on Charles Dickens "Tale of two Cities" Madame Defarge knits the names of those who are to die by the guillotine and sits knitting while she watches them die. So my question Hudson's new world order...who is to judge and who is to be sacrificed? Who is to say/ What are the criteria by which we will judge 'this man is to be rescued, while this man will have his savings confiscated in order that we rescue the first!" That's what bugs me about hudson!!!!!!! His solutions are totalitarian...he would deny this of course and claim to be sooooooooo in favour of liberty for all!!! Well so was madame Defarge!

              But the rise of a TR or performance (or lack of) of an FDR is going to make a huge difference in the future of everyone living in the United States, including myself.

              All I am saying is that whatever happens, won't be what's happened before.

              Perhaps can't be, but this is pure opinion.

              I know EJ for one feels innovation is the way out. But there are still consequences to consider:

              Innovation requires the rule of law. Only via patents and what not can the innovator reap the maximum rewards from his work, but unfortunately this same rule of law can equally be used to stymie innovation. See 'patent troll'
              As Chris said...only those with a lot of money can afford to lodge let alone defend their patents! I have personally given up on a couple. As to teh rule of law...the banksters are not the only ones who have set out to destroy our society and the rights of ordinary people. The lawyers are at least as responsible....then again we are all resopnsible
              C1ue I think we agree that all the excesses have led us up some sort of blind alley. As to EJ...he thinks a little differently...he says.."this is what is going to happen as a result of what these bastards will do...right or and i are "wasting' our time debating what 'ought' to happen...a thing my son constantly warns me against.

              Innovation also only benefits an elite few. What about the 99.9% of the rest? With labor, taxation, and regulatory costs being what they are, what possible incentive is there for innovative new industries to be built anywhere with a relatively high standard of living? And does this process not lead to an equally stratified world: one of the innovator elite over the huddled masses as opposed to the capitalist/rentier elite?
              I have few answers in this regard. The one thing i do know is that one cannot proscribe a world. That leads to totalitarianism with all its evils. I guess a 'free' society will always have 'levels' What we need to ensure is that we make it possible for people to move upwards. Secondly 'Man is born free AND he is everywhere in chains"...Rousseau's 'Social Contract' ...the contract we all make with our society, to contribute to it, to abide by its rules and mores, so that it accepts and looks after us for the benefit of all. The more each individual adheres to his 'social contract' the better we will all live.

              This is what I thnk about.
              Yeah well you do a lot of thinking and the world will be a better place for that! I'm another half a bottle of wine down!


              • #37
                Re: Thursday's Hudson


                Whatever my tone, let me be clear that I do appreciate the direct anecdotes you provide, and furthermore that I do share your outrage over what is happening.

                I think from your responses that the only remaining item of discussion is the interest/usury.

                Usury in the strict sense is all forms of requiring interest payments for loans.

                Usury in the American sense is now defined as 'unreasonable' interest payments for loans.

                Ezekiel 18:5
                5 But if a man be just, and do that which is lawful and right, 6 [And] hath not eaten upon the mountains, neither hath lifted up his eyes to the idols of the house of Israel, neither hath defiled his neighbour's wife, neither hath come near to a menstruous woman,
                Ezekiel 18:8 *

                8 He [that] hath not given forth upon usury, neither hath taken any increase, [that] hath withdrawn his hand from iniquity, hath executed true judgment between man and man, 9 Hath walked in my statutes, and hath kept my judgments, to deal truly; he [is] just, he shall surely live, saith the Lord GOD.
                Ezekiel 18:13 *

                13 Hath given forth upon usury, and hath taken increase: shall he then live? he shall not live: he hath done all these abominations; he shall surely die; his blood shall be upon him.
                Ezekiel 18:16

                16 Neither hath oppressed any, hath not withholden the pledge, neither hath spoiled by violence, [but] hath given his bread to the hungry, and hath covered the naked with a garment, 17 ** [That] hath taken off his hand from the poor, [that] hath not received usury nor increase, hath executed my judgments, hath walked in my statutes; he shall not die for the iniquity of his father, he shall surely live. 18 [As for] his father, because he cruelly oppressed, spoiled his brother by violence, and did [that] which [is] not good among his people, lo, even he shall die in his iniquity.

                (Interest on money or equivalent is condemned)
                Psalms 15:5
                5 [He that] putteth not out his money to usury, nor taketh reward against the innocent. He that doeth these [things] shall never be moved.

                (Interest on money or equivalent is condemned)
                Exodus 22:25 *
                25. If thou lend money to [any of] my people [that is] poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.

                (Interest on money or equivalent charged to the poor in your country is condemned)
                Deuteronomy 23:19
                19 Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury: 20 Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it.
                The Jewish scriptures supposedly separate the sin from usury to Jews, vs. moneylending to goyim (non-Jews).

                Either way, the point I am stressing is that there have been historical periods where moneylending for interest payments was prohibited, and those periods were marked by a powerful disincentive to invest.

                So I guess I'm saying that financial bubbles are a consequence of usury, and that usury itself can be good if controlled. But unfortunately it isn't being regulated well right now.


                • #38
                  Re: Thursday's Hudson

                  Anyone have easy (interwebs stuff) links for these?

                  I can't seem to formulate searches to find the right docs.

                  variations on this aren't giving me much ...

                  plutarch rome fall "debt laws"
                  Livy roman decline "debt laws"
                  diodorus rome "favored creditors"

                  and so on ...

                  Or is this material all dead-tree stuff only?

                  Originally posted by Hudson

                  Livy, Diodorus, Plutarch and other historians of the epoch attributed the prospective fall of the Roman Empire to its harsh creditor-oriented debt laws. But today, historians publish books speculating that perhaps the problem was lead piping or lead goblets for their wine, or disease, or imperial overreaching, or superstition anything but the cause to which the Roman historians themselves pointed
                  Or am I wrong to expect a cliff's Notes version, but the only existing ones are the much longer, unabridged versions - IOW Hudson's quote is the Cliff's Note?


                  • #39
                    Re: Thursday's Hudson

                    This source may be useful - The Spirit of Laws By Charles de Secondat Montesquieu,

                    See page 200 section 21 of the book titled - "Of the Cruelty of Laws in respect to Debtors in a Republic"