US Politics: OBAMAGATE - An American Story

[ants]

On 5/17/2020 at 2:29 AM, teej6 said:

I find it odd and hypocritical that many of these people who protest the welfare system, have no qualms about availing of the benefits of this system. There is a huge disconnect in their way of thinking. The biggest example of this hypocrisy was Ayn Rand, who collected social security checks. Her argument was that as long as it’s being offered, she might as well take it. Obamacare was the epitome of socialism for many of them, now a lot of them get their health care through this system. 

The most recent example of this hypocrisy was Mitch Mcconnell stating that blue state governments like NY should go bankrupt because they are mismanaged. Nevermind that tax dollars from people like me in these states keep Mcconnell’s state of Kentucky afloat. NY, in terms of federal tax dollars, is a net giver and Kentucky is a net taker. I don’t mind a system of redistribution of wealth in some form and will happily go on paying taxes so that the government can provide social services to the needy, even the needy in Kentucky. But when some of these very people then turn around and march with weapons to state houses, that’s when you fully realize the depths of their depravity and ignorance.

I think this argument is as flawed as people on the right saying if Buffett/Gates think taxes should be higher, they can just give their money to the government.  You can disagree with the system, want to change it, even work to change it, but still utilise the system as it currently exists to benefit you the most.   

Of course, Mcconnell's statements were obviously rubbish, but I don't think they're a good example of what you were saying.  They were simply outright lies said for political benefit. 

On 5/17/2020 at 12:56 AM, OldGimletEye said:

The difference is that banks are better at collecting information about a loan than private persons.

Banks do create money. It's the reason why we often talk about outside money and inside money. 

How does a normal bank create money?  

On 5/17/2020 at 3:06 AM, King Ned Stark said:

I agree.  The problem is that this is not a belief the Democrats ascribed to when accusations were cast on there political opponents.  Joe Biden being one, as a champion of #BelieveAllWomen and Title ix.  

Joe Biden hasn't called Reade a liar.  He's just said it doesn't happen.  I think its funny how long the left have said that believing all women doesn't mean all men are liars, which the Right ignored because the subtlety was either beyond them or meant they couldn't fight a strawman, and now when the left still uses that argument we're suddenly hypocrites.  Believing all women means an awful lot more than immediately assuming every accusation is 100% accurate and should be acted upon.  

[ants]

Ok, so I'm about 150 posts behind, so sorry if any of this has been subsequently covered. 

On 5/17/2020 at 2:56 AM, Rippounet said:

I do not have the knowledge or the vocabulary of the heterodox economists whose works I read, but the problem is precisely to think of the bank as if it were a person, when it is really not.
[The same is true of governments btw, there is a known fallacy of comparing the government to a household]

A person has a very limited amount of funds and may use these funds for personal consumption, or conversely risk their personal assets. A person puts at risk elements of their own life.

A bank is just an imaginary entity, an institution which -ideally- has a specific role to fulfill for the good of the community. A bank cannot take risks beyond its own existence and it can be argued that, as of now at least, some of its functions are guaranteed by the state.

A bank isn't an imaginary entity, it has a whole raft of rules it has to abide by which you seem to want to ignore.  In the act of lending, although its knowledge and systems will create substantial differences to an individual lending, the goal is the same - to get a good return on your lending that reflects the risk you're taking on.  

On 5/17/2020 at 2:56 AM, Rippounet said:

A few observations here:
- "Local banks still have a balanced sheet, which has to be balanced."

Except they are NOT balanced. To quote Mariana Mazzucato:

- It is traditional to think of the central banks as creating the money. But in today's structure all the decisions have been taken by the pivate banks. For all intents and purposes, the private banks are the ones that create the money.

To quote Ann Pettifor:

Um, sorry, but you seem to be equating deposits with loans to the bank.  In modern banking deposits often represent a small proportion of the loans to the bank. That doesn't mean those loans are made up.  They're usually from other bodies.  One of the reasons in the GFC a number of banks got into trouble was that they had short term debt funding them, and long term assets (loans to mortgage holders).  If banks had an infinite supply of money they're behaviour would be significantly different.   

On 5/17/2020 at 2:56 AM, Rippounet said:

Obviously you're supposed to bring a shitload of documents (business plans and all that) to the interview.

What, you have no personal contact with the banker in Australia?

In this instance, France.

I think you're arguing semantics.  There may be an interview, I don't think the interview is what is deciding the loan, except in a small percentage of marginal cases.  It will be the financial calculations around the person's financials and their proposal.     

On 5/17/2020 at 2:56 AM, Rippounet said:

I'm going even further than that: that the idea that risk entails higher returns is also problematic.

Ideally, a healthy economy rests on Keynesian principles: low risks and low rates of interest. Which means a heavily regulated banking and financial sector.
In a nutshell, the complete opposite of what we have today.

As someone who works in insurance, I think this is bonkers.  You will need to explain it to me in more detail.  Why should someone get the same return for lending some money when the odds of it being returned are low as when the odds of it being returned are high ?

20 minutes ago, karaddin said:

How are you meant to determine if you can trust a man without looking deep into his eyes as you judge the firmness of his handshake grip? That's the true measure of if someone is trustworthy!

I honestly don't know if this is meant to be a joke or not?  

20 minutes ago, karaddin said:

On the question of a ceiling and a floor on wealth, while I understand you don't see equality of outcome as desirable surely you agree that the below is closer to the right answer than the current scenario:

Proposed: ceiling = floor x 2

Current: ceiling(soft limit, currently being expanded) = average wealth x 210 000

Bearing in mind that the average wealth is already a lot higher than the floor.

I don't have a problem with a significant differential when its justified (i.e. built legally, based on performance, and (mostly) not inherited).  I've already said I'm a proponent of high corporate taxes, high individual income taxes, high capital gains taxes and wealth taxes.  I would see having no ceiling versus a ceiling at 2.0 as far more wrong.  

[ants]

On 5/17/2020 at 4:48 AM, Simon Steele said:

I'm not going to continue the argument with you or Teej as your arguments are circular at this point. For example, Teej used the words "categorical denial" in two posts. So I feel like this is just a "let's argue with someone I don't like" kind of thing.

Ok, so I went back to check, to see if I was wrong.  Teej6 did use the word. After you used it for the first time in this thread (on page 4), in the post I was quoting of yours.  Teej6 used the word in responding to your post.  Hell, so did I when responding to your use of it.  

If you don't want to debate points, fine.  But don't claim something happened that didn't.  Don't say that my responses are circular without saying why.  If you don't want to or can't respond, own that.  Don't play a made up victim.   

[karaddin]

22 minutes ago, ants said:

Ok, so I'm about 150 posts behind, so sorry if any of this has been subsequently covered. 

I honestly don't know if this is meant to be a joke or not?  

I don't have a problem with a significant differential when its justified (i.e. built legally, based on performance, and (mostly) not inherited).  I've already said I'm a proponent of high corporate taxes, high individual income taxes, high capital gains taxes and wealth taxes.  I would see having no ceiling versus a ceiling at 2.0 as far more wrong.  

Bolded - so was I! 

2nd - yes, very very much so. I'm also Australian so not like I can answer to the bizarre American banking practices. You know cheques are still heavily used there? Its so weird.

3rd - OK we just disagree on this point then. Billionaires do not need to exist and should not. I was even conflating two different things though as I think the original ceiling discussion was of income not wealth and even with equal income different behaviour can result in differences in wealth down the line. I definitely wouldn't put a ceiling on income as low as 2x the floor, and I'd probably opt for punitively high taxation above the ceiling as the machanism to enforce it rather than an absolute hard cap. I'd probably also apply the ceiling at a more local scope - its relative within the company rather than across society, so if a CEO can make the company more successful and thus pay their employees more they can also pay themselves more. That way there is still the potential reward for the company performing well, its just shared by the workers.

[ants]

1 minute ago, karaddin said:

1st - Bolded - so was I! 

2nd - yes, very very much so. I'm also Australian so not like I can answer to the bizarre American banking practices. You know cheques are still heavily used there? Its so weird.

1st - phew!  You never quite know on these boards!

2nd - Yes I do know (shudders).  

1 minute ago, karaddin said:

3rd - OK we just disagree on this point then. Billionaires do not need to exist and should not. I was even conflating two different things though as I think the original ceiling discussion was of income not wealth and even with equal income different behaviour can result in differences in wealth down the line. I definitely wouldn't put a ceiling on income as low as 2x the floor, and I'd probably opt for punitively high taxation above the ceiling as the machanism to enforce it rather than an absolute hard cap. I'd probably also apply the ceiling at a more local scope - its relative within the company rather than across society, so if a CEO can make the company more successful and thus pay their employees more they can also pay themselves more. That way there is still the potential reward for the company performing well, its just shared by the workers.

I have no issue with someone who creates the niftiest solution ever, them making lots and lots of money.  If Jane Doe tomorrow invents cold-fusion, and becomes a billionaire, good for her.

I do have an issue with her not contributing a big chunk back via taxes.  I have a huge problem with any children receiving huge amounts of money, private education, access to opportunities not there for anyone else, stepping into high management roles, and being set for life, especially when contributing little in tax and often saying anyone could make it if they try hard enough, like their dear departed mum Jane Doe.  I have a real issue with current C-suite remuneration, which I think is ridiculous.

I just think the idea that only a 2x difference is somehow justified, or that we should entirely remove the incentives to save, invest, take risks, back yourself and focus on wealth should be entirely scrapped as wrong.  

[karaddin]

I guess we just have hard lines on opposite sides - for me there is still room for a world of rewards available that falls under or at $999,999,999. You can live 100 lifetimes and never run out of money at that point, the scale of wealth for billionaires is so out of whack that it breaks the system. If they're being allowed to exist as they are, they are always going to have too much power to manipulate the rules to their own end and will do so.

So I don't think we should allow individuals to wield that much power due to the negative impacts it has on society, not whether they "deserve it" or not. 

While on the other discussion I'd see "2x is wrong" as a discussion of what that multiplier should be, not if that limit should exist.

[GrimTuesday]

1 hour ago, polishgenius said:

If Cuba is such a wonderful place and government, ruined only by the US's hatred of them, then why do, for example, their boxers defect? Why do they need to defect in order to have the freedom of choice of what to do with their career, and why is it so hard for them to do so and so devastating for them if they try and fail?

No-one here's denying that the US has fucked Cuba down the years, but Zorral your constant skating over the regime's repressive nature is fucking bullshit.

 

When you are a short boat trip away from the most powerful country in the world, and they are doing everything short of invasion to undermine and hand your country back to the puppet mafia and the exploitative scum who held absolute power in your country before you took it, you would become incredibly insular too. I'm not saying that what the Cuban government does is right, Baseball is my favorite sport in the world, so I know what those guys have to go through to get here, but at the same time any society whose formative years as a nation spent under constant threat from their next door neighbor has to develop a communal expectation to loyalty to one's community, and by extension the government. The people of Cuba did not want the old times to come again, so knowing that Batista and his folks were backed by the Americans, they  became very anti-American, thus the restrictions of Cubans being able to go to America for boxing, or baseball or what have you.

Once again, I am not saying they are right, they are not, nor am I saying that we should be silent in regards to those injustices, but you have to recognize the circumstances that got us here. Cuba was, and to a much lesser extent still is, a country under siege, we either need to recognize that or wait for everyone who remembers it to die, Not addressing the trauma the Cuban people have suffered at our hands, makes it impossible to address the trauma they have suffered at the hands of their government.

 

[Rippounet]

1 hour ago, ants said:

I think you're arguing semantics.  There may be an interview, I don't think the interview is what is deciding the loan, except in a small percentage of marginal cases.  It will be the financial calculations around the person's financials and their proposal.    

Sure... ? Talking of an interview is just an old way of putting it. Of course I'm aware it's technically superfluous.

1 hour ago, ants said:

A bank isn't an imaginary entity, it has a whole raft of rules it has to abide by which you seem to want to ignore.

That something is imaginary doesn't mean that there are no rules. On the contrary, rules are even more important.

1 hour ago, ants said:

Um, sorry, but you seem to be equating deposits with loans to the bank.  In modern banking deposits often represent a small proportion of the loans to the bank. That doesn't mean those loans are made up.  They're usually from other bodies.

What "other bodies" ?

The heterodox view I'm using, though not the dominant one, is rather well documented. For instance, the 2004 papers from the Bank of England: "Money in the Modern Economy : An Introduction" and "Money Creation in the Modern Economy."

Quote

Unlike currency, which is created by the Bank of England, bank deposits are mostly created by commercial banks themselves. Although the stock of bank deposits increases whenever someone pays banknotes into their account, the amount of bank deposits is also reduced any time anyone makes a withdrawal. Moreover, as Chart 1 shows, the amount of currency is very small compared to the amount of bank deposits. Far more important for the creation of bank deposits is the act of making new loans by banks. When a bank makes a loan to one of its customers it simply credits the customer’s account with a higher deposit balance. At that instant, new money is created.

Banks can create new money because bank deposits are just IOUs of the bank; banks’ ability to create IOUs is no different to anyone else in the economy. When the bank makes a loan, the borrower has also created an IOU of their own to the bank. The only difference is that for the reasons discussed earlier, the bank’s IOU (the deposit) is widely accepted as a medium of exchange — it is money. Commercial banks’ ability to create money is not without limit, though. The amount of money they can create is influenced by a range of factors, not least the monetary, financial stability and regulatory policies of the Bank of England. These limits, and the money creation process more generally, are discussed in detail in the companion piece to this article.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-in-the-modern-economy-an-introduction.pdf?la=en&hash=E43CDFDBB5A23D672F4D09B13DF135E6715EEDAC

Quote

The reality of how money is created today differs from the description found in some economics textbooks:
• Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.
• In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money ‘multiplied up’ into more loans and deposits.
Although commercial banks create money through lending, they cannot do so freely without limit. Banks are limited in how much they can lend if they are to remain profitable in a competitive banking system. Prudential regulation also acts as a constraint on banks’ activities in order to maintain the resilience of the financial system. And the households and companies who receive the money created by new lending may take actions that affect the stock of money — they could quickly ‘destroy’ money by using it to repay their existing debt, for instance.

Monetary policy acts as the ultimate limit on money creation. The Bank of England aims to make sure the amount of money creation in the economy is consistent with low and stable inflation. In normal times, the Bank of England implements monetary policy by setting the interest rate on central bank reserves. This then influences a range of interest rates in the economy, including those on bank loans.

[...]

Another common misconception is that the central bank determines the quantity of loans and deposits in the economy by controlling the quantity of central bank money— the so-called ‘money multiplier’ approach. In that view,central banks implement monetary policy by choosing a quantity of reserves. And, because there is assumed to be a constant ratio of broad money to base money, these reserves are then ‘multiplied up’ to a much greater change in bank loans and deposits. For the theory to hold, the amount of reserves must be a binding constraint on lending, and the central bank must directly determine the amount of reserves.While the money multiplier theory can be a useful way of introducing money and banking in economic textbooks, it is not an accurate description of how money is created in reality. Rather than controlling the quantity of reserves, central banks today typically implement monetary policy by setting the price of reserves — that is, interest rates.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf?la=en&hash=9A8788FD44A62D8BB927123544205CE476E01654

These papers caused a bit of a stir when they were released, because bankers apparently don't readily admit that they create money.
And yet, these descriptions are perfectly intuitive and easy to understand.

More importantly, they allow us to explain the origins of the recent financial crises - and more. The sentence "Prudential regulation also acts as a constraint on banks’ activities in order to maintain the resilience of the financial system." is worth a smile today I think.
It is obvious that the financial system is no longer resilient, because "prudential regulation" has been considerably weakened, if not almost eliminated.

1 hour ago, ants said:

As someone who works in insurance, I think this is bonkers.  You will need to explain it to me in more detail.  Why should someone get the same return for lending some money when the odds of it being returned are low as when the odds of it being returned are high ?

Because that money is created, not lended. If it was lended, the high return would be justified.
OTOH if it's created then the bank is only risking its own existence, not funds. And in doing so it threatens the value of money. The high interest rate means more money is created with a risky loan! In other terms, endeavors that are less likely to succeed end up creating more capital.
Obviously that's a problem: all that money created through "risky" loans will either mean inflation or... bubbles.

I think this is, in a nutshell, what happend in the GFC? Please correct me if I'm talking out of my ass.

[DMC]

2 hours ago, GrimTuesday said:

Cuba was, and to a much lesser extent still is, a country under siege, we either need to recognize that or wait for everyone who remembers it to die, Not addressing the trauma the Cuban people have suffered at our hands, makes it impossible to address the trauma they have suffered at the hands of their government.

I think this is fair, but it's also useful to look at it from both perspectives.  What would your reaction be, under a Rawlsian veil, if a hostile state 90 miles away welcomed nuclear warheads from your greatest adversary into their country - even if due to understandably thinking your government posed an existential threat to them - and then the leader of that state encouraged the leader of the state that controlled the nuclear warheads to deploy such weapons in an effort to eviscerate your eastern seaboard and, well, commence armageddon?*  

I don't know who knew what sixty years ago, but I'd say sustaining the embargo was a pretty good strategy to quell Castro's international influence, which was full stop in the US' national security interests - and it worked.  Anyway, it was sixty years ago.  Can we all move on?  The fact is right now we have two parties.  One recently had an administration that made historical gains in opening up relations with the Cuban government.  The other spent the past 3 years trying to dismantle all that - and even went after the MLB when they tried to make their own agreement with the Cuban government.  I agree, Biden was kinda a dick about not wanting the Cuban government back on the UN Human Rights Council - as if there haven't been countless states on that council that make the whole thing a joke.  But it's really making a mountain out of a molehill when you compare the two.

*Before anyone asks for any type of clarification for this really (really) long question, see here, here, and here.

[OldGimletEye]

6 hours ago, ants said:

How does a normal bank create money?  

I was going to give a response to this, but @Rippounet gave a good link that explains how it works. It shouldn't be controversial that every time a bank makes a loan it creates "inside" money. Nor should it be controversial that banks don't really wait around for deposits before creating loans. They often create the loans first and then go and borrow the cash to have the needed liquidity to cover any withdraws that might arise.

In fact one of the reasons that inflation did not appear after the US Federal Reserve injected huge amounts of base money into the economy was because of the collapse of bank created money.

[maarsen]

2 hours ago, DMC said:

I think this is fair, but it's also useful to look at it from both perspectives.  What would your reaction be, under a Rawlsian veil, if a hostile state 90 miles away welcomed nuclear warheads from your greatest adversary into their country - even if due to understandably thinking your government posed an existential threat to them - and then the leader of that state encouraged the leader of the state that controlled the nuclear warheads to deploy such weapons in an effort to eviscerate your eastern seaboard and, well, commence armageddon?*  

I don't know who knew what sixty years ago, but I'd say sustaining the embargo was a pretty good strategy to quell Castro's international influence, which was full stop in the US' national security interests - and it worked.  Anyway, it was sixty years ago.  Can we all move on?  The fact is right now we have two parties.  One recently had an administration that made historical gains in opening up relations with the Cuban government.  The other spent the past 3 years trying to dismantle all that - and even went after the MLB when they tried to make their own agreement with the Cuban government.  I agree, Biden was kinda a dick about not wanting the Cuban government back on the UN Human Rights Council - as if there haven't been countless states on that council that make the whole thing a joke.  But it's really making a mountain out of a molehill when you compare the two.

*Before anyone asks for any type of clarification for this really (really) long question, see here, here, and here.

 

 

The Soviet Union tried to put missiles in Cuba in response to the US putting missiles in Turkey near the border to the USSR. 

[DMC]

12 minutes ago, maarsen said:

The Soviet Union tried to put missiles in Cuba in response to the US putting missiles in Turkey near the border to the USSR. 

Ya don't say.

[Mr. Chatywin et al.]

3 hours ago, DMC said:

Can we all move on?

For whatever bizarre reason, Cuba is the one place we don't want to inject with freedom, which is odd because with better relations both countries would have a very beneficial relationship. 

[DMC]

10 minutes ago, Tywin et al. said:

For whatever bizarre reason, Cuba is the one place we don't want to inject with freedom, which is odd because with better relations both countries would have a very beneficial relationship. 

Uh, I don't know about "injecting freedom," but Obama spent his entire administration trying to normalize relations with Cuba.  Hell he even ran on it in 2008 - and took some shit for doing so.  Moreover, most Americans favor reestablishing relations with Cuba.  Hell, there's even a poll that says so do most Cubans.

[maarsen]

True enough about the Cubans wanting better relations. They have no objection or laws about Americans coming to visit, and some do, traveling from Canada to do so.

I have been all over Cuba and have never had the smallest interference by any people in authority. I even went to see Fidel's grave just after he died and interrupted a discussion a group of Cuban extremely senior military generals( judging by the gold braid and stars) were having to ask directions to a washroom. I did get a few strange looks but I did get directions.

As for Cuba being a police state, I have to say, wandering the cities and roads, I see more police in an average week here in Ontario. The only time we were ever stopped was when the police were investigating a hit and run accident and wanted to see if there were any witnesses. We were coming back from the Cuban government's private game reserve where visitors needed to show passports to enter. We did not have ours so we were asked to wait until the general in charge left and then we were let in by the guard. If this is repressive police state, the evidence is rather thin.

 

[Ran]

9 minutes ago, maarsen said:

As for Cuba being a police state,

It's more a police state in the vein of East Germany, say. Namely, that the (visible) policing force is small, but that every neighborhood and in some places (like Havana) every block have members of the CDR tasked with surveilling and reporting on any illict or counter-revolutionary behavior. Amnesty International mentions the CDRs in passing in relation to the widespread belief that the Cuban government is snooping on Internet activity.

 

[Mr. Chatywin et al.]

43 minutes ago, DMC said:

Uh, I don't know about "injecting freedom," but Obama spent his entire administration trying to normalize relations with Cuba.  Hell he even ran on it in 2008 - and took some shit for doing so.  Moreover, most Americans favor reestablishing relations with Cuba.  Hell, there's even a poll that says so do most Cubans.

It's a joke man. You don't have to take everything so seriously. 

And yes, I know Obama supported better relations between the two countries. I did work on both of his campaigns, after all.

My host family from Argentina traveled there all the time, and they never understood why more Americans weren't open to doing so as well. The place they feared in the Western hemisphere was Venezuela. The dad was an international businessman, and he joked that he always wore Chavez t-shirts when he went there, and stuffed his suitcases with them too so no one bothered him when they checked his shit.

[DMC]

4 minutes ago, Tywin et al. said:

It's a joke man. You don't have to take everything so seriously. 

Well, then make better jokes.

[Mr. Chatywin et al.]

32 minutes ago, DMC said:

Well, then make better jokes.

Well maybe I should open the next Covid thread and just call it "nobody cares about your Facebook avatars." 

Seriously, why is this a thing? 

I blame @Mexal.

[DMC]

Georgia: The Cradle of Democracy

Quote

 

The state of Georgia was supposed to hold an election Tuesday to fill a seat on the state Supreme Court. Justice Keith Blackwell, a Republican whose six-year term expires on the last day of this year, did not plan to run for reelection. The election, between former Democratic Rep. John Barrow and former Republican state lawmaker Beth Beskin, would determine who would fill Blackwell’s seat.

But then something weird happened: Georgia’s Republican Gov. Brian Kemp and the state’s Republican secretary of state, Brad Raffensperger, canceled Tuesday’s election. Instead, Kemp will appoint Blackwell’s successor, and that successor will serve for at least two years — ensuring the seat will remain in Republican hands.

 

 

6 minutes ago, Tywin et al. said:

Well maybe I should open the next Covid thread and just call it "nobody cares about your Facebook avatars." 

I don't even get this joke.