Castro has passed on

[Mycroft]

Actual libertarianism does, yes. Your American version of it is, as usual, leaving out part of the sentence, so let me fix that for you: "American Libertarianism empowers the individual capitalist".

Pray tell what is this "American Libertarianism" you speak of?

Such as expropriating the means of production? You know, like regular libertarianism would suggest?

AKA stealing. Also, busting the head of the owners when they object, or sending him to Siberia, or just taking their resources to give to other people and letting him starve.

See, you have a hypothetical where Bob dies. I have a reality where between 2.5 and 7.5 million people died. I want Bob to live, even though he's just hypothetical. I think it's reasonable to fine tune the system to help Bob survive. You have a religious dogma that looks away from the millions who were murdered to make it work in the past, and focuses on purely hypothetical flaws as reasons not to look at alternatives.

Rules such as market allocation of resources? Or private ownership of the means of production?

Yes. Rules that encourage the creation of wealth so that there is enough for everyone. Not rules that try to limit markets and impose arbitrary restrictions.

Capitalism is an organic process. It works without supervision. It grown on it's own to fill niches created by need/demand.

At the same time, just because it's an organic process doesn't mean it can't benefit from weeding, pruning, and nurturing to make it even more productive.

 

[Mycroft]

I never claimed that, did I? I claimed that the reason not everybody's needs are met is because of double use of the term "need". In one case having the normal meaning of, well, need, and in the other case being defined as "how much money you're able and willing to pay for something". If you distribute resources "efficiently" according to the latter meaning then it's hardly a surprise that it so badly fails according to the former meaning.

ETA: besides, you're the one implying that the problem is lack of resources:

My actual quote was, The availability of resources is limited only by the willingness to gather them. Lack of resources is not the reason why not everybody's needs are met. "

When your editing changes the meaning of what is being said, then the problem is your editing.

Also, you keep ignoring the question about what your superior alternative is. When will you answer that? Never? Is that because you don't have a superior alternative?

 

[Craig B]

Nobody posting under the name Darth Rotor made any effort to absolve anyone of deeds as autocrat. You really ought to not try crap like that, it's dishonest. Someone else began a comparison of the two, and the point I was trying to make was that they were two different cases and two different results in length of term and succession.

A person posting under the name Darth Rotor wrote

Ah, the joy of the comparative (rule 10) game.
After 17 years, Pinochet stepped down. It wasn't one of his family members who took over.
Castro? El Presidente for about five decades. Even if you like the guy, there can be too much of a good thing. He has so far succeeded in making Cuba subjects to a family dynasty.

That is not merely a comparison of different cases; it is a contrast between Castro, whom you condemn - and I have said rightly - for establishing a dynasty, and Pinochet who did not, and "stepped down". And Pinochet held power for 17 years and Castro for five decades. I read this as "absolving" misdeeds of Pinochet, by contrast with opposite (and indeed reprehensible) acts of Castro. If it's not that, then you must be asserting that Pinochet didn't commit any misdeeds requiring to be absolved. But however that may be, I wasn't being dishonest.

 

[caveman1917]

My actual quote was, The availability of resources is limited only by the willingness to gather them. Lack of resources is not the reason why not everybody's needs are met. "

When your editing changes the meaning of what is being said, then the problem is your editing.

I didn't edit anything, I quoted your literal words.

 

[caveman1917]

Pray tell what is this "American Libertarianism" you speak of?

American Libertarianism is the result of this:

One gratifying aspect of our rise to some prominence is that, for the first time in my memory, we, “our side,” had captured a crucial word from the enemy . . . “Libertarians” . . . had long been simply a polite word for left-wing anarchists, that is for anti-private property anarchists, either of the communist or syndicalist variety. But now we had taken it over. . .

About as much to do with regular libertarianism as national-socialism has to do with socialism.

 

[Craig B]

This one line certainly deserves it's own post.

No, the assets did not vanish.

The assets are the houses themselves, and the mortgage backed securities involved in their financing.

What happened is the perceived values of these assets dropped. Both the houses and the mortgages on these houses remained.

Your response deserves a whole book, but I will give it only one post. The assets did vanish. A house is an asset to a lender only because it has value. If it remains in place, but ceases to have value ... you are telling me that it remains an asset to a lender?

Mortgage backed securities have a monetary value at the market. Absent that, they are ink on paper, or mere electronic signals. If the monetary value vanishes, the "asset" is still there?

Now one can hold on to them in the hope that the "asset" might reappear, which is what I presume you mean, putting the best construction possible on your words. However the asset as understood by the agency that lends against it is the value at the market. If that vanishes the asset has vanished. It may recover, but that is extremely doubtful in the case of the "leveraged" assets typical of the 2003-2008 bubble. As it was in the case of the common stock bubble that ended in 1929.

 

[Mycroft]

A person posting under the name Darth Rotor wrote That is not merely a comparison of different cases; it is a contrast between Castro, whom you condemn - and I have said rightly - for establishing a dynasty, and Pinochet who did not, and "stepped down". And Pinochet held power for 17 years and Castro for five decades. I read this as "absolving" misdeeds of Pinochet, by contrast with opposite (and indeed reprehensible) acts of Castro. If it's not that, then you must be asserting that Pinochet didn't commit any misdeeds requiring to be absolved. But however that may be, I wasn't being dishonest.

He's observing one specific instance where Pinochet wasn't quite as bad as Castro. In no way, as I read it, is Darth absolving Pinochet of any of his crimes.

Saying one person is worse than a different person isn't at all the same as saying that either of them are acceptable.

 

[Mycroft]

I didn't edit anything, I quoted your literal words.

Did you quote them in their entirety? If not, you participated in something called "editing".

Like when you continually edit out every instance where I ask you to describe your superior alternative to Libertarianism.

American Libertarianism is the result of this:

Yeah, that tells me "different from your libertarianism". It doesn't tell me what the distinguishing characteristics are or why your libertarianism is better than mine.

About as much to do with regular libertarianism as national-socialism has to do with socialism.

There may well be profound differences in your "libertarianism" and Nazism, but as I demonstrated earlier, the differences are not found in how many people they kill.

Are you ever going to get around to telling me what your superior alternative system is? Or are you just going to keep editing this question out of your replies?

Or maybe your continuing to ignore this question should be taken as a tacit admission that you don't have a superior system in mind?

 

[caveman1917]

Did you quote them in their entirety? If not, you participated in something called "editing".

Yes, or at least the only sentence you made regarding that in that post.

Like when you continually edit out every instance where I ask you to describe your superior alternative to Libertarianism.

Me ignoring you does not constitute misleading "editing". You are free to actually address any of the points raised with respect to market-based allocation of resources. And if your "Libertarianism" doesn't contain at least the claim to put more resources under market allocation then it isn't "Libertarianism" even on its own terms.

 

[Mycroft]

Your response deserves a whole book, but I will give it only one post. The assets did vanish. A house is an asset to a lender only because it has value. If it remains in place, but ceases to have value ... you are telling me that it remains an asset to a lender?

The assets remained. Their perceived value changed.

If you have a home valued at X, and a change in the market reduces it's sale price to 80% of X, have you lost your asset?

Mortgage backed securities have a monetary value at the market. Absent that, they are ink on paper, or mere electronic signals. If the monetary value vanishes, the "asset" is still there?

The mortgage is still there. If the buyer is still paying it and continues to pay it, it has just as much value to the investor as it would have otherwise. People who buy these are looking for long-term investments.

In my real world example, OneWest bank made off very well because they were able to buy the assets (mortgage debts, if you need cliff's notes) of IndyMac at a time when the perceived value of those assets were very low. As this scandal unfolded, it was revealed that the underwriting, which is the work done to consider the assets and credit worthiness of the borrower, often inflated the value of the property and over-stated the reliability of the borrower. For a period of time the value of these tranches of mortgage backed securities was unknown and unknowable. That's what destabilized IndyMac.

OneWest had the foresight (well, liquid assets really) to look at those tranches of mortgage backed securities and realize that:

1) Most of them will be paid as agreed.
2) Many of the ones that aren't will be refinanced and paid off anyway.
3) Even where the borrower completely defaults, the loan is still backed by property.
4) Heck, if we can buy this pile of manure at well below market price we can even tinker with the terms of the loans to recover most of the value while minimizing foreclosures which have the side effect of further reducing property values in that neighborhood.

Now one can hold on to them in the hope that the "asset" might reappear, which is what I presume you mean, putting the best construction possible on your words. However the asset as understood by the agency that lends against it is the value at the market. If that vanishes the asset has vanished. It may recover, but that is extremely doubtful in the case of the "leveraged" assets typical of the 2003-2008 bubble. As it was in the case of the common stock bubble that ended in 1929.

Nonsense.

If you have a mortgage and I hold your mortgage, that asset doesn't vanish just because market conditions lower the value of your home. You still have a mortgage and you still make the payments, and I still have an asset which is a lot like a 30 year annuity.

Worst case scenario for me is if you're upside down in your home, meaning you owe more on it that it would sell for, and you decide you will come out ahead if you just walk away and leave me with the house. In that scenario, I basically have the asset of being the mortgage holder forcibly exchanged for having the asset of the home. Do I lose? Yes, but my loss isn't anywhere near 100%, more like 20%-30%.

Now if you've wrapped your head around that, just imagine that I actually owned ten of those mortgages and only one of them defaulted. That cuts my losses from the initial market evaluation from 20%-30% to just 2%-3%.

Then if you've wrapped your head around that, understand that it represents a default rate of 10%, which is huge. More realistic default rates for high risk mortgages are closer to 4%. For regular mortgages, much less.

 

[Mycroft]

Yes, or at least the only sentence you made regarding that in that post.



Me ignoring you does not constitute misleading "editing". You are free to actually address any of the points raised with respect to market-based allocation of resources. And if your "Libertarianism" doesn't contain at least the claim to put more resources under market allocation then it isn't "Libertarianism" even on its own terms.

I'm not entirely sure what you mean by that, but the gist seems to be that you're running out of steam and don't have much of value left to say.

If you want to ignore my question, go ahead. I think if you have a good answer to it then it would be a valuable contribution to the discussion, but I also think you don't have a good answer to it so...whatever.

 

[caveman1917]

I'm not entirely sure what you mean by that

It means exactly what it says.

If you want to ignore my question, go ahead. I think if you have a good answer to it then it would be a valuable contribution to the discussion, but I also think you don't have a good answer to it so...whatever.

There is no requirement for me to provide you with alternative resource allocation schemes in order to criticize market-based schemes.

 

[caveman1917]

If you really want to be provided with stuff, then here, have a heuristic instead:

Be especially skeptical about ideologies the slogans of which don't even form complete sentences (such as "capitalism is efficient").

 

[Mycroft]

It means exactly what it says.

I'll accept that and observe that it apparently wasn't important enough for you to make any clarifications. Like I said, running out of steam.

There is no requirement for me to provide you with alternative resource allocation schemes in order to criticize market-based schemes.

You are absolutely correct. You are under no obligation to answer any question at all, or even to participate in any discussion.

Again, if you want to ignore my question, go ahead. I think if you have a good answer to it then it would be a valuable contribution to the discussion, but I also think you don't have a good answer to it so...whatever.

If you really want to be provided with stuff, then here, have a heuristic instead:

Be especially skeptical about ideologies the slogans of which don't even form complete sentences (such as "capitalism is efficient").

Again, it's not religious dogma. Nobody is required to be married to any one system, nobody is required to be an extremist or fundamentalist for any one system, and most importantly, we're all free to explore ideas using analysis that are deeper than making straw-men arguments against slogans.

 

[caveman1917]

I'll accept that and observe that it apparently wasn't important enough for you to make any clarifications. Like I said, running out of steam.

It's very simple. Either you propose market-based resource allocation, in which case there are several points for you to address, or you are not proposing market-based resource allocation, in which case you're not proposing "Libertarianism". Unless it's now suddenly also a "fringe position" in American Libertarianism to propose market-based resource allocation.

 

[Craig B]

The assets remained. Their perceived value changed.

If you have a home valued at X, and a change in the market reduces it's sale price to 80% of X, have you lost your asset?



Thye mortgage is still there. If the buyer is still paying it and continues to pay it, it has just as much value to the investor as it would have otherwise. People who buy these are looking for long-term investments.

In my real world example, OneWest bank made off very well because they were able to buy the assets (mortgage debts, if you need cliff's notes) of IndyMac at a time when the perceived value of those assets were very low. As this scandal unfolded, it was revealed that the underwriting, which is the work done to consider the assets and credit worthiness of the borrower, often inflated the value of the property and over-stated the reliability of the borrower. For a period of time the value of these tranches of mortgage backed securities was unknown and unknowable. That's what destabilized IndyMac.

OneWest had the foresight (well, liquid assets really) to look at those tranches of mortgage backed securities and realize that:

1) Most of them will be paid as agreed.
2) Many of the ones that aren't will be refinanced and paid off anyway.
3) Even where the borrower completely defaults, the loan is still backed by property.
4) Heck, if we can buy this pile of manure at well below market price we can even tinker with the terms of the loans to recover most of the value while minimizing foreclosures which have the side effect of further reducing property values in that neighborhood.



Nonsense.

If you have a mortgage and I hold your mortgage, that asset doesn't vanish just because market conditions lower the value of your home. You still have a mortgage and you still make the payments, and I still have an asset which is a lot like a 30 year annuity.

Worst case scenario for me is if you're upside down in your home, meaning you owe more on it that it would sell for, and you decide you will come out ahead if you just walk away and leave me with the house. In that scenario, I basically have the asset of being the mortgage holder forcibly exchanged for having the asset of the home. Do I lose? Yes, but my loss isn't anywhere near 100%, more like 20%-30%.

Now if you've wrapped your head around that, just imagine that I actually owned ten of those mortgages and only one of them defaulted. That cuts my losses from the initial market evaluation from 20%-30% to just 2%-3%.

Then if you've wrapped your head around that, understand that it represents a default rate of 10%, which is huge. More realistic default rates for high risk mortgages are closer to 4%. For regular mortgages, much less.

Some recovered and some didn't. But the asset is the value of the thing owned. Galbraith repeatedly discusses the phenomenon of "margin calls" sent by lenders when the value of the securities borrowers had posted as collateral - often to "leverage" their speculative investments in stocks - fell below the value of the loan they had received from the bank or other lender. If they wrote back and said, don't worry, you've still got the share certificates in my file, so the asset is still there, I don't think that would have impressed the bankers.

They lent you ten thousand on your securities. These are now worth eight thousand. So pay us two thousand or we sell them now because your collateral is impaired.

That's the difference between "I sold out" and "I got sold out".

 

[Mycroft]

It's very simple. Either you propose market-based resource allocation, in which case there are several points for you to address, or you are not proposing market-based resource allocation, in which case you're not proposing "Libertarianism". Unless it's now suddenly also a "fringe position" in American Libertarianism to propose market-based resource allocation.

Jeebus.

If you're claiming not to understand my position after all this back and forth, then either you're not capable of understanding or you're just being disingenuous. I think it's the later,but if you really don't get it I'll encourage you to read through the thread again.

A hint: I am not and have never claimed to be a "pure libertarian", whatever the hell that is. Whatever differences there are between "American libertarianism" and "European libertarianism" are irrelevant in deciding which is better.

That guy you claim stole the word "libertarian" from the anarchists? Don't care. He's irrelevant. He may have been influential back in the day, but he's not part of the conversation anymore. He is not a profet and his book is not a gospel. Understanding how people thought in centuries past is not an obligation to agree with them today.

That's part of what I meant every time I said, "it's not religious dogma".

Another hint: I don't need to "propose" what already exists. Until you can propose a superior system, the default is market driven. Nobody claims it's perfect, but it's flaws alone are not reason enough to abandon it unless you have a superior solution to propose.

 

[Mycroft]

Some recovered and some didn't. But the asset is the value of the thing owned. Galbraith repeatedly discusses the phenomenon of "margin calls" sent by lenders when the value of the securities borrowers had posted as collateral - often to "leverage" their speculative investments in stocks - fell below the value of the loan they had received from the bank or other lender. If they wrote back and said, don't worry, you've still got the share certificates in my file, so the asset is still there, I don't think that would have impressed the bankers.

They lent you ten thousand on your securities. These are now worth eight thousand. So pay us two thousand or we sell them now because your collateral is impaired.

That's the difference between "I sold out" and "I got sold out".

Mortgages do not have "margin calls", so what is the relevance of this?

In stock trading buying on margin is high risk. High risk means that people who do it might get burned. If they don't get burned, it's an opportunity for the investor to leverage his capital for greater profits, but why should society as a whole care? It's basically an agreement between the investment broker and the investor.

 

[Craig B]

Mortgages do not have "margin calls", so what is the relevance of this?

In stock trading buying on margin is high risk. High risk means that people who do it might get burned. If they don't get burned, it's an opportunity for the investor to leverage his capital for greater profits, but why should society as a whole care? It's basically an agreement between the investment broker and the investor.

I don't care at all. I was discussing not only mortgages but assets in general as you included securities among them. Their value at the market is their measure, because that is what can be borrowed against them. In other senses a house may be an asset, if someone wants to live there, whether it can be sold or not. But whether it can raise a loan as collateral depends on its market value. That is why we are able to say that assets "disappeared" with the onset of the crash.

 

[caveman1917]

A hint: I am not and have never claimed to be a "pure libertarian", whatever the hell that is.

Are you in that much need of attention that you have to make a discussion about Libertarianism about yourself instead? I made some claims about Libertarianism, defended them, and I'm not particularly interested in discussing your personal political ideas unless they align with Libertarianism, so I'll consider the discussion as closed.