[Frieza_Prexus]

I'll start by saying that I am not a financial mastermind. I have a strong understanding of economics, morality, and finance, but I make no claim to be the second coming in these areas.

I have an MBA from the University of Houston Clear Lake and a BBA from the same school. I recently turned 24 years old and graduated in the spring of this year. So I would like to think that I am discussing from a reasonably intelligent position, but I admit that I do not have every answer. I only bring what I believe to be true.

There's a number of issues so I'll just start with this one.

Originally Posted by Kugbok & Lyrical

Insert Ron Paul Worship & then Hate

I am a huge supporter of Dr. Paul. In fact, he's my congressman and I've had the privilege of voting for him. I don't agree with every stance he takes on abolishing the fed, but he and I both have the same ultimate goal in mind. A stronger economy based on real (or at least more real than it is now) money.

Currently, our system is completely arbitrary and at the whim of the Fed. Dr. Paul wants the exact opposite and wants an inflation free (Yes, gold grows by a percent each year or so due to mining we can ignore this fact for now) system that is, as Milton Friedman puts it, completely automatic.

This is where he and I disagree. I understand the merits of a pure gold system that automatically controls inflation, but I agree with Milton Friedman as he said in Capitalism and Freedom. There should be a Pseudo Gold standard that lends weight to the currency, but it allows adjustment within a very limited range by using hard set rules.

There is a reason no major country is still on a hard gold standard today. But does that mean the benefits of it must be discounted completely?

Originally Posted by Lyrical

The problem with letting politicians run it is greater than their lack of knowledge.

Very true. This is why you have your scientifically established rules using history and prudence as your guideline. This allows organizations like the Fed to actually fulfill their intended purpose of keeping the economy stable.

What turned the depression from a bad recession into "the depression" was the fact that the Fed actually contracted the money supply instead of increasing it. They disobeyed their own mandate! This is clearly a case that illustrates the need for hard set in stone scientifically proven and ethical rules that allow some breathing room, but still packs the stability of a gold system.

Originally Posted by Lyrical

Another professor I had who worked for the Fed argued that an economy is like an old house. You jump in the shower, and can't get the hot water to come out. You turn up the hot water, and it is still cold. You can't see it, but the hot water is building up - only your feedback is delayed. And then eventually you get burnt.

That analogy is a good "rough" description of the Fed, but I think that it is ultimately flawed. In the analogy, you are the one turning the faucet. In the case of the Fed, it is a form of central planning. I believe, from what I have seen in historical data, that the Fed has nothing special about it that makes its central planners more qualified than the market.

Note, I don't immediately discount it on principle (that's another argument entirely), but on a historical and factual basis that I believe them to be incompetent.

Originally Posted by Lyrical

He argued that you have to have people that are somewhat removed from the political process and have long terms to run the economy. Or you would get people that would manage for the short term and screw us in the long term

Excellent point. This is why some monitoring agency has to exist. Under the constitution that would be Congress. I believe with the right pressure from the citizens that Congress could actually pick up this responsibility in a reasonable manner. Then again, I've been called an idealist.

Originally Posted by Lyrical

I don't know what Ron Paul stands for, but apparently that is a good thing. It seems he knows about as much economics as your average politician (jack-squat)

I believe this is unfortunate, as I regard Dr. Paul as one of the most knowledgeable people living today in regards to economics. Keep in mind, that just because you don't agree with someone doesn't mean they don't know what they're talking about. I believe Obama (and McCain) are barking moonbats. But they are both intelligent people that (typically) believe what they do for a good reason. It is incumbent upon me to use logic and diplomacy to show why they are wrong and why what I advocate is correct.

I feel that way about Dr. Paul because I have read many of his writings and he basically has gotten to say 'I told you so" in regards to almost every major financial upset in recent history. His sheer predictive power commands respect. Even if you think his solutions are bad, his ability to see the long run must be respected.

Originally Posted by Lyrical

Who is going to manage inflation? As a member of the Fed taught us in lectures, markets don't manage inflation well at all. A market left to totally free operations will let inflation spiral out of control as businesses keep testing on how much they can push the envelope, but at the same time, they don't increase what is paid to the workers.

In theory, only Congress has that power as I outlined above. I agree, again, with Milton Friedman on this issue. Steady inflation of 3-5% per year is what is needed to maintain real growth. This is the main reason I discount a pure & automatic gold standard. If you've got 100 people and $100 in the economy what happens when the population grows to 200, with the same $100? Massive deflation, which really really sucks.

Kugbok & Cynno,

I appreciate the zeal you have from Dr. Paul and his movement, but a major cornerstone of classical liberalism, libertarianism, Juris Naturalism, or whatever want to call it is the idea that things must be evaluated in a scientific and sound manner. We must be fair in doing these things and we must respect freedom of choice.

While you and I both believe deeply in Dr. Paul's message, we must consider what we are asking people to do. We are asking them to reconsider and reevaluate their stances, many of which are deeply held. It would be unfair on our part not to, at the very least, debate the issue fairly and consider that we could be wrong. I sincerely doubt that I am wrong. But in the spirit of diplomacy I must do what I am asking others to do.

I believe you would have more success in your efforts if you tried this.

Also Cynno, I believe you have misstepped with the comment on company valuation at asset value only. Not only does that view not consider intangibles or unquantifibles such as personnel and trade secrets, it also doesn't consider the idea that some companies are just better despite all real assets being equal. To centrally control that would violate a core tenant of capitalism.

Remember, under a true capitalist system people must be free to enter into any private deal they wish. Subject to reasonable (Pandora's box alert!) controls.

Originally Posted by Lyrical

The Paul plan doesn't even work on paper, and can be disproven in less than five minutes. Thank God Paul won't ever be President.

While that is not the plan I would choose I believe that plan would be preferable to what we currently operate under. Of course, changing things overnight would be bad obviously. Anything this sweeping must typically be phased in.

Grobbee,

The lack of respect you have for the constitution is disheartening. It covers objective moral issues about freedom. Issues that have absolute answers and will never become outdated. I find your attempts to destroy it immoral, unethical, and disingenuous at best.

Originally Posted by Grobbee

Capitalism at it's finest.

Why suffer these horrible swings? Why not just stop half-assing the regulation?

We don't live in a truly capitalist society. Not even close. (Counter point: As I said above, reasonable controls are nice. Extreme anything is usually bad.)

You advocate communism versus capitalism. I believe you're arguing a false position. Literally, apples versus oranges. A better analogy would be freedom versus slavery.

Under a capitalist society, you are free to enter into a communistic agreement with any willing participants. Under a communist system, I am jailed, or worse, for pursuing my own economic goals.

The difference between you and me is that I want everyone free to forge their own destiny.

You want me to be a slave to yours. And I dare assume you would justify murder and imprisonment in order to deny me my freedom of choice to live and trade as I want.

As Richard Maybury says in the "Uncle Eric" books line:

Originally Posted by Richard Maybury

There are two laws upon which all major religions and societies are founded.

Do all that you have agreed to do. This is the basis of contract law.

Do not encroach upon other persons or their property. This is the basis or tort law.

All other laws and rules can stem from those two. Should they not, they are not likely to be moral or add anything of value to our lives.

Ultimately, people should suffer for their own bad choices. The government should preserve our rights, and congress should not shirk its duties to a private and arguably incompetent unconstitutional organization.