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Thread: Should Banks be punished?

  1. #1 Should Banks be punished? 
    Forum Sophomore timel's Avatar
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    They have played with money they were not suppose to; In their crazy obsession on always making more money.

    They are putting everyone in trouble economy wise.

    Why should this people walk free after all?
    http://www.timesonline.co.uk/tol/com...cle4735446.ece


    A pilot lives in a world of perfection, or not at all.

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  3. #2  
    Forum Isotope Bunbury's Avatar
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    The crazy obsession is what makes the free market system work. It never was and still isn't designed to work for the benefit of anyone but the shareholders. If others benefit that is collateral benefit, which theorists like Friedman claimed would trickle down to everyone. In such a system it is the shareholders who must take the risk.

    I have always thought a free market system is literally impossible in a democracy because the voters with the least money are always the majority and will always vote for more regulation, for government-run social services and retirement systems. In a democracy the politicians apply a tax-powered pump to turn the trickle into a modest stream, thus producing a bit of trickle up when poor people actually have money to buy the stuff that the shareholders' businesses are producing.

    I am looking at Chile, a country that introduced a free market system by force and imposed it on an unwilling populace by torture, murder and disappearances (with Friedman and Thatcher cheering from the sidelines). That was decades ago. Now Chile apparently does have a thriving free market system and a democracy. How are things in Chile? Perhaps it's an example that proves me wrong.


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    Forum Isotope Bunbury's Avatar
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    Aha! An article about Chile in the Washington Post, a newspaper that is a stalwart advocate of free-market economics. I think the article supports my viewpoint stated above,, so congrats to the WP for fair and balanced reporting.


    "What makes Chile different from the rest of Latin America," said Manuel Riesco, an economist with the Center for National Studies of Alternative Development in Santiago, "is not that we embraced the free market more than our neighbors. What we realized is that the free market is like a car. There is no doubt that it is the best way to get you from point A to point B. But you have to steer. If you take your hands off the wheel, you will end up face-down in a ditch."
    Said Dani Rodrik, professor of international economics at Harvard University: "The myth is that Chile's success is purely the result of fundamentalist free-market policies. But the truth is quite a bit messier than that. Government activism and management in Chile did not stifle the power of the free market. It unleashed the power of the free market."

    http://faculty.smu.edu/lmanzett/Chile%20%20Market%20Economy%20(Washington%20Post). pdf
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  5. #4  
    Time Lord
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    I'd say directing a free market is kind of like directing any other natural force. In the first place, it's good to be aware that it is better to try and direct it than to oppose it (like how a sail boat can move around by adjusting its sails to catch the wind right)

    Just like with the boat, there's a direction we want to go (maximum benefit for everyone), but the natural forces of nature want to send us in a random direction instead. (what's more random than the wind?)
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  6. #5  
    Forum Sophomore timel's Avatar
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    Quote Originally Posted by kojax

    Just like with the boat, there's a direction we want to go (maximum benefit for everyone), but the natural forces of nature want to send us in a random direction instead. (what's more random than the wind?)

    I fear purely free markets. Where there is an avid desire for more and always more gains, there is always dangers of abuses and than consenquences.

    It's ideologicaly a great idea (free market) because it is based on human trust.
    We can trust human. I would still be open to a slight regulation and basic commun sens. Ideologicaly and optimisticaly I would go for free market, but back down to earth I'm more in favour of a regulated market.

    Less money = Less troubles
    A pilot lives in a world of perfection, or not at all.

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  7. #6  
    Time Lord
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    My thinking is that human greed is like the wind. It's neither bad nor good all on its own. It depends on how you direct it.

    Good regulating would be the metaphorical equivalent of a skilled sailor adjusting the sails. Communism would be like trying to build a huge fan and force the wind to blow where you want it to.


    The place to look for good regulation tactics is organized sports. No sporting competition really works very well without rules. You don't want runners trying to break each others' legs before the race starts, in order to win. You don't want football players bringing guns onto the field. Etc...
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