Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : The Castle -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (3058)	3/10/2004 11:09:19 AM
From: The Philosopher	Read Replies (1) \| Respond to of 7936

according to you, there is no benefit gained from having margin accounts or insuring bank accounts; that its been sheer luck that we have managed to not experience the booms and busts that took place between 1850 and the 1930s. I don't know about Tim, but: a. Nobody is forced to buy on margin. Buying on margin is one of those intersections between greed and stupidity. If people want to be greedy and stupid, that's their right, and I don't see why it's the government's obligation to prevent them from being greedy and stupid. Some people could make lots of money borrowing very heavily on margin who are now prevented from making those fortunes. So we punish the capable to protect the stupid. That's a good way to build a society of mediocrity, which we have, but a lousy way to build a dynamic society where those with the most capability, rather than the largest starting pot, can rise to the top. 2. Federal insurance, which is compelled insurance, also rewards stupidity and punishes competence. Without insurance, investors would have to investigate the places they put their money, but they would get higher rewards for it because the banks wouldn't have to pay those forced insurance premiums. The free market would step in and offer private insurance to insure your savings; those who wanted the safety belt at a cost could buy it, those who preferred the higher risk and higher reward of uninsured deposits could make that choice. Yet another move toward treating adults as children needing mommy to protect them, instead of treating them as adults who have the right to make mistakes and learn from them. It's really a question of whether government should be a parent or a referee. I prefer a referee, and let me worry about my parenting.

To: tejek who wrote (3058)	3/11/2004 3:38:32 PM
From: TimF	Read Replies (2) \| Respond to of 7936

I see......according to you, there is no benefit gained from having margin accounts or insuring bank accounts No Ted I didn't say anything about "having margin accounts" or insuring bank accounts. I said the crash was primarily caused by government action. I also said some of the government action in response to the crash and the depression was counterproductive. Neither of those statements is the same as saying that none of the government action after the crash was beneficial. Again you are attacking a straw man. Lately it seems to be one of your favorite pastimes. People had margin accounts back in the 20s, I assume you mean changing the margin requirements rather then "having margin accounts". I think both changing the margin requirements and insuring bank accounts have been broadly beneficial. They are not without drawbacks, esp. the bank insurance, but its likely that they have done more harm then good. Overt greed usually results in over the top speculation Overt greed exists in even totalitarian countries. Yes, but it doesn't topple markets because there are none to speak of in a total. country It might not topple markets in a totalitarian country if there is no real market to topple. But of course a toppled market is better then no market. My point didn't pertain to just totalitarian countries. Totalitarian countries where just the extreme example that overt greed exists in all countries and societies. So does covert greed. Greed and market speculation still exists in regulated markets unless they are so regulated that the regulations snuff the life out of them (and maybe even then). I can see this as a flaw but monopolies are far more likely to form because of government action then because of its absence. Yes, and did you know the sky was black? Seriously, all the years in school......I guess they were feeding me propaganda. I should have called you for the straight scoop. Name a true monopoly (not just a dominant competitor but a monopoly) that exists without government assistance in getting that monopoly. Try to make it one that isn't a monopoly in a very tightly defined market segment. Microsoft has a monopoly on the Windows operating systems because of copyright laws. It has a dominant position in desktop computer operating systems but it doesn't have a monopoly. Local cable companies are often given exclusive licenses, this gives them a narrow monopoly (in cable TV service to a particular area) but they have competition in providing video from over the air and satellite broadcasts. Intel is by far the strongest company in the CPU market but it is not a monopoly (unless you define the market as narrow as "the market for CPU's in computers sold by Dell). The same could be said for Tyson in the Chicken market and other companies. The real monopolies are those that get that monopoly from the government. I'm not saying its impossible for a business to get a monopoly in a broadly defined or other wise important market without government help but its a rare exception. know capitalism is a sacred cow with you but it is flawed. It's not as much that capitalism is flawed but that capitalists are, and probably always will be, flawed. Government regulation doesn't have the advantages of the market, but it has most of the disadvantages, in that politicians, bureaucrats, lobbyists, political parties and pressure groups, and yes even voters also can be greedy, short sided, and only concerned about their own special interest. Tim