Comments by "Wojtek The Bear" (@wojtekthebear4958) on "The Plain Bagel"
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Jay Blake Maybe you should read an economics textbook before you talk about economics. . As much as you decry people for using the wrong definition of socialism because "it can't be summed up in a paragraph" you create a strawman of what a market is, choosing to completely ignore the actual definition for it in economics.
You're not going to win any points by strawman-ing your opponents position and only that.
For instance you claimed this was that typical pattern of competition in a market: " If everyone started with the same amount of money in a market and then chose to invest it in various ways, there will be winners and losers, the losers will then not have as much money as the winners and eventually be vulnerable to being undercut and kicked out of the market by the previous winners. Eventually, after so many turns of the market game it's going to get very hard to win against the other winners"
Except two of the basic aspects of market competition are that 1. 'There are no barriers to entry into or exit out of the market.' and 2. 'No single firm can influence the market price, or market conditions. The single firm is said to be a price taker, taking its price from the whole industry.' and then there's the beautiful 3rd: government regulation exists to keep the market competitive (in cases of market power usually).
A good example of such competition is retail stores. Previously we had retail chains like Walmart, Target, Best Buy, Sears, Toys-R-Us, etc. Over the past few decades though, many of these store have been closing down. So your theory would hold up, right? Except they're closing down due to new competition from new entrants like Amazon, Chegg, E-Bay, etc. Entrants are supposed to be able to enter markets.
Is this idealized? Sure, a little bit. There of course will always be some barriers to entry or exit in a market, and externalities will always exist, but it's the government's job to make sure that the markets remain as competitive as possible, and, in 95% of cases that holds. There's only a few select industries which exist market failures, where markets do not run perfectly efficiently due to special factors, and these are the industries which need special attention. These include: infrastructure, utilities, healthcare, education, etc. And even the solution to these market failures isn't a complete nationalization for the industries. For example, when it comes to utilities, local cities tend to auction permission to run in their area to the lowest bidder. This tends to be the most efficient for local areas due to something known as the winner's curse (the 'winning' bid typically ends up overshooting the value of whatever's being bidded on).
Also, once again, this is only a problem in 5% of industries. When you need to fuel up your car, you only really pay attention to which gas station is offering gas at the lowest price. You don't care so much about anything else. That's market competition at work.
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Jay Blake Except Literally everything I said was sound economic theory. Also I did provide examples. Did you completely skip over the fact that I talked about retail stores and gas stations, using them as examples? Apparently. Also you totally made assumption. I took a direct quote from you in my argument where you made plenty of assumptions on how a market works in the long run (and of course it wasn't backed up by anything). I have economic history on my side.
"If everyone started with the same amount of money in a market and then chose to invest it in various ways, there will be winners and losers, the losers will then not have as much money as the winners and eventually be vulnerable to being undercut and kicked out of the market by the previous winners. Eventually, after so many turns of the market game it's going to get very hard to win against the other winners"
You know what all of those claims are called? Assumptions. You know what the claims put together are? A (bad) model on how a market works over time. You didn't use Occam's Razor. Don't act like you fucking did. You just built a model to suit your narratives without looking to see if it holds up to any sort of rigor, which, of course, it doesn't.
You want more examples though? Sure! Look at the economic divide between North and South Korea. Look at the exponential growth seen by more socialist countries after they adopted market reforms (China, India, Eastern Europe, etc). Look at Venezuela.
Now let's look at history for examples of complete economic nationalization working out well. The Great Leap Forward? Wait, no. That led to the deaths of millions of Chinese people and actually shrunk the Chinese economy. Er, the Five Year Plans of the USSR? No, the USSR never built a consumer economy and was always critically lacking in important goods like cars and even jeans. Er, North Korea. Still a shithole.
Huh, weird. It's almost like these economic experts who spent their entire lives studying how economies work know a little more on the subject than you, someone without even the basic knowledge of the subject.
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Jay Blake Good job again ignoring the evidence I did bring up so you could again state I didn't provide any. Funny since you then go on to attack my evidence using very horrible claims. Also your use of if in your scenario has no relevance to the assumptions I was referring to. Yes, your whole scenario was based on an if, but the claims you made in your scenario were just assumptions based on nothing. for instance you claimed that "after so many turns of the market game it's going to get very hard to win against the other winners". That's an assumption; plain and simple. You assumed that as markets go on, the winners make it too hard for entrant to enter the market and compete.
So let's take a real world example then: fast food chains. Over the decades, there have been many extremely successful fast food chains like Mcdonald's, Burger King, Wendy's, etc. So your assumption holds up, right? Except new fast food chains are started all the time to varying degrees of success. The burger chains above are now competing with places like Five Guys, Hardee's, and dozens upon dozens of regional chains. This is the same with sub shops with Penn Station, Jersey Mikes, and many more sub places I don't know about, retail chains with Amazon, Chegg, Chewy, etc, social networking sites with the creation of Twitter, LinkedIn, Snapchat, etc. I could go on. Your base assumptions were stupid and wrong. You just don't want to admit it. I'll also ignore your Venezuela comment because honestly I can't stop laughing at it. If you honestly think it's a market based economy, then you already proved you're too ignorant to even argue with.
Yeah, the North Korean performed better than South Korea.....when South Korea was under a brutal dictatorship and in no way market based. Thanks for proving my point? You claim that South Korea was propped up by the United States, but you realize that South Korea was extremely isolated from the US. right? On the other hand North Korea had a direct land border with the two largest Socialist countries that both had friendly relations with North Korea, and were more than willing to trade with them for their raw resources (which they had a lot more of than South Korea) and prop up. In fact the only reason North Korea has sense of an economy today is thanks to the propping up of the USSR, and now China. As for South Korea, you couldn't be more wrong. You wanted evidence though, so here's evidence. Straight from the mouths of some of the biggest economic experts
"Many studies attribute South Korea’s structural transformation to policy reforms aimed at opening the country to foreign markets. Indeed, the export-oriented policies of South Korea are one of the most important factors of its success: South Korea is now one of the top 10 exporters in the world, and its exports as a percentage of GDP increased from 25.9 percent in 1995 to 56.3 percent in 2012.3
Two additional factors have contributed to the increase in international trade and industrialization in South Korea:
An improvement in the business environment
Policies incentivizing investment in innovation"
In other words, they opened themselves up to foreign trade, found their niche on the global market, and reinvested their profits. That's how countries develop. North Korea didn't do this, instead focusing most of their investments on their military and only trading with countries like China and the USSR.
As for China, the fact that you call them socialist is hilarious. Let's look at a graph of China's GDP to show how ignorant you are, shall we? Here's a chart of their historical GDP: https://enacademic.com/dic.nsf/enwiki/11530901 Isn't it interesting that their economy only started to really grow in the late 1980's? Weird, since China was communist as early as 1946. Why did it take 40 years for them to actually start growing. Oh, that's right, they started liberalizing their economy and opening themselves up to trade. The 1980's was when China started rescinding it's Maoist policies and joining international markets and organizations like the WTO, World Bank, GATT, and IMF. Wow, I'm starting to notice a pattern here! FYI: The Great Leap Forward, China's big communist attempt to improve its economy and industrialize, happened two decades prior and was a colossal failures.
Today less than 30% of China's businesses are tied to the Chinese government. That is unless you want to say that the American manufacturing plants in China are somehow communist. This also isn't just me saying it either; It's the exact conclusion reached by the IMF: https://www.imf.org/external/pubs/ft/issues8/index.htm
Also I love how you brought up Poland like they're a failure. Their GDP grew exponentially since opening themselves up:https://www.henrykkowalczyk.com/texts/ukraine-the-world-is-watching/ Oh the horror! Poland's economy is over five times as large as it was in 1980!
I'll ignore your claims on the USSR because they too are blatantly untrue and I really want to continue on about Poland, because man you have really pissed me off about Poland. Seriously, you are scum for what you said. Also, before you say it, I'm not Polish, nor were any of my ancestors Polish. I took up this moniker simply because it's a cool, lesser known story of WW2.
First: in no way did Poland appease the Nazis and, fucking again, you are a horrible human being for even daring to suggest that. They lost the most people as a percentage of their population out of any country occupied by the Nazis. They fought both Germany and the USSR on two fronts for longer than the French government was involved. Hell, unlike France, they never even surrendered to Germany, instead forming a government in exile.
Second: Even while under occupation they had the largest resistance movement of any country, who fought and died tirelessly to free their country from Nazi rule. One of the most infamous, and horrifying, events came in the Warsaw Uprising, when the Poles in the Warsaw ghetto revolted against their Nazi occupiers to save the city the devastation from a battle with the USSR and its resulting occupation. The Soviet troops at the time were city across the river, able to support the Poles in their uprising, but they did nothing. They sat back and watched the Poles get massacred because, at the end of the day, the Soviets didn't give a rat's ass about the Poles. The Western Allies tried to airlift supplies to Warsaw, but ultimately their aid was too little and the uprising was crushed. The ghettos were then all but exterminated. Over 200,000 civilians were killed or thrown in concentration camps and a further 700,000 were expelled from Warsaw altogether, and you dare say that they appeased the Nazis? Fuck off you piece of shit.
Third: your claim that "a charge from privately owned cavalry was no defense from a charge of publicly owned, fully mechanised cavalry" is both Nazi propaganda and nonsensical. In no way was any part of the Polish army privately owned. Their military was funded the exact same way the German military, and every other military in the world was. Taxes and government spending. That incident also never happened. The Polish cavalry charged a German infantry position and, while mostly successful, were driven off by machine gun fire from other parts. When the Germany war correspondents caught up, they notice German tanks in the area and made up the above legend around that fact even though there is no historical basis for it: https://www.theguardian.com/world/2011/apr/06/myth-of-polish-cavalry-charge Now that you know the truth, you're of course going to never repeat such bullshit again, right? Sigh, probably not. Honestly I'm surprised you haven't gone into outright antisemitism at this point.
Just because I find you to be the epitome of scum and you're trying to declare one of the worst crimes against humanity as a success, I'll also provide evidence showing you're full of shit on the Great Leap Forward:
"No one is sure exactly how many people perished as a result of the spreading hunger. By comparing the number of deaths that could be expected under normal conditions with the number that occurred during the period of the Great Leap famine, scholars have estimated that somewhere between 16.5 million and 40 million people died before the experiment came to an end in 1961, making the Great Leap famine the largest in world history." (http://chronicle.uchicago.edu/960314/china.shtml) Also, before you claim bias. That came from a Chinese man who immigrated to the US and the stories his parents told him. I think he knows more on the subject than a keyboard warrior.
Here's another article on the subject: https://www.journals.uchicago.edu/doi/abs/10.1086/430804
A book on the subject: https://books.google.com/books?hl=en&lr=&id=14A1qPQOgQMC&oi=fnd&pg=PA39&dq=great+leap+forward+china&ots=EeQwZ874JZ&sig=V8uJ41CmJyF2NxLJ1dLvMEWpy0o#v=onepage&q=great%20leap%20forward%20china&f=false
Another article: https://www.sciencedirect.com/science/article/abs/pii/S0277953610003825
A Hong Kong newspaper on the subject: https://www.scmp.com/article/723956/revisiting-calamitous-time
Hell, China's own government acknowledges it as a failure: https://www.scmp.com/news/china-insider/article/1598753/great-leap-forward-commentary-western-hostile-forces-creates
Tell me, if the own government of China and the very party that enacted those reforms can acknowledge that they were a failure, why can't you? Me thinks it's because you're trying to spin a narrative and don't have any actual evidence to prove it. In other words, you really like spitting on the graves of the dead. Fucking scum.
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Jay Blake You're almost definitely a troll, but since your claim here is so easy to disprove, I thought I'd do so anyway. You want proof that traditional economic theories have worked? Here: https://slides.ourworldindata.org/world-poverty/#/declining-world-poverty-1820-2015-step2
Oh, the horror! Poverty, starvation, childhood mortality, etc are on the decline everywhere and education, equality, living standards, and average lifespans are on the rise! How could our modern economic order do this to us?!
Also you realize traditional economics has its roots in Keynesianism, right? Keynes was very much pro-markets and the traditional school of thought is called neo-classical or neo-Keynesian. You're bad at even trolling.
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Vladimir Lenin I find it odd how you want other people to read Marx considering Marx's theories were wrong. And I'm not even talking about his socialist ideals either.
1. This was before the Marginalist Revolution in economics. Marx, and most economic philosophers of the time, believed in the labor theory of value. In other words, a products value comes solely from the amount of labor put into it. A product that takes more time to make would automatically have to be more expensive.
Today we know that such a theory is false. A goods value is determined from the intersection between supply and demand. Recent oil prices and toilet paper shortages are an excellent example of this. Oil prices didn't drop because a lot less labor was randomly used to refine it, but because there was an oversupply of oil in the market. The labor theory of value featured prominently in Marx's argument for socialism.
2. Marx also believed that capitalist economies would crash on their own. To be fair to him, this was based on economic theory which, while sound on paper, didn't work at as such in practice. Basically economic theory holds that in a perfectly competitive market, no business is making a profit in the long term, as all businesses would be selling their products at the cost it took to make them. Gas stations are a good example of this. The gas station makes next to no profit on the gas they sell, their profits come from goods bought from their stores.
Because of this, Marx reasoned that businesses would have to pay increased costs for automation to keep their products competitively prices (this is in the mid 1800's, mind you), while receiving no actual profits since all their competitors are doing the same thing. With increased debt and no profits, the businesses would eventually go under. This is what Marx believed would happen on a macro scale and cause the downfall of the market economies.
Considering he wrote that over 150 years ago about automation which doesn't even compare to the level of automation and investments businesses have reached today, I think it's say that his theory was wrong.
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@bryanepie Wall Street doesn't have a problem with this. What most people don't realize is that, while the move to buy Gamestop and such stock was started by a grassroots movement. Within 48 a huge chunk of the shares being purchased were by the latest stock market funds like Fidelity, Vanguard, etc.
Otherwise it's already been explained why Robinhood had to stop purchases of Gamestop and AMC stock. Robinhood purchases their stock from a market maker, which is a firm which, well, makes markets between buyers and sellers on the stock market.
The market maker typically makes money by increasing the price of the stock a bit (usually a fraction of a cent) and taking that as profit. So they might buy a share of GME stock at $2.50 and sell it to Robinhood at $2.51
This only works when there is low volatility in a stock's price though. If GME generally fluctuates between $2.50 and $2.55, it's easy for the market maker to run an analysis to determine how much they can take as profit.
Well the shares are constantly fluctuating between $150 and $400 though? It's too volatile for market makers to make a consistent profit, so they stop trading in the stock.
And so what's Robinhood to do when it's supplier of shares of stock stops trading in said stock?
Not everything is a conspiracy by the rich, and I'd love to see what you have to say in a month when Gamestop's stock price inevitability plummets since, as everyone knows, it's a bubble.
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@caidenbond1988 Fucking what? Talk about worst takes imaginable.
1. Imperialism and colonialism both predate capitalism. Unless you're going to claim that early 16th century Spain was somehow capitalism when they still practiced manorialism/mercantilism. Actually, the major European powers had colonies before the Americas. By the 16th century, Portugal already had colonies in Africa.
2. It shouldn't even need to be said, but slavery existed way before capitalism. In fact many historians believe that one of Europe's main exports during most of the Middle Ages were slaves. There was a huge slave trade going on around the Mediterranean too due to the Ottoman Empire. How you're blaming that on capitalism is beyond me.
3. Fascism is a rejection of both capitalism and socialism. Mussolini even argued so himself when he wrote the Doctrine of Fascism. Fascists believed in working to better the state, but they also held up tradition to be the upmost importance. Granted, many business owners in Germany supposed fascism as they saw it as the best counter to socialism, but that has nothing to do with capitalism itself.
4. You realize historical economic data exists, right? Take this lovely collection of data, showing all the statistics the world has greatly improved on, including poverty, literacy, education rate, child mortality rates, etc: https://slides.ourworldindata.org/teaching_notes/ch1/poverty#/2
For instance global extreme poverty dropped from around 40% in 1980 to less than 10% today. How do you think that happened? Globalization and freer trade. With this, life satisfaction ratings have also shot up.
"But the US!" you say.
The US has had some problems, but we don't need to completely dismantle our economic system to fix them. Obamacare was already doing a pretty good job of fixing many of the problems in the US healthcare system, and Biden seems to be going along a similar route, so that's good.
Wealth inequality is a problem, but there are many easy fixes for that, usually involving raising the tax burden on the upper class.
Tada! The two biggest problems in the US are fixed and we didn't have to seize any means of production! Hurray!
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@atari7001 Except one of the direct causes of the 1929 crash was that the Federal Reserve raised interest rates in order to tighten the money supply when the money supply in Europe was already going through a deflationary period. This led to a drop in US exports as soon as American spending also started to fall due to the tightening money, causing a deflationary spiral and many missed stock market projections.
You're also wrong about the Fed. What made the 1907 Financial Panic so bad was the, well, panics. Specifically banking panics. With nothing to guarantee the solvency of banks, many people rushed to their bank at the first hint of trouble, which would cause more people to also take out their money, causing yet another spiral. This spiral only stopped when JP Morgan and other financiers used their own money to publicly guarantee the deposits within many of the banks, stopping the panic and finally letting the US economy recover.
If only we had some sort of entity which could do that. Oh, yeah! The Fed! Of course they can print money and yada yada, but they can also lend funding to banks to help protect them against such crises, basically becoming a governmental JP Morgan. That and US monetary policy at the time was chaotic and stupid. It was still stupid up until the mid-1930's due to the US being on the gold standard, the main cause of the Great Depression if you ask most any economist.
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@atari7001 I'm sorry but your claims are just getting worse and worse. Please read the introduction to a money and banking textbook, find a free lecture on the subject online (YouTube even has these series), read a credible article on it, anything really. Until you do that.
1. It's not fraud since the bank literally tells you what it does with your money. You know what happens to your money when you put it in a bank. Nothing fraudulent about it.
2. "Wiser generations" would punish bankers for making bad investments, which honestly isn't fair to the banker. If I invest in a project with a 95% chance of proving profitable and it doesn't, it's not exactly the fairest thing in the world to kick my ass and/or kill me for bad luck.
3. The banking system in the 19th and early 20th century was bad. Good thing we've learned from our mistakes. Not only do we have the Federal Reserve, which basically guarantees a low, stable inflation rate on our currency as well as loans to banking institutions which are still profitable, just insolvent, we also have insurance institutions like the FDIC, which insure all deposits made at a commercial banking institution up to a certain amount that no normal American would reach. Also this insurance is paid for by member banks.
So far the story has changed to: the bank tells you what they're going to do with your money when you make an account. If something bad happens to the bank, your money is still insured through the FDIC (or relating institution), so you'll get your money no matter what.
4. You didn't mention this, but I think it deserves mentioning. The banks in trouble during the Financial Crisis? The ones everyone decries as "too big to fail"? Yeah, though aren't traditional banks like you or I are talking about. So even during the Financial Crisis the banks you and I are talking about weren't the problem.
5. Banks destroying society? You're just speaking insanity. You realize 99% of the economies of the world are still growing, right? Nothing is being destroyed. Moreover, ask any developmental economist and they'll see that banks are vital for poorer countries especially. Let's say you're a farmer and you had a bad season. What are your options? Well if you have any savings, you could try and hold over until the next season? Without savings? You could take out a loan (which most do) and then pay it back with the harvest next year. Okay, but without a bank? Sell your farm? Banks provide an insurance against negative shocks like a bad harvest, unemployment, a sudden expense, etc, and are also great avenues for investment (sending a kid to college so they can have a better life). The vast majority of loans are paid off and the vast majority of borrowers aren't eternally in debt.
6. Of course end the Fed. You're just calling for a talking point you don't understand. You haven't once made a claim against the Fed or Fed policy. You just hear other people say "end the Fed" and follow them along. The Federal Reserve is one of the best institutions the US has and easily the most technocratic of them. There's a reason US monetary policy since the Great Depression has been so great.
7. Oh, money printing. You're wrong on every claim you make. The Fed doesn't print money. The Bureau of Engraving and Printing, part of the US Treasury, does. The Fed orders the money, but they do not print it. Furthermore, who gave them the authority? Uh, Congress? Through the Federal Reserve Act of 1913 (renewed several times since)? The House had the original authority and they passed it on to the Federal. That's how just about every government entity, like the FBI, USPS, etc work.
Furthermore, they don't charge us interest on USD printed. That's just blatantly not true. If you don't believe me, you can always check their financial statements online. "They're fake!" you say. Except every year the Fed has to publish their financial statements online, and these statements are always audited by the GAO and a private financial services firm that changes every few years to make sure they don't build a connection. The Fed makes money off of interest payments on loans lent to other banks and US government bonds only, the latter the Fed is forced to hold due to legislation Congress attached to the Federal Reserve Act during one of its renewals.
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@atari7001 Yeah, no, you just don't understanding banking.
1. People don't expect their money to be held by the bank forever. The bank clearly states what they are doing with your money. All they say is that they'll have the money necessary for any of your deposits, which is 100% true. If you honestly expect banks to always hold 100% of your money, then you have no idea how business works.
2. Commercial banks generally don't invest in Wall Street for that specific reasons. There are regulations they have to follow to make sure banks remain stable, and many of these regulations concern how safe an asset must be for a bank to be able to invest in it. Generally these are only assets rated AA or AAA, the two best ratings an asset can get.
3. Results include economic growth, monetary stability, more investing, etc. Yeah, I fail to see much of a problem here. Banks are hugely important in developmental economics for provide a type of insurance for the poor.
4. I have no idea where you got the claim about the FDIC as it's not true. The FDIC guarantees all depositors of any member institution up to $150,000. As most people don't have even close to that in a single bank account, they are well within the insurance limits of the FDIC and would be covered if the bank collapses. It doesn't matter how widespread the collapse is.
I'm appalled that you never learned any of this in a Finance 101 course. Also I am not, nor have I ever had, worked for a bank.
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@atari7001 Of course you bring up the Financial Crisis.
1. The banks that went under during the crisis were not the banks you and I are discussing, commercial banks. They were investment banks. They didn't take deposits and lend money to people. Customer opened accounts with them and used the funds in their accounts to make investments. Hence the term investment bank.
For example, the most notorious bank to fail during the crisis, Lehmann Brother, was solely an investment bank.
2. I never saw a single line or panic from people going to a bank to withdraw all their money from it due to a panic. There was no such declared panic in the entire banking sector. There were some insolvency issues due to investments going bad, but after some asset purchases and loans from the government, the insolvency issue wasn't a problem.
This is because commercial banks are overseen by the Federal Reserve. Investment banks like Lehmann Brothers had no such oversight, and so had no way of getting a loan since the Fed does not loan to them. This is why these institutions are referred to as shadowbanking. That was one of the core problems relating to the Financial Crisis, not fractional reserve banking, something that has existed for hundreds upon hundreds of years to the benefit of society.
5. Banks have money to cover all withdrawals. If a sudden shock happens causing more withdrawals than predicted, they have ways of acquiring funding for said withdrawals, typically through government loans. These loans have to be paid back to the government with interest.
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