It shouldn’t say “imperialism” (Obama’s version of national defense is to do nothing), it should say “socialism”. In this they truly are equal.

CA, imperialism doesn’t necessarily have anything to do with “national security.” Imperialism is the foreign policy version of putting your nose where it doesn’t belong. We’ll see no shortage of that in the Obama administration. He supports more troops in Afghanistan, will probably go along with the missile shield in E. Europe and will have little choice but to keep up the fight in Iraq. These are in addition to the US’s ongoing support of Israel (and its consequences), meddling in S. America, membership in the UN, “war on terror,” et al. Imperialism is alive and well, I’m afraid.

CA if you think that democrats and Obama in particular are non-interventionist, then I have a few people I would like to introduce to you. Lets start with Woodrow Wilson and WWI, work up to FDR and his negligent actions leading to US involvement in WWII, Truman and Korea, JFK and Lyndon Johnson in Vietnam, and Bill Clinton interventionist and world policeman. Maybe the focus of the soldier hole will be changed, but the empire will not shrink under Obama (barring currency collapse). I foresee entanglement in Africa (perhaps Darfur) as well as a continuation in the Middle East and Afghanistan and Pakistan. Obama may surprise me and further antagonize the Russians. Power makes people not care about consequences. Worse yet, Republican pressure will ensure that the empire can not shrink, lest Obama wish to be tarred with Jimmy Carter-ism.

Notice the skin color of the one putting on the Obama mask.

This proves that the one who represents imperialism is neither Obama nor Bush but ‘someone’ else, someone behind the scenes – hidden – who uses these politicians as a front by petting their egos.

The real power behind these ‘puppets’ is the unConstitutional coup. Oh yeah, it is imperialism – of the highest degree.

Our job is to do what is being done in the photos. Our job is to remove the mask and find out who exactly are the members of the unConstitutional coup. Paulson is one of them.

Conflating anybody else with Bush is nonsense. He and Greenspan share the blame for destroying America and have made a nonsense of the sites fundamental raison d’etre.

Free markets on The Street and in The City have been characterized by excess and hubris, all underpinned by neo-classical economic theory that is fundamentally flakey to say the least. Austrian economics just extends the flakiness that much further.

The real way forward is economics based on real resources, not money. In other words P = f(K,L) is wrong. The real equation is P = f(K,L,R) where R stands for natural resources. This includes most importantly energy, but also minerals, all other natural resources and the value that sinks represent.

To be relevant any economic theory must also include EROI, or Energy Return on Investment of which the basic ratio is EO/EI or Energy Outputs divided by Energy Inputs.

This is Biophysical Economics and if US policy had been based on these principles the events of the last year would not have happened.

Bush rightly stands condemned for his role. Obama is a very long way off demonstrating that he or his advisors understand what is happening either. Nevertheless on a scale of zero to 10, if Bush is zero, Obama is at least 3 and possibly a 5. So this post is BS.

Perhaps, to placate everyone, we could simply change “Imperialism” to read “The Imperial President.”

I do support the market.

However in the real world (as opposed to the ideal world) neo-classical economists determine public policy. This has demonstrably led us up a blind alley and the results are obvious.

Taking the fact that policy is inevitable, Austrian school economists argue for the market. Fair enough, but that relies on private property law.

This was OK so long as humans were not reaching “The Limits of Growth”. In other words resource availability and the continued operation of sinks (the biosphere collectively) ability to support the status quo (human population and economic growth) is now questionable.

It comes back as it always does to The Commons. Private property rights can never be extended over the air or the oceans. The air you breathe now I may breathe in a few seconds, minutes or weeks. I have a fundamental inalienable interest in it. Austrian school economics makes no provision for this fundamental fact or for its consequences.

It prefers the problem didn’t exist; and so ignores or denies it.

Lowell

I reject the “environmentalism = socialism” part of your argument, especially as I view it. In fact I fail to see how they are connected at all, other than many environmentalists are also socialist.

Your argument is shallow and specious. I am an environmentalist. I am not a socialist.

Also Thomas Malthus, in his famous essay of 1798, did not specify a timetable. Arguing that he was wrong is also specious and the central plank to his argument concerns the power of the exponential function. By definition what he says will come to pass.

I suspect unless we can find more oil that we are there now. The current financial mess resulted from the oil price spike. But most people do not understand that, because they do not understand energy economics.

@ Maurice

You sound an awful lot like those ivory tower intellectuals blaming the failure of socialism on “poor leadership” (and implicitly saying that if someone else more competent – say, um, themselves – were put in charge of a brand-new socialist experiment, things might turn out great).

Your statement that each “historical context”, or whatever you want to name it, calls for a different system amounts to the worst sort of relativism that impregnates today’s so-called broad minded thought. It leads directly to the idea that there is no right and wrong, only “different”. Well, I don’t believe in that. Of course there are complicated situations, but in my system of thought there are clear definitions of “right” and “wrong”, built brick by brick from self-evident truths – whatever controversy that may appear will be around the application of those concepts. But by your own belief that it’s all about people’s opinions, you can’t say that I’m wrong.

To say that maybe at some point in time and space a community might *need* socialism, or laissez faire, and that both are fine because they were necessary at their respective conjunctures is a pointless philosophy. It may sound like deep wisdom to the unwary, but in the end, amounts to nothing more than idly accepting the “tides of history”, something that rings vaguely – nay, strongly – Marxist, and violates the One Big Un-Freaking-Deniable Principle, which states that Humans Act.

Also:

(Quoting) “In order to minimize said effects, the market requires we limit the peak of the cycle in order to limit its resultant trough. Well, equally human beings do not self-impose limits on prosperity.”

You are suggesting that the boom-bust cycle is a natural result of human greed, an explanation ventilated and used as justification by advocates of further regulation (or downright socialism). There’s enough material on this domain alone to prove it wrong a gazillion times.

Environmentalism without private property laws= socialism. Obama wants to increase government intervention to solve the “environmental problem” instead of strengthening private property laws where one would be responsible for any pollution he produces which goes to another individual’s property. Increased government intervention especially in the states today WILL be socialism at its best (or worst…)

Maurice certainly has a point that needs to be dealt with. People psychologically really don’t like downturns. Even if the preceding boom still left them better off overall. This point lies at the heart of a mayor strand of anti-capitalist thought which started with Karl Polanyi and his book the Great Transformation. For Polanyi ‘society’ will always ‘protect’ itself from increasing free market capitalism by at the same introducing socialist measures to ease its effects. The more extreme attempts to push capitalism the more extreme the socialist backlash.
We do not have to accept that people will always act this way educating people about economics can help people to understand and support transition.
While it is undeniably true that even educated people will not allow others to die on the street and such like; We do not have to accept the premise that capitalism causes unbearable pain. The Austrian theory of the trade cycle is shows us a way to

“limit the peak of the cycle in order to limit its resultant trough”

through the reform of money and banking reserve requirements. The great thing about a TRUE market is that it is self correcting before the bust has time to occur.
Any hardship left over can be dealt with by charity in which the ‘moral’ people Maurice speaks of step in to help their fellow man. And more then at current levels because why should anyone feel the need to give when your taxes go to welfare whether you like it or not.
And as for this “No one system is the right system for every situation or at all times” business; that thinking has propped up repression in many places including both Russia and China today. If what we want is a society that is free, moral, un-corrupt and constantly prosperous; then capitalism is your system.

“I suspect unless we can find more oil that we are there now. The current financial mess resulted from the oil price spike. But most people do not understand that, because they do not understand energy economics.”

The oil spike caused the financial meltdown? Not overextended borrowers, easy credit from the Fed to stave off an increase in interest rates (that would in a free market accompany so a huge increase in borrowing), mortgages being rolled into government guaranteed investment products, and a continuing debasement of currency?

“is was OK so long as humans were not reaching “The Limits of Growth”. In other words resource availability and the continued operation of sinks (the biosphere collectively) ability to support the status quo (human population and economic growth) is now questionable.”

Trying to work the idea of maintaining the status quo into an argument about Austrian economics? Really? You know, they have a free online library. Go ahead, pick a book. Pretty sure that the status quo is not what anyone here is interested in preserving, markets are dynamic – government isn’t.

Hello Saildog,

I would like to point out, that the mess that we are in, is primarily because of bad decisions (populist), that were made and supported by the Democratic party, which were infact opposed by the Republicans, including President Bush Jr.

Freddie Mac and Fannie Mae, has done more to undermine the economy that President Bush or Mr. Alan Greenspan. I do not mean to say that the latter had made excellent choices, but I would like to point out that pinning the blame on these two is a very easy way of overlooking the atrocities committed by the Democrats.

The moves by these two major firm, Freddie Mac and Fannie Mae, had clearly caused the bubble in the housing market, and moves by the Republicans to curb this, were met with stiff resistance and support of the Democrats.

It is evident that this bubble, had burst and the financial system, which against prudent choice had given loans to people who didn’t have the repayment capacity (NINJA Loans – No Income No Job). Eventually when the housing market collapsed, even foreclosures didn’t help, as the banks had assets that were of much lower value than the loans they’d given for them.

This was amplified, greatly due to the trading in liabilities that had run rampant in the financial services sector, worldwide.

Because there were no banks that had touched the ‘sub-prime’ sector, when they began to open it, it was a booming sector – afterall, when the rest of the market is saturated, the growth potential is where the market was not even tapped. Hence almost every financial lending institution had gone head over heels into this market (the sub prime market) and those who traded in these, traded them as the hottest picks, in which most of the financial sector had invested, because it was the only booming sector in an otherwise stale economy.

When the underlying assets in these investments lose value, there has to be margins maintained, which required immediate correction to the loss of value of these assets, which had caused tremendous liquidity crisis and had led to the downfall of the majors like Lehmann Brothers. You could have assets worth billions of dollars, but if you do not have liquid cash, you really cannot run a business and the moment you decide to liquidate your assets, if the value of these assets are a fraction of your investment and if it isn’t possible to liquidate quick enough, you reach a stage where there is no cash! You’re bankrupt! Indeed Federal Reserve or others could jump in and offer some temporary relief, but this doesn’t go in the long run and is not in the interest of the country.

The stock markets worldwide shed most of their peaks, as the biggest drivers for most of these markets (especially in the developing economies) were the Foreign Institutional Investors (FIIs), as they required greater liquidity in their home markets (like US and Europe), they’d to withdraw from most of the emerging markets, which greatly affected the market sentiments in these stock exchanges, resulting in losses (corrections as they call it) that wiped out most of the gains made in years.

The less known part of this downfall is in the trading community, not trading in stocks, but commodities. I’m involved in one such market, trading in fertilizer components in bulk quantities. The prices in these markets had risen to over 12 times in a period of about 12 months, but it shed about 97% of the peak value in a period of just 3 months! It had touched new lows. The same is true for the bulk shipping industry (dry cargoes), because of lack of trade, a vsl which cost over USD 150,000.00 per day, came down to about USD 5,000.00 per day, that is a loss of about 97% of the peak value, this too happened in about 3 months time!

There is only one moral to the entire story, the boom was led by greed and corruption, which was not the right reasons for these levels of increases seen in the market, hence the outcome of the same cannot be good. The root cause of the troubles our economies are facing is one and only one, a Moral problem. When a society loses its moral value, it cannot survive for long. That in itself will become the cause for its downfall.

In a purely capitalistic society, where one’s personal gain is given the most importance, it will lead to a lot of anomalies. Similarly a purely communist society, where the society’s gain is given the most importance, at the cost of the people in it, also leads to a lot of anomalies.

The truth is that we have to balance it, such that the person is not forgotten and the society as a whole isn’t forgotten either.

Prudence and age-old wisdom cannot be undermined and cannot be replaced by rash and risky decisions that may yield some profits in the near term, but cause unaccountable damages and losses in the long term, which will leave a lasting scar in the economy and may even risk grinding the economy to a halt and thus risk the entire society itself.

Binoy A. Mathew

Did Bush show a lack of political courage? Yes. Did he make some huge errors? Yes. Is the current financial meltdown all on him? No. For a fact, direct blame can be laid at the feet of almost every president in my lifetime. I do know that a large part of the current financial problem is due to Clinton. Bush should mostly be derided for not fixing those developments and acting to make them worse.