How Govt. Ruined The Movies

[David Mullen ASC]

This is where the discussion about government size is most important. If the main activities of government are defense and judicial, then citizens would concentrate their eyes into these activities only. This way it would advance and evolve into systems that really worked.
The main problem that I see is that governments try to reach out into areas that are really should not, therefore expanding their size and power over citizens. A side effect of this is that citizens are not able to keep an eye, nor have the attention over everything the government is doing. Also this tends to disrupt government financial operations, maybe leading a bankrupt economy.
This is why I advocate to minimun states with a strong judicial and defense system as a priority.
I usually try to keep my contracts outside of courts, through private arbitration and bonds. I would never claim this is a substitute for a court system, but it tends to keep things simple. Also markets punish irresponsible companies, but it should be accompanied with a judicial system that works, but that does not overreach. This balance is were the real discussion really stands for me.

Yet can governments remain "small" when populations keep growing and markets keep expanding? We have several billion people on this planet and a worldwide economy. If we could keep everyone operating on a more local scale, things would be more manageable, but I'm not sure that degree of localization and simplification is possible -- if businesses keep expanding in size, reach, and complexity, then how can the systems that regulate it shrink in size and become simpler?

But I do think there are some institutions that work better when kept smaller in size -- school districts, for example.

Trouble here in the U.S. is that the ordinary citizen is relatively uninterested in what goes on in local and statewide politics, just national politics. Today is an election day in California and I suspect turnout will be abyssmal. How can we get more direct democracy on a local scale when people are increasingly bored with their local politics and look for solutions only from the national government? Or turn off completely from politics and think the solution is to hide on some ranch in some depopulated region, as if the several billion inhabitants of this planet can do likewise?

 

[jpp]

I think we just have to recognize that it isn't "us versus them" --it's all "us".

Have to differ here (a bit). Individuals today face institutional power, and institutional depravity is unique. Organizations, including large corporations, and governments as well, will do things that non-sociopathic individuals never would. The "enemy" isn't really human.

Which is why we need a functioning democracy of informed citizens, so the state itself doesn't become a sociopathic organism, and a strong regulatory apparatus for business.

Ultimately, it's all "us". But structurally, there's a case to be made that the struggle is in fact "us versus them", or maybe "us versus it".

 

[Chris Nuzzaco]

What amazes me, is the number of people who flat out do not have any understanding or knowledge of our monetary system, and why its important that we return control of it to the private public.

Anyone working in film knows that whoever controls the money calls the shots. Want more power over the govt.? Take back control of your money, then things will change for the better.

 

[Peter Weisberg]

What amazes me, is the number of people who flat out do not have any understanding or knowledge of our monetary system, and why its important that we return control of it to the private public.

Anyone working in film knows that whoever controls the money calls the shots. Want more power over the govt.? Take back control of your money, then things will change for the better.

you keep bringing this up. Maybe the average american joe doesn't know how our monetary system works, but that hardly means no one does. You don't have to be a libertarian to know our country and economy set up are totally messed up.

The real problem is that we are working from a flawed system... but all systems are flawed so nothing can be done about that but try and make it better. The problem with the government is its like a leaking dam with small leaks all over. Every time we plug one leak another 2 emerge. Instead of trying to fix these overly complex and inane setups we established we should work on establishing a new setup and completely overhauling everything to be able to work in the 21st century. We have the technology these days to allow citizens to voice their opinions more than ever before, yet public opinion has no real power unless its election time, in which case all the politicians are lying anyways.

Ya the monetary system is messed up but moving back to the gold standard isn't much better. We have moved into a new stage of human development and as such we need to reassess everything. But there is no way this will ever happen. I'm beginning to think obama is not going to follow through on a lot of what he promised and is just going to play the middle ground. shame too... I was hoping maybe we could start looking at things differently.

 

[Tom Lowe]

I think we just have to recognize that it isn't "us versus them" --it's all "us".

Actually, the Founders of this nation studied history very carefully before deciding to write a powerful Consititution designed to limit government power. They studied the ancient Greeks, the finest philosophers, and the long, unbroken history of power gravitating toward a central government, leading to tyranny.

"Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master." George Washington

Most of the Founders including Jefferson felt this way. It is the same way that many libertarians feel today.

In terms of the Madoff scandal, was the problem corruption, incompetence, lack of resources, or simple lack of interest on the part of regulators? All of the above? Was the SEC more or less 'strangled' by being underfunded and then led by people who fundamentally did not really believe in the importance of regulation? Or were they bought off? Or were they just bad at their jobs?

I've heard it said that a 5th-grader with a calculator could have discovered Madoff's ponzi scheme in 10 minutes. How on Earth he evaded the SEC is mind-boggling! Most of the people at SEC are life-long bureaucrats.

I'm not against regulation, I just think that regulation should be kept simple and focused on preventing fraud. Take AIG for example. Why not pass a law that says you cannot write insurance policies (credit default swaps) for more than 2:1 leverage? Banks are required to keep a certain percentage of accounts on hand in liquid assets, in case everyone wants to withdraw their money at the same time. These are simple, anti-fraud measures.

Of course, even with this you have to be careful. What if Bank A has 2:1 leverage, and their competitor bank B as 3:1 leverage. What if Bank A lobbies congress to pass legislation changing the rules so that a 2:1 leverage is the maximum allowed? This would effectively bankrupt Bank B. It just goes to show you that every time you give government power, you make an incentive for corruption or worse.

Maybe it would be better if banks were transparent and issues like 2:1 leverage versus 3:1 leverage could be decided by those who are depositing their money in the bank? Without FDIC, they would have an incentive to read Consumer Reports once in a while and find out which bank is the most solid.

Obviously the FDIC was completely out to lunch on the mortgage meltdown, as well, which was partly the result of other government institutions like Fannie and Freddie and congressional pressure on banks to issue bad debt to unworthy borrowers. Not to mention the Federal Reserve pumping out trillions of dollars at 0% interest to broke Americans.

So, here we have the government creating a problem, and then telling us that the only solution is more government! This creates a dangerous positive freedback cycle for never-ending bigger government.

 

[Gavin Greenwalt]

Tom google two things:

Ivar Kreuger (One of the most extensive ponzi schemes in history)
SEC

Pay very close attention to the important dates.

For everyone else I'll save you the search:
Ivar Kreuger almost single handedly caused a global economic meltdown due to his collapsing quasi-ponzi schemes in 1932
The SEC was created in 1934 in an effort to PREVENT ponzi schemes because people weren't making the 5 second calculations to figure it out for themselves.

So your claim that the SEC and by extension regulation is causing ponzi schemes now is not based on any sort of empirical evidence.

It's also incredibly coincidental that we suddenly have all of these huge accounting scandals Worldcom, Enron, Madoff etc etc now that we've dramatically reduced all of the regulations after decades of relative calm.

 

[jpp]

So, here we have the government creating a problem, and then telling us that the only solution is more government! This creates a dangerous positive freedback cycle for never-ending bigger government.

This is, once again, circular reasoning. According to libertarian dogma, government interference in the economy is responsible for all structural marketplace failures. So, by definition, all structural failures are the result of government interference. No need to look any further, because, by definition.....

That the institutions which failed (at tremendous public expense) are the same institutions which have hobbled, disabled and corrupted government regulation doesn't seem to bother you.

The solution, as you see it, is to free these institutions of the need to corrupt government, so they can do what they want without bribing anyone. How this will prevent structural failure remains a mystery, only to be revealed when all government restraints are removed. If structural failure continues, it means, by definition, that all the necessary conditions weren't present, and was the fault of government.

Anyway, I think we're at the end of road. On the subject of movies, David's second Polish brothers Red feature, Stay Cool, premiered at the Tribeca Film Festival and the reviews were a bit kinder than they were for Manure, though again there was praise for the cinematography.

 

[Gavin Greenwalt]

I'm telling you. Warlock based economy. It hasn't gotten a fair chance. It'll work like magic! Never been disproven.

 

[jpp]

Without FDIC, they would have an incentive to read Consumer Reports once in a while and find out which bank is the most solid.

I know I should let it go, but....

There are many countries without government deposit insurance. Guess what? When the banks started failing, the governments all stepped in and guaranteed the deposits.

Why? Because the alternative was total collapse of the financial system. Because the banking system doesn't work without guarantees and high levels of confidence. People will keep their money in the mattress or precious metals, precipitating a crash.

I guess we've learned absolutely nothing about the way markets work.

 

[GlennChan]

He actually brought his finding to the SEC numerous times, and they ignored him!
I think THAT is the problem... not the size the SEC.

The SEC has actually reduced its staff over the last several years I believe, which makes it more difficult for them to investigate.

But the other real problem is that the incentives at the SEC are all wrong. They typically do not go after big fish and lay down huge fines so that they can get nice jobs at the investment banks they investigate. e.g. the investment banks repeatedly get slapped on the wrist by the SEC, and they give jobs to SEC employees likely as a reward for the weak punishments.

Another example: A lot of Goldman Sachs alumni are in positions of government now or came from the government. This creates serious conflicts of interest, especially when Henry paulson (ex-CEO of Goldman) help organize the bailout of AIG... which helps his buddies at Goldman, because AIG owed Goldman money over credit default swap contracts.

Point being that when government becomes too large, their actions often backfire and have unintended consequences.[.b]
In this case the SEC was getting smaller.

The SEC got smaller due to lobbying.

I've heard it said that a 5th-grader with a calculator could have discovered Madoff's ponzi scheme in 10 minutes.
Those people are BSing you.

You needed to understand options well, and some of the calculations Harry Markopolos did are difficult to do on a calculator (e.g. calculating sharpe ratio).

So, here we have the government creating a problem, and then telling us that the only solution is more government!

The US (and many other countries but not all of them) have financial problems because:

A- Lax government regulation.
This allowed lenders to make a lot of bad loans without consequences, since they were able to securitize these loans and flip them onto another sucker.

The investment banks also had insufficient regulation... which let them take excessive risk and take on way too much leverage (e.g. 30:1).

B- Excessive debt. Consumers have been using their homes like ATMs and racking up credit card debt instead of saving money. The savings rate in the US is very low.

The US government is also taking on huge debt, which has recently tripled. Now the US administration is trying to solve the problems of too much spending and too much debt with more spending and more debt. This will not work.

---
Heading into the future, the US is probably digging a bigger hole for itself.
A- Protectionism. Protectionism is bad for the economy and was probably a major contributor to the Great Depression. Yet Obama looks like he will be implementing more protectionist policies.
B- Bailing out bad banks and failed financial institutions. These people made a lot of bad loans and mistakes... now the Obama administration is giving them more money. That is throwing good money after bad. Businesses have been failing for centuries and the world goes on... these guys should be allowed to fail.
C- The various bailouts are causing US debt to balloon. It's unsustainable.

While I think that the US is going to run into some serious trouble, it's not the end of the world. The US got through the great Depression, two world wars, etc. etc. If you have a job, employable skills, and live within your means (i.e. don't rack up debt)... you'll get through it fine.

Without FDIC, they would have an incentive to read Consumer Reports once in a while and find out which bank is the most solid.

That didn't work in 1929. And without the FDIC, bank runs will be much more likely.

 

[Joe G.]

"What amazes me, is the number of people who flat out do not have any understanding or knowledge of our monetary system, and why its important that we return control of it to the private public."

It's even more astounding that I already called out your blatant error and misunderstanding of the federal reserve (sic) system, and you keep on plowing away from a position of ignorance.

The Federal Reserve (sic) is a private, for-profit corporation with secret investors that operates in secret. This concept was fought tooth and nail, with several attempts by the "central bankers" over the course of US history on one side, and US presidents on the opposite side.

In 1913 Woodrow Wilson signed the Federal Reserve Act after it was passed over the Christmas holiday, when most of Congress was home, and not voting in opposition. This could be the greatest crime in American history.

There are several attempts by current Congressmen (including Ron Paul whom you should be acquainted with) to stop the Federal Reserve. Another attempt is to "audit" the secretive federal reserve.

The federal reserve is not federal, and it's not a reserve. That's the problem. Your argument presupposes that the government has control of the money supply, which is demonstrably false. Not sure why we have these discussions at all, since the words never seem to sink in or have any noticeable effect on misconceptions.

 

[Andrew Kimery]

As for this smoking example, I have this to say:

Who made you smoke?

This doesn't really mesh w/what was being said though. You said,

Again, this is more non-sense. If I kill off my customers, who in the world will I sell my product to? I'd be eliminating my market.

And I pointed out a product that if used 'properly' will most likely kill you yet the companies making said product have been around for decades.


-A

 

[Tom Lowe]

I know I should let it go, but....

There are many countries without government deposit insurance. Guess what? When the banks started failing, the governments all stepped in and guaranteed the deposits.

Why? Because the alternative was total collapse of the financial system. Because the banking system doesn't work without guarantees and high levels of confidence. People will keep their money in the mattress or precious metals, precipitating a crash.

I guess we've learned absolutely nothing about the way markets work.

Oh, man, now you're going to make me start quoting Osama bin Laden about the dangers of fractional-reserve banking. :yikes:

I think I'm going to bow out of this thread gracefully. It's just too detailed a conversation for here. Plus all my renders are almost done now, so I need to start working on editing and stop jabbering here! I have enjoyed the conversation, though, fellas! :thumbsup:

 

[Chris Nuzzaco]

"What amazes me, is the number of people who flat out do not have any understanding or knowledge of our monetary system, and why its important that we return control of it to the private public."

It's even more astounding that I already called out your blatant error and misunderstanding of the federal reserve (sic) system, and you keep on plowing away from a position of ignorance.

The Federal Reserve (sic) is a private, for-profit corporation with secret investors that operates in secret. This concept was fought tooth and nail, with several attempts by the "central bankers" over the course of US history on one side, and US presidents on the opposite side.

In 1913 Woodrow Wilson signed the Federal Reserve Act after it was passed over the Christmas holiday, when most of Congress was home, and not voting in opposition. This could be the greatest crime in American history.

There are several attempts by current Congressmen (including Ron Paul whom you should be acquainted with) to stop the Federal Reserve. Another attempt is to "audit" the secretive federal reserve.

The federal reserve is not federal, and it's not a reserve. That's the problem. Your argument presupposes that the government has control of the money supply, which is demonstrably false. Not sure why we have these discussions at all, since the words never seem to sink in or have any noticeable effect on misconceptions.

I have no misunderstanding for the umptenth time, I understand the federal reserve is private and have stated it is (go back and check).

It is technically private, however that is highly debatable as the President and Congress appoint its leader... so how is that private? Again, rabbit hole.

So there, I already pointed this out, prior to your other post if you take the time to have a look... I also pointed out the blatant political connection it has, which you seem to brush aside as if inconsequential. If a politician can appoint it's Chief, don't tell me you can't flex political influence over it. To think the Federal Reserve is totally free of political influence is naive, very naive. It says you totally trust our leaders. Have you heard much about Pelosi and torture lately? How about the Bush gang and torture? I'm just illustrating my point.

Either way you slice and dice it, we don't have control over our money, and thats a real problem. At lest we both agree the Fed needs to be eliminated.

 

[Chris Nuzzaco]

I think I'm going to bow out of this thread gracefully. It's just too detailed a conversation for here. Plus all my renders are almost done now, so I need to start working on editing and stop jabbering here! I have enjoyed the conversation, though, fellas! :thumbsup:

I'm with you Tom, it is very hard to explain this stuff because of all the strings attached. I suggest studying the library over at mises.org and really putting some time into it, especially the Austrian economics stuff.