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My predictions for 2009
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Author Topic: My predictions for 2009  (Read 7425 times)
Medivh
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« Reply #15 on: January 06, 2009, 01:31:05 EST »

I hope that was sarcasm...
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And if i catch you comin' back my way
I'm gonna serve it to you
And that ain't what you want to hear
But that's what I'll do
-- "Seven Nation Army", The White Stripes

So what you're telling me is that LTV's fudge factor means more than it's independent variable?
Yes...
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« Reply #16 on: January 06, 2009, 07:48:14 EST »

The others will not be crazy because they won't have the money.
Exactly.  The mass drop in oil prices just saved us a boatload of trouble (even if the drop was due to other problems).  Russia, Venezuela, Iran, and the rest of the middle east thought they were hot stuff when the oil prices were above 4$ a gallon, but now that the prices are down, they don't have the money to be as aggressive externally, nor can they use their wealth to quiet internal conflict.
Temporarily yes.

The best part is that Americans have chosen to keep in the conserving mindset even after the prices dropped, meaning that it won't just bounce back.
If people think that the high oil prices of the recent past represent a historic trend then they will conserve in the future because of the danger of future price rises.  If though they come to think that the high oil prices were an artifact of the bubble then they may decide that they are unlikely to happen again.  Different people will come to different opinions on this score.  So, it will be difficult to predict what will happen.
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wodan46
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« Reply #17 on: January 06, 2009, 14:26:24 EST »

The best part is that Americans have chosen to keep in the conserving mindset even after the prices dropped, meaning that it won't just bounce back.
If people think that the high oil prices of the recent past represent a historic trend then they will conserve in the future because of the danger of future price rises.  If though they come to think that the high oil prices were an artifact of the bubble then they may decide that they are unlikely to happen again.  Different people will come to different opinions on this score.  So, it will be difficult to predict what will happen.
There you go again, presuming such extensive rationality and future planning on the part of the people.  You think like that.  Most people don't.

What has happened is that now that people have begun conserving, not only have they become used to conserving, many times they have made an investment in conserving.  For example, if they bought a green car, now that prices have gone down, they aren't going to exchange that green car for an SUV.  Even if SUVs became a practical and good choice for a car, people will still refuse to buy it, because they remembered how bad they were not that long ago.  People no longer trust SUVs, and that distrust can and will extend to irrational degrees if need be.  People think based on anecdotal experience and habit, not on rational long term planning.

I'll say it again.  You Libertarians think that everyone thinks the way you do.  They don't.  People don't think about the long term consequences.  People live in their own little short term worlds.  They think via heuristics that are often little more than superstition and habit.  While these heuristics were developed because they worked, they have no idea what to do if they don't or even know how to recognize when they don't.  They can still handle their short term little worlds, and most of the time it will work out, and society will keep going, in part thanks to the people that do think in the long term, but even so, most are incredibly vulnerable to long term consequences they can't see coming.
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« Reply #18 on: January 06, 2009, 15:34:27 EST »

The best part is that Americans have chosen to keep in the conserving mindset even after the prices dropped, meaning that it won't just bounce back.
If people think that the high oil prices of the recent past represent a historic trend then they will conserve in the future because of the danger of future price rises.  If though they come to think that the high oil prices were an artifact of the bubble then they may decide that they are unlikely to happen again.  Different people will come to different opinions on this score.  So, it will be difficult to predict what will happen.
There you go again, presuming such extensive rationality and future planning on the part of the people.  You think like that.  Most people don't.

What has happened is that now that people have begun conserving, not only have they become used to conserving, many times they have made an investment in conserving.  For example, if they bought a green car, now that prices have gone down, they aren't going to exchange that green car for an SUV.  Even if SUVs became a practical and good choice for a car, people will still refuse to buy it, because they remembered how bad they were not that long ago.  People no longer trust SUVs, and that distrust can and will extend to irrational degrees if need be.  People think based on anecdotal experience and habit, not on rational long term planning.
Well, that's not really a very big critique of rationalism is it.  People look to the past because it provides information that guides their future thoughts.  That's what rationalism is in the Scottish sense.  I agree though lots of ordinary consumers may be somewhat irrational about this.

Overall though I doubt this will be important.  Changes to the price and consumption of oil are mostly caused by changes in the policies of the big users and producers, not personal consumption.  What really matters is the decisions they make.  Although if the personal consumers change their habits it will have an effect.

I'll say it again.  You Libertarians think that everyone thinks the way you do.  They don't.  People don't think about the long term consequences.
Some people don't certainly.  Why though really a problem with Libertarianism?

They think via heuristics that are often little more than superstition and habit.  While these heuristics were developed because they worked, they have no idea what to do if they don't or even know how to recognize when they don't.
Well, I think that people use heuristics certainly, and many of these are only habits that people don't actually understand.  I think that they also use rationality.  I fail to see though why this is an argument *against* libertarianism.

As Hayek spends much of his book "The Constitution of Liberty" talking about this, using it as an argument for Liberty.  It is hard to summarize what he says.  The essence of it though is that people have knowledge of the sort of decisions they are used to making, but little knowledge of those they are not used to making.

They can still handle their short term little worlds, and most of the time it will work out, and society will keep going, in part thanks to the people that do think in the long term, but even so, most are incredibly vulnerable to long term consequences they can't see coming.
Well, yes.  Again, where is the supposed critique of my point of view.
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wodan46
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« Reply #19 on: January 06, 2009, 17:27:05 EST »

I'm rather hungry right now, and when I'm hungry, I get pissy, so I apologize if I end up sounding nasty.

Well, that's not really a very big critique of rationalism is it.  People look to the past because it provides information that guides their future thoughts.  That's what rationalism is in the Scottish sense.  I agree though lots of ordinary consumers may be somewhat irrational about this.
That is correct.  That is my point.  Most people tend to follow lots of heuristics that are based off of anecdotal experience, habit, and outright superstition.  This works well enough for them to get by from day to day, and it works well enough that they can't perceive the flaws in their system.  However, they will regularly fail to correct or change their heuristics to new situations, or to long term situations where you can't operate by rule of thumb anymore.

I'll say it again.  You Libertarians think that everyone thinks the way you do.  They don't.  People don't think about the long term consequences.
Some people don't certainly.  Why though really a problem with Libertarianism?
Because you assume everyone thinks like you do, IE from a rational standpoint that disregards or corrects erroneous heuristics.  People do not.  As a result, they will never fit into the system you've designed for them, and any society based on Libertarianism is doomed to failure.  It is much like Communism in that regard.

They think via heuristics that are often little more than superstition and habit.  While these heuristics were developed because they worked, they have no idea what to do if they don't or even know how to recognize when they don't.
Well, I think that people use heuristics certainly, and many of these are only habits that people don't actually understand.  I think that they also use rationality.  I fail to see though why this is an argument *against* libertarianism.
Because people don't use rationality, they stick to the heuristics, and when those heuristics fail, they either fail to notice, or fail to correct it properly.  More importantly, heuristics are devices for dealing with short term or outright instantaneous decision making, not long term decision making.  For long term decision making, people tend to get lost, and behave in irrational manners, if they bother to even think about long term decisions at all.  Even for short term decision making, rational heuristics can be over-ridden by emotion, which is not a rational heuristic, but an evolutionary vestige that is not properly designed for handling situations consistently.

Libertarianism requires people to be rational in both short and long term decision making.  In the short term, people are emotional, and in the long term, they are irrational if not outright ignorant.  You might ask how people survive that.  The answer is that those Heuristics were good enough to get society going, and that society, and its ultimate expression, government, allowed for the creation of situations where Heuristics are more consistently effective.  Not to mention that society allowed those who were capable of thinking unemotionally and rationally, or at least those who were better than average, to push society forward, slowly but surely.  It wasn't easy, but it happened.

As Hayek spends much of his book "The Constitution of Liberty" talking about this, using it as an argument for Liberty.  It is hard to summarize what he says.  The essence of it though is that people have knowledge of the sort of decisions they are used to making, but little knowledge of those they are not used to making.
People have experience, not knowledge.  Countless times, people fail to learn from their mistakes, of when their heuristics fail, and they irrationally write it off as being due to something else.  That's just in the things that people actually do regularly, as for the stuff they don't, they're even easier to exploit.  That's why government exists, to minimize exploitation, in order to give people the maximum opportunity to carry out their lives.

They can still handle their short term little worlds, and most of the time it will work out, and society will keep going, in part thanks to the people that do think in the long term, but even so, most are incredibly vulnerable to long term consequences they can't see coming.
Well, yes.  Again, where is the supposed critique of my point of view.
The part where your view is dependent on people not doing that.
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wodan46
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« Reply #20 on: January 06, 2009, 17:47:30 EST »

Also one more thing: Bernard Madoff.  Explain how normally intelligent people and groups would end up investing ALL of their money in one individual of dubious authenticity, ultimately leading to over 50 billion dollars being lost.  That answer is that for long term scenarios, people aren't able to separate the good choices from the bad.  Bernard Madoff was merely a more extreme example of the bad choices and resultant exploitations that happen to people every day as they interact with corporate entities.  Government can help that by prohibiting any the worst choices, or choices which a person would not be able to tell the difference.

Also, I think you are creating a fair amount of strawmen.  For all my rhetoric, I don't really advocate that much corporate regulation.  I'm not saying that the government should start making choices for the public.  I'm saying that the government should prohibit corporations from committing fraudulent or near fraudulent activities, or otherwise do underhanded damaging actions that the average citizen has little ability to defend against or even understand if its happening.

Here's what I favor again, the prohibition of the below:
1. White Collar Crime
2. Suppression of Union Power, Excessive Union Power
3. Monopolies
4. Products that fail to work as advertised, or warn adequately of danger
5. Excessively complicated legal writing* (see 4, and things like the Credit Card Bill of Rights for where they become a concern)
6. Externalities

*Yes, cases can be made based on excessively complicated legal writing.  If the average person reading it can't be expected to understand it, then it is essentially a fraudulent contract, as people will not be able to know what it is describing.
« Last Edit: January 06, 2009, 18:09:43 EST by wodan46 » Logged

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Andrei
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« Reply #21 on: January 06, 2009, 18:02:06 EST »

Quote from: Heq
That being said, American liberals are going to continue flirting with fascism, so fuck them.
I don't see why you're so down on fascism.

I'd say fascism is like colonialism (to mention another of your hot topics), it can be used for good or for evil. Mussolini is an example of fascism used for evil. Franco is an example of fascism used for good.

Quote from: joshbrenton
- I predict that "The Simpsons" will become funny again (I know it's a longshot, but that's what the stars told me.)
I wish I could believe you, but usually, that elevator only goes one way : down!
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He looked severely at me for awhile, then, grabbing his moustaches, he said:
- Boss, with all due respect, you are naive and pedant.

"Alexis Zorba", by Nikos Kazantzakis (translation mine)
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« Reply #22 on: January 06, 2009, 18:11:44 EST »

I'm rather hungry right now, and when I'm hungry, I get pissy, so I apologize if I end up sounding nasty.

Well, that's not really a very big critique of rationalism is it.  People look to the past because it provides information that guides their future thoughts.  That's what rationalism is in the Scottish sense.  I agree though lots of ordinary consumers may be somewhat irrational about this.
That is correct.  That is my point.  Most people tend to follow lots of heuristics that are based off of anecdotal experience, habit, and outright superstition.  This works well enough for them to get by from day to day, and it works well enough that they can't perceive the flaws in their system.  However, they will regularly fail to correct or change their heuristics to new situations, or to long term situations where you can't operate by rule of thumb anymore.
Yes.  I think they do consider things rationally also though.

I'll say it again.  You Libertarians think that everyone thinks the way you do.  They don't.  People don't think about the long term consequences.
Some people don't certainly.  Why though really a problem with Libertarianism?
Because you assume everyone thinks like you do, IE from a rational standpoint that disregards or corrects erroneous heuristics.  People do not.  As a result, they will never fit into the system you've designed for them, and any society based on Libertarianism is doomed to failure.  It is much like Communism in that regard.
To begin with my political views, classical liberalism, are not in "system that is designed".  I am not interested in ideas about rebuilding society from scratch, those are science fiction.  What I promote is the evolution of society rather than its deliberate design.  This evolution takes place mostly within the market economy limited by the rule or law.

I recognize that people may not always disregard or correct erroneous heuristics.  This though is an inevitable problem with almost any arrangement of society.  I can't see how it poses more problems to classical liberalism than to the sort of interventionism you propose.

Do you suppose that people will not disregard or correct erroneous heuristics in their market decisions but that they will do so in the ballot booth?  Do you suppose that parliaments and bureaucracies are entirely without heuristic decision making?

They think via heuristics that are often little more than superstition and habit.  While these heuristics were developed because they worked, they have no idea what to do if they don't or even know how to recognize when they don't.
Well, I think that people use heuristics certainly, and many of these are only habits that people don't actually understand.  I think that they also use rationality.  I fail to see though why this is an argument *against* libertarianism.
Because people don't use rationality, they stick to the heuristics, and when those heuristics fail, they either fail to notice, or fail to correct it properly.  More importantly, heuristics are devices for dealing with short term or outright instantaneous decision making, not long term decision making.  For long term decision making, people tend to get lost, and behave in irrational manners, if they bother to even think about long term decisions at all.  Even for short term decision making, rational heuristics can be over-ridden by emotion, which is not a rational heuristic, but an evolutionary vestige that is not properly designed for handling situations consistently.
All of this though does not show that others can make decisions better for those people.  That is what you need to show.

Whatever problems there are in decision making are likely to reveal themselves in both individual decisions and in group decisions.  That is why we have to discuss institutions of decision making.

As Hayek spends much of his book "The Constitution of Liberty" talking about this, using it as an argument for Liberty.  It is hard to summarize what he says.  The essence of it though is that people have knowledge of the sort of decisions they are used to making, but little knowledge of those they are not used to making.
People have experience, not knowledge.
Yes.  That would be a better word.

Countless times, people fail to learn from their mistakes, of when their heuristics fail, and they irrationally write it off as being due to something else.  That's just in the things that people actually do regularly, as for the stuff they don't, they're even easier to exploit.  That's why government exists, to minimize exploitation, in order to give people the maximum opportunity to carry out their lives.
Why though should government do this?  Government is not a force from outside of society.  It is a part of society.  It may take steps to counteract the effects of the irrational decisions that members of society make.  That though does not automatically mean that it can know how to do that, or that it will do that.

To show that such a thing will happen you must explain firstly how government can know what individual actions to limit and what to permit.  Then you need to show why government should do this rather than doing something else.

If you rely on democracy think about what you are saying.  You are saying that voters in voting booths are able to see problems with their own behaviour that those same voters cannot see when they are acting individually.  Even though when they are acting individually the repercussions of their success and failures are direct.

They can still handle their short term little worlds, and most of the time it will work out, and society will keep going, in part thanks to the people that do think in the long term, but even so, most are incredibly vulnerable to long term consequences they can't see coming.
Well, yes.  Again, where is the supposed critique of my point of view.
The part where your view is dependent on people not doing that.
Consider this in concrete terms.  My friend Anthony does not think about the future much.  He does not have a pension or much savings even though he is quite clever and could get a job that would pay him a pension.

Now, the state can provide Anthony with a small old age pension as a welfare provision, I don't disagree with that.

However the state is in general not necessarily better placed to think about the long term than the individuals within it are.  If the government is a dictatorship or aristocracy then it may be and several have being very long term in their thinking, but a great many more haven't.  A Democratic state though depends on the opinion of the voters.  If voters as a whole do not think about the next ten years then there is no reason for the government to do so.

Also one more thing: Bernard Madoff.  Explain how normally intelligent people and groups would end up investing ALL of their money in one individual of dubious authenticity, ultimately leading to over 50 billion dollars being lost.
I think they were idiots.

That answer is that for long term scenarios, people aren't able to separate the good choices from the bad.
A great many people did not invest anything with Madoff.

Bernard Madoff was merely a more extreme example of the bad choices and resultant exploitations that happen to people every day as they interact with corporate entities.
I wasn't just a matter of bad choices, but one of actual fraud.  Madoff was not just an unwise investor he stole.

Government can help that by prohibiting any the worst choices, or choices which a person would not be able to tell the difference.
Why though should they know what the "worst choices" better than those involved?  Even if they do why should they act against the situation?
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wodan46
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« Reply #23 on: January 06, 2009, 19:32:54 EST »

I'm rather hungry right now, and when I'm hungry, I get pissy, so I apologize if I end up sounding nasty.

That is correct.  That is my point.  Most people tend to follow lots of heuristics that are based off of anecdotal experience, habit, and outright superstition.  This works well enough for them to get by from day to day, and it works well enough that they can't perceive the flaws in their system.  However, they will regularly fail to correct or change their heuristics to new situations, or to long term situations where you can't operate by rule of thumb anymore.
Yes.  I think they do consider things rationally also though.
You can think all you want.

To begin with my political views, classical liberalism, are not in "system that is designed".  I am not interested in ideas about rebuilding society from scratch, those are science fiction.  What I promote is the evolution of society rather than its deliberate design.  This evolution takes place mostly within the market economy limited by the rule or law.

I recognize that people may not always disregard or correct erroneous heuristics.  This though is an inevitable problem with almost any arrangement of society.  I can't see how it poses more problems to classical liberalism than to the sort of interventionism you propose.

Do you suppose that people will not disregard or correct erroneous heuristics in their market decisions but that they will do so in the ballot booth?  Do you suppose that parliaments and bureaucracies are entirely without heuristic decision making?
It is better than any other possible/feasible alternative.  I have argued nothing more than that.

As for why, that is simple.  People are prone to errors in reasoning.  In politics, it is possible that those in power will be motivated to exploit those errors, and it is possible that those in power will be motivated to minimize those errors, and prevent people from engaging in exploitation in the future.  In markets, those in power are always motivated to exploit errors, or at the very least not correct them.  In short, it is possible and feasible for political power to be non-exploitative, but not for economic power to be such.

All of this though does not show that others can make decisions better for those people.  That is what you need to show.

Whatever problems there are in decision making are likely to reveal themselves in both individual decisions and in group decisions.  That is why we have to discuss institutions of decision making.
That doesn't really counter my point.  In actuality, most people make poor decisions regarding their overall life as well as quick instantaneous decisions, unlike what you seem to imply.  In such a system, allowing the few foxes to run the overal henhouse will lead to a lot of dead chickens.  Unless you give the chickens a means to fight back.  There is no such means economically, but there are such means politically.

People have experience, not knowledge.
Yes.  That would be a better word.
It is fundamentally different in its implications.  Saying that a person has gained knowledge implies that they have learned something, whereas you can have plenty of experience but never learn anything.  People spend a lot more time gaining experience than knowledge, to put it mildly.

Why though should government do this?  Government is not a force from outside of society.  It is a part of society.  It may take steps to counteract the effects of the irrational decisions that members of society make.  That though does not automatically mean that it can know how to do that, or that it will do that.

To show that such a thing will happen you must explain firstly how government can know what individual actions to limit and what to permit.  Then you need to show why government should do this rather than doing something else.

If you rely on democracy think about what you are saying.  You are saying that voters in voting booths are able to see problems with their own behaviour that those same voters cannot see when they are acting individually.  Even though when they are acting individually the repercussions of their success and failures are direct.
No I am saying that people aren't smart enough to make decisions, but they are smart enough to elect people that are smart enough to make decisions.  I am saying that while that will not always work, the alternative is that people keep making stupid decisions on their own anyways.

The part where your view is dependent on people not doing that.
Consider this in concrete terms.  My friend Anthony does not think about the future much.  He does not have a pension or much savings even though he is quite clever and could get a job that would pay him a pension.

Now, the state can provide Anthony with a small old age pension as a welfare provision, I don't disagree with that.
Ok...

However the state is in general not necessarily better placed to think about the long term than the individuals within it are.
Seeing as its job is to make long term decisions, and have those handled by people who are good at making long term decisions, I think they generally are better placed than individuals.

If the government is a dictatorship or aristocracy then it may be and several have being very long term in their thinking, but a great many more haven't.
No comment.

A Democratic state though depends on the opinion of the voters.  If voters as a whole do not think about the next ten years then there is no reason for the government to do so.
No.  See, the politicians want the country to do well or they are voted out of office.  In order to do well, they must make long term decisions for it.  Voters may not think about the next 10 years, but in 10 years they are not doing well, the politicians get kicked out office.

Do you think that just because I do not know how to fix plumbing, the plumber that I hire will not either?  The same is true for the government.

Also one more thing: Bernard Madoff.  Explain how normally intelligent people and groups would end up investing ALL of their money in one individual of dubious authenticity, ultimately leading to over 50 billion dollars being lost.
I think they were idiots.
Actually, many were smarter than average people, or even entire decent sized companies.  This is my point.  The average person is an idiot who would happily invest all of their money in to a fraudulent venture with the right story.  These are the people that you trust to grasp the nature of the market, invest wisely, and otherwise choose good long/short term behaviors?

That answer is that for long term scenarios, people aren't able to separate the good choices from the bad.
A great many people did not invest anything with Madoff.
That is completely and utterly irrelevant.  The Madoff case is just an example that many people of intelligence average and above can make huge and obvious mistakes regarding long term decisions.

Bernard Madoff was merely a more extreme example of the bad choices and resultant exploitations that happen to people every day as they interact with corporate entities.
I wasn't just a matter of bad choices, but one of actual fraud.  Madoff was not just an unwise investor he stole.
Irrelevant.  MY point was the people make bad decisions.  Investing millions of dollars, often all your money, in a venture that is fraudulent is a pretty bad decision.  If 50 billion got tossed away on that, how many billions get tossed away on decisions of lesser badness.  In fact, the whole putting all your eggs in one basket can happen on all sorts of other scales legal and illegal, and is a perfect example of how people can make terrible decisions.

Government can help that by prohibiting any the worst choices, or choices which a person would not be able to tell the difference.
Why though should they know what the "worst choices" better than those involved?  Even if they do why should they act against the situation?
Because, as we have just demonstrated, people can easily be tricked by fraud, to say nothing of pseudo-fraudulent policies that are still technically legal.  The government has access to experts and resources that are capable of evaluating which decisions are bad, and it then prohibits the worst of those decisions from being allowed, but moreover, it doesn't check for the actual fraud/pseudo fraud, it prohibits situations wherein such fraud would be easy to do.  As for why, the answer is because the government exists to ensure the success of its constituents, and it is thus in its interest to promote economically sound decisions, often by prohibiting situations were it would be hard to tell between an economically sound decision and a terrible one.
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