Jon Stewart basically kills Jim Cramer

[DaddyTorgo]

so by those measures - Rush is reaching 2.7m per day and John Stewart is reaching about 1m per day

[ISiddiqui]

So, I guess the Daily Show in late 2008 had a viewership that was double of what is now (if you are using some updated numbers)?

(It would make sense for a drop off after a Presidential election)

[DaddyTorgo]

i haven't found viewership #'s for daily show. i was just using what rainmaker referred to in his post as "a million a day"

[flere-imsaho]

Originally Posted by SportsDino

I think a book called the 'Road to Serfdom' makes a pretty good case for why socialism inevitably tends towards elites corrupting it in self interest. I think it ultimately leads to an oppressive elitist regime as well, since those are the tools that most closely fit the needs of the rulers.

You could say the same thing about capitalism, honestly, or in fact pretty much any economic model. After all, haven't we just seen a legion of examples whereby our "elites" have corrupted the system in their own self interest? In fact, as I posted a long time ago in the Recession thread, the Wall Street elites went so far as to pervert the system for their own short-term ends while wilfully ignoring the damage they were causing to that very system. Sowing the seeds of one's own demise to be sure!

Capitalism is nice in that its mechanisms support freedom and individual success, in fact it works best in cases with both, but is not so nice in that it has no guarantees of social kindness either.

In a theoretical world, sure. But look, you can't critique Socialism based on how it's fared in the real world in one paragraph, and then promote Capitalism in the next paragraph based on how it should function in a theoretical world. This is why you're not seeing that a capitalist system can be used just as much to further the causes of an oppressive "regime" as a socialist system (or any system) can.

I personally am for a sub-branch of economics called by varying terms, but generally social capital, where you value things that are traditionally not quantified by a pure 'goods in, goods out' model of economics. I think ultimately that will be the missing factor in the equations, that there is an inherit value in goodwill towards one another and stability of the social system... so some portion of income should be invested there as well as in traditional goods production.

Are you perhaps suggesting a Social Contract? Put in general terms, Socialism proceduralizes the Social Contract while Capitalism assumes (hopes) it'll happen as a matter of course.

To whit:

Well having had my share of crappy welfare cheese (no more disgusting a foodstuff do I think possible), in a family that jumped from poverty to struggling middle class back and forth during the 'good years'... my perspective is a bit different. You invest to what is essentially charity in order to either stabilize the rabble, smooth out hardships, or preserve potential growth opportunities or social standards. The harsh economies of the third world would chew up people like me, on the other hand a slightly sappier country like the USA picks up an unlikely money machine (at least I hope to create jobs and cool products in my lifetime).

So I disagree that being capitalist is being anti-social spending, and that socialism is the best system for raising average standard of living. Although it does seem to be the common mold, so I guess it is true until we truly understand more about economics.

Pure capitalism has very little to say about social spending, so one assumes it's anti as a matter of course. Pure socialism is very much a good system for raising the average standard of living, at the (likely) expense of great strides being made on the back of innovation. In theoretical applications (both), of course.

In real world applications the difference between these two models on the subject of "social spending" is, put simply, a difference on the implementation of a "Social Contract". If socialism is enshrined at the state level through the real collective will of the people (take, again, Scandanavian countries as examples), then the populace has effectively agreed to provide for their common men proactively and as a matter of course. They have, in effect, decided to trade some economic freedom for some economic security as (and this is the important bit) a group.

In real world capitalism the populace, as individuals, prefer economic freedom to economic security and view it as the individual's responsibility to use the former to procure the latter. Redistributing wealth to fulfill a "Social Contract" is generally either an act of pure altruism (ignore the tax-deductability of most charitable donations) or pure cynicism (making sure a deeply embittered and potentially violent underclass does not exist is crucial for maintaining one's economic freedom and security).

I liken it to fuedalism, which is not so much the populace pledged to militaries, rather the people were property tied to the land (serfs). Kings mostly dealt with a class of nobility that provided military power (knights and levies of commoner troops). The people really had no say or use, they played along because it offered a certain measure of security and certainty, in exchange for pretty bleak prospects of advancement.

Well, that's basically what I was saying. Bear in mind feudalism is largely a pyramid structure, with common people pledging to a local lord, who pledges to a regional lord, who pledges to a national lord, etc.... The point being that each is pledging to someone with the strength (and in medieval times, this was military strength) to protect them.

To me this is similar to how many corporations are becoming structured. CEOs need only assemble the pledges of a few compliant board members and executives that wield the modern military power of the day (lots of money and influence). They view workers as essentially commodities, there to suck up debt and goods, provide cheap labor, but they again do not really look for the masses to have any real input to decision making, we see this with increasing distasteful politicians and non-voting of public shares in companies.

Agreed 100%, which is why one of the outcomes I can see for the world over time is actually a reversion to some sort of feudal-capitalist hybrid, especially as resources dwindle and governments (especially big governments) fail.

For instance, I can't imagine the following scenario is too far-fetched: it's 50 years from now. Your local, state and federal government are essentially bankrupt and provide the bare minimum of services. GE offers you a job where you'll live with your family in housing on their enormous, and gated, corporate campus, your kids will go to school there, and you and your family's health care is completely covered, in return for you working for them virtually every day of the week, at a rate they set, in perpetuity. Do you take the offer?

[SportsDino]

We probably need a capitalism versus socialism thread.

Road to Serfdom tries to demonstrate that socialism inevitably corrupts due to the mechanism itself. Any mechanism of course can be corrupted (i.e. capitalism is vulnerable, I would argue it is not inevitable). It is a pretty complex argument, but I can easily see how socialism quickly degenerates into breaking individual freedom... not to mention how it has trouble raising standard of living due to a very weak incentive system. So my statement is that socialism ALWAYS breaks down once you get past the tribal (one big family) level.

Capitalism makes it harder to shut people out of the elite, whereas socialism/fuedalism makes it easy. Because the whole system of capitalism encourages the search for competitive idea makers, until the system is completely corrupted you could have someone come along and make so much money that other capitalist actors can join them for sake of money rather than power ties. In a socialist/fuedalist regime power becomes the only currency (again why socialism will fail, when all wealth is shared power to control how that wealth is shared becomes the only wealth, i.e. the forming of a party elite).

I disagree with the formulation of 'pure' or traditional capitalism, as an incomplete theory. So I disagree that only altruism/cynicism cause social spending, but rather there is some value that is being bought with social spending that has some impact on the efficiency of the economy. For instance, if you ask me the Scandanavian model is more a capitalism hybrid than socialism, it invests heavy social spending to provide a high value in economic security. Under a more complete theory of capitalism, this would probably not be called socialism, and it might be proven to be simply a highly efficient form of capitalism that takes into account social costs/values as I have described. Economic security certainly has a value even in capitalist societies, the more people feel 'safe' that the essential survival requirements are taken care of, the more they can pursue creative endeavours that can cause economic growth.

In the GE fiefdom scenario you described we would likely see the other results of fuedalism, much more isolationist trade, more resources devoted to subsistence living, and more economic and military warfare. More likely is a capitalist facist state that faces increasing civil unrest until a completely new democratic revolt takes place. In either case I'd be one of the rebels fighting to the death against either, I would consider it a great sadness if the most successful political and economic systems devised to date are decayed by apathy and stupidity on the part of the populace and the elite, and consider it something worth fighting for. I'm hoping things can be turned around from the inside of course, just have to get past the complete and foolish cynicism of modern culture.

[flere-imsaho]

Interesting stuff, SD. I still think you've spent too much time thinking about the weakness of socialism and strengths of capitalism (and too little time on the converses), but otherwise I agree (or at least follow) with much of what you say. In some cases I think all that separates our thinking is simply our individual lenses and definitions, which is fine.

Edit: As an example (or litmus test), what, to you, is a "managed economy"? Is it different from a "planned economy"? Is a "managed economy" something that's socialist in nature, or can it be a reasonable real-world evolution of capitalism on the state level?

[SportsDino]

A managed economy has a high tendency to become a planned economy. I would rather have a government as a neutral and fierce regulator, and a massive 'pooled' consumer for things best dealt with in aggregate (military, infrastructure, social welfare for disadvantaged).

The more areas we expect government management, the more likely the government will be used to take advantage of people rather than help them.

[RainMaker]

Originally Posted by DaddyTorgo

i haven't found viewership #'s for daily show. i was just using what rainmaker referred to in his post as "a million a day"

I just got it from here. It's a year old so I don't know if it's changed much since then.

Jon Stewart's Nielsen Ratings Down 15 Percent; Colbert's Up 11 Percent -- Vulture -- Entertainment & Culture Blog -- New York Magazine

[flere-imsaho]

Originally Posted by SportsDino

A managed economy has a high tendency to become a planned economy.

OK, but what is a "managed economy"? How would you define it? And a planned economy, for that matter? And then: what is Germany?

[molson]

Socialism would be great if we could have complete trust in the government. Maybe a future, more enlightened society can have that.

Private crime and breech of ethics are damaging enough. It's many times worse when those things are committed by entities that have the police and regulatory powers.

[SportsDino]

If I recall, a planned economy the government directly says 'you produce this in this quantity and sell at this price'. I.E. old school Russia.

A managed economy is where the government attempts to implement price controls and other regulations of the decisions of production, without necessarilly ordering specific production policies. I might be oversimplifying it. Technically, the U.S. is and has been a managed economy in various sectors off and on.

I'm a bit off in left and right field (but never center, haha), I pick and choose from a grab bag of hard-core conservative economists (note 'conservative' is not the common understanding of the term, I'm talking about within the field of economics a conservative) as well as some left-leaning economic theories (a little from what is currently the kumbuyah group, lets all be friends, a little from the government spending theorists, and on occaison some of the currently popular monetarist policy which I consider leftist on the scale of economics for the most part).

But anyway, in my somewhat warped world view as I've just described, it becomes certain that attempts to control prices at best create an indirect planned economy or most likely lead to significant gaming of the 'management' to extract money from government's price control efforts.

I'm not opposed to regulating abuses of prices, or even putting in some panic guards to prevent artificial price pressure from causing severe damage... but I consider the attempt to control prices an ultimately impossible and unnecessary endeavour.

I'm not sure if that is what you meant by managed/planned or not. To a large degree I would consider the US and Germany (and most of the first world) to be wandering amonst managed and 'free' economy based on the situation. To some extent there will always be government interference in markets, due to the unique entity that a government must be, but I am worried about government as a tool for bad companies to kill off good ones, or for government to redirect productive forces into stagnation.

If I were to summarize my stance towards managed economies... it would be a general 'no', I prefer to model the government as a unique customer of pooled concerns... it makes some of the differences between right and left economists drop out as factors and to me does a better job of modeling how government impacts the economy that is left unexplained by other theories. Unfortunately, that notion is not very popular as far as I know, and its incomplete and takes a lot of work to fill in the holes. In that model though, the assertion that government should be limited is valid, and that government should use massed bargaining power for public benefit is valid... so my methods would end up with things that would be classified as managed economies I am sure.

After however many centuries, I still consider economics to be in its infantcy, so we'll be regularly creating and breaking definitions all the time. I notice this when I read papers from entirely different camps that have different definitions or interpretations on the same words... so I apologize if all this babble just makes things even more cloudy! I'm a terrible explainer.

[flere-imsaho]

That all makes sense - thanks for taking the time to write it out. I mostly wanted to get a better understanding of where you were coming from.

To me, the difference between planned and managed economies is that the former deal with regulating the end products (i.e. price controls, protectionism, output quotas, etc...) while the latter use targeted investment (government to private sector) and coordinated efforts amongst various sectors to place the production side of the economy in the best possible (i.e. competitive) place on the world stage.

The planned economy views the free market as an enemy and looks inward to provide for its citizens. The managed economy views the free market as a fact of life and looks outward, coordinating its efforts between government and private industry to the benefit of both.

[SportsDino]

In my view, that is what the stock market is 'supposed to do', assemble investment dollars for good ideas, and keep people involved in a somewhat democratic fashion with the means and profits of production. Obviously its a big epic fail for some time now... I'll try get back to realism for a moment and say it is very unlikely we'll get to that level of efficiency.

Government as a big investor is attractive, and may seem necessary... I can understand why it would be considered an important realistic option to consider. It is just so dangerous though, and i really hate to think we have to rely on the government to make investments. But ya, i'm well aware of the Germany and Japan subsidies... I'll be honest we probably need to follow that example to compete. Again a practical thing, not necessarilly the 'right' thing.

[flere-imsaho]

Bear in mind it's not just subsidies. Or protectionism. A practice Germany and Japan pioneered, and one you now see a number of "emerging market" countries taking, is to have the government work with home-grown private industry to help coordinate/facilitate work done that gave/gives advantages to these companies.

The German government, for instance, acted as a powerful broker between labor and business for decades, to great effect. The Japanese government did, and still does, organize things like infrastructure development in consultation with private industry to get the best bang for the buck, economically.

You see countries like Brazil and India taking a look at their emerging industries and saying "what can we do in these areas so that, in 5/10/20 years these industries will be in a great position to reap the benefits of what we do now, and compete well with their international competitors?"

Right now in the U.S. the great majority of this, I think, is ad hoc and purely lobbying-driven. There's no coordination or long-term planning. But I guess that's the difference. The capitalist position is to do what's best for right now, and assume what's needed later will sort itself out.

[sterlingice]

Originally Posted by SportsDino

If I were to summarize my stance towards managed economies... it would be a general 'no', I prefer to model the government as a unique customer of pooled concerns... it makes some of the differences between right and left economists drop out as factors and to me does a better job of modeling how government impacts the economy that is left unexplained by other theories. Unfortunately, that notion is not very popular as far as I know, and its incomplete and takes a lot of work to fill in the holes. In that model though, the assertion that government should be limited is valid, and that government should use massed bargaining power for public benefit is valid... so my methods would end up with things that would be classified as managed economies I am sure.

My personal view is that government needs to basically be the referee for economies. There's no way they should be dictating prices (i.e. "corn should be produced in X quantity at Y price") but I don't have problems with them influencing things with moderation (i.e. "The British are killing us with their subsidized corn, we're going to subsidize ours to make it more fair" or "our car industry is important, time to put in some tariffs").

They also need to be able to create a system and place a dollar amount on things that don't have a monetary business value (or the number si ahrd to tease out). The PR from polluting is bad, but you can spend money to fix your image. The government needs to fine companies enough to deter that behavior. Create a cap-and-trade system to regulate carbon since as the government, you have to pay to clean it up so those responsible should have to pay for it.

The last major job is punishment. Ok with putting a dangerous product on the market since you determine a recall is more expensive than legal costs (ala the Pinto), you should feel the pain as a company. Ok with trying to make a lot of profit the wrong way- fine, break up, or nationalize the company. Introduce more moral hazard not less. And, for the love of pete, enforce the rules already on the books.

In these ways, the government should and *must* intervene. Otherwise, you have a lot of problems with the economic system going "unchecked", making their moves only on what is best for themselves and profit. The government needs to be a watchdog for the people.

SI

[SportsDino]

A lot of those things are possible without truly going to a managed economy though.

Subsidies, you implement with the government just buying the items for some purpose at a price they are willing to pay. Market price for steel is X, government wants to pay Y > X... that is their business. In general I'm anti-subsidy though, if there is a critical commodity, you buy it at whatever price will keep that production sustainable... and the government can easily execute its buying power by buying directly from American firms only. I prefer that over tariffs (I think some tariffs are good for the economy though, generate taxes on imports instead of income/payroll taxes).

Very few markets need to be propped up by the government. I would argue the best strategic move in many cases is to allow cheap commodities, and conserve our local natural resources, and allow the consumers of those cheap materials to boom. If we can get cheap steal from a bunch of other countries, buy the cheap steel instead of paying out subsidies, and build more tanks and junk to take over other countries! (okay too much Civ 4 playing, hehe) All you really need to maintain is a strategic steel production capacity and the ability to ramp it up quickly, not the actual produced quantities of steel.

My notion of the government as a pooled consumer is meant exactly to target "things that have no monetary business value". And some things that do. For instance, military security is something you can't really run private sector... or pollution controls (because pollution floats in the air and water pretty freely, easy to screw your neighbors with it). I have no problem with the government imposing costs for the public good, for instance, carbon credits end up having a health care and cleanup cost that is hard to evaluate. So go ahead government and establish a price meant to control those through various methods.

I think we need a more vicious carbon credit system, the current one actually is a mockery that is used to give polluters more tax payer money more often than not. For instance, it was setup so if you had a real smog machine you would be given government credits, you could cut back your production or close your plant, and then sell those credits for profit to others. So it failed at the real purpose, net pollution was equal, but it also managed to give some politically connected former polluters free cash.

Government as watchdog, enforcing laws about product safety, large punishments for committing crimes, and so on, none of those require managed economy. I would argue they are even very capitalist oriented goals, they just get ignored by modern economic theory too often. If the government got into the business of promoting the public good, instead of just getting elected each year, then I'm sure we would see some capitalist style efforts in the market to achieve those goals (in exchange for government not beating on them, or to get incentives provided by the government).

Everyone else can measure profit in dollars, the government in a democracy should at the very least measure profit in votes, and ideally measure profit in standard of living for its constituents (which in theory would lead to votes, yes I know it does not, advertising dollars and sheep herders like Rush Limbaugh do that).