GM bailout
Posted by WARREN MOSLER on November 7th, 2008
Seems to me GM and the banks need the same thing: people who have sufficient income to buy cars and make mortgage payments.
In general, direct public spending is for public goods: military, legal system, various infrastructure, etc.
To support private sector output the way to go is to support demand, and let consumers decide which products succeed and which don’t.
If government had declared a payroll tax holiday (treasury makes the fica payments for employees and for the business) three months ago, car sales would be up and mortgage delinquencies down.
And don’t forget to toss in something that reduces fuel consumption sustain our real terms of trade.
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November 7th, 2008 at 6:45 pm
“There is more to life than increasing its speed.” -Ghandi
Warren the more I read statements from you like below the further my respect for you falls and I hate that because I really like you, I thought you were one of the good guys who understood humanity going down its current course of increasing materialism is the well intentioned paved road to hell.
Warren: “people who have sufficient income to buy cars and make mortgage payments.”
Let the car companies fall - Every illegal alien on my block has at least 2 vehicles in their driveway already and none even know how to change the oil, some have 5 or 6 cars, anything sustaining this sick perversion is EVIL and any person advocating it is EVIL. The people on my block are fat and riddled with health problems and so are their kids and a LARGE majority of those problems could be solved with LESS cars and more shoes and bicycles - so why are you advocating the path to more DOOM and diabetes riddled kids who don’t get enough exercise because they ride in cars too much?
Warren: “In general, direct public spending is for public goods- military, legal system, various infrastructure, etc.”
Where is the direct public spending on cloning research, I want to be able to go to my community college or high school and have young kids there studying how to clone my cells to extend my life and theirs and yours.
Warren: “To support private sector output the way to go is to support demand, and let consumers decide which products succeed and which don’t.”
Wrong Warren, the marketing execs at greedy megacorps have engaged in a brainwashing campaign through advertising outlets that make the CIA puke with envy for mass brainwashing in a harrison bergeron wet dream. A brainwashed consumer sold on EVIL by the marketing DEVIL cannot be entrusted with the keys to the kingdom.
I am not worried about the terrists cause I know in time through radio, tv, internet, and print they will be exposed to the memes of the marketing overlords to CONSUME MORE, more barbie dolls, more hotdogs, more hairdos, more shopping trips with sada and sole and mia BLU CANTRELL hit em up style.
I just saw a special on “current TV” about 9 year old children making up the bulk of african military forces in regions around darfur - some go willingly because a parent was murdered and they are extending that hate and some are forced, but I know in time as food and civility come those children will be sold on nintendo and pokemon and nike and mcdonalds and even though I love General Romeo Dallaire and his thoughts of inserting armed forces in the middle of these conflicts all he has to do is look at our kids here for why they are not picking up guns and blowing each others heads off (columbine aside), because they have been pacified to the extreme in a consumer crazed futureshock existance that leaves little else for the little kids but to engage in consumer warfare of keeping up with the joneses kids from the age of 2 years old.
Sada can’t be happy if sole and mia has a louis vitton handbag and a new convertible mercedes and she does not, how sick and pathetic the power these marketing overlords have had access to our children since BIRTH putting our kids in front of tv and movies where they are sold on all kind of MEMES that would make my granpappy PUKE with disgust with what american has let beomce of the lessons taught to its children.
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November 7th, 2008 at 10:34 pm
Bailout? Are they all smoking dope. And where is all this bailout money going to come from? Bailout=bankruptcy. 1929 Germany here we come! This is what happens when career politicians and lawyers run the government.
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November 9th, 2008 at 5:47 pm
Moller Flying Car - Warren I don’t want to poo poo your mosler super car baby too much because I know it is like a child to you, but sometimes like the great economist Jehovah you have to sacrifice your son for the good of the rest of the borg. Why can’t you put money into moller flying car type subsidies? The more money and people we throw at this problem the better the future can be. The more money and people we throw at GM and the MT900 - the less quickly we get to the george jetson future eh?
http://news.google.com/news?hl=en&ned=us&nolr=1&q=moller+car
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November 9th, 2008 at 6:24 pm
I worked as a engineer for 30 years. I’ve been a member of SAE. GM’s answer to all problems is more lawyers and lobbyist. They needed to be disassemble, so the functional parts can be run by competent management.
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November 9th, 2008 at 8:51 pm
they should use a version of the MT for a flying car- it’s about a thousand pounds ligher than the ferrari.
and the new MT900 should get about 28 mpg highway
also, while gm no doubt has all kinds of problems, the entire industry is way down due to potential buyers not having suffient incomes.
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November 9th, 2008 at 10:25 pm
Warren, I agree, they should use the MT900, so why don’t you call up my friend stephen fleming at Ga Tech - commercialization officer - and talk to the Moller folks and make a real push to do something groundbreaking - The Mosler flying Super Car MT1000 - who needs another fast roadcar - this is your chance to change the world. We are having asphalt shortages, new roads are not in the future - this is your big chance to “change” the direction of your baby and be remembered as the pioneer who brought humanity flying cars in the worst depression in 100 years and gave the world a new vision for a brighter future - your name will go down in the halls of history with Henry Ford and Carnegie. They will remake the Jetson’s with the lead charcter being Warren Mosler. I have friends in tampa who are paying 200K for branson to take them into space one time, but I bet if you gave them a flying car with VTOL from the helicopter pads in their front yerds they would pay you as much if not more.
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November 9th, 2008 at 10:37 pm
I just called my buddy Wozniak and he said private submarines and helicopters for his super yacht are so last decade, he was excited hearing talk about a mosler super car VTOL vehicle he could put on his yacht and had many millions he would gladly pay for one to show how “elite” he was, so when are you going to start? I am going to tell Obama on his website not to support GM but instead put all those people to work on helping you with the Mosler MT1000 VTOL. Let honda and toyota work on road cars with an ashpalt shortage in our future, lets think outside the box. Fleming is already working on a new racing league with ESPN to supplant NASCAR - jet plane racing - but you could have international VTOL racing car leagues all over the planet and do him one better. Think of the marketing opportunities - who wouldn’t love to go to their local city sports complext and see MT1000 flying cars race around the skies.
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November 10th, 2008 at 3:00 am
Corvette facing more cuts. Holy Smokes Warren, at this rate corvette will not be around much longer - then where will you source your engines from?
http://www.wkyt.com/news/headlines/34167974.html
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November 10th, 2008 at 4:05 pm
Warren,
Speaking of the MT900.
I love this quote from car and driver about the MT900:
And then there’s the Mosler. It was just so astoundingly fast that, frankly, our amateur skills could not fully exploit its capabilities. It handles quite well—predictable, glued down, and with outstanding brake feel. But uncorking the 550-hp LS7 V-8 propels this featherweight, 2584-pound car like a cannon shot.
Back to the subject. I agree. So you keep the auto mfgs in business. If the demand isn’t there, who will they sell to? Maybe next the govt buys cars and gives them away.
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November 10th, 2008 at 5:15 pm
if they are compelled to give a direct subsidy i’d suggest ultra low interest govt loans to car buyers.
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November 10th, 2008 at 6:17 pm
Raises an interesting question–if they can lower rates for car buyers, and they can lower the rate AIG pays, why don’t they lower the rates for qualified borrowers to refinance homes–particularly since the Tsy owns the GSEs now?? That would seem to help things–I know I would take advantage of it and would spend the extra few hundred $$ per month.
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November 10th, 2008 at 10:00 pm
STF there are some homeless vets living in an empty condo construction near me, every so often the police come along and arrest a few. These men gave legs and arms in defending freedom, why can’t we just give them the empty building? I asked 2 of the owners of the project - 1 from tennessee and 1 from china to help out our homeless vets and they didn’t have much to say. Several moveed out to this gazebo in the public park, well the citizens complained so the city took down the gazebo and told the homeless they couldn’t stay there anymore. I don’t see those homeless anymore, I don’t know what happened to them.
I don’t like what you might define “qualified” as. I moved a few in with me but they started urinating in the front yard in broad daylight and the neighbors complained so they had to leave. They had a lot of mental problems - maybe being around them got me crazy too. I am very intrigued by your Idea - who makes the rules who gets the deals and who does not and how do they make those rules, I don’t like a lot of the rules I see being made. Jonathon hoenig - the capitalist pig was on fox tonight saying that GM is stealing from the taxpayers and should go out of business, but I am not joking when I ask warren if that happens - how can his Mosler car survive when the US taxpayer is no longer subsidizing his engine development - so I feel he has ulterior motives for coming here talking about keeping that GM dinosaur alive and can’t be an objective economist. I really want to see him reduce the price of his car and move development and construction to china because they deserve to have a place in the supercar world too and no one is giving them a chance. How can he talk about all his economic theories of letting china give us their exports while we lazy around all day but his actions don’t follow his words?
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November 10th, 2008 at 10:35 pm
stf,
yes, the agencies already are funded by the tsy and passing the lower rates through to the borrowers.
i’ve suggested helping people in forclosure could be accomplished by the govt buying the house at the lower of the mtg balance or the appraised value, and then renting the house to the former owner with maybe a one year option to buy it back if they keep the rent current.
or something like that.
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November 10th, 2008 at 11:13 pm
All sounds good. My point is, the lower rates getting passed through could be set at whatever level they want them, which they are doing already for others.
Scott Fullwiler
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November 11th, 2008 at 12:42 am
Ferrari to quit formula 1 Racing - LOL! They better start talking about the china price, cause thier price is too fuggin high! Where is the warren mosler super car going to get cheap engines in the future? From a country whose leader is a lawyer, or from a country whose leader is an engineer - how silly!
Speaking to the media at Ferrari’s end-of-season celebration event at Mugello, the Scuderia president announced that the ten F1 teams had agreed - unanimously - to cut the amounts being spent on engine development by around £12m over the next three seasons, bringing the cost of down to ‘just’ £4m.
The announcement also provoked Ferrari to issue a threat to quit Formula One not heard since the 1980s, and Montezemolo admitted that he suspected that the other major marques used to providing engines in the top flight may take a similar view should the motion be passed.
“It is unthinkable that constructors like Ferrari, Toyota, Mercedes, Honda, Renault and BMW could accept putting their badge on a car with an engine made by someone else,” the Italian said, “The purpose of F1 is that investments in innovation, research and development reverberate in industrial production.”
The recent meeting between Montezemolo and Toyota’s John Howett - on behalf of FOTA - and representatives of the FIA was also due to cover the supply of ‘customer’ powertrains and the possibility of using common chassis parts, including standard suspension, wheels and other expensive parts which ‘add nothing to the spectacle or the public interest of Formula One’, although the president did not reveal details of any plans for these.
http://www.crash.net/motorsport/f1/news/171621-0/teams_plan_engine_cuts_to_head_off_fia.html
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November 11th, 2008 at 1:31 am
“So you keep the auto mfgs in business. If the demand isn’t there, who will they sell to?”
I would think “bailing out” the big auto makers has several obvious benefits to the economy. First, it keeps a lot more people out of unemployment in the near term, which theoretically supports aggregate demand by keeping paychecks flowing. Second, when this recession finally ends, it provides for a domestic employment base . Third, it seems rather obvious to me that such interventions can be used as an arm of policy in order to force innovation. For example, should the government “bail out” GM, the government can do that with the “demand” that a certain percentage of the funds be used only for innovation into lower consumption / alternative fuel technologies, and can even require specific deliverables. In other words, these companies can be forced to do what they should already have been doing, which is utilize their very significant technological resources to create cars that help us reduce our reliance on alternative fuels, and which at the same time help us do something stunningly unusual in America today: become a world leader in something other than XBox 360 and “reality” TV.
I’d like to think that directly subsidizing normal folks would work towards this end, but the number of Hummers driving around here in southern california leaves me feeling disappointedly flat in that respect. The fact is, companies did provide what consumers wanted… and until gasoline started ticking past $3.00 a gallon, that was great big SUV’s with leather seats, 19 way sound, and built-in nav. Not trying to be funny, but that’s just reality - these firms built what consumers wanted and their failure was the failure of myopia; they glued themselves to the market so tight that their business model was subject to immediate upset when that consumer sentiment changed. This is important: If these companies were guilty of a lack of vision, that is only because they locked the scope of that vision directly to the obvious market demands. When those demands changed suddenly, they were not able to keep up.
So what is the point in that? It is this: you won’t rescue American innovation by placing it at the whim of consumers. That might sound diabolically socialist, but let me explain.
It may seem like common sense to “let consumers decide which products succeed and which don’t”, but I would argue that consumption isn’t exactly the best mechanism for determining how a company ought to innovate. Consider this: 3 years ago, when GM and Ford were deciding what they were going to be putting on the market today, the consumer wanted big fat SUV’s with 20 inch dubs and tinted windows. That is what the consumers “decided”. On the other hand, the Japanese manufacturers have a long established track record of being years ahead of the demand curve in their research and development. What drives that? Is it as simple as having a better sense of the consumer? Did someone at Toyota, 8 or 10 years ago, get the idea that they ought to develop a hybrid power train because they really expected that there would be a huge energy crisis coming soon, and suddenly consumer sentiment would swing towards lower consumption vehicles… or was there something of a corporate philosophy at work there too… a philosophy that fundamentally was driven towards innovation? I would argue that it is the later.
My point is this: consumer demand is a very poor barometer for gauging product development. That sounds daft on its face, but I don’t think it is. Truly ground breaking technologies are never driven by consumer demand, because they fundamentally innovate entirely new ways of doing things. For a trivial example, take the iPhone. Prior to the iPhone there was no demand for a device that tied together things just as it does. As a matter of fact, Steve Jobs and company took a huge risk developing that gadget because there was little reason to think that consumers would flock to their device in a cellular market that is teeming with gadgets and which is always moving at breakneck speed. The advent of the Macintosh itself, with its newfangled graphical user interface, is the exact same story. Yet in both cases it is arguable that the advent of these single products, and the underlying innovations in the design of these devices… ushered in entire industries and indeed changed aspects of society itself. Don’t think so? Hey, I bet we wouldn’t be talking about economics on this blog, using the world wide web, if computers had stayed as hard to use as they were in the days of MS-DOS.
The point of all of this is that real innovation - the kind we need to meet the kinds of needs we face in the world today… has to happen well in advance of the actual advent of the need itself. In that respect, innovative technologies always happen in the ABSENCE of consumer demand, not in response to it. They are not driven by consumer demand, they foresee it, and in some respects DRIVE it. T be really blunt, innovation takes guts, and and uncommon vision. It happens so far in advance of the actual need that you have to possess the nerve to really go for it. I’ve worked for companies that constrain their vision to what the marketplace wants right now, and it is in my opinion not very advantageous for them. Don’t get me wrong - it works for them in the near term because selling product is really where the “rubber meets the road.” However, as a long-term modus operandi it really doesn’t work at all because these companies cannot ever really move into new spaces in the market, and they are inevitably left behind by competitors that do innovate and that do think ahead.
So what is my basic point, then? I would say that letting the consumers decide which products win is actually a rather bad way of trying to foster innovation. If innovation is indeed the aim, then we would do much better to demand it of companies equipped to produce it by attaching it as a required output for a given input… in this case lots and lots of money.
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November 11th, 2008 at 2:28 am
“government can do that with the “demand” that a certain percentage of the funds be used only for innovation into lower consumption / alternative fuel technologies,”
I thought the 25 billion was supposed to do that, if warren gets his supercar up to 28MPG and .121 power to weight or better he might can get some free money too.
“become a world leader in something other than XBox 360 and “reality” TV.”
Mosler super cars and corvette zr1’s that do 215 mph are nice enough, but here in the florida swamps you have all those deer and coon and cougars you got to avoid - no fun hitting them at 215mph. I would much rather race warrens super car on the xbox360 than risk my life on florida roads where the ashpalt shortage has caused bad potholes all over the state. Have you ever hit a bad florida pothole at 215 mph - no fun!
“I’d like to think that directly subsidizing normal folks would work towards this end, but the number of Hummers driving around here in southern california leaves me feeling disappointedly flat in that respect.”
I was at the tampa international auto show hoping to see warren and his super car and super cat yacht but he didn’t show, hummer did though - I really feel safe in that big vehicle with all the crazy drivers around me who are high or drunk or just mad or wanting to committ insurance fraud, hummer makes me safer.
” The fact is, companies did provide what consumers wanted…”
That is correct, daddy doesn’t want his little sada to get injured coming back from the frat party with the bush daughters in her drunken state, much better to crash into soccer mom in big SUV than little econo car right?
“model was subject to immediate upset when that consumer sentiment changed. ”
You are wrong, consumer sentiment has not changed, most parents I talk too still want airheaded children to have big safe vehicle to protect little shopping machine metrosexual from a head injury that might knock some sense into them ;)
“This is important: If these companies were guilty of a lack of vision, that is only because they locked the scope of that vision directly to the obvious market demands. When those demands changed suddenly, they were not able to keep up.”
What you do is outlaw vehicles over 50cc - make sada and bush daughters start riding bikes or mopeds everywhere - but then how would Mosler sell his supercar?
“So what is the point in that? It is this: you won’t rescue American innovation by placing it at the whim of consumers. That might sound diabolically socialist, but let me explain.”
No I agree with you totally, consumers that have been brainwashed by evil marketing devils since birth have gotten too many whims catered too, and it needs to stop. First by controlling these marketing devils who have unfettered access to our children in so many mediums.
“That is what the consumers “decided”. On the other hand, the Japanese manufacturers have a long established track record of being years ahead of the demand curve in their research and development.”
So what is up with that new toyota truck that is bigger than all the american trucks?
“My point is this: consumer demand is a very poor barometer for gauging product development.”
The governer before george wallace said a good political leader is more than a reflection of his people - so when everyone wanted to desegregate he said NO WAY and they shot him. LOL! See Daddy Mosler is never going to want sada and bush daughters to go to college and be unsafe in little death trap econo car when big tanklike SUV makes them feel safer. So we are enanged in an ever increasing death spiral balance of power of consumer vehicles being safer and sturdier and bigger and faster so our kids don’t get hurt. What you are asking for is to go out into the beach where there is a big jaws shark and throw little sada in the water, no parent is going to do that, have to take all the jaws sharks off the road before they will send little sada onto the highways and feel safe without big cage around her.
“That sounds daft on its face, but I don’t think it is. Truly ground breaking technologies are never driven by consumer demand, because they fundamentally innovate entirely new ways of doing things.”
I agree, I don’t see mosler talking about flying mt1000 super car though
” For a trivial example, take the iPhone. Prior to the iPhone there was no demand for a device that tied together things just as it does.”
When I was a wee lad I watched kirk call up scotty on this device, and they could do all kinds of neat things, tricord stuff and scan and analyze and pull up info, I wanted that ever since I was exposed to the meme. A lot of people did, but it took many decades for that to come.
“society itself. Don’t think so? Hey, I bet we wouldn’t be talking about economics on this blog, using the world wide web, if computers had stayed as hard to use as they were in the days of MS-DOS.”
MS-Dos was easy - when you had to code your own shell on the old mainframes - that took some skill in raw machine language - people today are so ignorant of the underyling technology they use - like all my neighbors who have 2 or 3 cars but don’t know how to change their brakes or even their own oil and bitch when the service station charges them 100 dollar an hour labor fee. They are just too lazy to even download a free video to teach them how to do these things.
Before this blog there was sci.econ on usenet - decades ago.
“The point of all of this is that real innovation - the kind we need to meet the kinds of needs we face in the world today… has to happen well in advance of the actual advent of the need itself.”
But you are dealing with human beings, lazy monkeys that eat and fart and don’t want to work very hard most of the time, so that is why necessity remains the parent of invention. Look at Warren, he is content to make lotsa money clicking buttons on his trading terminal while some ignorant african child dies in the congo mining the elements he needs to build super cars - the world economic rube goldberg machine makes you sad sometimes.
” In that respect, innovative technologies always happen in the ABSENCE of consumer demand, not in response to it.”
I ride a recumbent bicycle, they have been around for over 100 years and save your back, but you still see so many people hurt their back riding regular bicycles - why? There was a monk in spain in the 12th century that flew the first glider - why did it take 800 more years before we had lotsa airplanes?
” They are not driven by consumer demand, they foresee it, and in some respects DRIVE it. T be really blunt, innovation takes guts, ”
I read about this guy named Tesla who was gonna power the whole city wirelessly, but they didn’t have good technology to meter and control all that energy flow so someone burned up his lab, sometimes guts get you killed.
“and and uncommon vision. It happens so far in advance of the actual need that you have to possess the nerve to really go for it.”
I remember woody allen once said that had he been born an indian in an indian tribe his comedy wouldn’t have done much for him in that environment and he would probably have gotten his head scalped. But in the right environment of today he was able to molest and marry his daughter and have a lot of wealth and power - the technology cannot be too far out of the age it is needed but I like your spirit!
” I’ve worked for companies that constrain their vision to what the marketplace wants right now,”
Holy smokes you too? Were you as disgusted by those number crunching boring MBA types as I was? We sat in more meetings wasting time talking about projections based on faulty models than we ever spent on real research and work - pathetic.
“and it is in my opinion not very advantageous for them. Don’t get me wrong - it works for them in the near term because selling product is really where the “rubber meets the road.”
Bogle talks about this in his lost soul of capitalism book, and many ceos complain they have to beat the street by a penny or they are fired and even the great god Keynes said Liquidity was the MOST EVIL fetish of them all, yet people like Warren who really understand how EVIL this fetish of liquidity is does not really do anything to CHANGE this EVIL and that makes him EVIL. Tomorrow he will click more buttons on his futures/options/currency account trading on this EVIL of liquidity fetish and contribute to the downfall of mankind that you have so eloquently identified as a REALLY BIG PROBLEM.
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November 11th, 2008 at 4:09 am
I think Warren is just trying to make a buck, not save the world. And, although Warren can talk into some highly placed ears, I doubt Warren has the resources to really make a dent in many of these problems all by his lonesome. It’s not really fair to hold him responsible for the ills of the world.
To be brutally honest… and this is likely to make many of the free market types puke… fostering innovation is, and should be, one of the primary goals and purposes of government. This is so for a number of reasons. First, fostering innovation is in fact part of supporting the public good, and that is a primary purpose of government, or at least it was at the time that my junior high civics book got written. Second, government is the only agency in place to regulate and coordinate efforts at innovation to the degree necessary to really effect change.
One of the things that is badly wrong with our system of governance today is the way it has been so radically co-opted by corporate interests. Lots of people running around behind Obama have caught wind of this idea but I think very few actually have an inkling of why its such a bad thing. I consider it true that the mixing of government and private interests comes directly at the expense of public interest; A government which is serving the interests of private entities is by definition NOT serving the interests of the public. However, I don’t think this is for very obvious reasons. It isn’t because addressing private interests necessarily contradicts public wishes, and here is where it gets interesting: these private interests are often themselves driven by market demands. The issue is not that giantCo is focussing on building really cheap MP3 players rather than building sugar powered fuel cells… it is that giantCo’s mission is being driven by consumer demand, and that consumer demand is driving the lobbyists… so that consumer demand is now infecting and driving government policy. Weird! While helping giantCo to deliver what the consumers want, the government in fact completely fails to serve the public good. Ironically, it is actually fair to say that what consumers want is not what they need, nor does it serve their interests.
I recognize that these ideas are likely to completely discombobulate both free market proponents AND neoCons alike. After all, serving the public good is synonymous with doing what the public wants, right? But in fact, I would argue that at its best, government policy is entirely detached from consumer demand and driven by other factors which do not have anything at all to do with business, consumers, or the economy for that matter. I would submit that the greatest advances we have ever made as a people, and those which have added the most to the collective good of humanity… have never been driven either by consumer sentiment or by corporate bubbleheads intent on beating the street. When we allowed our government to become influenced by these things… that is the day we went seriously wrong.
If you think about it, the biggest things we have accomplished as a nation and as a people have been driven by broad, bold ventures with no obvious (or at least highly questionable) benefit. When JFK stood at a podium and said “We will go to the moon. We will go to the moon in this decade and do the other things, not because they are easy but because they are hard” he was lighting a torch that illuminates the difference between government then and government today. The legitimate function of government… the function government used to at lest marginally perform, is not to help widgetCo build more widgets faster and cheaper, or to help widgetCo optimize its profits. The role of government is to advance the big picture agenda that serves our collective good. Nobody could have foreseen when JFK made that announcement just how much the technologies that came out of that effort would transform our society and the world, nor could they have foreseen what an engine of economic might they would foster. Consequently, the “market” could never have “decided” that these ventures should be undertaken.
One final note: I think you bust Warren’s chops entirely too much. Although you might not agree with Warren’s monetary actions, Warren does advance an economic model and associated policies which is, I think, essential to achieving the many dreams you talk about. If we are to ever conquer the kinds of problems you tend to dwell on, we cannot do so by using economic models based on the principle of monetary scarcity. We will never be able to really attack the big problems so long as we think that our efforts to do so are constrained by scarcity in the supply of “liquidity” with which to drive those efforts. So, while you bust Warren’s chops for funding grad students, you ought to realize that the economic principles these students are being taught are (if correct) the ones that will be quite instrumental in fostering an economic system capable of driving the kind of innovation you spend so much of your time mentioning. Change happens as a result of all sorts of drivers. The kind of change you envision cannot happen without change in our economic models as well. No problem is ever entirely in a single domain… it is not ever entirely technological, entirely social, economic, or spiritual. Warren happens to be doing his work in an arena different from the one important to you, but I think its a mistake to think that these ideas do not contribute to the outcomes you seek.
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November 11th, 2008 at 8:38 am
good points on consumer demand and product devel. that was the late jkgalbraith’s point in ‘the affluent society’- business figures out what it can build, then decides if/how to market it.
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November 11th, 2008 at 5:37 pm
Somebody, somehow, somewhere has got to be brave enough to provide credit to auto buyers. Without financing there is basically no market for the big threes cars. Credit=auto sales. It’s just that simple.
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November 11th, 2008 at 8:41 pm
If only we could get (back) to a place where people can purchase cars WITHOUT credit…
We don’t need more credit; people need to live within their means. The problem with that is that it limits growth. Without constant growth, people have to stop riding waves and just swim.
–
Milken: “Where is the direct public spending on cloning research, I want to be able to go to my community college or high school and have young kids there studying how to clone my cells to extend my life and theirs and yours.”
This is one of my personal favorite points to argue because almost no one agrees with me: I believe that a big part of our problems has to do with advances in medicine. Medicine has gone too far: we enjoy historically unimaginable birth success rates and we have an exceedingly high life expectancy for a bunch of overweight, underexercised burger-munchers. Who has to pay for the single mothers with 9 babies? Who has to pay for the herds of geriatrics bursting from the seams of hospitals and care facilities? In short, who has to pay for all of the people who are not adding to agg demand, and who are only alive because of modern medicine? The answer, I believe, is everyone else.
We need to thin and strengthen the herd. We need fewer consumers and more productive citizens.
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November 11th, 2008 at 9:35 pm
You’re preaching to the choir with this boy. I agree with everything you say. You have the courage to say what many think but are afraid to say. The old folks will simply bankrupt us. Its beginning already. But what do you do about it??
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November 11th, 2008 at 10:04 pm
“I think Warren is just trying to make a buck, not save the world.”
If true and he isn’t here on a holy mission from god to spread the word and one day soon he will require payment for blog access, then why does he criticize my company GS for also just wanting to make a buck?
“And, although Warren can talk into some highly placed ears, I doubt Warren has the resources to really make a dent in many of these problems all by his lonesome.”
I have asked one thing really of Warren, to stop playing in the market casino and contributing to the fetish of liquidity and by having his personal jerry maguire moment he could set the example for others to follow - he COULD do that, but his greed stops him.
“It’s not really fair to hold him responsible for the ills of the world.”
I just want him to show by personal example that he can put down the mouse and stop clicking buttons and show other people that life can go on if they don’t click buttons their whole life trading blips on a computer screen. Instead he proves keynes right day after day and by his own personal example leads other souls into the bottomless pit that is “trading” in the fetish of liquidity that is sucking mankind dry - too many of our borg that need to be working on formula F1 engine development or cloning research are clicking buttons trading day after day. Look at the amount of time he spends trying to figure out the lies and corruption of the government, the fed, the treasury, GS, etc etc everyday that he could have used to make an MT1000 flying mosler car - that is what keynes was talking about - the market casino is sucking the lifeblood out of people that could otherwise do truly productive things for all us borg.
“To be brutally honest… and this is likely to make many of the free market types puke… fostering innovation is, and should be, one of the primary goals and purposes of government.”
Whatever the goals should be, having worked at a fortune 5 company I can tell you the goals will not be. I think most politco types start out well enough, but after all the mossad type tricks, and money, and hookers, you get corrupted.
” This is so for a number of reasons. First, fostering innovation is in fact part of supporting the public good, and that is a primary purpose of government,”
One of my econ professors (an ex GM corvette operations manager) said gubbment had 2 purposes, 2 give money to the poor from the wealthy to keep them pacified and not burn your mansion down, and to support a national army to keep the poor in another country from burning your house down, see it is all about keeping the poor from burning your house down ;) If we didn’t have rich people needing protection from the poor, I think he would argue a big national government would not be necessary!
“One of the things that is badly wrong with our system of governance today is the way it has been so radically co-opted by corporate interests.”
Something that will only be fixed when government representatives are more beholden to their voters than to the lobbyists, we must make 250 states, each senator lords over to many citizens, making their individual votes worthless to his concerns. When the framers of the constitution made the rules there was much less population, now there is much more and the congress has not scaled appropriately.
“these private interests are often themselves driven by market demands.”
From brith the children are taught to shop til they drop, it starts with tickle me elmo on sesame street and ends with chris farley laying dead in his cocaine overdose. I have lived all over the world, it is amazing how conceptually different people can become if they are raised around a group of others with so many different thoughts. My grandpa said he knew it was over for mankind when he let the TV into the bedroom, he went to love on grandma some and she said lets watch john wayne instead!
You talk of kennedy and the moon, I know many nasa boyz, they are glad to see the government get out of the space business and let the private industry take over because they are sick of the government 800lb gorilla moving so slowly.
“One final note: I think you bust Warren’s chops entirely too much.”
If not me - who? I don’t ever see ONE other person bust his chops, emperor’s with no clothes need to be told sometimes. If someone else wants to step up to the plate, I will step down.
“Although you might not agree with Warren’s monetary actions, Warren does advance an economic model and associated policies which is, I think, essential to achieving the many dreams you talk about.”
No - warren studied this guy named keynes, and keynes said the fetish of liquidity was the greatest evil, don’t take that lightly when the money god talks about the biggest devil.
From that greatest evil has grown the demon seeds of CEO’s who must beat the street by a penny and can only look at the short term and never invest for the long term, you know we didn’t always have a 24/7 market casino that everybody and their dog could trade round the clock in nanoseconds. I have not heard Warren refute Keynes saying that the fetish of liquidity is indeed the greatest Devil and from wence most of the other demons that you pointed out so plague us and spring forth.
“If we are to ever conquer the kinds of problems you tend to dwell on, we cannot do so by using economic models based on the principle of monetary scarcity.”
We must be in seperate churches, why do you think we should NOT tackle the fetish of liquidity that causes long term planning to be scrapped for next quarters profits? Why do you think we should NOT limit the power each government represntative has by dispersing that power among more people?
“We will never be able to really attack the big problems so long as we think that our efforts to do so are constrained by scarcity in the supply of “liquidity” with which to drive those efforts.”
Scarcity of money or bernanke helicopters from heaven will not change the fetish of liquidity problem or the too few government representtives problem in this country, that is why I keep saying over and over any monetary genie warren thinks he can pull out of his hat will do little compared to altering those 2 things.
” So, while you bust Warren’s chops for funding grad students, you ought to realize that the economic principles these students are being taught are (if correct) the ones that will be quite instrumental in fostering an economic system capable of driving the kind of innovation you spend so much of your time mentioning.”
I think you are wrong, I think until we address the demon that keynes said was our greatest enemy, and the demon that is the awesome power controlled by so few government representatives, that all these other things will have very very limited impact - I am willing to listen though why you think keynes was wrong and the fetish of liquidity is not demon number 1, and why 350 million people being served by 100 US senators is A OK?
“Change happens as a result of all sorts of drivers.”
Yah the titanic is sinking (our country) and you and warren are talking about teaching those guys down in the engine room about a better lubricant for engine number 2 (grad students), but that is such a small issue compared to what really needs to change.
“The kind of change you envision cannot happen without change in our economic models as well.”
The problems is as you said, lack of long term planning of our companies, and too much government power in too few hands, I have offered solutions for both of those, one from keynes himself, and you say a few grad students with the right ideas will fix the sinking titanic, I guess we will have to agree to disagree.
“Warren happens to be doing his work in an arena different from the one important to you,”
Not to me, Keynes said what warren does is EVIL, and I have not heard him refute keynes meme about the fetish of liquidity being the most evil of all anytime I have brought it up - have you?
“but I think its a mistake to think that these ideas do not contribute to the outcomes you seek.”
I once was young and idealistic, then I went to washington, and I got enough taste of that, absolute power corrupts absolutely, without addressing that, anything else is just rearranging the deck chairs on the titanic - sponsored grad students or not.
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November 11th, 2008 at 10:34 pm
“If only we could get (back) to a place where people can purchase cars WITHOUT credit…”
Holy smokes, I already asked warren to give me a loan to buy his mt900, you know how long it takes a pre-med student to go through college, pay off his loans, then save up enough to buy a 400K Mt900? They would be too old to enjoy the features of the car by the time that came about, what can an 80 year old wore out half blind doctor do with an mt900? ;) I would much rather enjoy the car at 40 or 50 years old and go into a loan to do so then wait until I was 80 to save up the cash - wouldn’t you? You are not making sense.
“We don’t need more credit; people need to live within their means.”
I know, I watched this movie 2001 and couldn’t understand why those dumb monkeys picked up a bone and hit each other, they had perfectly good hands to hit each other with and teeth to bite with. All this “reaching” that mankind does for a better future and existing beyond their “means” is so sad! How can we stop it? You have so many people like me that want more that god himself could give, and even then we will not be satisfied, my lord I guess there are easily several billion like me by now, how do you stop us? You are just one guy - ever hear the saying - if you can’t beat em - join em?
“The problem with that is that it limits growth. Without constant growth, people have to stop riding waves and just swim.”
I heard first emporer of china sent his massive fleet all around to explore for anything better in the world, they went a little ways and came back to the emporer and said there wasn’t anything out there worth bothering with so he called them home and never explored ever again. Just think had he kept wanting growth and pushing the boundaries, there could be 40 billion chinese speaking people on the planet today with an mt900 kevlar fiber car.
“This is one of my personal favorite points to argue because almost no one agrees with me: I believe that a big part of our problems has to do with advances in medicine.”
LOL! If only we all could die at 9 from most the diseases that killed many children before modern medicine think how much better the world would be! 9 years for any human to contribute to the world, umm I guess shirley temple did most of her good stuff before 9, but I am having trouble thinking of too many other humans before 9 that made a big impact - help me out.
” Medicine has gone too far: we enjoy historically unimaginable birth success rates and we have an exceedingly high life expectancy for a bunch of overweight, underexercised burger-munchers.”
We haven’t gone nearly far enough - I want Warren Mosler to live forever and you too - I can’t wait until 500 quadrillion borg like entities that aren’t even human as you know them but AI robots reproducing and cloning ourselves all over this solar system and galaxy exist. I want to honor god and fulfill his first commandment, go forth and multiply.
“Who has to pay for the single mothers with 9 babies?”
I have offered to move many mothers with babies in with me and they all run away after the first day, they say no old man should want sex that much and I am confused because I thought them being mothers they were cool with making babies!?! ;)
“Who has to pay for the herds of geriatrics bursting from the seams of hospitals and care facilities?”
I was at the vets hospital today helping some of those old shot out worthless veterans you talk about, lots of kids from the local schools wrote them saying thanks for defending thier freedom, with medical advances, they wouldn’t be in that condition. I bet if you built a bomb and blew up a couple nursing homes you could fix some of that waste we have out there! Why don’t you give some action to your beliefs and go recruit some young columbine type kids and start blowing up these places and do the rest of us a favor? Don’t expect the government to fix this very important problem you have identified - be like the founding fathers - take matters into your own hands!
“We need to thin and strengthen the herd.”
I agree, and I think you are one of the ones needing thinning, so go walk off the nearest bridge and do the rest of us a favor ;)
“We need fewer consumers and more productive citizens.”
This can be achieved without you walking off a bridge or bombing nursing homes or letting the sick and feeble perish and not advancing medicine, come on - open your mind! Is your life really so terrible?
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November 11th, 2008 at 11:17 pm
I think Warren has a very devoted fan.
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November 12th, 2008 at 1:52 am
Aren’t we all here because we are fans? I send everyone I can to read the blog of the inventor of Mosler’s Law, but in the meantime I am going to focus on warren’s future election campaign, I need him in washington and so do all the rest of you. That is his best destiny for all us borg. Soon my wealth will attract those slightly less wealthy and as we all grow into a strong powerbase where I can influence them to donate to send him to washington with large donations of my own. I estimate within 4 years to be able to pull 4 million for Warren’s campaign from my circle of influence, the rest of you need to adopt similar strategies if we are going to fix what is really broken and it is damn sure time. 4 million will not be nearly enough but it is the best I think I will be able to do - I need help - perhaps you too Ted can help get Warren to washington where he really needs to be.
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November 12th, 2008 at 12:55 pm
The most fundamental, inviolable fact of life is that everyone must die. We pathetic humans can’t even figure out how to use play-money without causing global crises; do you really think we have the intellectual capacity to play god? We don’t have a clue what is best for us or for the planet. Not everyone dies at 9; but everyone dies, no matter how much money you spend fighting it. We have been made to expect a standard of living that is neither practical nor sustainable. We have been made to fear and shun death. For whose benefit do we keep our elderly alive?
I was with my grandmother for the last several years before she died; she was in pain, she had to take more pills than she could physically handle, she could barely get around the house, and, more importantly, she was horribly depressed because of the pain, the pills, and the feeling of uselesness that comes along with being unable to do anything. I watched doctor after doctor perform countless numbers of tests and administer countless treatments… all to try to patch up a sinking ship and draw out the course of a terminal illness. The ability to keep people alive is not the same as the ability to mantain quality of life. My grandmother was kept alive because her children weren’t ready to watch her go. The destination for her was the same; the path, however, was made longer and harder.
Beneath the unpleasant and inflamatory examples, my point is simply that there is no such thing as a free lunch. Most of my grandmother’s care was provided by medicare, medicaid, and the remaining insurance benefits from her husband having worked for Martin Co. That means that every tax-paying citizen, and every employee of Lockheed-Martin was paying my grandmother’s medical bills. I don’t think that’s fair.
Nor is it fair for someone to rack up thousands of dollars of credit card debt and then, when they can’t make the payments, settle that debt for pennies on the dollar. Nor is it fair for banks to reduce mortgage principals so that people can make payments on the houses they can’t afford and shouldn’t have purchased in the first place. Soft-currency economics notwithstanding, someone has to pay for it.
Perhaps I am a bit backward-looking; however, I believe that everyone should pay their own bills - I can’t think of a more fair method of economic accountability. You can make fun of my primitive vision all you like, but I don’t remember hearing of any credit crises among the Aborigines; they must have something right.
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November 12th, 2008 at 3:31 pm
Ted said:
“Bailout? Are they all smoking dope. And where is all this bailout money going to come from? Bailout=bankruptcy.”
Have you read Warren’s papers?
“Somebody, somehow, somewhere has got to be brave enough to provide credit to auto buyers. Without financing there is basically no market for the big threes cars. Credit=auto sales. It’s just that simple.”
What do you think of Paulson’s move this morning? It appears this problem is clearly front and center in their vision, since they’ve made an abrupt about face with just what they intend to do with the “bailout” money.
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November 12th, 2008 at 3:42 pm
“The most fundamental, inviolable fact of life is that everyone must die. ”
That is simply not true, as early as the 70’s prize winning scientists have been able to keep cells alive idefinitely - that means forever - til the end of time. Hayflick limits and dna breakdown - all solveable problems. Who taught you otherwise and lied to you? You have a lot of reading to do, google is your friend.
“We pathetic humans can’t even figure out how to use play-money without causing global crises; do you really think we have the intellectual capacity to play god?”
If you believe in him - By being his children don’t we all grow up and become like daddy?
“but everyone dies, no matter how much money you spend fighting it.”
That is just not true. If people will listen to michael lewis and keynes, and start spending time on science and less on studying currency swaps, mankinds problems will be fixed more quickly.
“We have been made to fear and shun death. For whose benefit do we keep our elderly alive?”
For our own, it is ultimately a selfish meme that drives us to save our elderly borg. It is part of what makes us civil and rise above the chaos around us.
“My grandmother was kept alive because her children weren’t ready to watch her go.”
Exactly, right now it is for our own benefit, but in the future she won’t have to go until a time of her choosing. You could have pushed in her front of a semi truck if you were so worried about her pain. How cruel of you to make her endure that suffering when you had the strength and knowledge to end it, why did you treat her so badly and not smother her to death under a pillow one night?
“Beneath the unpleasant and inflamatory examples, my point is simply that there is no such thing as a free lunch.”
That is correct, it is going to take a lot of work and time to make a better future, it won’t come with beliefs like yours to not even try - especially when scientists have already proven that immortality is an achievable future. Go to your local library and read some books, use google and read some science articles, physorg is a nice place for daily science news - there is hope - for all the negatives I feel towards Rhammy, he has brought a lot of money to neurological research and is progressing science and knowledge.
“employee of Lockheed-Martin was paying my grandmother’s medical bills. I don’t think that’s fair. ”
Obama is going to do even more that you probably don’t think is fair, and for every one of you thinking it’s not fair, there are 500 or more of me that think it is, when we find the fountain of youth - we will share with you - don’t worry.
“Nor is it fair for someone to rack up thousands of dollars of credit card debt and then, when they can’t make the payments, settle that debt for pennies on the dollar.”
That is what is happening though, a lot of the skeletons in the closet that caused this mess won’t be repeated again in the near future, now we can get busy with real problems.
“Perhaps I am a bit backward-looking; however, I believe that everyone should pay their own bills - I can’t think of a more fair method of economic accountability.”
You exist today with the lifestyle you do because so many borg in the past and now did so much for you, you could never repay or duplicate it on on your own, you will be assimilted, resistance is futile.
“You can make fun of my primitive vision all you like, but I don’t remember hearing of any credit crises among the Aborigines; they must have something right.”
I would rather you join the future than try to take us back to the past - Why haven’t you moved to live with the aboriginees if you think that is the best thing? See - deep down you know you have it better here - with all our credit and bailouts and cronyism. Don’t worry, this is just a rough patch, we are going to come through this and things are getting better all the time.
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November 12th, 2008 at 3:54 pm
“I believe that everyone should pay their own bills - I can’t think of a more fair method of economic accountability. ”
Does that include corporations who pay taxes after extracting losses from operations, or just individual citizens, who pay taxes before “losses from operations”? Does it include the rich folk who offshore their accounts and hide their wealth behind shell companies and the like, and fancy themselves “citizens of the world”, or does it just apply to the normal folk who are struggling just to be a citizen of somewhere, USA? What happens to the regular folks who maybe get sick, lose a job, and then wind up unable to pay? Should we kill them only after they move from the “asset” to the “liability” portion of our spreadsheets, or should we be preemptive about it and just whack them at age 30 or so, ala “Logan’s Run”, so that we give them a reasonable time to pay us back for the bother of educating them and making sure they had food when they wer