How the free market works

[Ought Six]

http://www.youtube.com/watch?v=R5Gppi-O3a8

[Mackie]

Pick out the most simple product and try to tell people how easy the free market is. Not sure this is helpful.

There are 3 things why I don't believe in a REAL free market:

The free market is no model to run a economy. It's just price finding via demand.
Sometimes I think liberalism expects too much of it.

The free market don't serves the people/country/society. It doesn't considers social security, national security or a long term business model.
There is no strategic element behind it. The long term thinking is done by the CEOs. And I don't believe in this poeple since there too many MBAs and only few entrepreneurs in the system.
Things like the shareholder value make it even worse.
You don't understand a modern market. We've seen it in the crisis. Especially the financial industry has become too complex to understand for economists and the business people who run it.
Since I highly doubt that the governments will change that or even understand it to create functional regulations, I think the tools of today are simply outdated. I think that the MBA of today is almost worthless since it doesn't give people the right tools to analyze the market. Forget Porter, learn kybernetics. Modern tools of system analysis is the key. For the market and the company.

The third point is that main target for a company in a free market is to eliminate it's competitors.
So the market itself is in a suicidal mood.


Friedman had some good points. But I think he would have rethink some of his theories after 2008.

[Ought Six]

Friedman had some good points. But I think he would have rethink some of his theories after 2008.

2008 was a total vindication of Freedman. The government intervened massively in markets, and the results were disastrous. It appears that we are about to see a repeat.

[Mackie]

2008 was a total vindication of Freedman. The government intervened massively in markets, and the results were disastrous. It appears that we are about to see a repeat.

The government created nested financial products?

[JCR]

Milton Friedman was singularly fortunate in dying before his ideology collided with reality.

[kamazz]

The government created nested financial products?

no, but it did give the banks that created these products a financial FDIC insurance on all deposits made to the bank, basically encouraging risky and unstable investments.

But thats not even the real point. We could have 2008 crash even if the govt never provided the crack to the crackheads, thats fine, no financial system will ever be risk-proof or crash-proof.

The biggest problem with federal intervention in the markets is that corrective actions that would normally take place after the melt down were hindered and never taken. People that should have been fired and companies that should have gone out of business for making bad decisions, were kept afloat and rescued by govt bailouts. There was no fundamental restructuring that would occur in a natural market. It seems that if govt is to play any meaningful role in the markets, their traditional roles as monopoly busters and Glass Steagal enforcer should be their primary focus.

[Ought Six]

The government created nested financial products?

The toxic mortgages mandated by the government had nothing to do with those financial instruments failing? The fact that Fannie and Freddie owned or backed over half the mortgages on the market was not massive government intervention in the market?

[Mackie]

The toxic mortgages mandated by the government had nothing to do with those financial instruments failing? The fact that Fannie and Freddie owned or backed over half the mortgages on the market was not massive government intervention in the market?

Some economists have seen the risks and warned and some don't. With or without government, with the current methods and products, we will see more bubbles in the future.
The Dotcom bubble was not due to governemnt intervention but bankers who never understood their investment.

But seriously. Why Friedman? He's more ordoliberal and not classic liberal.

[Ought Six]

Some economists have seen the risks and warned and some don't. With or without government, with the current methods and products, we will see more bubbles in the future.

But government intervention makes the normal recession cycle so much worse, which is why we are currently suffering the worst pseudorecovery in American history, and are now headed down into the second 'dip' of the worst recession since the Great Depression.
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The Dotcom bubble was not due to governemnt intervention but bankers who never understood their investment.

False. It was both.
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But seriously. Why Friedman? He's more ordoliberal and not classic liberal.

Why not Friedman? The video gave a good, very basic explanation of how the market creates products. It did not go into deep economic theory, so I fail to understand your even bringing up that subject in relation to it. How is that even relevant to the video?

[Mackie]

But government intervention makes the normal recession cycle so much worse, which is why we are currently suffering the worst pseudorecovery in American history, and are now headed down into the second 'dip' of the worst recession since the Great Depression.

Some billions less, that's the difference. But it's not the main reason for this crisis. I mean, why should this business people think long term? They are not classical entrepreneurs. They follow a business school that isn't sustainable.
Blame government intervention only is a cheap trick to continue with the current mess. It's not only a government crisis. It's a crisis of the neo-lib business school.

----------False. It was both.

We had our own bubble here. And it's very simple. Idiots who didn't understand what they sell. 95% in the financial industry just follow another guy. And noew let this guy be wrong.

----------Why not Friedman? The video gave a good, very basic explanation of how the market creates products. It did not go into deep economic theory, so I fail to understand your even bringing up that subject in relation to it. How is that even relevant to the video?

I am not a fan of cherry-picking. If you post a vid about Friedman, I guess you agree with this person. Especially since this video is very simple.

[Ought Six]

Some billions less, that's the difference. But it's not the main reason for this crisis. I mean, why should this business people think long term? They are not classical entrepreneurs. They follow a business school that isn't sustainable. Blame government intervention only is a cheap trick to continue with the current mess. It's not only a government crisis. It's a crisis of the neo-lib business school.

The government being largely responsible for the crisis is not a "cheap trick". It is a fact. You cannot dismiss facts by merely pasting labels on them. The government created the mortgage crisis that brought down the SIVs and the financial institutions that created them. No amount of handwaving or labels is going to change that.
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We had our own bubble here. And it's very simple. Idiots who didn't understand what they sell. 95% in the financial industry just follow another guy. And noew let this guy be wrong.

That is half the problem.
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I am not a fan of cherry-picking. If you post a vid about Friedman, I guess you agree with this person. Especially since this video is very simple.

You are trying to take a simple video that explains the free market and blow it up into something else. Sorry, I am not playing your game. It is a two-minute explanation of the free market that any economist would agree with; nothing more.

[KoTeMoRe]

What JCR said. Overall people like Friedman know fairly well that the Market is flawed. That´s why they bet on it.

[Mackie]

The government being largely responsible for the crisis is not a "cheap trick". It is a fact. You cannot dismiss facts by merely pasting labels on them. The government created the mortgage crisis that brought down the SIVs and the financial institutions that created them. No amount of handwaving or labels is going to change that.

And you underestimate the problem and avoid a look at the big picture.

----------That is half the problem.

It was the complete problem. Is it that hard to understand that most people don't give a **** about what they were buying? And even when they asked for it the abnker couldn't give a good answer.
It was against Buffets rule #1. Buy only what you understand.

----------You are trying to take a simple video that explains the free market and blow it up into something else. Sorry, I am not playing your game. It is a two-minute explanation of the free market that any economist would agree with; nothing more.

If this video is out of question, why post it in a discussion forum?

[Ought Six]

And you underestimate the problem and avoid a look at the big picture.

That is rather comical. I am looking at both the financial institutions and the government, while you put blinders on and refuse to look at the government at all. And then you claim I am the one trying to "avoid a look at the big picture". Your statement is a good description of your own position, not mine.
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It was the complete problem.

Utterly false. You are in denial about the government's obvious and major role in the crisis?
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Is it that hard to understand that most people don't give a **** about what they were buying? And even when they asked for it the abnker couldn't give a good answer. It was against Buffets rule #1. Buy only what you understand.

Is is that hard to understand that there was more than one factor involved in creating the crisis? I fail to see why you are willfully blinding yourself to the government's role in all of this.
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If this video is out of question, why post it in a discussion forum?

If I said "the video is out of the question", which I presume means not up for discussion, you would have a point. Of course, I said no such thing.
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Me: "The video is a simple explanation of market forces at work."

You: "But, but, but.... MILTON FRIEDMAN!"

Me: "The video is a simple explanation of market forces at work. It is not a discussion of competing economic theories."

You: "But, but, but.... MILTON FRIEDMAN SUCKS!"

Me: "The video is a simple explanation of market forces at work. It is very basic, and any economist of most any economic school short of Marxism would agree with this incredibly basic description."

You: "But, but, but.... MILTON FRIEDMAN IS STUPID! WHY WON'T YOU TALK ABOUT MILTON FRIEDMAN ?!?:"
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We could go on like that all day, but it would be a waste of my time. Continue without me if you must.

[Ought Six]

What JCR said. Overall people like Friedman know fairly well that the Market is flawed. That´s why they bet on it.

That is an astonishingly nonsensical statement, well above your usual level of nonsense. Congrats on that singular achievement! >*golf clap*<