Hi LowerLobe,
I'm glad you asked.. This will be a long post as you've actually managed to ask a lot of questions (that you obviously believe to be simple) that take a little explaining.
Originally Posted by LowerLobe
Do you have a problem with people not wearing seat belts,driving at excessive speed or not being told about the dangers of smoking...because if there were no regulators checking things in life, people would be free to do anything they want without understanding they are being taken for a ride and suffer the consequences.
1. Seat belts - In an ideal world no , so long as they are informed of the possible consequences and risk. If people wish to place themselves at risk and they don't threaten the health and safety of a third party then they should be free to choose. If we regulate that seat belts must be worn why not regulate against sky diving?
2. Driving at excessive speed - of course, it places a third party at risk We allow people to drive at high speed on private property or on a race track but not on public roads because it risks harming others.
3. Not being told about the dangers of smoking - of course I don't support that. I didn't say people should not be told about risks. People should be free to choose what personal risk to their safety they accept so long as it doesn't effect a third party.
Originally Posted by LowerLobe
Money gained is somehow derived from thin air and therefore has no impact on anyone else....Do you think that money is taken from a bottomless pit and that it has no impact at all on others....
I didn't say money is a bottomless pit. Let me answer your initial question with a question. Why doesn't the Earth have the same amount of wealth that it did in the year 100AD? Are you far better off than your ancestors because money was transferred from someone to you? I'll fill in one piece of the puzzle for you. It wasn't because a central government commanded that people should earn more.
Tell that to families who have a member with a gambling addiction
That's a matter for private individuals. If an individual wishes to gamble his / her own money away he should be free to do that. If other family members are unhappy with that then that's a matter for the individual and their family. If it's someone elses money, then that's a crime. That is what government is for.
Originally Posted by LowerLobe
Looking into your strategy of 100% freedom reminds me of Wall Street when started.... Ahh yes...Wall Street.....the leading example of market forces and the way things ought to be run....
I didn't advocate 100% freedom. When you construct a
"straw man argument" and tear it down you don't advance your point. Wall Street was about one man "Gordon Gecko" taking advantage of breaches in private agreements. Companies seek mutual benefit in making deals and enforce "Non Disclosure Agreements". What Gordon Gecko did was hire someone to break into premises in order to gain information on private agreements. That is one key role of government - to enforce private agreements. Hence why Gordon Gecko found himself in grief.
Originally Posted by LowerLobe
Now can you explain to us the exact cause of the current GFC,where it started and how a number of CEO's and board members seem to think they are a law unto themselves...
A failure
due to (
not because of an absense of) government intervention. Why are loans under duress at 6% in the US whilst under 1% in Australia? It's not because of government intervention in Australia. It's because the US Democrats intervened in the market years ago. They brought in legislation that would financially harm US Financial institution is they didn't loan a certain amount of their loans to "disadvantaged groups". Secondly the US Government made it possible for US Financial institutions to loan money and transfer the risk. They made it possible for a bank to loan money to a low income person and on sell the loan to what was essentially a Federal Government institution (i.e Fannie Mae- a stockholder-owned corporation chartered by Congress in 1968 as a government-sponsored enterprise (GSE)). The US Democrats disabled the free market mechanisms that prevent this. In the free market people make investment decisions (or in this case loan decisions) based on the risk versus reward. The US Government took away the risk. This is the core problem.
So yes, the GFC was not caused by a lack of regulation but because of the unintended consequences of government intervention.
Originally Posted by LowerLobe
'm not mentioning any specific person or entity but if there were no regulatory bodies and people were free to do anything they want we would have a GFC every 5 years or perhaps permantly.
I never advocated an absense of government in the market. The government should be there to enforce deals between two private individuals / companies. They should not be there to prevent agreements between private individuals as the current Prime Minister desires.
people were free to do anything they want we would have a GFC every 5 years or perhaps permantly.
That's ridiculous. What you are suggesting is that people would continually make bad investments knowing they would lose their skin in 5 years (or every year if you believe your "permanenty GFC". Your lack of belief in rational human behaviour is staggering. If it become a known fact that shares tank every 5 years do you think people would invest in shares? Of course not. You are being illogical. Again to quote a Nobel Laureate
Originally Posted by Milton Friedman
The most important single central fact about a free market is that no exchange takes place unless both parties benefit.
You seem to lack a basic understand of free markets. The owners of QANTAS would not have offered to pay Geoff Dixon the amount they did unless they thought the company would benefit from it. Geoff Dixon would not have agreed to work for QANTAS unless he thought he would benefit from it.
I'll conclude with another Milton Friedman quote:
Underlying most arguments against the free market is a lack of belief in freedom itself.
You argue against Freedom, economic Freedom at that. Whether you acknowledge that our not you are in the same class as Stalin. Do you believe socialism did the former USSR well?