patrick.net

Actually, I'd like to have my own nuclear submarine. I'd go out in the Atlantic and play underwater footsie with the Brits and the French, just for the thrill of it. Yeah, that's the ticket.

Not sure about nuclear but you may be interested in this:

http://www.ussubs.com/submarines/phoenix_1000.php3

It is over 200-ft long and not much more expensive than a new BBJ.

http://www.topnews.in/iraq-blames-failure-sell-saddams-yacht-financial-crisis-2113291

Iraq blames failure to sell Saddam's yacht on financial crisis

I blame the 1980's design.

http://yachts.monacoeye.com/files/helsingor_basrah_breeze.php

Private jets symbolize freedom the same way automobiles did. Also, they are a essential business tool for large companies. I do not understand the outcry against them. Companies should be able to keep their jets to receive TARP. You cannot tie people’s hands and expect them to improve

I agree completely. Give them back their jets and get back our Trillions.

Give them back their jets and get back our Trillions.

Absolutely! Bailouts are bad anyway.

Peter P,

What will we see first, private subs or private space flights? US Subs or Virgin/Rutan to lead in actual production?

Atlantis Submarines operates private submarine tours in Hawaii. These aren't Disney ride submarines, but real ones that go to 125 ft. It is a pretty interesting sensation to be 120 feet at the bottom of the ocean, especially in that clear water.

What will we see first, private subs or private space flights? US Subs or Virgin/Rutan to lead in actual production?

This is on my shopping list...

http://www.ussubs.com/submarines/phoenix_1000.php3

What will we see first, private subs or private space flights? US Subs or Virgin/Rutan to lead in actual production?

I think Paul Allen's Octopus carries a small submarine already.

You can't pay me to go to space.

Honestly, I am not thrilled about having a private submarine. I need breathing room. Besides, I am practical. I am more interested in something that will get me to Europe whenever I want at mach 0.85.

A corrupt and/or incompetent free market entity will not last long (absent government intervention such as with BAC or C).

Will a government that is self-serving, corrupt and incompetent last long? History would indicate no, but whatever the outcome, government corruption and incompetence have far worse consequences as is shown with the current crisis.

Uh, and what interests have corrupted the government, exactly? Other than corrupt and/or incompetent free market entities?

What other entities exist that could corrupt the government other than private interests? Aliens?

You need to read this book:

http://www.amazon.com/Contagion-Financial-Epidemic-Sweeping-Economy/dp/0470442212/

The entire book deconstructs your supposed free-market nonsense completely and finally.

A central tenet is that behind every supposed governmental free-market intervention (or lack thereof) is a powerful industry lobby fixated on maintaining that status quo; particularly of its corrupt and/or incompetent management.

The current crisis is *entirely* the product of private interests seizing control of the Federal Government/Federal Reserve and destroying the regulatory measures that would have prevented this meltdown.

Your entire position is bankrupt because for the last eight years there hasn't been an independent government in the United States. Just crony capitalists and their industry handlers.

What other entities exist that could corrupt the government other than private interests? Aliens?

This cracks me up.

"A government is a body of people, usually notably ungoverned."
-- Some Quote

There is no such thing as a public person. Behind every governmental figure there lies the same human weaknesses as exibited in every other private, self-serving entity under the sun.

But don't get me wrong. I believe government needs to exists, only just so to protect my interests.

Whether or not you're a fan of Limbaugh's ( and actually I'm *not, it just moves e-n-t-i-r-e-l-y too slow for me ) he's been doing the show for years.

@SSHOLES like John Devaney ( anyone remember the 210' motor yacht "Carry Trade"? ) were by any comparison, a mere flash in the pan. Kind of like my @SSHOLE neighbor 'thought' he was a "bigshot" ( have I told you guys about how his bank went under and the lights are OFF at his condo..? )

There's leverage... and then there's longevity. 'That' is what "I" respect! No matter 'what' you do for a living.

I thought his yacht measured only 142-ft...

Sad... is length, in inches or feet, the only measurement of a man?

I... stand, corrected. O.K, so he was 68 foot LESS @SSHOLE!

In any regard it was enough to land him a spot in the Housing Bubble Hall of Shame. Cripes Peter?

Sure. ;)

Oh, my point was that his now defunct and useless firm "U.S Capital Markets" simply sprouted up like a mushroom -solely- to exploit the MBS Securitization Model. Had it not been for that, he'd of been peddling Muni's to "widows and dentists".

Sorry f@cker.

Oh yeah, and buying up precious and priceless "works of art". Maybe I was thinking he went belly-up OWING $210 mil!? Where'd that 210 # come from? Oh well, doesn't matter.

Kewp,

Seems we agree on certain things after all :).

Malcolm, at the risk of stating the obvious, I'll offer the following rebuttal for the benefit of those who might be swayed by your [imo] flawed views. I also have no interest in discussing this further with you as I tire of hearing arguments given in the face of an avalanche of evidence to the contrary, such as is the case with the crisis now at hand.

Private industry doesn’t have the time or resources to conduct fundamental research (Lyons-Johnson, 1998).

Firms have an incentive to share their technological advances through arrangements such as licensing, exchange agreements and the joining of technology exchange consortium. Firms that engage in such exchange give themselves competitive advantages over firms that attempt to go it alone. Many firms then have access to the best technology, but have an incentive to innovate to collect royalties from licensing, and to have valuable technology to trade with other firms. This favors entrepreneurship over bureaucratized R&D (which is much more costly in comparison) [Baumol 2002].

In essence, Lyons-Johnson argues that the inefficiencies evident with R&D can be solved with government intervention. What he doesn't prove is that government intervention is the optimal solution. As Baumol illustrates however, no government solution could possibly be better than the best free market solution.

Stiglitz is spokesman for pro-government and believes market imperfections can be avoided with government intervention but he completely fails to prove this. I know this because I studied his Nobel prize winning paper on imperfect information and incomplete markets. I do agree with him in a recent article in Vanity Fair where he calls the bailouts a mistake so he's not a complete crony.

Public private partnerships have existed in the United States since its beginning

Well then it must be a good thing [sarc]. Hasn't crime and corruption existed since the beginnings of civilization too?

As for patents, the question that needs to be asked from a utilitarian perspective is whether the benefits exceed the costs. These monopolistic privileges certainly impose costs on society and are meant to compensate the inventor for his investment. But is the award of a monopoly privilege really the most appropriate and effective form of reward? Here again, the free market offers a better solution. Is it any surprise that most things the government does can be done better by private enterprises that stand to profit or lose? For those interested in better alternatives, I refer you to "Patents and Copyrights: Do the Benefits Exceed the Costs" by Cole, 2001.

For those of you who wish to be enlightened, I refer you to mises.org for some excellent free articles, papers and books.

Kewp, I had mistaken you for a free market advocate. Oh well...

Uh, and what interests have corrupted the government, exactly? Other than corrupt and/or incompetent free market entities?

This argument has been rehashed so many times that I have to wonder whether you're an alien recently come to Earth. The point you fail to see is that it is government policy that enabled these crooks (both inside and out of the government) to get as far as they did. In a nutshell, bullshit regulation gave false security to and caused otherwise cautious individuals to lower their guards while policies and long-standing institutions such as low interest rates, bankruptcy reform, Fannie and Freddie and fractional reserve banking (etc) favored certain behavior like buying a house (instead of renting), going into debt, borrowing without regard to paying back, loaning without regard to ability to pay back causing the current crisis. This couldn't have happened without the help of government intervention.

The current crisis is *entirely* the product of private interests seizing control of the Federal Government/Federal Reserve and destroying the regulatory measures that would have prevented this meltdown.

This is an excellent argument against those who would call for more regulation in answer to the crisis. Regulation does not work! Eliminate government meddling and let the free market do it's thing.

Frank,

By that same argument, why should we have criminal law? Apparently, these laws do not stop crimes from being committed, so we may as well get rid of them. Laws do not work, they only provide a false sense of safety.

I have to say that I retract my original assertion that Frank was just regurgitating dogma. Although I strongly disagree with him I respect the rebuttal. I will happily participate in friendly engagements on the subject with you.

How about the story of the Concorde, what's your take? I assert that society has taken a huge step backwards because the pulling of a small investment by government.

Justme, great question...

Law and liberty are necessary conditions for a free market system. Hayek believed that under the enforcement of laws governing just conduct, human activities of much greater complexity will form than could ever be produced by deliberate arrangement and so interventionist activities of the government should be limited to the enforcement of such laws. Where government leaves off then, market solutions can take over...

http://mises.org/story/2423 and http://mises.org/journals/jls/5_4/5_4_3.pdf.

Justme, my reply is in moderation for some reason

Thanks Malcolm, but Concorde on another day... it's late for me.

Also, since you have a very pure opinion seemingly dismissing PPPs I have to ask, what in the world could be wrong with the commercialization of government discoveries?

Ok, but you have an open invitation. I find my polar opposites interesting when I encounter them.

http://www.fdic.gov/bank/individual/failed/banklist.html

Excuse me but why is Citigroup not on this list? As much as I can tell it is a failed bank and that is what FDIC is to address:

http://www.fdic.gov/about/learn/symbol/index.html

If we are going to discuss delusions of grandsire, I will share what I want.

I would love to travel in my own Ha'tak Star Ship from the Series Star Gate.

Frank,

I have to say you (or Mises) didn't really resolve the inconsistency that I pointed out.. If government is performing 2 societalal functions, call them A and B, why should one apply different standards of perfection to them? Even to the point when A is deemed worthy (although quite imperfect) whereas B is deemed unworthy (at the slightest imperfection, even if caused by corruption that is avoidable).

A= criminal law and prosecution

B= financial regulation and prosecution.

How about the story of the Concorde, what’s your take? I assert that society has taken a huge step backwards because the pulling of a small investment by government.

Don't worry. Supersonic jets will be back shortly.

http://www.aerioncorp.com/

Ah....there's a problem. Flying at .98 Mach is by definition not supersonic.

Am I missing something? Did the marketing people get ahead of the engineers again?

The Concorde is an example of foolish governmental meddling in the market. The US had several good SST designs in the 1960's but didn't go forward because they made no economic sense - an SST is a gas hog in today's parlance. The Brit/Frog consortium went ahead economics be damned. The Concorde is just as dumb as supporting the housing market via mort. interest deduction/cap. gains exclusion.

DennisN Says:
February 28th, 2009 at 6:27 am
"The Concorde is an example of foolish governmental meddling in the market. The US had several good SST designs in the 1960’s but didn’t go forward because they made no economic sense "

Hence a certain limitation in the private sector. On its own the private sector could not have produced something like the Concorde 'because it doesn't make economic sense.' The Concorde is a very good example to demonstrate how intervention can develop a technology faster than just waiting for the free market to produce it. It is very useful to a small group of people which is unfortunately why in my model it would not be a candidate because in order for government involvement I believe something has to have a clear and compelling social need, clearly the Concorde as a passenger plane did not. Pulling the funds and shutting it down literally did cause one of the largest steps back in aviation, and as a whole the entire world now doesn't have a capability that it once did. That takes me back to a point I made a few posts ago where I was saying on its own the free market eventually stagnates, which is why government actions in things which on their own aren't commercial cause all sorts of new activities in the economy and also propel a country to a leadership role. Young people only get to hear and watch history shows on a time when people could go on a supersonic airliner and they talk about 'returning' to the moon.

Another small detail I'd like to point out is the notion of meddling in the market. People who believe in a hybrid economy don't necessarily believe in government meddling. Despite the tendency for labels I am not a soc1alist. Government should not compete with the free market and should allow the free market to compete with it in order to keep markets free. In other words, if the free market is currently or likely to do something government should generally leave it alone. If UPS can deliver a package better than the post office go use UPS.

The theory of partnerships and a hybrid model is based on the fact that some things of high social value are not undertaken because of inherant limitations. One of those being that highly needed services with a high social benefit don't yield an income stream and so they aren't undertaken. A specific example of this would be a substance abuse treatment program. It is kind of difficult to charge a fee to a broke drug addict but only some real die hards here would dispute the high social value in the use of public funds.

Justme, the answer is in the links, but here's my version...

Hayek realized the shortcomings of government in doing A or B or anything else for that matter. But absent a free market solution in the beginning he suggested a boot-strap approach of letting the government do the best it could until the free market could form the foundation it needed to take over.

Here's an example I like to use...

I believe that we should eliminate FDIC because it fosters irresponsible investment practices on the part of the banks. Depositor risk (and hence caution) is removed at taxpayer expense and therefore the banks lose an incentive to invest conservatively.

Other countries currently have functional banking systems without government insurance for depositors. The alternatives vary country to country and formed over time as a result of the free market forces present (for the most part). These alternatives do not suffer from the obvious flaws of FDIC and at the same time foster an environment where depositors willingly place their savings in banks.

We in the US could attempt the same but we if immediately eliminated FDIC we would cause a national bank run overnight. One solution would be to ease out of the government meddling and at the same time letting the free market work out the best solution for us.

Yes, we would be open to continued bank abuse as the process occurred, but we won't be in any worse shape than we are now and we have a better system to look forward to in the end.

frank Says:
February 28th, 2009 at 7:39 am
"Hayek realized the shortcomings of government in doing A or B or anything else for that matter. But absent a free market solution in the beginning he suggested a boot-strap approach of letting the government do the best it could until the free market could form the foundation it needed to take over."

Just for reference, this is in line with my thinking.

Ah….there’s a problem. Flying at .98 Mach is by definition not supersonic.

Am I missing something? Did the marketing people get ahead of the engineers again?

Dennis, it flies at mach .98 over land and supersonsic (mach 1.6) over water. Someone passed a silly law in here that prohibited speeds above mach 1 in the US regardless of the amount of sonic boom.

Hence a certain limitation in the private sector. On its own the private sector could not have produced something like the Concorde ‘because it doesn’t make economic sense.’

Concorde was probably killed by private jets.

Let's say you wanted to fly from Hartford to Reykjavik. To fly the Concorde you would have to first get down to NYC. Then the supersonic flight would only get you to London. You would have to take another slow flight back to Iceland.

Even a slower jet like the Challenger 601 would beat a 3-leg routing even if one segment is supersonic.

Besides, Concorde would still bind you to the inflexible schedule and you would still have to fly with strangers.

Moreover, a smaller jet can get into smaller/closer airports like the one in St. Moritz.

Frank,

There is hardly a modern industrialized country that does not have deposit insurance. I simple trip to Wikipedia will debunk your claim thoroughly.

Instead of changing the topic, please explain the logic of why A and B are treated differently.

It is unfortunate, but free market fundamentalism is nothing but a religion that makes wholly unfounded claims based on certain dogma or axioms that quite simply are not valid in the real world. As such, is it as deeply flawed as many other well known pure ideologies.