patrick.net

Nice.

austrian_man says

It is due to both parties screwing up.

EightBall says

Kinda like how we experimented with spending a trillion stimulus dollars proposed by the democrats to keep the unemployment rate low?

Be that as it may, it probably kept unemployment from getting much worse.

But you missed my point with the experiment thing because you were trying to make a cheap talking point about federal spending while ignoring the substance of the conversation. I said that each of the 50 states can serve as a laboratory for experiments for their own ideas, without referring to federal policy.

austrian_man says

You are attributing the fault largely to lower taxes and low regulation (which is primarily a GOP political viewpoint) and I am saying it isn't.

No, I'm not *attributing* it to that. I'm saying that the correlation isn't promising. This is the closest to ideal GOP environment for their talking point, and it's an abject failure.

TerriDeaner's criticism that Nevada may not represent the rest of the country was a far better critique, and is a valid point. My counterargument would be that Nevada is a great example because it meets many GOP ideals, and suggests that monotonically lowering taxes and lowering regulation has its limits too. What this suggests to me is that there's an appropriate *range* of taxation and regulation that in combination with other policies and assumptions creates a good economy. Some of those might be cost of living, skill level of the job pool, diversity of industry, etc.

terriDeaner says

Not really... I'd argue that Reno and LV are now getting a LOT more like California than the rest of NV, particularly since there are so many Californians who live or own income property there.

If a Californian moves to Texas, does Texas become more like California? I doubt it. What you meant to say was that Reno and Las Vegas are becoming more urban like parts of California, and like parts of other states. Is Phoenix becoming more like LA because I've heard anecdotally that some people from LA move there for cheaper housing? What about Portland and Seattle, because I've heard people from LA move there too. Are Reno, Las Vegas, Portland, Seattle, and Phoenix becoming monotonically more alike? I doubt it.

If boomers, as you say, are moving to Nevada in large numbers, shouldn't the massive influx in completely new cash (from a Nevada-centric standpoint) help their economy, rather than hurt it, bubble or not? Massive cash influxes coming from outside Nevada should only buoy their economy, so your assertion that Californians are moving to Nevada (whether true or not) actually undercuts your argument.

austrian_man says

Given that we are SO WAY OFF from what I state above, regulation is a key factor to ensure things are in check.

I don't disagree -- I just wanted to point out the irony. Perhaps the way to fix this is to have more regulation, not less -- but you said it, not me. :)

terriDeaner says

Hmm... do you really mean 'unregulated free market', or rather 'deregulated and gamed market'?

But that's the problem, isn't it? At one end of the spectrum (perhaps socialism, real socialism, not the type that idiot politicians refer to in their talking points), you have a government monopoly with heavy government regulation. At the other end (true hardcore libertarianism, aka anarcho-capitalism), you have corporate monopolies that result in what is essentially heavy corporate regulation. The spectrum really wraps around into a circle.

That's why we have to get our terminology right. Some people use "free market" to refer to a market driven by supply and demand but that isn't driven by monopolies and oligopolies unfairly. Other people use "free market" to refer to what is essentially anarcho-capitalism which results in mafias and cartels running things (basically feudalism). The first definition necessarily requires some degree of regulation in the market to ensure that the market is free. The latter definition asserts that regulation is unnecessary because economics will result in self-regulation.

corntrollio says

I don't disagree -- I just wanted to point out the irony. Perhaps the way to fix this is to have more regulation, not less -- but you said it, not me. :)

I don't get what's the irony.

Unstable monetary system, rigged markets => more regulation required to keep things in check.

Sound, stable monetary system, fair markets => adequate regulation required, too much regulation is redundant and actually inefficient.

corntrollio says

The spectrum really wraps around into a circle.

:) very well said.

corntrollio says

If a Californian moves to Texas, does Texas become more like California?

Yes, by 0.0000000004%.

corntrollio says

What you meant to say was that Reno and Las Vegas are becoming more urban like parts of California, and like parts of other states.

Not exactly, you misunderstood me. With the demographic shift, there was also a substantial cultural shift as well. Have you been to Reno or LV before the boom by any chance?

corntrollio says

Are Reno, Las Vegas, Portland, Seattle, and Phoenix becoming monotonically more alike? I doubt it.

I would say yes, particularly in terms of sprawling population growth, relative to before the housing bubble. This is certainly based on my own experience, but I imagine that with a little digging I could find some metrics to support this thesis.

corntrollio says

If boomers, as you say, are moving to Nevada in large numbers, shouldn't the massive influx in completely new cash (from a Nevada-centric standpoint) help their economy, rather than hurt it, bubble or not? Massive cash influxes coming from outside Nevada should only buoy their economy, so your assertion that Californians are moving to Nevada (whether true or not) actually undercuts your argument.

Try the past tense on this one, dude. Boomers DID move to NV during the boom, DID speculatively buy investment properties, and it DID result in a massive, destabilizing influx of cash. I don't think many Californians are moving to Nevada now, and I didn't assert that they were, either.

corntrollio says

The spectrum really wraps around into a circle.

That's why we have to get our terminology right. Some people use "free market" to refer to a market driven by supply and demand but that isn't driven by monopolies and oligopolies unfairly. Other people use "free market" to refer to what is essentially anarcho-capitalism which results in mafias and cartels running things (basically feudalism).

Fair enough. Marcus posted this last week:

Also, I am using 'free market' here to mean free of regulation. Defining a 'free market' strictly as one driven by supply and demand always seems a bit slippery to me... I'd be inclined to describe the latter as a market in dynamic supply-demand equilibrium. Catchy, no?

terriDeaner says

Not exactly, you misunderstood me. With the demographic shift, there was also a substantial cultural shift as well. Have you been to Reno or LV before the boom by any chance?

Sure, of course, I have. You know, my experience with Nevada is not just casinos, but, as an example, some casinos still do that thing where they tag employees' hometowns. Certainly there are some folks from California, but most of the dealers that I talked to that were from California moved a long time ago (15-20 years ago) and are not boomers who moved recently, and some of those former Californians had lived in Nevada so long that they started putting their Nevada residence as their hometown. Not to suggest that casino workers are representative of Nevada, but it is one of the primary jobs there.

terriDeaner says

Try the past tense on this one, dude. Boomers DID move to NV during the boom, and it DID result in a massive, destabilizing influx of cash. I don't think many Californians are moving to Nevada now, and I didn't assert that they were, either.

Well, hang on there. If there was a past cash influx to Nevada, and it was destabilizing, that just means that native and resident Nevadans didn't use that influx of cash wisely with their low taxes and low regulation -- i.e. to buy a cheaper house for retirement, to invest, to start a business, etc. Why does cash have to be destabilizing? Also, most boomers aren't quite at full retirement age yet (do the math, 1946-1964) -- are you saying that lots of people were moving for job opportunities in Reno/Las Vegas?

The housing bubble on its own ran a frenzy in Nevada. It didn't need Californians to do anything. The Californian thing is just what people in Vegas and Phoenix said to justify the housing bubble. Turns out they were wrong, and the housing bubble had other causes.

Huntington Moneyworth III, Esq says

Failed paradise? I can eat stuffed crust pizza off the bare breasts of an obese Armenian woman at 4am. Tell me that is not paradise, good sir.

Obese women are not a paradise at any time.

corntrollio says

Well, hang on there. If there was a past cash influx to Nevada, and it was destabilizing, that just means that native and resident Nevadans didn't use that influx of cash wisely with their low taxes and low regulation -- i.e. to buy a cheaper house for retirement, to invest, to start a business, etc. Why does cash have to be destabilizing?

It doesn't have to be, but funny money in the hands of stupid people is VERY destabilizing - and we have ample evidence of that from the past 10 years. And it was in Reno and LV...

And I bet that MANY Nevadans that initially profited from the boom did just as you suggested - bought lower-maintence retirement houses (which would have been MORE expensive, since prices were rising, and since before the boom housing was pretty cheap to start with, relative to CA), invested their money in their businesses, in investment properties, and whatever else they percieved to be responsible investments. And I'm sure plenty of them blew their dough on fancy cars, McMansions, and shiny crap from China as well.

The problem, however, is that all this economic activity happened in an unnaturally short period of destructively high demand - such that years (decades? who knows...) of growth and productivity were pulled forward. So now the most heavily populated areas of NV languish in depression.

The same thing happened in much more heavily taxed and regulated California too. So I don't think this is primarily a tax/regulation issue - it's just that the NV economy is fucked because it is much smaller and and less resiliant to the boom-bust than other places in the country that had less of a boom-bust and/or more resilient local economies.

corntrollio says

The housing bubble on its own ran a frenzy in Nevada. It didn't need Californians to do anything. The Californian thing is just what people in Vegas and Phoenix said to justify the housing bubble. Turns out they were wrong, and the housing bubble had other causes.

But would it have been as bad in Reno and LV (people and inflationary money sink during the boom) if NV wasn't geographically proximal to the large population centers of CA (people and inflationary money source during the boom)?

terriDeaner says

But would it have been as bad in Reno and LV (people and inflationary money sink during the boom) if NV wasn't geographically proximal to the large population centers of CA (people and inflationary money source during the boom)?

Without evidence to the contrary, I'd say yes. What are the real numbers of Californians who moved to Reno/Las Vegas during the boom, and how many of them owned houses previously in California and used the boomtime windfall to overpay in Nevada? That's the question one would have to answer.

I've heard anecdote, but I've also heard that foreigners will save our housing market, numerous times. Hasn't happened yet. 5 years and counting. My anecdotes matter just as much as everyone else's -- I knew people who were busy buying up rental properties during the boom in cities like Reno, Las Vegas, and Phoenix as residents of those cities (some were glorified slumlords). The money didn't have to come from California or New York or China to cause a boom. Bank lending was enough.

terriDeaner says

The same thing happened in much more heavily taxed and regulated California too. So I don't think this is primarily a tax/regulation issue - it's just that the NV economy is fucked because it is much smaller and and less resiliant to the boom-bust than other places in the country that had less of a boom-bust and/or more resilient local economies.

But again, this is my argument. Taxes and regulation are merely two factors for businesses. However, if the most favorable environment possible wasn't enough, that should tell you something -- that they are not as big a factor as many people think.

MarsAttacks! says

Now if you want to nail Nevada for not having the strong anti-debt slavery laws that Texas has, then I'd join you in that.

Wow, Texas has that kind of laws? that's pretty good. explains why there was lesser of an impact in Texas compared to hard hit areas because of the bubble.

Let us not forget that Vegas & Reno are single-industry towns. Tourism & gambling (go hand-in-hand).

The place attempts to re-invent itself on a weekly basis. I've watched it go thru so many attempts to do so. It tried to be family friendly "themed" resorts (Treasure Island, Excalibur, New York New York roller coaster), then to mimic different landmarks (Paris, New York New York), then do the corporate landmark thing (Hooters Hotel, Hard Rock Hotel...). Anywhere else, they renovate. Vegas blows shit up right & left.

When tourism was great, Vegas was great. Now that it's in the toilet, so goes Vegas. sucks.

Las Vegas IMO is missing out on most of it's "sin" image. Gambling eclipses all else. 6 other deadly sins not getting due attention. Although monetizing "acedia" seems like it'd be a tough one.

To the point of this post, how can a state be GOP when it's run by the Democratic Senate Majority Leader

The Democratic vs Republican paradigm - Like have a masturbation contest with the mirror.

Ron Paul is Don Quixote de La Mancha.

Many people like reading that book, they have a fondness for the madman tilting at windmills. That doesn't however mean they are going to saddle up and follow him.

Just to name 2 flaws:
1) Ending the Federal Reserve. The finance industry is utterly structurally opposed to this, so you can forget their support.
2) Ending military adventurism, retreating to a small standing army sufficient only for national border defense.

These are ideas many like in the abstract over the water cooler, but are not going to have millions marching with pitchforks and torches. Actually I argue they are very conflicted over #2, some just plain want an endless war, but more importantly many like having the biggest stick to wave around and are not going to vote to put that down.

Our admiration for Ron Paul is exactly the same as Don Quixote. Even when you don't agree with his ideas, which Jon Stewart and many others do not, you can abstractly admire his style but do not mistake that for meaning we want to see ideologues in 100% power. You cannot lead anyone, anywhere they don't want to go. Clearly we WANT people in power who are like us, full of contradictions and craziness, if we didn't we wouldn't keep electing them over and over.

Vicente says

1) Ending the Federal Reserve. The finance industry is utterly structurally opposed to this, so you can forget their support.

He wants to audit the Fed, which might eventually lead to ending the Fed. You did see that the Fed injected liquidity to foreign central banks during 08 right? There is no congressional oversight on any of these things. it is out of control. Frankly - I don't see how everyone thinks this is A-OK.

Vicente says

2) Ending military adventurism, retreating to a small standing army sufficient only for national border defense.

May be we should think about whether we can afford to fight wars or to improve the quality of life domestically. May be we should rethink priorities, rather than bossing around.

austrian_man says

Nevertheless, you can't say that things would go so out of control as it stands today, if there was a restraint imposed by gold.

This is exactly was the wealth hoarders would want at this point. Those who currently have would continue to hoard, and going back to the gold standard would make lending standards even tougher.

Who benefits from debt and a hard currency? Those that are owed the debt.

If the relative value of the debt is decreased compared to wages (ie through inflation) that benfits those that OWE the debt.

Going away from an asset based currency helped cause this problem, but going back to one would exascerbate the problem.

The are two solutions to wealth inequality:
1. Confiscate the wealth (through a highly progressive tax system)
2. Increase the relative value of labor compared to capital (income inflation)

Pick your poison. Bottom line is the 99.9%ers might be waking up. The world has seen it before and it never ends well for the .1%.

david1 says

The are two solutions to wealth inequality:
1. Confiscate the wealth (through a highly progressive tax system)
2. Increase the relative value of labor compared to capital (income inflation)

Pick your poison. Bottom line is the 99.9%ers might be waking up. The world has seen it before and it never ends well for the .1%.

Sweden did both actually in 1991. They raised taxes and they also targeted NGDP (which sort of raises wages, people can spend more only if they get more cash).

I do think for the long run, a high tax system actually hurts the economy rather than hindering it.

See this study: http://www.libera.fi/uploads/2011/10/Libera_The-Swedish-model.pdf

The Swedish model is often dramatized in the public policy debate, described as
either a social democratic utopia or a failed socialist experiment. These views are
far from the truth. Sweden is a successful country in terms of low poverty rate and
long life expectancy. However, these factors have much to do with Swedish culture
that existed already when taxes were still relatively low.

According to the US Census, Mississippi has the highest poverty rate in the United States [Yahoo News, 10/20/2011]

Central Banking = price fixing, false market signals, bubbles, unemployment, economic chaos, and inflation, to name a few if the benefits.

Ron Pauls ideas are practical, but I doubt such a longstanding power structure will let him near the white house.

We only elect these officials because we have been duped into believing freedom means sitting on our ass in front of the tv while everything great about this country is systematically dismantled. We are to blame for taking our responsibility for granted, but these people do not represent who we are, only how we have failed.

Honest Abe says

Central Banking = price fixing

To be more precise, fixing the price of money
price of money = interest rate

Without any intervention, interest rate demonstrates the willingness of market participants to part with their money for a duration to earn return.

NuttBoxer says

We are to blame for taking our responsibility for granted, but these people do not represent who we are, only how we have failed.

well said.

NuttBoxer says

I doubt such a longstanding power structure will let him near the white house.

yep, common sense is not beneficial to the elite.

austrian_man says

May be we should think about whether we can afford to fight wars or to improve the quality of life domestically. May be we should rethink priorities, rather than bossing around.

Actually I agree with you. However, consider this. Most people when they say they want to end our current wars, do not actually mean they want to slash the WAR MACHINE to the bone. They want the troops to come home and have a period of quiet. However they by and large would not agree with decimating our military. And as long as you have a large standing army with a large force projection ability, it's only a matter of time until adventurism comes around again. The American public likes that big stick, they are conflicted about it's use, but they like it a lot despite how stupidly expensive it is. I'm not arguing this point in detail, I'm explaining why I think Ron Paul will never get real traction on this.

Vicente says

I'm not arguing this point in detail, I'm explaining why I think Ron Paul will never get real traction on this.

He gets more donations from military than all Rep. Candidates combined and he gets more than Obama. So the people who are in the ground get this.

Vicente says

They want the troops to come home and have a period of quiet. However they by and large would not agree with decimating our military.

I don't think Dr. Paul's stand is to completely eliminate the military. His position is clear. Defend the country, don't defend the world.

austrian_man says

I don't think Dr. Paul's stand is to completely eliminate the military. His position is clear. Defend the country, don't defend the world.

However many in the MIC, the ruling class, and the voting public LIKE having a big military with bases all over the world. Defending the homeland doesn't require B-2 bombers any more. It doesn't require a Navy bigger than the next 13 navies combined. Are we going to bring home all those troops from bases around the world and pay them to dig holes and fill them up in Kansas? No. Nobody really wants to think about the real consequences of stripping down to homeland defense, which would mean laying off >50% of the troops and mothballing a lot of equipment and shuttering huge swaths of the MIC. They'd like less adventurism for NOW because their bellies are kind of full, but they might be hungry in the morning so stick the leftovers in the fridge....

I'm trying to explain why so many people you would think should back him, instead ignore Ron Paul. He's got some ideas that people feel they OUGHT to be for, but actually have mixed feelings about. Hence he'll always be a fringer.

Sometimes when we take positions on things we talk as if the changes should be made tomorrow. Obviously when we are so far from where we started as a country, we can't get to where we need to be overnight. These are still good principles, but enacting them in a way that won't destroy the country in the process will take years, decades if we move at a normal pace. Eight years is enough for Paul to start his plan, but much will need to be carried on by those who follow.

Still, we need to start somewhere.

austrian_man says

He gets more donations from military than all Rep. Candidates combined and he gets more than Obama. So the people who are in the ground get this.

Hah. Nice Freudian slip.

Vicente says

I'm trying to explain why so many people you would think should back him, instead ignore Ron Paul. He's got some ideas that people feel they OUGHT to be for, but actually have mixed feelings about. Hence he'll always be a fringer.

Well, let's be honest, he is far right on some things too. On this two axis test, Ron Paul is as libertarian as John Edwards, but as far right as Tom Tancredo:

http://www.politicalcompass.org/uselection2008

So sure, he has some good ideas, but he also has some bad ones. No different from most other politicians, really. Also, presentation matters too, not as much to me, but to many other people it does.

Bitcoins are the future says

Bitcoins are the future

Hmm, I'm going to start taking you less seriously just because of your username. Did you see this recently, by the way?

http://www.betabeat.com/2011/10/17/price-of-bitcoin-still-dropping-falls-below-the-price-of-mining/

Bitcoins are the future says

And if you think mining is easy, you're a frakkin moron.

No one said mining was easy -- some types of mining are more sophisticated than others, obviously. However, people skilled at mining are not skilled at other non-mining businesses that might relocate in Nevada. The overall job pool is not very useful to relocating businesses.

Bitcoins are the future says

Beverly Hills, CA

Bitcoins are the future says

Its kind of hard to throw stones at NV from a state that is almost bankrupt.

It's hard to reconcile that. Did you put your zip code as 90210? :)

Bitcoins are the future says

See, we had a real good thing going in NV... but our entire economy was based on home construction & gambling. So when home prices crashed, they stopped building homes in NV. And then everybody from CA who won unreasonable amounts money in the housing boom didn't have the cashola to go all Fear and Loathing anymore. Beyond that, they have recently built huge indian casinos in between every major CA city and NV city, so people are lazy and just don't go all the way to NV...

I might add that it's apparently okay to blame California for Nevada's massive failings (however misguided that is), but it's not okay for Californians to comment on it. That seems entirely consistent, doesn't it. :)

corntrollio says

Hah. Nice Freudian slip.

what are you talking about? it is not a verbal or a memory mistake.

You want the data? Here it is: http://www.digitaljournal.com/article/310783

corntrollio says

So sure, he has some good ideas, but he also has some bad ones. No different from most other politicians, really

yeah, but he is consistent. He doesn't flip-flop, he says what he means and he means what he says. His track record should speak for itself.

He saw the housing bubble way back in 2001. That's pretty good, of course nobody wants to listen to 'Crazy Uncle Ron' though.

No one can agree with any presidential candidate 100%. It is certainly about whether you can agree with the person more than you can disagree with. On the critical issues such as economy and monetary policy, it is important for anyone who votes for Ron Paul to truly understand what his guiding principles are.

austrian_man says

what are you talking about? it is not a verbal or a memory mistake.

Dude, read your typo. You said "in the ground" not "on the ground." I wasn't disputing the substantive point at all (and honestly I don't care about this data point very much), although it's interesting that Obama draws 78% of what Paul does and the overall split Obama to R is 36/64. That's a lot more than most people typically expect for Dems when you're talking about the military.

austrian_man says

yeah, but he is consistent. He doesn't flip-flop, he says what he means and he means what he says. His track record should speak for itself.

Without getting into the substantive political points, if you are using "flip-flop" in the traditional US political sense, that's not really a great quality. It was a very effective criticism on John Kerry because he did a terrible job explaining, but there's nothing wrong with changing your mind based on new information or based on context, and it'd be stupid not to do so.

austrian_man says

He saw the housing bubble way back in 2001.

Again, without getting into substantive political points, and as an aside, using this as a positive trait here sort of negates the criticism of Robert Shiller made by someone else on this forum.

Bitcoins are the future says

Nah, its ok to comment on it, but to blame all of the results of the housing bubble on the GOP is ignorant. That was a team effort.

Read my comments again more carefully. None of this was blamed on the GOP specifically (and it's silly to assume that it was). It was an observation that the current stated philosophy of the GOP has not worked very well in one US state. Obviously, YMMV, and this experiment can be repeated in other states to see what happens there.

corntrollio says

there's nothing wrong with changing your mind based on new information or based on context, and it'd be stupid not to do so.

that's correct.

corntrollio says

if you are using "flip-flop" in the traditional US political sense, that's not really a great quality.

i'm not saying in the traditional sense. If you look at specific critical issues (say for example bank bailouts), many of the Rep. candidates said yes, Paul said no. That's the kind of consistency I'm talking about.

corntrollio says

using this as a positive trait here sort of negates the criticism of Robert Shiller made by someone else on this forum.

I don't know what the other point made was, but Paul's economic philosophy is Austrian and it's pretty solid in predicting bubbles. Nobody can predict the timing, but the trend is there for all to see.

For example, Fed is engineering a bubble in bonds. It is obvious that it is becoming frothy, but nobody knows when that will pop. Paul made this point in the debate yesterday, which also stems from his strong understanding of business cycles and Austrian theory.

I think I should kinda put that Nevada isn't all the same. Northern nevada has some huge gold mines and not much for people (Elko county).

Also if you go to western states BLM owns large chunks of land..we're talking serious amounts.

Since the state government cannot tax federal land that limits revenue..

NV boomed by making things legal there that weren't elseware. It was easy to get married/divorced, allows sports betting, obviously has casinos..some counties allow prostitution.

There are sales taxes but there's a fixed percentage that goes to education instead of a general fund.austrian_man says

there's nothing wrong with changing your mind based on new information or based on context, and it'd be stupid not to do so.

Don Imus said before on his show that if someone cannot change their mind then what are they supposed to do? If someone votes say..for a war does that really mean they should be for it all the way?

mdovell says

Don Imus said before on his show that if someone cannot change their mind then what are they supposed to do? If someone votes say..for a war does that really mean they should be for it all the way?

Hey I don't have a problem with politicians changing their minds. All I'm saying is I haven't seen even a single politician to be as consistent as Ron Paul. On the things such as economics, monetary policy in which he has essentially never wavered, it is grounded in sound economic theory.