I posted this as a comment on the prior post, but I thought it was worthy of its own post.
| I'm fine with the "Socialist" label if you want to pin it on me and if you believe that Socialism entails some kind of central planning. Because if that's true, then we're all Socialists even if we don't know it. We've had central planning in this country for the past 40 years, perhaps not from the government, but from the corporate "state." Everything we buy; all of our consumption decisions, plus, income policy, wage policy, trade policy, monetary policy, tax policy, the way the nation's resources, capital and labor are allocated...ALL of these things are dictated and decided by corporate interests. The government has been COMPLTETELY out of the equation with the exception of enforcing what these interests desire. And what do we have to show for it? A vapid, ignorant, programmed consumer class that ends up buying lots of plastic junk that swiftly ends up in a landfill because some philandering golfer or the Kardashian girls tell them to. Either that, or we have an arrogant coterie of professional gamblers who call themselves "financiers" who feel it's their birthright to eviscerate private savings, create untold havoc and instability and destroy companies because their "analyses" tells them it's okay to do so. On the other hand, if I'm a Socialist because I want to see more public investment in infrastructure, education, health care, basic R&D and transportation, for starters, then by all means call me a Socialist! |
22 comments:
I wonder how many of these anti-socialists would abolish the SSA and Medicare and deprive their parents of the benefits. Since most need their social security and Medicare to a degree, this could affect most of the families of these commie fighters.
Mike,
I see that you are "accepting managed accounts". In doing so you are of course gambling with your clients' money (unless you're only buying T-bills held to maturity). What makes your style of management vastly more ethical than the gamblers and financiers you decry? I assume you demand compensation? I assume you invest in equities of some of the evil corporations that control everything as per above or do you just buy Treasury securities? This is a serious question, not an attack. Hopefully you can explain how you invest without enabling or supporting corporations as that would seem very difficult.
Red,
Tom Hickey here has made a differentiation between "Productive" capitalism vs "Finance" capitalism. I think we all (at least I do) come down on the side of "Productive" capitalism. I have almost nothing but disdain for "finance" capitalism. It adds little to no real value to our society.
Mike posted a video a while back about how two of the giants of western industry, true leaders, of business and industry, Henry Ford and Thomas Edison, felt the same way about finance capitalism as many of the MMTers do today.
I come down on the side of Henry Ford and Thomas Edison, not on the side of Pete Peterson or Robert Rubin or Hank Paulson...
Resp,
Agreed and so I await Mike's explanation of how his account management is more productive capitalism than financial.
@ TOM :
YOUR EXCERPT SAYS THAT THERE IS A FREE ASSOCIATION OF WORKERS - BUT UNIONS COST A LOT AND THEY ARE NOT FREE FOR WORKERS AS THEY ARE MANDATES - THAT IS LIKE THE UNIONS ARE A CAPITALIST THING
@ RED ROCK
CHAVEZ IS NOT A SOCIALIST AS PER A DENMARK COMPARISON, NOR IS HE AN ENVIRONMENTALIST. NO TRANSPARENCY AND HE IS AN OIL HOG.
ARGENTINE PRESIDENT FERNANDEZ KIRCHNER JUST TOOK OVER THE ONLY PAPER COMPANY IN ARGENTINA CITING THAT THE NATION'S MAIN 2 NEWSPAPERS HOG THE PAPER SUPPLY AND DO NOT PROVIDE ENOUGH PAPER FOR THE OTHER NEWSPAPERS - SO SHE IS IMPOSING EQUITABLE REDISTRIBUTION OF SUPPLY ACCESS TO THE PAPERS THAT WILL WRITE SOMETHING NICE ABOUT HER BUT RESTRICT THE PAPER FROM THE 2 MAJOR NEWSPAPERS WHO CRITICIZE HER.
MEXICO PEMEX STATE RUN OIL COMPANY IS NOT EXACTLY PRIVATE.
APPLE DOES FORCE THE CUSTOMERS INTO THEIR LEGAL ENGINEERING - JUST LIKE WINDOWS WAS A LOCKED SYSTEM WHICH THWARTED OUTSIDE CO-DEVELOPERS FOR MANY YEARS COMPOUNDED BY MICROSOFT'S DESTRUCTION AND PURCHASE OF COMPANIES WHICH TRIED TO COLLABORATE OR COMPETE, APPLE TOOK IT FARTHER
APPLE TOOK IT FARTHER BY LOCKING OUT BOTH THE HARDWARE AND THE SOFTWARE, NOT JUST THE OS.
THESE TYPES HAVE NOTHING TO DO WITH SOCIALIST OR SOCIALISTA !
THIS IS FASCISM AND DICTATORS.
MIKE IS LOOKING AT THE DANISH AND EUROPEAN SOCIALISM IDEAL - CREATING ASSETS AND PROTECTING THEM FROM GAMBLERS AND MECKLENBERG PIRATES FROM GERMANY, AND FASCISTS
WHO RAZE THE SMALL GUY'S WINDOW SHOPS BY BREAKING THE FRONT GLASS EN MASSE ( LIKE CRYSTAL NACHT ) AND THEN TURNING AROUND AN DREVOKING THESE SMALL BUSINESS' ABILITY TO RECEIVE COMPENSATION FROM THE INSURANCE.
CRYSTAL NIGHT / NACHT WAS NOT ONLY A VIOLENT ANTI-SEMITIC OCCURANCE, BUT IT WAS ALSO A FINANCIAL AND INSURANCE SCAM
national socialism ( aka fascism ) NO
traditional european danish-ideal socialism - yes > that's why the danes can still create the Kroner along with the Scandinavians - not completely out like the British but they are hedged
Red Rock,
Mike spends an awful lot of his valuable time educating people about the economics of price stability and full employment. Its not hard to imagine investment strategies that profit from and thereby promote these fundamentally productive insights. Admittedly it is sort of fun to imagine a Dr. Jekyl and Mr Hyde scenario where Mr Norman really allocates his client's capital in an antithetical fashion. But then why would he spend time developing all these brilliant ideas?
I think it's mostly pointless to argue with US libertarians and Austrians who play the "Socialist" card. (Disclosure: I'm Austrian by passport not persuasion ;-) These people aren't amenable to facts and view the world only through their one-eyed ideological googles.
On healthcare reform you could present them tons of OECD statistics comparing for instance the US versus Germany. They countered with some ad hoc arguments (we're better in dealing with that particular cancer) and the general line, that Germany is a socialist country and implementing German-style healthcare will only destroy the vibrant capitalist spirit in the US. Only Mister Market can provide good healthcare.
6 months later Germany is their posterchild for good old-fashioned capitalism. Mister Market fled from the US and domiciled in Germany. Again ignoring every fact they point to Germany as the example confirming that Obama's socialist "Keynesian" stimulus wasn't working and was evil while Angela's alleged austerity and supply-side economics produced a miracle.
Why serious people feel the need to argue against their "Socialist" reproach is beyond me. After all someone oblivious to reality and facts waking up every day with the paranoia to live on the road to socialist serfdom doesn't need your argument but a therapy. If Hayek would step out of his grave he would recognize what his contemporary followers are: a bunch of neurotic intellectuals funded by some not so neurotic captains of industry to further their vision of a John Galt society.
Yes, if you want to be snarky I guess you could say I support the "corporate state" by definition when I invest, but as Matt pointed out there are distinctions within that category. I hate finance capitalists and I avoid them (or short their stocks when I can). In addition, as TB mentioned, I spend a lot of my time trying to educate people on these ideas. I do television, write this blog, give speeches, write articles, teach courses, talk to lawmakers and policy people, etc. We have created a system in this country whereby much of the policy is dictated by the corporate state because we have bought into labels (Socialism, capitalism, etc) and the labels we embrace or disdain have become our creed. I think that is rigid thinking. One thing I am not is a martyr and I have no intention of becoming one. If this is the system we have then, yes, I will use it to make money, but having said that, there is plenty I steer clear of.
Mike,
I'm hardly against making a buck but I still suspect there is something a wee bit hypocritical about making a living supporting rentiers (both your clients and your investments) while decrying their existence.
Also, stating that you only short financial firms is a bit disingenuous. Everyone who buys a stock must sell it to realize a profit. If you short a stock, you must buy it to make a profit. Same process only the order is reversed so I don't see how your version is any holier.
The problem isn't that main street invests per se but how the people invest/save their money. One example: 401(k) investment is basically a scam. People aren't aware of the fees they are paying each year. Approx. 3%! Then most investment goes into mutual funds. Actively managed mutual funds have a very dubious record. On average over 5 years only 20% earn back fees and load. The next 5 years a very different 20% break even. Finally a 401(k) investment ist illiquid. Normally illiquidity means a lower price but 401(k) investors pay a premium for a very illiquid asset. And I'm even not considering that a 401(k) investment is now where it was in 1998.
Insofar I agree: the important thing is to educate people about the system and how exactly the Wall Street machine operates.
Stephan,
I have no idea what fees Mike charges or what his performance record is. It may be worse than mutual funds, it may be better. His fees may be equal to index investing (although I highly doubt it!) or they may be hedge fund type fees. So far he's silent on the subject and obviously that's his right.
I'm just not clear on what the standard MMT position is on investing. Is it as you seem to suggest that indexing is fine but actively managed portfolios are not? Or is the objection to any fee higher than 0.5% or so of AUM?
"..worthy of its own post."
Indeed, Mike, indeed!
Red,
Investment account management = gambling w/ OPM ? That's a stereo type and not true in a literal sense. In all seriousness, the "seriousness" of your inquiry is negated by the cheap shots.
Your assumptions lead me to assume either you got screwed by someone or maybe you're bitter from tripping over yourself as you are trying to recover from your own misguided actions.
Echoing TomBas "Mike spends an awful lot of his valuable time educating people ..."
".. so I await Mike's explanation.."
Seriously?! lol That's what I call picking a fight with a twist of politeness.
Red,
As far as I can judge MMT acknowledges that the private sector desires to save and the only prudent thing a government should do is to accomodate that desire.
Now in regard to 401(k) I don't think that is rocket science. Set-up a small department at the treasury, name it the "US retirement saving fund" (aka RSF) and hire some dull non brilliant finance graduates. The portfolio: 40% in treasuries with the promise of x% premium on market yields to induce people. 20% in FX treasuries to make up for FX fluctuations (But only bonds from truly sovereign nations. Euro bonds are a No No.) 20% to the most broadest US index thinkable and 10% to the most broadest world index. The rest cash or equivalent. No fees, no loads, no greedy middle-men. Just 25 dull bureaucrats. Every 401(k) would look very different now ;-)
BTW: There was an interesting experiment here in Germany. Some cities looked for alternative financing. The mayors placed an ad in the local newspaper listing upcoming local investments with costs attached. Then they asked local citizens to fund the investments by subscribing to an OTC bond. The bond was a simple two A4 page contract every layman can understand. The public answer? Every bond was 2-times over-subscribed. And the banks? Crying wolf — Socialism!
Mike,
How do you dress yourself?
Stu Varney walked all over you. It's not that you're a socialist that has me scratching my head. It’s the rumination over how you successfully found work without having slept with someone. Although, having perused your website, which conveniently has no direct e-mail, leads me to believe you may just landed yourself a job as a consultant of some sort at a fly-by-night operation there. Exciting stuff.
Well, here’s to seeing you on yet another of Stu’s filler interviews. Head on back over to Fox News studio when you’re fit for debate in English.
Red,
Mike wouldnt have you out of US Treasuries because he thought the US could go bankrupt. Mike wouldnt have you in gold because he looks at this chart and thinks gold is going to $5k/oz because of an increase in settlement balances, he wouldnt have you long Nat Gas at $13 (Amaranth) because someone forecasts 5 hurricanes for the gulf this year (Mikes words: "I wish it was that easy"), etc...
That probably puts him ahead of 99.9% of advisors.
Resp,
Mortgage Angel,
Have to disagree with virtually everything you said. Investing in anything other than T-bills is a form of gambling as the results cannot be known in advance. You are "betting" on a certain outcome one way or another.
I have not been "screwed by someone" nor am I bitter about my own investing. I have no idea where you came up with these assumptions.
This began as a serious question that remains unanswered (at least to my satisfaction). Let's take Mike out of the picture. How does an adherent of MMT that objects to rentier behavior, a) invest their own money and b)how do they justify managing OPM especially charging fees that are higher than an index fund would charge?
I understand the difference between productive and financial capitalism and it would be wonderful if we could all establish and prosper as industrialists, but that's clearly out of the question. How do the rest of us ethically invest our money and what is the difference between ethical and unethical money management of OPM?
Matt,
OK so now we supposedly know what Mike would not invest in but that provides no insight into what he would invest in unless you have specific knowledge that he is short gold and natural gas.
Regardless, this avoids the issue I raised. How does an individual or firm that is critical of rentier behavior justify managing OPM with a management fee greater than index funds?
@ Stephan
I remember the "krass keynesian" remark by the finance minister of Germany a couple of years ago when TARP and stim came out ...
It's too bad that these stimulii went to save partially the European banks as well as Germany.
We should have let them flop and let the dollar pop all the currencies under ...
Red Rock,
Go ahead and call me a hypocrite if that rocks your boat; I don't care. I believe it was Keynes who said, "Euthanize all the rentiers." Yet Keynes was a very active speculator and investor. I guess he was a hypocrite, too. If so, I'm in good company.
@googleheim
What the German government said in regard to TARP etc. was hypocritical. To put it mildly. Most was posturing targeted at the electorate. To put it in perspective you must always consider, that the Germans are saving like crazy and as if life expectancy suddenly sky rocketed to 150 years. So the average German doesn't understand how somebody can buy a house without saving at least ten years ahead and a down payment of >20%.
I was also critical of TARP but for another reason. I considered it the exact opposite of Mike's Keynes quote. TARP was public welfare for the rentiers. I would have preferred Swedish-style nationalization. Guess you can call me a socialist too.
Steal a page from the creationists:
Don't call it Socialism, its Intelligent Design. :o)
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