World's eight largest economy to issue IOU's instead of real money.

[starhawk18]

Hmm don't we have that already......... it's called federal reserve notes aka the US dollar bill.

[texdav]

Originally Posted by gwynedd1

Hi sweetpotater58,

Having grown up raised as a classic conservative republican there was a time I would have classified what is going on as liberalism as well. After about 20 years of research in history and economics I have abandoned it as nonsense. The poor are often far too politically weak and disorganized to actually have enough political influence to have any effect. The cause is not liberalism or socialism, its capitalism. The reason why the state of California makes life attractive to illegal aliens is because the agribusiness can hire cheap labor and pass expenses to the state. The wealthy love to hire them as their gardeners , house keepers, maids, and nannies and have the state educate and pay the medical costs.

Thats free for all capitalism. In a pure lazier-faire capitalism anything goes. I suspect few people actually support it and many who think they do don't realize preventing the murder of your competition is in reality, a regulation for the public good. However, many monopolistic practices masquerade as regulation for the public good. The reason liberalism ,as in the maximum public good, is often perverted is because its simply presented as such but is very often a monopoly capitalist behind it regulating their competition out of business, passing off their costs, or driving down their labor costs. Being "nice" to illegals is just California agribusiness attracting cheap labor and passing the cost to the state.

Loking at the California sate budget tells a much different story as I saw on a program just recently. They have far too many entitlements and programs that they can't affords.There is nothing wrong witht eh economy 'its purely a budget problem where they have kept increrasing spending. Use to be as the program point out that they just passed higher taxes but that wqas sdtopped by the voters. They then shifted to higher fees but that did make up the difrference. They then had to borrow money on money expected each year bfore it came in, The recession then they really fell behind.Its just spending more than you take in really and no budget displend. That is what we are seeing nationally now.

[gwynedd1]

Originally Posted by texdav

Loking at the California sate budget tells a much different story as I saw on a program just recently. They have far too many entitlements and programs that they can't affords.There is nothing wrong witht eh economy 'its purely a budget problem where they have kept increrasing spending. Use to be as the program point out that they just passed higher taxes but that wqas sdtopped by the voters. They then shifted to higher fees but that did make up the difrference. They then had to borrow money on money expected each year bfore it came in, The recession then they really fell behind.Its just spending more than you take in really and no budget displend. That is what we are seeing nationally now.

Hi texdav,

Oh no doubt. The state services they provide themselves are ridiculous. I have even heard people in other states taking in people from California who could no longer afford it ask why they don't have similar amenities. I guess the dotes did not connect.

[gwynedd1]

Originally Posted by floridasandy

i agree 100% on the lobbying issue! i disagree that this is a failure of capitalism, but rather it is a failure of government to regulate. government chooses what it wants to regulate (or not, think banks and wall street) based on the amount of funding/favors/obligation they feel towards big business.

there was an interesting paper in the NYT regarding this issue:
A Failure of Regulation, Not Capitalism - Economix Blog - NYTimes.com

Hi floridasandy.

It not about the failure of capitalism but understanding its weakness. Socialism has its own weakness. A society that fails to apply either of them at the right place and circumstances is what causes faliure. Unfortunately in the US we are fed a one sided view just as I suppose the Soviet system did for socialism. We are caught between the issue of human motivations and common properties. In cases of limited resources, common property and natural monopolies the classic capitalist models fall apart. The same is true for socialism when these are absent.


Lets look at a classical socialist setting like public roads. Only one road goes straight. Multiple roads use up limited land resources and cross many private boundaries. Its a classic common property issue were cooperation exceeds competition. Even so called private roads are granted such powers and must be regulated monopolies.

Speaking of water one of the first to observe that the Western United States was not feasible without public water works was John Wesley Powel. He was ignored and drought disasters followed including the Dust Bowl. It is also noticeable it was only something the Mormons could pull off to some degree which were a social unit.

Capitalism tends to thrive when public resources are not limited and externalities ,like pollution, are not passed to the public. The company that sells cheaper because it hides its pollutants is not winning with a superior product. Government run restaurants or hot dog stands are poor. Competition is a much better model. One example where we have socialism and it breaks all the rules of where it is appropriate is the educational system. Schools can go anywhere, don't go though limited space or dangerous switchbacks, or deplete fish stocks or grazing. Socialism does not belong there.

The confusion comes in a classic mixed case like fisheries. The fastest boat using state of the art radar wins the competitive battle. However if it depletes the fishery what then? There is going to have to be a social system of some sort that does simply result in catching the most fish as efficiently as possible. We want the resource to be efficiently used but also managed. Its a hard case.

We need to be aware that we face the dilemma of human motivation favored by private ownership that is in some cases limited by public resources that must be managed and not abused. If someone's method of farming washes nitrates into a fishery while another does not, the former is not doing it more efficiently than the other, rather they are simply passing the cost to another. That is capitalisms greatest flaw that need to always be addressed.

However as I stated before, the same mechanism used to prevent abuses by capital is used by capital to impede their competition or expand their market. The cattle rancher next door and the company that sells bug repellent will certainly think the cattle rancher down the street should allow the drained wetland to revert to its natural state in the name of the public good. Perhaps it is but not for those reasons. Monopoly capital can install its own agents to use regulation as a cudgel. So often the problem is not traceable to government and the real force behind it is not over regulation but actually back to a flaw in capitalism that will regulate its competition out of business and happily fund the politician who does so.