Basejumper.com - archive

Think of a packer at a DZ, the going rate is $6 for a regular, quickie, pro-pack. To get more than the going rate a packer would have to provide some type of extra utility, such as soft openings or nice big set of tits.

Or the [people] can lobby politicians to pass new legislation that has the effect of limiting competition. In a free market, the government would not have the authority to make these regulations.

Or the [American Medical Association] can lobby politicians to pass new legislation that has the effect of limiting competition. In a free market, the government would not have the authority to make these regulations.

Or the [software vendors] can lobby politicians to pass new legislation that has the effect of limiting competition. In a free market, the government would not have the authority to make these regulations.

without regulatory authority/government intervention, there would be no clean air act.

without regulatory authority/government intervention, there would be no licensing of doctors and you could buy ANYTHING without a prescription.

I charge $ 5 for packjobs.

Minimum wage laws are bad! They effectively price people whose labor is not worth the arbitrary minimum, out of a job! Minimum wage laws are one cause of unemployment, since in the absense of minimum wage laws, wages tend toward the point where all people that seek employment find it.

I DO believe that minimum wage should be set and then ratched up with inflation to remove it
from the political arena.

the entire town has been overrun with cheap labor

Besides, without government intervention, half of Mexico's population would be here faster than you can say "Pass the Patron".

Oliver Twist begging "Please sir, I'd like some more".

The answer is somewhere in the middle... the exact position will be debated for as long as we humans are on this (or any other) planet.

I'm actually against licensing. Milton Friedman does a good job of dispelling your exact argument in his book "Free to Choose." Which was also turned into an excellent pbs show that can be viewed here http://www.ideachannel.tv/.

Would you be happy just relying on some private accreditation process to assure quality and efficacy?

How long would he stay in business if he did that?
Remember that people would still have redress for injury in civil law. A company that intentionally set out to harm people (which is pretty silly) would (a) go out of business pretty fast, and (b) be subject to redressing the harm.

Private processes often work better than government mandated ones. The oldest private food verification agencies are private, and honestly, I could make a pretty good case that they do a better job than the government mandated ones, and don't cost the taxpayers a dime, to boot.

I would prefer that the government stop causing inflation (the increase in the the supply of money)!

Private processes often work better than government mandated ones. The oldest private food verification agencies are private, and honestly, I could make a pretty good case that they do a better job than the government mandated ones, and don't cost the taxpayers a dime, to boot.

If there's no inflation, I have no incentive to spend my money today.

But if there is inflation, my money will be worth less tomorrow than it's worth today.

The higher the velocity of money, the higher a country's economic activity.

I want to retain (or even grow the value of my money) via bank deposits, stocks, mutual funds, or other investment vehicles.

the biggest risk in the EU and USA right now is not inflation, but actually DEFLATION.

retailers are going to be forced to lower prices

why not just piss in a bottle and call it "Adam Lanes' alternative cold medicine"? And maybe stick some amphetamines in there so people really feel the results? Don't you think, there should be some licensing or public oversight to make sure people aren't "free" to do something horrible like this?

but then there are more complicated examples. how would people make choices

Are you serious? In this age of information overload, are you suggesting that people will have a hard time making informed decisions?

Debt is slavery. For people that have been living beyond their means, and who are over their heads in credit card debt, auto loans, and mortgages on houses they can't afford, then yes deflation is bad.

look at all the borrowers that fell afoul in the current crisis. many had no idea about their contractual obligations because they chose not to make an informed decision. just because information IS available does not mean people make informed decisions.

In the modern era of high speed information flow, I think we'd be better off letting people regulate their own affairs, one transaction at a time.

Seriously though, in the absence of government regulation, reputation for honest dealings and a quality product is "everything". Such a reputation has a high value to a company, and it would take a company a long time to develop such a reputation. It would be highly unlikely they would risk losing this hard-earned reputation by pushing some "snake oil" in order make a quick buck. On the other hand an upstart will not have the reputation to be able to swindle people easily. There are multiple levels at work here also for added protection, for example the reputation of the manufacturer of the product, and then the reputation of the retailer.

I think you're wrong about that. I'd argue that most of those people made bad deals for themselves because they believed that the system was being "regulated" by the government in a way that guaranteed they wouldn't "really" get hurt.

think about the commercials for towels, sheet,
detergent, etc. Lots of babies, puppies, children, and happy
moms smiling or feeling exhausted but the voice-over always
re-affirms mom is important, mom must worry, mom cares
about her family, she the glue that keeps it all together SOO
she must buy ----insert Product---.

"Well, the FDA has approved thalidomide, so it must be safe...right?"

The market can provide product information very well. Have a look at hotel reviews on line, for example. Why aren't there similar reviews of medications, or doctors, or hospitals? Perhaps because health care is so heavily regulated that there is no real consumer choice going on, so there is no need to provide choosing consumers with quality information.

Inflation is theft.

My point is, is that the wealth one has created is a contract between them and society, and the value of your wealth would naturally decrease over time if you just stuck it somewhere. Society is moving on without you, and they care less and less about your contribution you made so many years ago. That's why deflation, which may be good for some individuals, is bad sign: it means that today's work is less productive than last year's work... i.e. progress is backwards, not forwards.

Well stated

derka derka
sallie may is a tranny
i want the goverenint to preserve my proparty rights to her ass soi can do lines of it

right before i stick my "gold standard" in there
thats my capetalisem

Just reminding you that there is more than just ONE reason to explain a pattern of rising prices in a given market.

I'd argue that most of those people made bad deals for themselves because they believed that the system was being "regulated" by the government in a way that guaranteed they wouldn't "really" get hurt.

...because people are not perfectly rational.

Case 1: Lets say, in a world with zero inflation, a stable real-estate market, and your ideal money supply.... I built a barn on my lot. In 1980 I could have sold it for $20,000, but I never maintained the barn or the land, I let it go to crap and now because my barn is in disrepair I can only sell the property for $12,000. Nature "STOLE" $8,000 from me!!!

Case 2: in the real world, I get a job and produce $20,000 worth of wealth, and I stick it under my mattress. I don't do anything to preserve the value of my wealth, and now, in 2008 its only has the buying power of $12,000 (don't check my math). Did society "steal" $8,000 from me?

Could in inflation occur in an economic
system that used a gold based currency?

Could in inflation occur in an economic
system that used bartering & no money?

When oil prices rise, it is true that some things will become more expensive, but other things should therefore become less expensive to compensate for a shift in household budgets.

If people in general are not rational enough to make their own decisions affecting their own lives, then how can it be expected that the people running the government are rational? How is it that irrational people can't make decisions for themselves, but are somehow rational enough to make the best decisions affecting others?

Alan Greenspan noted in his Congressional testimony last week, he was “shocked” that markets did not work as anticipated. “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.”

Good quote to add to the discussion!

Roughly speaking, there are four steps to every decision. First, you perceive a situation. Then you think of possible courses of action. Then you calculate which course is in your best interest. Then you take the action.

Over the past few centuries, public policy analysts have assumed that step three is the most important. Economic models and entire social science disciplines are premised on the assumption that people are mostly engaged in rationally calculating and maximizing their self-interest.

But during this financial crisis, that way of thinking has failed spectacularly. As Alan Greenspan noted in his Congressional testimony last week, he was “shocked” that markets did not work as anticipated. “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.”

So perhaps this will be the moment when we alter our view of decision-making. Perhaps this will be the moment when we shift our focus from step three, rational calculation, to step one, perception.

Perceiving a situation seems, at first glimpse, like a remarkably simple operation. You just look and see what’s around. But the operation that seems most simple is actually the most complex, it’s just that most of the action takes place below the level of awareness. Looking at and perceiving the world is an active process of meaning-making that shapes and biases the rest of the decision-making chain.

Economists and psychologists have been exploring our perceptual biases for four decades now, with the work of Amos Tversky and Daniel Kahneman, and also with work by people like Richard Thaler, Robert Shiller, John Bargh and Dan Ariely.

My sense is that this financial crisis is going to amount to a coming-out party for behavioral economists and others who are bringing sophisticated psychology to the realm of public policy. At least these folks have plausible explanations for why so many people could have been so gigantically wrong about the risks they were taking.

Nassim Nicholas Taleb has been deeply influenced by this stream of research. Taleb not only has an explanation for what’s happening, he saw it coming. His popular books “Fooled by Randomness” and “The Back Swan” were broadsides at the risk-management models used in the financial world and beyond.

In “The Black Swan,” Taleb wrote, “The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup.” Globalization, he noted, “creates interlocking fragility.” He warned that while the growth of giant banks gives the appearance of stability, in reality, it raises the risk of a systemic collapse — “when one fails, they all fail.”

Taleb believes that our brains evolved to suit a world much simpler than the one we now face. His writing is idiosyncratic, but he does touch on many of the perceptual biases that distort our thinking: our tendency to see data that confirm our prejudices more vividly than data that contradict them; our tendency to overvalue recent events when anticipating future possibilities; our tendency to spin concurring facts into a single causal narrative; our tendency to applaud our own supposed skill in circumstances when we’ve actually benefited from dumb luck.

And looking at the financial crisis, it is easy to see dozens of errors of perception. Traders misperceived the possibility of rare events. They got caught in social contagions and reinforced each other’s risk assessments. They failed to perceive how tightly linked global networks can transform small events into big disasters.

Taleb is characteristically vituperative about the quantitative risk models, which try to model something that defies modelization. He subscribes to what he calls the tragic vision of humankind, which “believes in the existence of inherent limitations and flaws in the way we think and act and requires an acknowledgement of this fact as a basis for any individual and collective action.” If recent events don’t underline this worldview, nothing will.

If you start thinking about our faulty perceptions, the first thing you realize is that markets are not perfectly efficient, people are not always good guardians of their own self-interest and there might be limited circumstances when government could usefully slant the decision-making architecture (see “Nudge” by Thaler and Cass Sunstein for proposals). But the second thing you realize is that government officials are probably going to be even worse perceivers of reality than private business types. Their information feedback mechanism is more limited, and, being deeply politicized, they’re even more likely to filter inconvenient facts.

This meltdown is not just a financial event, but also a cultural one. It’s a big, whopping reminder that the human mind is continually trying to perceive things that aren’t true, and not perceiving them takes enormous effort.

just thought this should be added for the record...


it seems as if even the pillar of unregulated markets, Alan Greenspan, now questions the basic assumptions of free market capitalism.

As far as Greenspan or anyone else not realizing that individuals look after their own money better than governments, banks, organizations or individuals will look after other peoples money is ignorant! The Federal Reserve Bank (FRB) set artificially low interest rates in 2001 after the dot-com bubble and terrorist attacks to stimulate the economy. This enabled people who normally would not qualify for loans (because they are poor credit risks) to get loans that they began to default on when interest rates went up.

I believe we should be open to systems that have not been tested on a large scale

What's your take on participatory economics?

now if you are right about free market capitalism (where the players act rationally in their own interest), we should have seen the lenders and borrowers acting in their self interest. nobody stopped THAT process.

You're assuming that US financial markets are reasonably free. I'm really not convinced that's the case.

Any market that rewards bad decision making with a 700 billion dollar incentive to do it again is a long, long way from being free.

it is free market capitalism, distorted by government.

To whatever extent it is distorted by the government, it is, by definition, not a free market. I'd argue that the extent of distortion is actually very large. I'd further argue that we'd do better, collectively, were the distortion reduced. Unfortunately, it seems like most of the American body politic thinks that the solution to problems caused by those distortions (government interventions--mostly massive government spending) is simply more distortion.

"Well, it didn't work, so let's try more of it, because maybe somehow that will work."

Absolute Advantage - is having an
absolute advantage in providing
some good or service.

p.s.
what is the difference between a market distortion and a competitive advantage?

- is having so much oil under Saudi a market distortion or a competitive advantage?

- is Microsoft having such a dominant position a market distortion or a competitive advantage?

- is having the ear of a government official a market distortion or a competitive advantage?

- is having access to a public supplied bridge a market distortion or a competitive advantage to a BASE instructor?

consumers did NOT have to choose to accept all the sub-prime loans. lenders did NOT have to choose to make those loans either. it appears that neither acted rationally, in their own self-interest. thus any theory that assumes they will is fundamentally flawed.

...as people refuse to act as assumed by the theory ... it appears that neither acted rationally, in their own self-interest. thus any theory that assumes they will is fundamentally flawed.

When the government bails out those financial institutions, it sends a clear message--that they will be saved from poor decisions, and further, that actively deceiving consumers into accepting poor loans is a good business practice, because the government will save the banks.

Your contention is that individuals are not rational.

You think the solution to irrational behavior is government regulation.

I disagree.
(...snip...)
The government, by bailing out the banks, actually creates the "irrationality" that you're seeing in the situation. In fact, the banks aren't acting irrationally at all, and neither are the consumers. They both react, rationally, to the situation that they are in, which is largely not a true market, but rather a government supported deception.

and everyone is still forgetting that banks failed and people got burned long before we abandoned the gold standard...

"...for you to say [that,] is to show great ignorance at the world... ...what the fuck are you talking about... ...you are ignorant... ...even more ignorant than I thought... ...where do you come up with this shit... ...you and most of the rest of society is woefully ignorant of both history and economics... ...pathetic... ...your immature smears..."

http://www.basejumper.com/...nt;postatt_id=84990;

That is a very interesting question that I have pondered many times in different contexts. I am not claiming to have the answer since I myself have difficulty in rationalizing legitimate real estate property rights in the United States, since the US government basically stole, or bought it from other governments that stole it, from the previous inhabitants.

Um, I'm not arguing for a gold standard, here. You've got me confused with Adam.

As far as negative externalities go, that would not be an issue where the rights of individuals were actually protected by government, instead of what we have today which is the government infringing on the rights of individuals, and also the government allowing others to infringe on the rights of individuals.

It is rational and necessary for the government
to allow some measure of pollution since we as
a society enjoy goods like cars, parachutes, and
eating cooked food, which all require at least
some amount of pollution.[/green[

Tobacco has negative externalities since 435,000
people a year die and quite a few of those need
medical services on the way paid by taxes. This
is exactly why cigs have excise or sin taxes to
help offset this future unseen cost associated w/
consumption of this good, or bad.
.

I disagree. If you enjoy using your car, parachute, or whatever, I believe that you ought to pay the full cost of that use. If one of those costs is some sort of pollution, I believe you ought to pay the full cost of that pollution. Hopefully, this would move us toward a more environmentally friendly economy. I think we all need to realize that "the enviromnment" just means "all the rest of us on the planet." When one of us imposes on the rest of us (i.e. "the environment") the individual doing the imposing should be required to make it right. If you were truly required to neutralize your externalities, you'd see development of things like zero emissions cars (because it's cheaper and easier to simply recapture the exhaust in some kind of container, and pay for proper disposal, than it is to try to get it back once it's already polluting everyone else's air).

Pollution, second-hand smoke, really loud music
at 4:00 AM, insurance fraud, stealing, not paying
one's debts, never exercising, never eating any
kind of vegetables, drunk driving, cheating, etc.
are all decision given the current system that
eventually have an impact on someone else.

This summary of Market Failure is very good.