As I told last week, I believe the speculation holds the key to the destruction of the M&S. The M&S can exist because of socialist beliefs in working people. They demand to give the M&S welfare. If they would stop supporting them, the M&S would be nothing more than another outside group wanting our resources and would be handled the same way: by the armed forces of the country.
Speculation itself is a negative-sum action. People buy papers based on future expectations but these expectations are not unrelated to the expectations of other people. For normal goods elevation of the price decrease demand. For investment instruments elevation of price make people believe that others know that it's a good investment making them want to buy it more.
The typical example is the home sector. Homes are for living in, so the ultimate value of a home is how much someone would pay for living in it. That is defined by rental prices. The value of the home is defined by the opportunity cost of other safe profit providing instruments. Example: people are ready to pay $5000/year to live in that home. Safe bank deposits pay 4% interest. The home worth $125000 as having $125000 in the bank instead would provide exactly rent. If some moron asks $200K for the home I'm better off putting the money in the bank for $8000 interest, rent the same home and have $2000 profit.
The rental prices elevated a bit, but nothing near the home price skyrocketing between 1990 and 2008. People kept buying homes for much-much more than their values with the hope that they can sell it to someone else for more. How could they do it? Because banks gave them loans, accepting their (already overpriced) homes as collateral. Everyone (homeowners, banks and whoever bought the repacked home-loans) hoped that there will always be a guy who pays more for that home. The bubble had to pop.
Why is investment good for the economy? Because it provides the lie that your salary will be multiplied: "earn $20K now, invest it in a home and in 5 years you'll have $100K!". It make people overvalue the monetary rewards of their work, therefore motivate them to work harder, providing more GDP. This GDP plus makes sure that countries that make anti-speculation laws will fall behind, exactly because they tell the truth: "if you earn $20K, you'll have $20K". People work harder for the promise of $100K, even if they will never get it. The long time average GDP growth of such country is higher, despite it has collapses regularly.
So far so good, but what does it do with the M&S?
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Joost found this wonderful specimen: he begged for 30G to be able to buy a blue shield on the AH for 80G. This was his lucky day as Joost not only sent him here but helped him save 50G while getting profit for himself too. If only the specimen would know that business helps him more than begging:
Speculation itself is a negative-sum action. People buy papers based on future expectations but these expectations are not unrelated to the expectations of other people. For normal goods elevation of the price decrease demand. For investment instruments elevation of price make people believe that others know that it's a good investment making them want to buy it more.
The typical example is the home sector. Homes are for living in, so the ultimate value of a home is how much someone would pay for living in it. That is defined by rental prices. The value of the home is defined by the opportunity cost of other safe profit providing instruments. Example: people are ready to pay $5000/year to live in that home. Safe bank deposits pay 4% interest. The home worth $125000 as having $125000 in the bank instead would provide exactly rent. If some moron asks $200K for the home I'm better off putting the money in the bank for $8000 interest, rent the same home and have $2000 profit.
The rental prices elevated a bit, but nothing near the home price skyrocketing between 1990 and 2008. People kept buying homes for much-much more than their values with the hope that they can sell it to someone else for more. How could they do it? Because banks gave them loans, accepting their (already overpriced) homes as collateral. Everyone (homeowners, banks and whoever bought the repacked home-loans) hoped that there will always be a guy who pays more for that home. The bubble had to pop.
Why is investment good for the economy? Because it provides the lie that your salary will be multiplied: "earn $20K now, invest it in a home and in 5 years you'll have $100K!". It make people overvalue the monetary rewards of their work, therefore motivate them to work harder, providing more GDP. This GDP plus makes sure that countries that make anti-speculation laws will fall behind, exactly because they tell the truth: "if you earn $20K, you'll have $20K". People work harder for the promise of $100K, even if they will never get it. The long time average GDP growth of such country is higher, despite it has collapses regularly.
So far so good, but what does it do with the M&S?
- At first it enables the idea that "one can provide for himself". In the non-speculating country, the economy grows slowly, people are in constant competition. The M&S lose the competition and goes bankrupt/don't get jobs. The constant large amount of losers make the socials feel uneasy. They don't want a fellow groupmember suffer, so they want to help them and not blame them. The "one can provide for himself" blames the losers (properly), so this thought is painful to the socials and replaced by "success depends on luck and we must help the unlucky". On the other hand in the speculative country 9 out of 10 years are boom years. In boom years there are free (lie) money for everyone, the competition is weaker so M&S can get jobs. They will be laid off when the bubble pop, and they create uncompetitive products that people buy only because the money is free. However socials see everyone who is not openly destructive to find jobs easily, so he can accept the "one can provide for himself" idea. This idea is necessary to fight M&S as it blames the failure on the loser and not on luck.
- In the non-speculating country the people openly fight against immigration as they see it as new competition for limited resources. In the speculative country, the people live in the lie that the resources are nearly unlimited, there is place for everyone under the sun, so they let immigrants in. Some of the immigrants are highly qualified and intelligent. Meeting them will slowly decrease the "we are good they are bad" social nonsense in people's head. So they will be less social.
- Some insider people will have social connections to the immigrants. They will start seeing them as "one of us". In the collapse period these "I like them" socials will collide with the "they are aliens, away with them" socials. They will fight between each other! Also, the immigrants who see us "them" will be more violent in demanding what they feel entitled for than an insider (and they objectively get less, so they are extra angry). This leads to several anti-social acts, damaging the social feelings in people. In a sinking ship there is no friendship, all men is for himself!
- In the collapse phase the hard working socials are forced to face that they were living in a lie. Their "made of air" money vanishes into the air, their beloved social status crumbles. From "middle manager living in a home with pool" they will fall to "unemployed guy with an underwater home" in a few weeks. They will be angry. While objectively they should blame themselves for investing into an overpriced home, they are socials, so they never blame themselves. The want a scapegoat. The speculators seems fine for that job, but they elude punishment. The irrational anger of the hard-working socials cannot vent to that direction, so it flows to the natural way: kick the weaker! They will start blaming the M&S.
- The collapse of economy, the mass lay-outs leaves the M&S hungry. They commit crimes against the hard-working guys. The robbed, beaten guy will definitely won't demand more welfare to his attackers anymore!
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Joost found this wonderful specimen: he begged for 30G to be able to buy a blue shield on the AH for 80G. This was his lucky day as Joost not only sent him here but helped him save 50G while getting profit for himself too. If only the specimen would know that business helps him more than begging:
40 comments:
Check out Freedomnomics by John Lott.
There's some discussion in there of the benefits of speculative activity in the market.
My 1st objection is about your definitions of speculation and M&S. You're only advocating capitalism vs. socialism (or socially-inclined-systems). Speculation is about buying tons of stuff (usually stock) for making people believe that the demand is high, therefore pulling the price higher, and reselling at the new higher price. More or less, it's a trick to abuse the stock market. Also nowadays 75% of all the stock-market buy-or-sell orders come from machines reacting by the millisecond, not people... That would complicate the picture.
On your first keypoint, you are oblivious to the interactions between countries. Economies come and go. Companies delocalize. etc. There's no such thing as "constance" even in socialist states.
On your 2nd key point (immigration), USA trumps your argument. Over there, you can easily associate the 3 concepts : conservative-ultracapitalistic-racist. It's not the democrats who go kill Mexicans trying to cross the border. And the so-called capitalists are in fact VERY inclined to protectionism... which goes against what they advocate. Unless you consider that politics should play along to give unfair advantages to American companies (which is the reality) despite the fact that it's a betrayal of the core principle of capitalism.
On your 3rd keypoint : I can agree only if you're describing a country plagued by civil war, riots, hard-core anarchy... like Louisiana after hurricane Katrina. Capitalism and every-man-for-himself is the fastest system that can be created on the ashes of a collapsed system. But I can't see it happening in a somewhat stable system.
The main idea of this post is... well... blatantly false.
I live in Latvia - we had the biggest GDP drop until Greece collapsed and probably still have the highest actual unemployment rate.
And people blame the banks who gave out cheap loans and the government who let them.
The unemployed are not held to be responsible for anything - instead the government is blamed for them not being able to find jobs.
Meanwhile, Greeks are violently protesting public spending cuts. They have the biggest debt in EU and they have been rioting for half a year by now. All blaming the government for finally doing what the previous governments should have - trying not to spend more than they have.
Both countries are cutting various welfare spendings and even people who don't need any welfare are up in aggro about it.
I am not specifically aware of situation in countries with less dramatic debt problems, but I doubt they blame the unemployed.
The only exception being countries with a lot of immigrants where people only hate the leeches that do not share their skin color (e.g. - many gypsies were just deported from France, but the french are rioting about the retirement age being lifted to 62)
There was still money left on the table with that deal in moron of the day.
I'd have charged him 50g (80-50= the 30g he wanted).
Perfect information wasted there...
I paid cash for my house and plan to live in it until I die. I'm a socialist!
I like it better when you apply your economist skills to the micro economy of pixel worlds.
The basic problem is an unlimited work force. There are way more workers then jobs. An Investor should easily see that welfare is a cheap and safe way to side line this excess supply.
Wars and prisons are long term economic dead ends, requiring no-value production. Restricting reproduction could easily result in a economic regulation revolt which is a bad long term investment strategy.
A welfare system which distracts the excess supply with cheap entertainment/propaganda is long term win for the true Investor because it minimizes disruption.
Keep them fat and happy. Because the hungry are dangerous.
@Big heals: this is nonsense. jobs are just as unlimited as workers as thy provide services to the people. By being a worker I get money and spend it to buy the work of other ones.
The welfare leech is the REASON for unemployment as the workers money is taxed so they can't spend it to buy products.
As usual its an interesting theory, but I think it underestimates the capacity for people to return to being social.
Hence when people mix with immigrants, they don't realise they nonsense of a them and us mentality, they just add these "good immigrants" into their group and remain hostile to the rest.
It seems to me that people in the face of a crash may turn against M&S generally, but they still remain loyal to their M&S, make all manner of excuses and so on. Examples of this abound. When the economy returns to a boom they proceed to welcome back additional M&S into their group and all the inclinations to social behavior are there again.
For the process to work, de-socialised individuals would have to have some sort of escape. In Warcraft you can get sick of it all and log off or I guess join one of your non-social guilds. I am not sure there are many examples of non-social employment.
In America right now, the M&S CONTINUE to blame the government for all of their woes, as Grim suggests.
How do you explain this? Has America simply not been through enough bubbles to reach the breaking point?
Also, you haven't taken into account the actions of a government in responding to crises. We can all figure out how the 'ideal' government would respond, but fighting gov't policy is often the hardest battle, since gov't seeks to continue to prop up its nation.
Interesting, the given example (home market) is the direct base for the Financial crisis of 2007–2010.
Your following points show how the system works in general... ...well at least it fits in germany and several european countrys.
Well in the collaps of the Leman Brothers and the following quakes the fascistic parties got a decent jump in votes. Also racist based crimes got a decent push up.
So the Theory has a stable base.
It describes the source and outcome of financial crisis (a bit simplified).
The big question is how to avoid all this, without "getting rid" (killing) the M&S.
Simply turn the M&S into valuable member of the society. Yes integration for M&S instead of welfare, but how? Simple education is (in a nutshell) available for everyone. How to get rid of the extreme "I don´t want to work!"?
I think thats the interesting question resulting from the given theory. Well of course you could also say, kill all of the M&S and we are done... ...but, hey we saw that in germany, only based on religion (yes jews are a religion and not a race) instead of performance and I must say that this is no alternative (if it wouldn´t be based on my rudimentary ethic at least the german law forces me to say so).
As a few others alluded to, your theory falls flat once again. But I think the biggest issue is "what do people do with their time?" Workers work, speculators speculate, and leeches? That is to say the unemployed will be voting when it's time to vote, and any politician that says damn the stupid/lazy commits the same political suicide as damn the elderly. Thus negative sum and crash cycle or not the point is moot. Speculation can't kill the m&s, they own the guys in charge.
"By being a worker I get money and spend it to buy the work of other ones."
Problem is, real life reflects WoW in the aspect that once you obtain a certain amount of wealth, you STOP spending it.
If you get gold capped in game, you just sit back and stare at the gold. You don't go out there and spend it. Same in Real Life: The biggest earners aren't using that money to continue the Supply/demand cycle; they hoarde it. They stay "cashed up" during what they call "lean times".
Big companies don't use record profits to make their business bigger and hire more workers. They KEEP the profit unspent, and "streamline" their current operations to make the existing business more profitable with less costs. Just as the WoW Goblin streamlines his gold-making operation to cut time and maximize gold earning per hour.
I don't see any Goblin out there proclaiming THEY have the largest workforce of farmers on their server and are actively seeking more, do you? Of course not. The Goblin way is to REDUCE their workforce to a level of max profitability and KEEP the gold they make as... well, gold: unspent and uninvested. This leaves the burden on Blizzard/government to make the average WoW worker's lives more affordable by giving them more gold via QUEST rewards while keeping vendor prices the same. See what happens when Goblins (like real life CEO's) chose not to reinvest their wealth and grow their business by paying willing workers/grinders, but instead stay "cashed up"?
Your true complaint should be that the game prevents you from doing anything with the gold once you're capped (or capping at all). Instead, you do what business does once they reach a level of wealth that gives them inner contentment: sit on it.
(It's a serious question, by the way. Have you EVER seen a WoW Goblin say "I have the biggest workforce of players on any server ever"?)
"Yes integration for M&S instead of welfare, but how? Simple education is (in a nutshell) available for everyone. How to get rid of the extreme "I don´t want to work!"?"
This is happening right now in Real Life. Extorionist Education.
Society has successfully hammered in the "You need education to financially suceed" message, and colleges charge $850,000 for what used to be a $5,000 course. The M&S is burdened with enormous debt, and is now FORCED to get a job waiting tables and digging ditches, instead of living on welfare because they had no debt (ie. freedom).
And once they are in the workforce at the lowest level, they have a larger percentage of getting a better position and slowly evolving from a non-M&S, as opposed to the true M&S who remains jobless because he does NOT have a college debt of $85,000 to pay off.
And naturally, the RL Goblins saw the "Education is the silver bullet to all life's troubles" marketing spam, and invested accordingly.
@Visalyar
Many Jews in pre-holocaust Germany were business owners and successful at that. This enabled the Nazi party to blame them for post-WWI economic problems (don't forget what National-Socialism actually means).
The origins of Holocaust were more like M&S using their majority to attack goblins than anything else.
Eugenics is largely a different issue, that was piggybacked onto Holocaust by historians due to the Nazi's radical approach to it. Technically it does not have any direct relation to "the Jewish question"
I have been reading and following what you say for 5+ months. And you finally said something that I think even you dont understand, "politics".
"If they would stop supporting them, the M&S would be nothing more than another outside group wanting our resources and would be handled the same way: by the armed forces of the country."
What country? US? I may be a jarhead, SRS, only know how to walk from what I was told. But I know BS when I see it. US only helps who needs it, and before you say whatever shit out your mouth, get out the basement, and do something other than compare who's dice is better for D&D, I used to get up every morning at 4AM, P.T. till 6AM, chow at 7AM, Inspections by 8am, "Classified - 4pm", Dinner at 5pm, 3 hours of free time, start all over. And dont say this president is better than that president. They are all the same, they make 0 choices, ans if you belive "we the people" make the choices, well, you are dumber than expected. I dont like correcting people, but next time, know the facts.
@ Gevlon - I do agree with one of the Anonymous who said that socials are still likely to remain faithful to their peers. Why is there anti-immigration sentiments? Because socials are cliques, and the bigger the collapse, the more the socials get hurt, the more they will turn (as a collective group) against the wealthy who profited out of it.
There's a wave of anti-immigration and anti-bank hysteria around Australia at the moment. They're working as a collective union, focusing their collective hate on single targets/groups. And the hard worker can't get his way, because the majority (i.e. also the ones who lost the most) are also the ones who hold balance of power in the government - people who are willing to buy votes to stay in power.
Yes, I think your belief is wrong. It's far too simplistic to work in a complicated political life.
@ Gevlon - clarifying the last comment - it doesn't work because there aren't enough hard working people to *decide* that welfare should be cut off. Instead, because there are more slackers, welfare only increases in times of crisis and collapse, because they're the majority and have the lion's say in government.
If hard workers were the majority, it would be a different case. But then, you've already demonstrated that hard workers don't survive in a speculative economy, and the hard workers would put restrictions on said speculation (eg, banking regulations).
Gevlon said : jobs are just as unlimited as workers
This is obviously wrong. Would you care to add the extra bit of context for your statement ? or do you think that unemployment rose from 2.5% to 10% in USA in just 2 years because leet people transformed into lazy M&S overnight ?
@Gevlon: I think there are a few logic flaws in your essay. The first is that you think M&S are all on welfare. I think many are, but realistically, a country's workforce also has a large number of M&S, even during recessions.
Second, (and this could just be a matter of definition), I think speculators ARE M&S. In your examples, you state that socials bought houses that were overpriced and that they couldn't afford in hopes to make money. To me, that's what a speculator does. And it's a classic example of M&S (didn't do the math, hoping for quick & easy money). True investors would have done the same math you did and realize it was better for them to invest their down payment.
Because of these, I don't think speculation will destroy the M&S of the world. But even assuming you're correct and I'm wrong, speculation still won't destroy the M&S because no matter what you do, there will be people who act on faith rather than logic, and there will be people who don't want to put effort into anything.
And that's good! Without these people, there would be no way for greedy goblins like yourself (and me) to make serious cash.
@Squishalot: if the government is in the hand of the M&S, it's actually a good thing. It's always easier to hate the government (that observed to be strong) than a "poor unfortunate fellow man".
The "less power to the government" movements are getting stronger and stronger, just look at the incoming landslide republican victory in the US.
I'm NOT claiming that these parties are rational, but they are doing something useful for us: decreasing the size of the government, so while the M&S owns the government, it can't really help them.
"This is happening right now in Real Life. Extorionist Education."
Oh, I´m happy for the US (or UK?). Anyway the german universitys started the tuition fee (hope I found the right word) a few years ago. The number of students is getting smaller every new semester. And as if it hasn´t gone far enough, the city of hamburg (as an example, since I study there) disestablished any support for the students welfare organization.
Well of course there are parts of germany where it doesn´t cut that deep but they keep on axing the education system.
I think you're missing a very important real life example here, Gevlon: the example of America. Here we've been suffering a burst bubble economic decline for a little over two years. Instead of causing the socials to turn on the M&S, it has instead seen them circling the wagons against the rational few.
The economic freefall following the implosion of the poisoned-papers trade has seen, in succession, the passing of a $700 Billion bank bailout, the election of arguably the most socialist president in American history, further bailouts and subsequent government acquisition of several struggling major industries to the estimated tune of $1.2 Trillion (!), the passage of a healthcare bill which is little more than free taxpayer-funded health insurance for the M&S-est of the M&S, and a tooth-and-nail fight in congress over a bill that would impose a straight-up limit on production in a country that is already >90% service-based economy.
Far from destroying the M&S or turning the socials against them, the result of unchecked speculation seems to be driving them closer together and making the socials hate even more those few rationals that want to take away the M&S' free ride.
TL;DR: You keep using that word (destruction). I do not think it means what you think it means.
Anonymous said...
"By being a worker I get money and spend it to buy the work of other ones."
Problem is, real life reflects WoW in the aspect that once you obtain a certain amount of wealth, you STOP spending it.
This statement is so true. In the great depression the Fed chairman at the time compared the economy to a poker game - once someone has all the chips the game ends. For capitalism to thrive money MUST change hands. The economy and job market contracts if money isn't recirculating aggressively. Governments can print more money but it only devalues the currency and dilutes the spending power; Every Fed chairman knows this and every leader who isn't a total economic moron has to provide incentives to make the rich spend there money.
A welfare system which distracts the excess supply with cheap entertainment/propaganda is long term win for the true Investor because it minimizes disruption.
Keep them fat and happy. Because the hungry are dangerous.
I so agree with this last statement. The poor are a mob and mobs are fickle and cruel and dangerous when provoked. The "let them eat cake" policy has never worked well for the rich.
They say those who ignore history are doomed to repeat it. And history is full of example of what happens when the poor are left to fend for themselves.
And the poor are fodder for goblins who want money and power; they will use the poor and fan the flames of riot and rebellion. We ignore the poor at our own peril.
I would like one person to point out a stable government that gives ZERO social services to the poor. Even the romans who reigned for 1000 years were famous for their "bread and circus" events. And roman society expected roman senators to actively participate in the patronage system where they would have to invest their money in supporting tradesmen and other business men and the poor.
Interesting enough it is (mostly) the American M&S who are supporting the Tea Party ...
Irony apart, the deregulation (aka less government) is the perfect recipe for disaster. Market does not self regulate, since it is not an entity. I thought that by now this should be quite clear, only strong and clever regulation can enable a true effective and liberal market (and not is not a contradiction).
The problem is you cannot get the MS out of the economy. The slacker still buy some of your glyph, some of mister X flask, mister Y enchant and mister Z crafted BoE. IRL, the MS still make the economy run by buying the farmer's food, the cheap TV and all such things. If you kick all of them out by having the socials turn against them, the bar will only go higher. The most slacking of the current non slacker population will llose thier share of the pie and be driven out of the market.
You can live for some time without any gold income but at some point, the playing expense (flask, repair and such) will eat up your stashed gold slowly but surely. While you are out of the market because it is currently not worth your time as the MS stopped purchasing (they are gone so they won't buy anything) the other get the gold. After a while, you need more gold because you spent it all.
Now Gevlon re-enter the market. Gevlon is hard working and 100% not slacking. He will minimise cost as much as it can be done and will drive other people out of the market so he can have gold. Fighting over the market endlessly only bring little gold because you are always in undercutting war. When gevlon finally secure his market, the gold will start flowing in.
While the gold flow in, ex market owner will spend what gold they had made and when they reach 0g, they will need to get more. Problem is, Gevlon won;t let his market go so he holds it with an iron fist. Whenever someone try to enter, he drive him out the glyph wall way but adapted to whatever market he is in. The ex market is now goldless and guess what? He became the new norm of MS. Here we go again...
Only wawy to stop it is to make the economy boom and never feed of the MS. If you feed off of them, they reduce teh amount of wealth available by "destroying" some. Want no more economic MS? Stop stashing gold away and spend all you get so you "buy" them jobs. But what goblin would spend his hard earned gold???
@French Guy
First of all, people aren't killing Mexicans coming across the borders. Murder is one of those crimes that are aggressively tackled in the US, is silly to think we are simply offing people coming through a desert. While immigrants are a scapegoat it isn't unreasonable not to want them leeching off the system.
Second, you comment on unfair advantages of American companies being protected is way off. The reality is that tariffs and subsidies are BAD but American companies have to obey laws that enforce work rights, age/hours limits, and regulate worker conditions. These competitor nations that we are "wrongly protecting our companies from" do not have these things. So I will continue to buy my government subsidized sugar and not buy the 16 hour, child labor harvested, death sugar from .
Lastly your comment "do you think that unemployment rose from 2.5% to 10% in USA in just 2 years because leet people transformed into lazy M&S overnight ?" is a false assumption. They didn't change, they STAYED socials. A social's reasoning is they can't take a step backwards from being a Number Processor lvl III to a janitor. They have to wait till times are good again, they have to wait it out with the good old unemployment benefits. The other issue is that they don't want to START a business. This is hard work and they "has life lol"
@Gevlon
Is it really likely we will have a spiral to antisocial behavior? I don't think socials will continue the course of anti-social activity once they are back in comfortable lives again. Using the US as an example we have socially protected a number of key banks and industires from collapsing which will preserve social activities. In essence our social to anti-social behavior, I believe, will mimic a boom-bust cycle.
Hmm, now where could I have heard this before? Ahhh, yes:
"In the next two years I see the collapse of organized societies worldwide... Millions of taxpayers will be unemployed. Over 30 million Social Security recipients and nearly that amount on Welfare will see their checks stopped. Millions who are now on Valium or other narcotic tranquilizers will go insane when they cannot get more. Medical supplies will command astronomical prices as drug addicts swarm over pharmacies looking for dope, ruining everything they don't steal. Cities will be cut off from food as oil supplies run out and the truckers cannot get fuel. As oil-based fertilizers become unavailable to grow food, agricultural production will drop to the point where famine will be a reality. No governmental system can long put off the inevitability of the above chaos and ruin of our already overburdened society.... So many world systems are breaking down at this time that it is projected by socio-economists more knowledgeable than I that the collapse will come in late 1981 or '82. It will begin like the 1929 Stock Market Crash and go on to the utter ruin and obliteration of nations."
- Kurt Saxon, "Investment in Survival", 1980.
@Sjonnar: The US is a bit special because the investors have great confidence in the US state papers, so ready to fund the extreme deficit. The bubble has NOT popped in the US yet.
@Joshua: no doubt that there will be a more social change in the next bubble. But don't forget that in every bubble more "outsiders" get in, so the next bubble will be more anti-social.
@Ephemeron: I'm no doomsayer. I don't claim that the economy will really collapse and we'll be cavemen again. I think the GDP will keep grow on average. I think the bubble pops are normal. They just gradiently cause more anti-sociality.
Over there, you can easily associate the 3 concepts : conservative-ultracapitalistic-racist. It's not the democrats who go kill Mexicans trying to cross the border
It's more complicated than that. In the US, the "conservatives" are an alliance of three different groups with different agendas: The capitalists, the xenophobes, and the fundamentalists. (Obviously some people are members of more than one group.)
The capitalists like immigration because it provides them with a pool of people who will work hard for not much money and who can be kept in line with the threat of deportation.
The xenophobes hate immigration by definition. The fundamentalists are in the middle; they like immigrants who share their religious beliefs but in general they don't care much about the issue.
So what happens is that the capitalists use their media resources to get the xenophobes more and more upset. That ensures that Congress won't be able to pass any kind of amnesty program, and illegal immigrants will stay illegal and easily exploited.
They also make vague promises about sealing the border and doing mass deportations, but that's never going to happens. (Pretending to seal the border is a possibility, because they can increase profits by getting a bunch of government contracts to build a really expensive fence. Meanwhile, the immigrants will continue to come here legally on temporary visas and then overstay them.)
> Homes are for living in, so the ultimate value of a home is how much someone would pay for living in it.
The value (or market price) of an item is whatever someone else will pay for it. It might be related to the cost of renting that same home, but that certainly isn't the only factor.
You should never try to say that X is the 'proper' or 'correct' price for a good.
> Because it provides the lie that your salary will be multiplied: "earn $20K now, invest it in a home and in 5 years you'll have $100K!".
A rather jaded look. Ignore the 'invest in your home' nonsense and let's just talk about investment returns. Say my salary is 60k. After taxes, that gets me around 40k. I spend 35k to live in decadent luxury, leaving me 5k savings. 4% return, in 18 years that 5k will be 10k. Do you think I act like that applies to my current salary, and I work harder, knowing that I'm really getting 65k?
Pah, speculation only matters for rich people anyway. The average American isn't thinking about 4% returns because he doesn't have any savings at all. The average American is 117k in debt. Among those who _aren't_ in debt, they have fewer than 35k in savings, usually from some employer sponsored retirement plan. I don't have an exact figure, but I'd be willing to bet that more than 2/3's the of the population live pretty much paycheck to paycheck.
Speculation is all about rich people wanting to get richer. Some portion of that speculation is capital investment, which leads to real gdp growth and higher absolute tax revenues, which ends up getting to the M&S through vote-buying feel-good programs anyway.
Economies that discourage speculation discourage the rich people from improving the economy as a whole, so the social safety net becomes frayed and M&S get screwed.
If you want to get rid of the leeches feeding off the health of the strong, get rid of progressive taxation. Let people get out of the government exactly as they put into it.
@French Guy: Jobs are basically unlimited, because you can always create your own job, or move to a location where there are jobs (I believe there are good opportunities in Asia at the moment). Unfortunately, due to the fact that people are stuck with underwater mortgages, the latter is not possible, which is one of the things hampering the economy, and many people are afraid of doing the first (I would be as well).
A problem is that the people that lost their money/jobs in the crisis have now decided to pay off their loans/save money, and have therefore stopped spending, which is causing woes everywhere, because the people that have money are refusing to spend it instead, also citing the poor economy.
In order to have the economy as it is going again you'd need to either create inflation (which is very hard, given that interest rates are already near zero, and even if you print money, no one is spending it) or reduce interest rates below zero (not possible yet: money is still a physical substance that you can't take away. Once people have all their money in electronic bank accounts this becomes an option) or give massive debt relief to the people that would be spending money (probably will not be considered as people will think this rewards bad behavior).
Gevlon has a Marxist view that there will be a revolution/war that will resolve this issue, but it is more likely to become a lingering decades long slump.
Point out first that the social elasticity (isthis how you say it in english? something elastic, or "elongated"?) of hard-working socials tends to be very large, you should not be so confident on the "enlighting" that may come from the extrapush of long crisis.
Also, I want to ask you for something. As you did a wow newbie's guide from a goblin perspective, can you or do you want to do a similar guide but for living? Something like "Life for newbies", by Gevlon the Greedy Goblin.
Something pretty short just to cover the basics to not get screwed up by life, socials, leeches and your own selfhating for being better (or different) than others (this last part is half ironic half true) (i hate this brackets) (Hi World!)
@Gevlon: 'The bubble has NOT popped in the US yet.'
True, and at the same time, not true. The housing bubble most certainly popped, and the economy shit itself down to 10% unemployment quickly after. However, there was another bubble inside the first: the 'US state papers' you mentioned. the TARP (Troubled Asset Relief Program) was a $700 billion bailout in which the US government bought the poisoned CDSes from the banks at face value, rather than their actual value (which was fucking close to nothing). So now people are terrified of US government bonds, because they know those bonds are backed by useless assets. Foreign governments and private investors are quietly dumping dollars, because they see the government trending in the same direction that the housing-speculation-driven banks did.
So yeah, the bubble did pop. It's just about to pop again - the same goddamn bubble, only a different color, and for exactly the same reasons.
"Every collapse will make people less and less social."
I disagree.
Economic need tends to create social interdependence. Families share their resources. Neighbors help neighbors. Healthy (IMO) interdependence.
People don't turn on each other in tough times, they turn on authority figures.
Look at what's happening in the US today. People are voting chaotically to punish the government. They are angry at anything the governement does. They are venting at an administration that didn't even exist when the economic crisis occured.
Five years ago, before anybody heard of Credit Default Swaps, I talked to middle-income people who had quit their jobs or were working much less because they were making 6 months salary buying and selling homes. For about 20 hours of work.
That's what I consider anti-social behavior.
@ Duncan,
There was indeed a opportunity to get more profit. However the enjoyment it gave me that this guy PAYED me 30G, the 30G he begged me for in the first place was worth the extra profit I didn't get.
#Hunter Paniek
Tarren Mill EU.
@ Gevlon: "if the government is in the hand of the M&S, it's actually a good thing. It's always easier to hate the government (that observed to be strong) than a "poor unfortunate fellow man".
The "less power to the government" movements are getting stronger and stronger, just look at the incoming landslide republican victory in the US."
That's just 'the government of the time'. As soon as the Republicans get in, they will start catering to the whims of the majority (think of the anti-Muslim, anti-immigration sentiments in the early 2000s after the 9/11 attacks). The cycle simply repeats itself.
One thing that you may be wrong about is that you're assuming that people become more or less social as a community. In reality, attitudes are more likely to 'reset' with each new generation, meaning there's no long-term shift, only short-term shifts.
@Grim: Didn´t want to state out the jews in 3rd reich as beeing the M&S nor that the situation were similar in any way.
(I know the story of the jews since I´ve been six. It´s kind of strange to teach first grade kids about the holocaust, but well at last they do it now in 5th grade. I´ve also been to Ausschwitz and Bergen-Belsen twice, fist at school and second, to get my own impression. It´s still a very popular topic here in germany.)
I just wanted to say that the holocaust would be the only similar situation, when you try to extinguish a specific part of the population in an industrial scale (the act, not the background).
My opinion by this excaple is educate > eliminate.
"That's just 'the government of the time'. As soon as the Republicans get in, they will start catering to the whims of the majority (think of the anti-Muslim, anti-immigration sentiments in the early 2000s after the 9/11 attacks). The cycle simply repeats itself.
One thing that you may be wrong about is that you're assuming that people become more or less social as a community. In reality, attitudes are more likely to 'reset' with each new generation, meaning there's no long-term shift, only short-term shifts."
Exactly! The modern welfare checks and glamorous TV shows aren't all that different from cornbread rations and chariot races of the Roman Empire.
How many bubbles have popped between then and now? How many wars, revolutions, riots and cultural upheavals? And yet here we are, back where we were two thousand years ago.
Ideologies can be discredited, economic theories can be proven false, but basic human urges - those ape-subroutines that you revile so much - will always endure and reassert themselves.
Saying that speculators will destroy the M&S is like claiming that new level 85 abilities will cleanse the Icecrown of all cultists: it's ignoring the fact that they'll all respawn the moment you turn your back on them.
I agree 100% with this whole post. Because of the build-up leading to it, I thought I might be disappointed. But it is one of the best I can remember reading. Here in the U.S., who hates Obama the most? The M&S. They say he is communist, that welfare must end, and unions are evil. These are minimum-wage earners saying these things. As you know, we had elections here in the U.S. yesterday. I came to work where everybody but upper management makes between minimum wage and a median income. I wanted to talk about the elections and who we voted for. Guess how many co-workers I talked to who bothered to vote? ZERO. M&S blames each other and politicians who help M&S. Then they are too lazy to vote. I am not sure whether to laugh or to cry but Gevlon, I think you are right and it is better this way.
"Anonymous said..."By being a worker I get money and spend it to buy the work of other ones." Problem is, real life reflects WoW in the aspect that once you obtain a certain amount of wealth, you STOP spending it."
Businessman "A" is successfull and has great ammount of money. Likewise is true of businessman "B".
"A" keeps his money somewhere and does not spend it. It is stolen by some force and eventually spent and or he spends money to keep it safe.
"B" puts his money in a bank or investments. Bankers or investers earn profit from his contribution and spend money ( and "B" makes profit)
Money is spent.
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