[Mustang19]

Kinda ironic that as far as economics goes, the American business environment punishes anyone who doesn t take the short-term / quartly earnings view and business schools specifically utterly fail to provide any kind of long-term business politics or planning competency with their case study based farce of a curriculum.

Now that's what they'll be hired to do once they lead up a publicly traded company. You can run the company into the ground on paper profits, winning the next shareholder election is all that matters.

I'm not an economist but my unexpert opinion is that public ownership of corporations should be restricted if allowed at all. Dividends are enough, you don't need people who might only own the stock for a year or two voting on how to run the company.

[Grizzly]

"Researchers" is too broad, but the other fields? Yes, they don't, at least in proportion to the number of graduates in these fields. If they were able to produce something of economic value- a product, an idea, expertise, a patent- they're entirely free to market it. Well, let's just say that the number of applicants exceed job openings and self-employment opportunities are minimal in these fields.

edit: Opportunity costs, more economically productive things to do with your time, etc. is what I'm saying.

But the point is not that it may or may not be usefull to society (if we let people dictate what they should learn, we wouldn't be a democracy), the point is that everyone who is mentally capable of doeing something should be allowed to do it. If someone is not capapable of doeing something, like becoming a geologist, just because of financial reasons, that is wasted potential and a dream shattered.

Now, I have yo uheard saying what's bad about the system applied in most european countries, but I did not hear you saying what you think is better. So. What do you think is better?

[Mikes]

Now that's what they'll be hired to do once they lead up a publicly traded company. You can run the company into the ground on paper profits, winning the next shareholder election is all that matters.

I'm not an economist but my unexpert opinion is that public ownership of corporations should be restricted if allowed at all. Dividends are enough, you don't need people who might only own the stock for a year or two voting on how to run the company.

The extreme short-term view is  something specific to the US... lots of companies in other countries (Germany, Japan, etc.) also use shares for funding, yet take a much more longterm view. (Comparative Management and Organisation research is very conclusive regarding that fact.)

There are a couple more factors involved... but if I had to decide on one single specific factor that had the most influence on putting us exactly where we are.... it would be US fiscal policy.
If you (i.e. the federal reserve) slash interest rates every single time you run into a problem...  for decades...  every 1st semester textbook can tell you you are running into a long-term brickwall.

Along these lines it must also be questioned whether the bail-outs during the financial crisis did any good at all. De Facto we bought ourselves a couple of years before the same problem will come back to bite us in the butt...  only that the bubble that is gonna burst is gonna be even bigger then and the government will be weaker and less able to respond to the acute humanitarian crisis following the financial breakdown. I.e. the longer this farce is kept up, the harder the fall is gonna be...    that's the longterm view that everyone is too scared to acknowledge.

And don't take me wrong... I don't want the US economy to fail either. The whole world would find itself in a crisis of never seen proportions. Deep down I'm glad the bail-outs worked in the short-term (on a purely emotional level).
I even perfectly understand anyone who wants to do everything in their power to prevent a collapse in the short-term. - It's just that Reality doesn't care what either of us wants and the longterm Reality is that the economy is going down. The question that remains is if the government is going down with it.

[Grizzly]

But my cynical side says that if the US economy collapses completely without recovering, we will probably never run into economic crisises again.

[Mustang19]

But the point is not that it may or may not be usefull to society (if we let people dictate what they should learn, we wouldn't be a democracy), the point is that everyone who is mentally capable of doeing something should be allowed to do it. If someone is not capapable of doeing something, like becoming a geologist, just because of financial reasons, that is wasted potential and a dream shattered.

Now, I have yo uheard saying what's bad about the system applied in most european countries, but I did not hear you saying what you think is better. So. What do you think is better?

Well it's better that every bum gets admitted than a large portion of potential engineers and scientists never get an education. But government regulation of universities is part of the reason why there are so few European schools in the world top 100, so I'd pick the US model if it means better quality universities.

Along these lines it must also be questioned whether the bail-outs during the financial crisis did any good at all. De Facto we bought ourselves a couple of years before the same problem will come back to bite us in the butt...  only that the bubble that is gonna burst is gonna be even bigger then and the government will be weaker and less able to respond to the acute humanitarian crisis following the financial breakdown. I.e. the longer this farce is kept up, the harder the fall is gonna be...    that's the longterm view that everyone is too scared to acknowledge.

The bailout had to be done to prevent the biggest collapse since the great depression, and it didn't fundamentally change incentives either. Sure, some institutions got bailed out, but there were even more (Lehman, New Financial, American Home/Freedom Mortage, Madoff, Charter, Mervyns, Netbank, Terra, Sentinel, Washington Mutual...) that were allowed to fail. TARPs did cover some people's asses, but most people who invested in real estate before the crisis probably lost money overall. It's not so much that everyone's going to take insane risks all the sudden because they have a small chance of making a profit after paying off the next TARP, but that the business cycle is a fundamental problem of every industrialized market economy, ever. Financial crises aren't unique to the US and their are many factors that cause them that are far more significant than whether or not people expect a bailout.

The extreme short-term view is  something specific to the US... lots of companies in other countries (Germany, Japan, etc.) also use shares for funding, yet take a much more longterm view. (Comparative Management and Organisation research is very conclusive regarding that fact.)

True, but cross-holding is more common in those countries (especially Germany; Japan of course has the keiretsu) between banks and the business they support, often resulting in management voting for itself every year. This is fine as long as shareholders hold stock in the long term and can take that perspective.

[Grizzly]

But the point is not that it may or may not be usefull to society (if we let people dictate what they should learn, we wouldn't be a democracy), the point is that everyone who is mentally capable of doeing something should be allowed to do it. If someone is not capapable of doeing something, like becoming a geologist, just because of financial reasons, that is wasted potential and a dream shattered.

Now, I have yo uheard saying what's bad about the system applied in most european countries, but I did not hear you saying what you think is better. So. What do you think is better?

Well it's better that every bum gets admitted than a large portion of potential engineers and scientists never get an education. But government regulation of universities is part of the reason why there are so few European schools in the world top 100, so I'd pick the US model if it means better quality universities.

Thanks for admitting that you don't know **** about admittance, or any goverment regulation. The goverment does not regulate universities (or atleast, not in the Netherlands), it just ensures that the students have enough finances to be able to work there. The university still decides on who gets admitted.
ANd yes, if you put up another research into university quality, you end up with an different graph. Note that this one is based on an entirely different criteria. You can't simply say based on some score that a university is good, the same way that you can't give a student a score.

[Mikes]

The bailout had to be done to prevent the biggest collapse since the great depression, and it didn't fundamentally change incentives either. Sure, some institutions got bailed out, but there were even more (Lehman, New Financial, American Home/Freedom Mortage, Madoff, Charter, Mervyns, Netbank, Terra, Sentinel, Washington Mutual...) that were allowed to fail. TARPs did cover some people's asses, but most people who invested in real estate before the crisis probably lost money overall. It's not so much that everyone's going to take insane risks all the sudden because they have a small chance of making a profit after paying off the next TARP, but that the business cycle is a fundamental problem of every industrialized market economy, ever. Financial crises aren't unique to the US and their are many factors that cause them that are far more significant than whether or not people expect a bailout.

Frankly... you do not even remotely understand the enormity of what we're in and of what is coming. I envy you.

Talking about business cycles is all nice and dandy - like talking about storms and tornados that are a fact of life, if i may use that analogy,... but this perfect Storm heading our way? Nope...  we didn't have something like this. The Great depression is gonna look like childs play when this monstrous bubble that makes up the current financial sector bursts. Which is the whole point... the buildup has been longer than ever before in history.

The financial sector and the real/industry sector are just so completely out of whack. I'd say if we get away with wiped out savings and a new currency followed by a decade of depression and misery we'll be lucky.

[Mustang19]

Maybe not in the Netherlands but as mentioned before in the Sorbonne example education reform is a big deal in France apparently.

Despite such mock doubts about the Minister's sanity, the National Assembly last week approved his plan, although only after a highly emotional debate. The program adds up to the most sweeping revision of higher education in France since Napoleon established the imperial university system in 1808. Aimed at preventing a renewal of the kind of riots that shut down the universities last spring, Faure's program also attacks the bureaucratic rigidity of the highly centralized system. His reform bill, which will not take full effect for at least a year, specifically indicts the "inhuman dimensions," "immobility," "isolation," and "superficial and arbitrary examinations" of the present system.

Stripping the Ministry. Faure's reform seeks to remedy those ills by stripping the central education ministry of its powers to select the presidents of each of France's present 23 universities, appoint their professors, determine their curriculums, draw up and grade exams, dictate teaching methods. Most of those powers will shift to regional and local university councils, which will include teachers, students, and even outside educational experts and political leaders.

Talking about business cycles is all and well like talking about storms and tornados that are a fact of life, if i may use that analogy,... but this perfect Storm heading our way? Nope...  we didn't have something like this. The Great depression is gonna look like childs play when this monstrous bubble that makes up the current financial sector bursts. Which is the whole point... the buildup has been longer than ever before in history.

Got a source on that, other than Glenn Beck?

[Grizzly]

So what IS the US model exactly? I have heard quite a lot of bad things about the US eduation system, not in the universities, but in the high schools and such.

[Mustang19]

In terms of education, nothing special. Probably the main difference between the US and say France is that America has some very good private schools with large endowments and a decentralized tertiary education system. It also probably has something to do with the fact that the Ivy League "got there first" and has so much money and prestige already that they prevent anyone else from getting good faculty.

I'm not into the whole "US versus Europe" thing, though, since that discussion is all about overgeneralizations. Now if you want to compare two specific countries, that's fine.

[Grizzly]

I'm not into the whole "US versus Europe" thing, though, since that discussion is all about overgeneralizations. Now if you want to compare two specific countries, that's fine.

You just got us in there 0_o.

[Mustang19]

My bad.

[Mikes]

Got a source on that, other than Glenn Beck?

I'll help you with your ignorance in 3 easy steps:

1st: Don't use Glenn Beck in a discussion. (That was a period, with emphasis) - and especially not to gloss over your own ignorance with some kind of silly insult.
2nd: Open a textbook on national economics and read up on the goals and function of a central bank.
3rd: Look at what the Fed is doing. Check the current interest rates. If necessary: Read up in your textbook what the inevitable dangers of such behavior are.

Once you got the basics and are willing to leave the insults out, we can gladly continue to discuss on a more in depth basis.

Frankly... I'm at a loss of words that people still don't get it. I mean the financial crisis by itself hardly came as a surprise if you've been following the scientific discourse of the last decade.
And Kontratieff will hardly save us from our own long lasting irresponsible behavior - if that was your hope.

[Mustang19]

It's still an exaggeration to say that the Fed is running the country into the ground. The worst case scenario I see is us turning into Japan. I mean rising private debt levels are something to be concerned about and stagnation is likely, but that's probably about as exciting as it's going to get.



Now looking at historical trends it does concern me what's going to happen a few decades from now if no lessons are learned about banking deregulation and allowing people to take on more credit than they can afford. The booms and busts will just get bigger.

[Kosh]

It's still an exaggeration to say that the Fed is running the country into the ground. The worst case scenario I see is us turning into Japan. I mean rising private debt levels are something to be concerned about and stagnation is likely, but that's probably about as exciting as it's going to get.

Actually right now we're facing 70's style stagflation.

[Mustang19]

Even that wouldn't be accurate, because the economy grew 2.8% last quarter and inflation is merely 2.1%. Growth is a little slow, yeah, but it's picking up. And inflation is practically ideal, at least for now. What really sucks for people is the high and persistent unemployment. For once it's even harder to get a job than it is in "Europe" (oops again).

[Grizzly]

* -Joshua- seriously considers moving to Tenesse.

Even that wouldn't be accurate, because the economy grew 2.8% last quarter and inflation is merely 2.1%. Growth is a little slow, yeah, but it's picking up. And inflation is practically ideal, at least for now. What really sucks for people is the high and persistent unemployment. For once it's even harder to get a job than it is in "Europe" (oops again).

Could you back up that statement? How hard is it to get a job in 'Europe' (Take a country from western europe as an example, I do know such a problem does exist in the Netherlands), and how does this compare to the US?

[Mustang19]

GDP growth

Inflation

Plus a million other places you can find this information on the internet. I pulled it out of the Economist.

Although social democracies tend to have good job security it's hard for young people to get an entry level job in the first place. This might be why unemployment tends to be higher. Picking on France again, you can see the US had slightly lower unemployment in the years before the crisis.





edit: inb4 overgeneralizations. Only some countries in Europe have high unemployment.

[Grizzly]

Although social democracies tend to have good job security it's hard for young people to get an entry level job in the first place.

Your information is quite accurate. It happens in The Netherlands too, with the current laws prefering older people getting a new job and/or keeping their current one, which makes it rather difficult for young people to get jobs. In fact, it makes them dependent on some social security policies, security policies which older people who do not want the politicians to change those aforementoined current laws want removed so there's enough money for the social security when they turn 65...

Along with the problem that there is probalby not going to be enough money when the babyboomers turn 65, this is one of the most... avoided... problems in Dutch politics (Used to be along with immigrants not integrating society until Pim Fortuyn decided to point it out with a lot of fanfare). Some parties try to do something about it, but apperently, its not a popular issue.

Luckily, not being employed in Europe is not as big a problem as not being employed in the States, thanks to the social security. But not being employed still sucks, and you have a lot of politicians breathing down your neck all the time.

[Mustang19]

I live in the US and I've had two jobs before. It's pretty easy to get hired in normal times and there's minimal government paperwork other than the stupid I-9s (citizenship/visa verification). Overall though if I was the average working class person I'd prefer to get one job and not worry about loosing it all my life even if it makes it a little harder to get employed. Isn't the Netherlands doing some kind of economic liberalization like a lot of other EU countries, rolling back the welfare state and so forth? What do people over there think?