"The verdict is positive"

[MSimon]

Simon,

Other than the fact that temperamentally you are somewhat to the right of Atilla the Hun and I probably would prosper and approve of a Brave New World - type controlled society we do not disagree so much.

But the real issue with rules is one of Control Engineering: is the system more or less stable? Or rather, are the inevitable instabilities amplified (large crashes) or damped (small crashes). And which rules you have make a differnce to this.

Best wishes, Tom

Tom,

A stable control system depends on quality feedback and amplification factors (this is a simplification to get the major point) that will prevent oscillations.

But what do we know about the oil market: because of the gain inherent in being able to use oil as a transportation fuel we have high amplification factors. And we have poor feedback - the number of explorations and their odds of finding oil (a noisy statistical process which adds shocks to the systems) are all unknown sometimes even after the fact.

So how about the run up from $10 to $150 oil. Well oil has always been cyclic due to lags etc. But this time the oil cos. were not going to fall for the same old tricks. When oil got to $40 a bbl and then $50 a bbl. they were not going to rush out and start looking for new sources - oh no. They were going to hold off until it got to $70 or $80 where profits could be assured. So that was when the rush for explorations started.

When oil got to $100 - well explorations really got going but economies started getting strangled. So all of a sudden oil hits $150 - economies are going south and a lot of new oil is on the market or coming soon.

Now what do you call a system with large gains and large lags?

An OSCILLATOR.

Oil has been working this way for as long as we have known it. No one yet knows what the rules should be to damp it out. At least no rules all players will accept.

Actually I'm rather a lefty myself - I think governments should stay out of people's lives. Economic and personal. The original enlightenment position.

What I thing has outlived its usefulness is Westphalian rules. Letting governments oppress their own citizens excessively (your definition of excessive may vary) is no longer viable in a high speed world.

So I am rather a neocon. A currently unpopular position. No matter. It will be vindicated with time. Because the alternative is to play out 1918 to 1939 again. And that is exactly what the current system (imperfect as it is) is designed to prevent. Damp out the oscillations before they become systemic catastrophic. Which is why Americans have bases all over the world. We are the only power every one trusts to keep the peace. And pay no attention to what folks say. Look at how they act. Have the South Koreans asked the Americans to go home? We would you know. Just ask the Philippines.

We will not be leaving Iraq in 2012. No matter what you heard on the news.

[Skipjack]

Well you either have laws and regulations to protect peoples property and lives, or you dont.
If you dont have laws and regulations, you have anarchy. That is the right of the strongest. That means anyone could come and rape your wife and doughter, take everything you own and if you are lucky, he will leave you alive. That is, if he is stronger than you.
Now most of us eggheads here would not stand a chance against the average no brains but 250 pounds of muscle gorillas out there that would love to do such things to us and our families. That is why there are laws and an executive to protect us.
Now there are always people that will be "stronger" than you in one way or the other. It does not matter whether this is muscles, intelligence, lucky birth (rich and powerful family), ruthlessness, the power of a big company, or the better weapons. All these things can give someone an advantage over you. Many of these will be ruthless or at least selfjustifying morons. Should the weaker people be left as pray to these? Without laws and regulations they would, we all would have long been pray to someone. No matter how smart, strong, well armed and physically excellent you think you are, there is always someone who will have an advantage over you. Do you want to be at the mercy of someone like this? Would you want your family to be? Because in a purely anarchic system you would be.

[MSimon]

Well you either have laws and regulations to protect peoples property and lives, or you dont.
If you dont have laws and regulations, you have anarchy. That is the right of the strongest. That means anyone could come and rape your wife and doughter, take everything you own and if you are lucky, he will leave you alive. That is, if he is stronger than you.
Now most of us eggheads here would not stand a chance against the average no brains but 250 pounds of muscle gorillas out there that would love to do such things to us and our families. That is why there are laws and an executive to protect us.
Now there are always people that will be "stronger" than you in one way or the other. It does not matter whether this is muscles, intelligence, lucky birth (rich and powerful family), ruthlessness, the power of a big company, or the better weapons. All these things can give someone an advantage over you. Many of these will be ruthless or at least selfjustifying morons. Should the weaker people be left as pray to these? Without laws and regulations they would, we all would have long been pray to someone. No matter how smart, strong, well armed and physically excellent you think you are, there is always someone who will have an advantage over you. Do you want to be at the mercy of someone like this? Would you want your family to be? Because in a purely anarchic system you would be.

You are confusing me with the anarchists. Limited government is not no government. It is merely a set of rules which tell the government where it can "help" and where its intrusion is unwarranted.

I would limit government to malum per se crimes and fraud. And even with fraud there are limits to what you can do without excessively strangling new ventures. Risk has to be allowed. Even stupid risk. Caveat emptor.

There is no rule that can prevent people from taking on more risk than they should. And many of the things done to reduce risk also make people less risk averse. Thus increasing risk. If you know how to fix that one I'd be interested in knowing the method.

[Skipjack]

Yes, but the government also has to provide means for those to seek justice that feel betrayed. When people fall for a Fraud, it is not always a matter of risk misscalculation, but sometimes also of simple lack of knowlege or understanding. A lot of people that are in danger of loosing their money when banks crash (even those that have it on very conservative and "secure" saving accounts) are IMHO the victims of fraud by the banks (that told them their money would be save with them). People will seek justice. If they dont get it, they might take matters into their own hands. All you need is enough people that are unhappy with a situation and that feel betrayed, or (especially) feel like they are victims of an injustice and you will get a revolution. This does not require a majority, but "only" about 20% of the population. Revolutions rarely go without bloodshed and high losses of property. I dont think that it is wise of any government to risk that.
So say you have 20% of the population that feel that they, or their family have been betrayed over their life savings by "the banks". The next day you have banks stormed, bankers shot on open streets and if you dont bring the military in, you have anarchy (again).
A good government will try to protect its people against fraud (which is a criminal activity just like theft, or robbery, IMHO) to make sure that not to many people feel let down by the law.
How little it takes to bring a government to its knees can be seen by what is happening in Greece right now (and no, I am absolutely not sympathising with these left winged anarchos in Greece. The police there did right when they shot that gangster, 15 or not).

[MSimon]

Yes, but the government also has to provide means for those to seek justice that feel betrayed.

Yeah. All well and good. Now how do you fix it for people who are betrayed by their own stupidity and want to blame it on others? Say I put the big bucks in a ZPE venture and it goes bust. Was my lack of due diligence at fault? Or should we tar and feather the ZPE promoter?

There has to be a fair amount of "suck up your losses and move on" to make civilization work.

[MSimon]

Yes, but the government also has to provide means for those to seek justice that feel betrayed. When people fall for a Fraud, it is not always a matter of risk misscalculation, but sometimes also of simple lack of knowlege or understanding. A lot of people that are in danger of loosing their money when banks crash (even those that have it on very conservative and "secure" saving accounts) are IMHO the victims of fraud by the banks (that told them their money would be save with them). People will seek justice. If they dont get it, they might take matters into their own hands. All you need is enough people that are unhappy with a situation and that feel betrayed, or (especially) feel like they are victims of an injustice and you will get a revolution. This does not require a majority, but "only" about 20% of the population. Revolutions rarely go without bloodshed and high losses of property. I dont think that it is wise of any government to risk that.

So say you have 20% of the population that feel that they, or their family have been betrayed over their life savings by "the banks". The next day you have banks stormed, bankers shot on open streets and if you dont bring the military in, you have anarchy (again).

A good government will try to protect its people against fraud (which is a criminal activity just like theft, or robbery, IMHO) to make sure that not to many people feel let down by the law.

How little it takes to bring a government to its knees can be seen by what is happening in Greece right now (and no, I am absolutely not sympathising with these left winged anarchos in Greece. The police there did right when they shot that gangster, 15 or not).

You want your money to be safe? I know of no way in this life. Gold bullion is the closest. And that is subject to theft of one sort or another.

The problem in Greece is they did not shoot enough kids on enough days to make the risk of riots unwarranted. The proverbial wiff of grape.

How it oughta be is very nice. I prefer to live in what is.

Although I dearly love the material world (so much fun to play with) I prefer the peace of being at home in my skin. Identifying and considering just add obstacles to your path.

Let me add that the troubles in Greece are due in the main to bad religion - government can shield you from the ups and downs of the world. We don't get those so much in America because at least 1/2 the population knows that nothing can be guaranteed. Shite happens.

[Skipjack]

Well, I know that, but many people dont...
These are the ones that are in danger of loosing a lot of money right now. Thats also why many governments have to pump billions into banks to keep them from crashing right now.
No riots in the US? What about the riots in LA, when was that? 1992? Rodney King, yes that was the guy that was what it was all about. One grown up man (not a boy) and he was not even killed, "just" beaten up really badly!
So no, you guys do have the very same issues, sorry to disappoint you...

[MSimon]

Well, I know that, but many people dont...
These are the ones that are in danger of loosing a lot of money right now. Thats also why many governments have to pump billions into banks to keep them from crashing right now.
No riots in the US? What about the riots in LA, when was that? 1992? Rodney King, yes that was the guy that was what it was all about. One grown up man (not a boy) and he was not even killed, "just" beaten up really badly!
So no, you guys do have the very same issues, sorry to disappoint you...

What calmed the LA situation was a bunch of Korean grocers with shotguns. If more shop owners had been willing to protect their property the disturbances would have been shorter.

BTW I think LA riots lasted 3 days. Last I checked they are still going on in Greece after 10 days. Have they extended beyond 10 days? I haven't checked for a couple of days.

[scareduck]

The problem in Greece is they did not shoot enough kids on enough days to make the risk of riots unwarranted. The proverbial wiff of grape.

and

I think governments should stay out of people's lives.

One of these things is not true.

That said, I would still like to see my questions from a couple pages back answered. Recognizing that the only person here who could answer them is Dr. Nebel, in the interests of coherence I recommend the political discussion be moved elsewhere.

[Skipjack]

The riots lasted 6 days officially (curview by the army was lifted on the sixt day).
The riots were still pretty tough though:
"Fifty-three lives were lost, many of them murdered[citation needed], with as many as 2,000 people injured. Estimates of the material damage done vary between about $800 million and $1 billion. Approximately 3,600 fires were set, destroying 1,100 buildings, with fire calls coming once every minute at some points. Over 10,000 people were arrested."

The riots in Greece while they have been going on for longer have not been this insane yet.
Edit: The riots in Athens have been going on since December 6th, but on and off...
I dont think there have been any casualties, but quite some property damage.

[MSimon]

The problem in Greece is they did not shoot enough kids on enough days to make the risk of riots unwarranted. The proverbial wiff of grape.

and

I think governments should stay out of people's lives.

One of these things is not true.

That said, I would still like to see my questions from a couple pages back answered. Recognizing that the only person here who could answer them is Dr. Nebel, in the interests of coherence I recommend the political discussion be moved elsewhere.

Actually if the function of government is to keep order on the streets and otherwise let you go about your business both can be true.

[djolds1]

People will seek justice. If they dont get it, they might take matters into their own hands. All you need is enough people that are unhappy with a situation and that feel betrayed, or (especially) feel like they are victims of an injustice and you will get a revolution. This does not require a majority, but "only" about 20% of the population. Revolutions rarely go without bloodshed and high losses of property. I dont think that it is wise of any government to risk that.
So say you have 20% of the population that feel that they, or their family have been betrayed over their life savings by "the banks". The next day you have banks stormed, bankers shot on open streets and if you dont bring the military in, you have anarchy (again).

Overstates the case, at least in the West. We'd need to see a complete collapse of government legitimacy before the financial implosion, as in Weimar Germany. More likely in the West would be a radical but peaceful change in government. Fascism at one extreme, FDR's 60 year Democratic dominance at the other.

How little it takes to bring a government to its knees can be seen by what is happening in Greece right now (and no, I am absolutely not sympathising with these left winged anarchos in Greece. The police there did right when they shot that gangster, 15 or not).

The situation in Greece, as in France in 2005, is an absolute failure of will. The Greeks and French before them flatter themselves so civilized that necessary extreme measures may not even be considered to maintain social order. What Greece needs is a whiff of grapeshot. Until they and the rest of Western Europe bother to recover their gonads, that will not happen. In the interim, much of the EU is dramatically vulnerable to civil unrest from any quarter that wishes to create it.

Duane

[djolds1]

There has to be a fair amount of "suck up your losses and move on" to make civilization work.

There also needs to be a fair degree of "we will preserve our own." Half the population is on the down side of the standard curve by definition. Economic efficiency is not the only consideration in maintaining a society, nor is it even the primary one.

You want your money to be safe? I know of no way in this life. Gold bullion is the closest. And that is subject to theft of one sort or another.

How it oughta be is very nice. I prefer to live in what is.

1) people will trade security for prosperity. It is a balance that is weighted to security seeking. Maintaining balance or weighting to prosperity requires sacrifices and costs that orthodox economic theory refuses to admit. Operate under the theoretical economic optimum and the human reaction will overturn the theorotopia.

Breaking political economy into political science and economics was a profound error.

2) Europe was given a 45 year holiday from history, thanks to US strategic protection, to develop its transnational experiment in. Since it has semi-worked for three generations now, they think it can be be applied to the entire world. Like other triumphalist fools they think they have found the escape from history, refusing to examine the actual roots of their "success."

Actually if the function of government is to keep order on the streets and otherwise let you go about your business both can be true.

Power expands. Any idealistic minarchist government will in time expand to one of wide authority under an oligarchic arrangement of some sort. Its an inevitable dynamic of any organization. See Michels' Iron Law of Oligarchy.

Duane

[MSimon]

Duane,

As Franklin so perceptively put it: "A Republic, if you can keep it."

[Art Carlson]

If anybody actually has or wants to talk about *news*, be sure to start a new thread. I won't be reading this one any more.