• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Reverand Paul gives a sermon on the Book of Fiscal Conservatism

You think Bush created the housing bubble? Hmm...I thought it was the Democrats that pushed the banking industry to give home loans to more and more people.

Well, like I said, I knew you'd be blaming a Democrat, because....duh!, but wasn't sure which one - guess it's the fault of generic "Democrats." After all, what power does the POTUS and the GOP House and Senate have to do anything about regulating the housing and lending markets? I'm pretty sure Barney Frank controlled the housing market from his minority position in the House from 95-07, so he's a big one to blame I think.

And, sure, it's terrible what the Democrats made the bankers to do.... make loans to the poors, including a bunch of blahs in the inner city, and make record profits and bonuses and stock prices. DAMN DEMOCRATS!!! Forcing bankers to make more money then ever before!!
 
Sorry Beau, “as bad as the dems” is just a narrative you use to ignore reality. As Chomsky points out republicans are worse. They not only cause higher deficits but they do it as they rail against deficits.....

I agree, but I don't think the timing is correct. With both Bush Sr. and GW Bush, they built the deficits, but they weren't discussed very much while they were in office. As soon as Clinton, and later Obama, got into office, that's about all we heard about in the news. The entire Tea Party, created and coordinated by FOX News, was founded to counter everything Obama did. I imagine we won't hear much about it, even if it continues to escalate, now that a Republican is back in office.
 
You think Bush created the housing bubble? Hmm...I thought it was the Democrats that pushed the banking industry to give home loans to more and more people.

Kind of hard to blame the Dems on this one. Bush was in office for 8 years, and for some of those, he had a majority in the House and the Senate. Deflection argument.
 
Well, like I said, I knew you'd be blaming a Democrat, because....duh!, but wasn't sure which one - guess it's the fault of generic "Democrats." After all, what power does the POTUS and the GOP House and Senate have to do anything about regulating the housing and lending markets? I'm pretty sure Barney Frank controlled the housing market from his minority position in the House from 95-07, so he's a big one to blame I think.

Well, yeah...it was them who pushed these things via the Community Reinvestment Act.

Here's How The Community Reinvestment Act Led To The Housing Bubble's Lax Lending - Business Insider

And, sure, it's terrible what the Democrats made the bankers to do.... make loans to the poors, including a bunch of blahs in the inner city, and make record profits and bonuses and stock prices. DAMN DEMOCRATS!!! Forcing bankers to make more money then ever before!!

I don't care who gets the loan, so long as it's a loan that is solid and based on economic realities. Yeah...they made some good profits, by either derivatives based on toxic housing loans or sell them to GSAs like Freddie and Fannie.
 
Well, yeah...it was them who pushed these things via the Community Reinvestment Act.

Here's How The Community Reinvestment Act Led To The Housing Bubble's Lax Lending - Business Insider

I'm not going to get into another debate about the housing market. Let's just say the CRA is most defintely NOT a prime contributor, which we know for all kinds of reasons, mainly that the hardest hit lenders weren't covered by CRA, and the hardest hit housing areas were not CRA regions - suburbs, condos in Florida, etc. were where the real problems arose - and CRA loans performed better than non-CRA loans. Plus, it was a worldside housing and debt bubble, and last I looked CRA didn't apply in, say, the UK or France, which had bigger bubbles than we did. Etc.....

And of course, the GOP controlled the House and Senate from 1995-2007, of course the WH and therefore all the banking and housing regulators from 2001-2009. So it's kind of incredible that you guys reflexively blame Democrats.

I don't care who gets the loan, so long as it's a loan that is solid and based on economic realities. Yeah...they made some good profits, by either derivatives based on toxic housing loans or sell them to GSAs like Freddie and Fannie.

The point is the bankers didn't need anyone to force them to make profits hand over fist. They got the regulatory environment they bought and paid for over the years, with their servants in both parties doing their bidding. The idea that Wall Street was 'forced' to do anything in that era is just total nonsense. CRA is a pretty good example - you can't find a banker anywhere blaming CRA for their problems. You can't find a banker pre-crash really even complaining about CRA. What they said under oath is it was at worst a nuisance. The big changes under Clinton came after a repeal of interstate banking prohibitions, and were at least written in part by Robert f'ing Rubin, former Goldman Sachs co-chair, who post Clinton went on to make $100 million or so with Citibank.
 
You think Bush created the housing bubble? Hmm...I thought it was the Democrats that pushed the banking industry to give home loans to more and more people.

oh FK, I understand why you want to deflect from the thread topic, I posted things that were "factually true" that shredded what you wanted to believe. And I used your links. So of course you want to discuss anything but that. Here's where you learned Bush's last FY was 2009 and his budget deficit was 1.4 trillion
first FK, thank you for pointing out that I used "deficit" incorrectly. Yes, I meant "debt". Now you say its "not factually true". Seems like a rather wordy alternative to "false" and "not true". So I'm a little curious if you have some "secret meaning" in there. Anyhoo, let me show you why what I've posted is "factually true". Lets look at the links you posted.


Open the second link and scroll down to “recent federal deficits FY 2006 to FY 2016.” See that big scary jump in 2009. Quite a jump. You and yours were shown that quite regularly to prove “Obama bad” or “Obama spend too much”. Open the first link. That’s actually from the Treasury dept. To get that 1.4 trillion number you have to subtract the number on 9/30/2008 from the number on 9/30/2009. Yes, that 1.4 trillion dollar deficit started 10/1/2008. That’s why you are always shown the bar chart. It glosses over the fact that FY 2009 was Bush's last budget.

Bush’s first budget started 10/1/2001 and his last ended one ended 9/30/2009 (that's where the 6 trillion added to the debt comes from). If you look at the CBO Budget Outlook from Jan 7 2009, you’ll see Bush’s last budget deficit was revised up to 1.2 trillion. Yes that’s before President Obama took over. Here’s a handy chart of Bush’s last fiscal year starting with his budget request and estimated revenues.
FY 2009_______________
Date of estimate___2/1/08___1/7/09___actuals
Total Revenues___2,817___2,357__ 2,105
Total Outlays____3,100___3,543___ 3,518

You hold Bush blameless for a recession that started 7 years into his presidency but hold President Obama accountable for the trillion dollar deficits he inherited. How does that make sense to you?

And fyi, you know Bush is responsible for the Bush Mortgage Bubble so its actually a dishonest deflection.
 
I agree, but I don't think the timing is correct. With both Bush Sr. and GW Bush, they built the deficits, but they weren't discussed very much while they were in office. As soon as Clinton, and later Obama, got into office, that's about all we heard about in the news. The entire Tea Party, created and coordinated by FOX News, was founded to counter everything Obama did. I imagine we won't hear much about it, even if it continues to escalate, now that a Republican is back in office.

I agree. The "railing" was after 1/20/09. While their base was foaming at the mouth, republicans attacked anything that would help the economy. They even attacked things that would have lowered the deficit faster. And their base cheered them on because the president was born in kenya and wanted to kill old people. That's why Ryan's statement proves beyond all doubt that they were lying about debt and deficits the last 8 years.
 
oh FK, I understand why you want to deflect from the thread topic, I posted things that were "factually true" that shredded what you wanted to believe. And I used your links. So of course you want to discuss anything but that. Here's where you learned Bush's last FY was 2009 and his budget deficit was 1.4 trillion

And fyi, you know Bush is responsible for the Bush Mortgage Bubble so its actually a dishonest deflection.

No...I just pointed out a lie. His deficits were pretty low up until the recession and no one was going to change that. I know you want to say it's a deflection, but it's not. I simply put the deficit into the context of the recession. A recession which was due to a housing bubble created by Democrats, which was predicted by Ron Paul years earlier but he's just an old crazy nutter. While Democrats spent all their time saying it wasn't true. Sorry, but I'll give more credence to the person that called it years before it happened over some apologists that played politics after it happened.



Then you have video of, you know, your own people saying exactly what I've said. So great we have video these days so lies can be called out. Here we have your boys straight out saying they pushed banks to give loans they wouldn't have.



 
In other words, Democrats don't get to create a mess and then blame it on someone else.
 
In other words, Democrats don't get to create a mess and then blame it on someone else.

FK, you can flail forever about Bush being responsible for the Bush Mortgage Bubble but we were discussing debt and deficits. And of all the things to cowardly deflect to I have to chuckle that you chose the Bush Mortgage Bubble. Anyhoo, you said I posted something "factually not true". I proved it was "factually true" using your own links. Stop cowardly deflecting and address my post. If your obedient narratives always require you to cowardly cut and run, maybe you obediently believe the wrong narratives.
 
In other words, Democrats don't get to create a mess and then blame it on someone else.

Right, it's always the Democrats' fault. For partisan ideologues, that's a given, definitional, and the only task is to figure out a way to assign the correct blame on Democrats, of course.

But here's the problem. The GOP controlled the Senate and House from 1995-2007. Bush was in the WH from 2001-2009. So by this "logic" Clinton was all powerful when it came to the housing and credit markets, but Bush, with the identical authority as Clinton, was powerless. Even though Bush presided over the bubble forming AND collapsing - he could do nothing, although Bush appointed all the agency heads, who regulated the various entities. Clearly the bubble and burst cannot be blamed on Bush or the GOP, because Clinton, who left in January 2001, and Democrats, who last held a majority in either chamber in 1994. The Democratic House and Senate imposed their will, apparently, on the GOP prior to 1995. But after the GOP gained power, the GOP became absolutely powerless.

I'm dying to hear how you can explain this.
 
Right, it's always the Democrats' fault. For partisan ideologues, that's a given, definitional, and the only task is to figure out a way to assign the correct blame on Democrats, of course.

But here's the problem. The GOP controlled the Senate and House from 1995-2007. Bush was in the WH from 2001-2009. So by this "logic" Clinton was all powerful when it came to the housing and credit markets, but Bush, with the identical authority as Clinton, was powerless. Even though Bush presided over the bubble forming AND collapsing - he could do nothing, although Bush appointed all the agency heads, who regulated the various entities. Clearly the bubble and burst cannot be blamed on Bush or the GOP, because Clinton, who left in January 2001, and Democrats, who last held a majority in either chamber in 1994. The Democratic House and Senate imposed their will, apparently, on the GOP prior to 1995. But after the GOP gained power, the GOP became absolutely powerless.

I'm dying to hear how you can explain this.

I'm going to stick with the person that predicted it, and also those people who admitted to pushing policies that I stated. Sorry that you missed that part.
 
I'm going to stick with the person that predicted it, and also those people who admitted to pushing policies that I stated. Sorry that you missed that part.

Of course. You can't explain how Clinton is all powerful, but Bush powerless. The Democratic Congress all powerful, but the GOP Congress powerless. Or why those in charge of the levers of power during the bubble's formation and collapse are blameless in the crisis.

So you're going to blame it on Democrats because they're to blame, by definition, always.
 
Of course. You can't explain how Clinton is all powerful, but Bush powerless. The Democratic Congress all powerful, but the GOP Congress powerless. Or why those in charge of the levers of power during the bubble's formation and collapse are blameless in the crisis.

So you're going to blame it on Democrats because they're to blame, by definition, always.

I have their own words. What do you have? Nothing.
 
I have their own words. What do you have? Nothing.

What I have is your obvious inability to explain the powerlessness of Bush and the GOP to do anything about the coming bubble and collapse?

FWIW, of course Democrats are partly to blame. For example, Clinton, at the end of his second term, signed the repeal of Glass-Steagall and a measure that essentially prohibited regulating derivatives, which given the global nature of the debt and housing bubble, and the global rise of derivatives, along with global low interest rates, are FAR more likely causes of the bubbles, plural, than CRA and the U.S. GSEs who didn't have much to do with housing prices in Europe. But that legistlation was sponsored in part by republicans and broadly supported by republicans, obviously, who controlled the House and Senate at that time.

But what you can't so is rely on blind partisanship and absolve the GOP who really actually DID control the regulators while the bubble blew up, and the GOP who controlled the House and Senate from 1995-January 2007, that is until after the bubble had turned over and was on the way to a crash.
 
But what you're suggesting is basically that consumer confidence is unmoored from market fundamentals, and that's just not true. It really can't be true, unless people are irrational and remain irrational over long periods of time. Jobs are in fact plentiful but as a group the local population "feel" jobs are scarce?

Lets see... first we are getting away from the thrust of my premise which is that the why...can matter less than the what/how. That how people feel..affects their behavior in the economy. and that there is power.. sometimes more power in understanding the how they feel .. than the why.

But lets get to this "unmoored from market fundamentals"... the idea that we are "moored" implies that we are completely tied to the market. And the market is a solid, unwavering pier.

When that's not reality. The reality is that human behavior is really more like a ship that can go in any direction it likes.. but is influenced by the tides, the wind and the currents.. and the actions of other ships.. and other ships are influenced by your actions.

Jobs are in fact plentiful but as a group the local population "feel" jobs are scarce?

Well yes.. that can happen.

And there's a good reason for that - those feelings are in any kind of long term going to be very firmly grounded in market fundamentals.

but they aren't.

Especially when it concerns Johns premise.

According to John. Because the US currency is a fiat currency.. we can never default as a country. Because we can always " print" more money . According to John.. there is no consequence of printing more money unless we "run out of things to buy" with that money.

Now.. is it a market "fundamental".. that we are a fiat currency? Yes. Is it a market fundamental that we can create more money to pay our debts? Yes.

But we don't do that do we? And almost no economists recommends it. We have terrible fights in the government over debt and deficit. Polls show that at times people are more concerned about the debt and deficit than they are over things like unemployment.

Why is that? According to John.. and now according to you.. according to "market fundamentals"... we should have no concern over the debt and deficit.

The reality is that the debt and deficit are a concern.. because we FEEL its a concern. It has power.. regardless of whether that feeling is based on "reality"... that feeling IS reality.

Economic is about HUMAN BEHAVIOR.. and there is a degree of unpredictability in human behavior because our behavior is based upon what we feel/ believe.
 
What I have is your obvious inability to explain the powerlessness of Bush and the GOP to do anything about the coming bubble and collapse?

FWIW, of course Democrats are partly to blame. For example, Clinton, at the end of his second term, signed the repeal of Glass-Steagall and a measure that essentially prohibited regulating derivatives, which given the global nature of the debt and housing bubble, and the global rise of derivatives, along with global low interest rates, are FAR more likely causes of the bubbles, plural, than CRA and the U.S. GSEs who didn't have much to do with housing prices in Europe. But that legistlation was sponsored in part by republicans and broadly supported by republicans, obviously, who controlled the House and Senate at that time.

But what you can't so is rely on blind partisanship and absolve the GOP who really actually DID control the regulators while the bubble blew up, and the GOP who controlled the House and Senate from 1995-January 2007, that is until after the bubble had turned over and was on the way to a crash.

Very true.,.... now if you could only get VERN and Incisor.. and a couple of others to understand what you just printed.
 
Lets see... first we are getting away from the thrust of my premise which is that the why...can matter less than the what/how. That how people feel..affects their behavior in the economy. and that there is power.. sometimes more power in understanding the how they feel .. than the why.

But lets get to this "unmoored from market fundamentals"... the idea that we are "moored" implies that we are completely tied to the market. And the market is a solid, unwavering pier.

When that's not reality. The reality is that human behavior is really more like a ship that can go in any direction it likes.. but is influenced by the tides, the wind and the currents.. and the actions of other ships.. and other ships are influenced by your actions.



Well yes.. that can happen.



but they aren't.

Especially when it concerns Johns premise.

According to John. Because the US currency is a fiat currency.. we can never default as a country. Because we can always " print" more money . According to John.. there is no consequence of printing more money unless we "run out of things to buy" with that money.

Now.. is it a market "fundamental".. that we are a fiat currency? Yes. Is it a market fundamental that we can create more money to pay our debts? Yes.

But we don't do that do we? And almost no economists recommends it. We have terrible fights in the government over debt and deficit. Polls show that at times people are more concerned about the debt and deficit than they are over things like unemployment.

Why is that? According to John.. and now according to you.. according to "market fundamentals"... we should have no concern over the debt and deficit.

The reality is that the debt and deficit are a concern.. because we FEEL its a concern. It has power.. regardless of whether that feeling is based on "reality"... that feeling IS reality.

Economic is about HUMAN BEHAVIOR.. and there is a degree of unpredictability in human behavior because our behavior is based upon what we feel/ believe.

I asked you a few days back to come up with a few examples of when "feelings" not tied to an actual economic event - like the price of oil spiking, or banks becoming undercapitalized - had a real effect on the economy, and you couldn't do it. If peoples' concern about the national debt sways the economy, then show me where/when it happened.
 
Lets see... first we are getting away from the thrust of my premise which is that the why...can matter less than the what/how. That how people feel..affects their behavior in the economy. and that there is power.. sometimes more power in understanding the how they feel .. than the why.

But lets get to this "unmoored from market fundamentals"... the idea that we are "moored" implies that we are completely tied to the market. And the market is a solid, unwavering pier.

When that's not reality. The reality is that human behavior is really more like a ship that can go in any direction it likes.. but is influenced by the tides, the wind and the currents.. and the actions of other ships.. and other ships are influenced by your actions.

I think a pretty accurate reflection of reality is people as a group behave rationally. Obviously over short time periods, some "market' can become irrational, like with housing and debt, and before that tech stocks. But even those 'bubbles' had objective factors that explained much of the 'irrational' behavior, and of course those bubbles burst and we got back to rational prices.

Furthermore, functioning markets depend on participants making rational decisions. When supply drops below demand, prices rise, they don't EVER fall.

According to John. Because the US currency is a fiat currency.. we can never default as a country. Because we can always " print" more money . According to John.. there is no consequence of printing more money unless we "run out of things to buy" with that money.

Now.. is it a market "fundamental".. that we are a fiat currency? Yes. Is it a market fundamental that we can create more money to pay our debts? Yes.

But we don't do that do we? And almost no economists recommends it. We have terrible fights in the government over debt and deficit. Polls show that at times people are more concerned about the debt and deficit than they are over things like unemployment.

Why is that? According to John.. and now according to you.. according to "market fundamentals"... we should have no concern over the debt and deficit.

Well, OK, so people were concerned, some predicted hyperinflation - that's what ZeroHedge has been predicting for nearly a decade now - and what has come of this deep concern? Do you see hyperinflation? What are Treasury rates doing? 2.4%. That's off the record lows but still historically VERY low.

So what won out - irrational feelings by people whose fear of inflation has been ginned up by right wingers and inflation 'hawks' OR market fundamentals? It's the latter.

The point is that concern over the confidence fairy stuff is nonsense.

The reality is that the debt and deficit are a concern.. because we FEEL its a concern. It has power.. regardless of whether that feeling is based on "reality"... that feeling IS reality.

Economic is about HUMAN BEHAVIOR.. and there is a degree of unpredictability in human behavior because our behavior is based upon what we feel/ believe.

I'll just end it by saying your theory is ultimately an empirical question, and I've cited a study showing consumer confidence adds little to nothing to objective data, and your anecdote about the public's concern about deficits and debt, in these circumstances, actually disproves your hypothesis. Despite all this supposed worry, inflation remained low, interest rates low, wage increases low.

And yes, economics is about "human behavior" but the field is premised on people/particpants/markets over the long term behaving rationally. Sure, over the short term anything is possible including irrational behavior, but if that's all your point is, then I'm not sure why we're debating.
 
I asked you a few days back to come up with a few examples of when "feelings" not tied to an actual economic event - like the price of oil spiking, or banks becoming undercapitalized - had a real effect on the economy, and you couldn't do it. If peoples' concern about the national debt sways the economy, then show me where/when it happened.

I did John.. All the times the market goes one way.. and then another in a couple of days. Heck.. recessions and depression were called "panics". I did do it. What economic factor caused the market to plunge then correct when Trump got elected. Please point to it.

What you can't accept is that peoples feelings matter and a lot because its what causes them to act. .. and those feelings are not quantified in a number.

Its why your economic premise fails.. and fails miserably.
 
I did John.. All the times the market goes one way.. and then another in a couple of days. Heck.. recessions and depression were called "panics". I did do it. What economic factor caused the market to plunge then correct when Trump got elected. Please point to it.

What you can't accept is that peoples feelings matter and a lot because its what causes them to act. .. and those feelings are not quantified in a number.

Its why your economic premise fails.. and fails miserably.

You can't point to any examples outside of a jumpy stock market, and I would hardly call daily fluctuations in the stock market much of an indicator of how an economy is doing. Jasper is absolutely correct here - consumer concerns about the national debt (your big example) haven't meant diddly to interest rates or anything else. And all of those "panics" you are referring to had people in a panic for good economic reasons.

But stick with your consumer confidence argument, Hiroo. The U.S. Army is bound to surrender to you someday, if you hold out long enough.
 
You can't point to any examples outside of a jumpy stock market, and I would hardly call daily fluctuations in the stock market much of an indicator of how an economy is doing. Jasper is absolutely correct here - consumer concerns about the national debt (your big example) haven't meant diddly to interest rates or anything else. And all of those "panics" you are referring to had people in a panic for good economic reasons.

But stick with your consumer confidence argument, Hiroo. The U.S. Army is bound to surrender to you someday, if you hold out long enough.

This is funny.. Stock Market is moved by rumors, confidence and daily things happening. Then it's influenced by economic data second. Economic data doesn't come out daily but weekly or biweekly or even monthly. For example today (Jan 17th), settlement for 3y note, 10y note and 30y bonds, then short term auction for the 4w, 3m and 6m bills. Tomorrow (Jan 18th), is Mortgage numbers, CPI and the Redbook. Thursday (19th) is housing starts ( done once a month), Jobless claims and Philly BoS.

There is a lot more data released but these are the biggies on a week to week, bi-weekly or monthly.

For business it's every 3 months (quarterly reports). Yet these companies are traded on a second by second bases on a BELIEVE or a best guess it's gonna go one way or the other. The other data helps paint a picture but it never paints a full picture.

As we saw in 2007/2008 data was mixed. Basically nothing was wrong. Reality was different. Consumer Confidence collapsed and not just fell 10 points but fell 40 points. Many economist and talking heads on those economy shows (cough) Mike Norman (cough).. ignored Consumer Confidence. No matter how much money the Fed or Government throw money at the problem.. if Consumers don't feel confident, they ain't buying ****. Consumer Confidence is higher then it was in 2007-2011. But it's been flat since 2015. Flat isn't bad but it isn't good.

I like to explain it like this to people who ask me about investing and how I tell them just to stick with the Blue Chips.. every generation of Americans had a "common idea" in a tech or upgrade. Be it National Highway System/NASA (space race), Rebuilding US military, or IT.. since 2000s we really haven't had that. We haven't had that united technology or upgrade in the US. So there isn't a a feeling of a common idea we had in the past. Yes, the previous tech has gotten better, but it has been a massive upgrade to how we live our lives.

Which is why I talk about improving mass transit, internet speeds and desalination plants on the West Coast.
 
I think a pretty accurate reflection of reality is people as a group behave rationally. Obviously over short time periods, some "market' can become irrational, like with housing and debt, and before that tech stocks. But even those 'bubbles' had objective factors that explained much of the 'irrational' behavior, and of course those bubbles burst and we got back to rational prices.

No, people in a group or out of a group DO NOT act rationally. To act rationally one has to IGNORE the collective and have PERFECT information for individualism or accept no role in the Collective and be left out out the discussion.



 
No, people in a group or out of a group DO NOT act rationally. To act rationally one has to IGNORE the collective and have PERFECT information for individualism or accept no role in the Collective and be left out out the discussion.

I understand those points but I tried to be clear that I wasn't talking in absolutes, and people as a group simply do generally make rational economic decisions. It's why 'free markets' work exceptionally well. Even your first video points out that in tragedy of the commons cases, people are behaving rationally as individuals. It's not really what we were discussing

If you're into that kind of thing, the book Predictably Irrational by Dan Ariely is fascinating, or was to me.
 
I understand those points but I tried to be clear that I wasn't talking in absolutes, and people as a group simply do generally make rational economic decisions. It's why 'free markets' work exceptionally well. Even your first video points out that in tragedy of the commons cases, people are behaving rationally as individuals. It's not really what we were discussing

If you're into that kind of thing, the book Predictably Irrational by Dan Ariely is fascinating, or was to me.

But in economics, especially if you believe in Keynesian economics (which I do not).. absolutes are needed in all models. Non-absolutes throw off models. Free markets work because there is no perfect information (irony I know) and people ignore the collective. I.E. You see the glass half full and I see is as half empty. Both sides are competing against each other. It's only when both sides agree we have a Bull or Panic markets.

We are discussing it. Rationality can be irrational to others. Dan Ariely fails to address this. I am actually surprised he didn't come up with an answer for this (well not really). In every case of the "Commons", it always comes down to the individual. But at that point it's not the "Commons" but rather individualism. NAZIs were highly collective but highly individually motivated. So were the Soviets. So is the US or any other system you can name. It's the mentality, it's good for me so it's good for the commons. But we all had different ideas.

I'll give you a personal example.. I am a Penn State undergrad. I am loyal to The Family Clothesline. It's owned by Penn State Alumni and hires Penn State students and locals. I could get my sweatshirts, jerseys, t-shirts and so on much cheaper from others. As an Alumni, I support local at Penn State, I know many of the people who work at the local store. They were there when I was a Freshman. After 4 years they were family. Christmas cards, cookies or even making sure I had some place to go for a holiday weekend when dorms closed. To economist based on price mechanisms, it's irrational that I spend 10 to 20% premium. Just as it's irrational to most I donate to Nittany Lion Club for seats when I can buy cheaper on StubHub and so on. Yet for the collective, I pay more.
 
Back
Top Bottom