Mario Kart Socialism
My fiancee got me a Wii for Christmas — as selfless as that sounds, she enjoys it probably as much as I do. As a gaming system truly designed to assuage the boredom of all ages, Wii and its developers have restored and renovated a number of my old favorites: Zelda, Mario Brothers 3 (for the original Nintendo), and Mario Kart.
For you fortunate souls unfamiliar with the glory of Mario Kart racing, here is a quick primer: twelve traditional Mario World characters, from Toad to Princess Peach, and from Luigi to the lowly Koopa Troopa (see above), awkwardly perch atop under-sized go-karts and race around traditional Mario World venues, such as Bowser’s Castle, which have been conveniently converted into racetracks — because everyone loves a good flip. Aside from these well-documented venues, there are other, new racetracks set amongst imaginary lands (you know, for kids).
However, this isn’t any ordinary race. About every quarter-mile — and I’m just approximating here — the carbon-fuming peloton will rush through a neatly-laid chain of ‘question boxes.’ Think of it as that speed bump at Wal-Mart that you can’t safety drive around. But instead of abruptly dislodging your Super-Sized Frostie from the cupholder, a question box will randomly grant you one of a dozen superpowers.
Pretty good deal, right? Not always. As it turns out, the type of superpower ‘randomly’ provisioned correlates negatively with your position in the race. So for example, if you are a great go-kart driver at the front of the pack, you are likely to be provided with a small banana, which can be strategically slipped under the wheels of a trailing opponent to induce a minor spin-out. Not exactly a game-changer. Compare that to the perks of last place where you are guaranteed a potentially devastating superpower, such as a lighting bolt that fries all of your opponents and leaves their shrunken figures to scurry around the racecourse like ants for you to crush under-tire. Or, my personal favorite, the power to instantly transform into a massive silver bullet and rocket your way past racecourse obstacles and past that smug over-achiever holding the banana.
To put it simply, the all-powerful Mario Kart Administrator provisions resources to each player according to her needs. It’s socialism, plain and simple. This is why we should all be infuriated by the lack of a good-ole American video game programming industry. Forget that every other game out there romantically extolls the virtues of American militarism, which can be relived daily in the timeless conquest over the Nazis or Aliens, or whatever the evil de jour. Mario Kart is training future generations of James Taggarts to quietly hide among the unambitious masses and wait for the system to provide deliverance.
I didn’t realize this phenomenon until my adult years, so I’m afraid, for me, it may be too late. But for you parents out there, maybe it is time to have a discussion with your kids about whether or not they really earned that silver bullet.
The N64 Mario Kart was Marxist as well (Marxist, right, rather than socialist? Or no?). Can’t speak to the SNES one.
As implied here, the content of the question box goes a long way toward determining the winner of the race. It’s next to impossible to hold onto first place. Very frustrating and unfair.
— Elvis Elvisberg · May 1, 01:39 PM · #
I see it as a teachable moment — the race is not to the swift or the battle to the strong, but time and chance and blue shells happen to them all.
— kenB · May 1, 01:57 PM · #
Gabe of Penny Arcade has a similar, albeit more vulgar, take on Mario Party.
On a more serious game mechanics note, that idea is incorporated into many modern boardgames, in part by virtue of trading. In this case, it’s less socialism and more classic realism with bandwagoning against a would be emperor.
— Greg Sanders · May 1, 02:08 PM · #
This spreads to other gaming genres as well. There was an SNES basketball game whose name escapes me in which the player that was behind was given enormous advantages in stealing and shooting to allow them to catch up. Many other sports games followed suit.
— JS Bangs · May 1, 02:17 PM · #
I’ve not played the N64 version enough to know whether the same system holds, but my recollection was that it did not work that was on the SNES.
On the other hand, it’s also always seemed to me that most of the time, smart driving will allow you to keep and hold first place. The really powerful items are usually reserved for the last couple places, and they’ll typically only pull you past the next 5-7 players — leaving the top 2 or 3 untouched. The exception, of course, is the blue shell, but even that usually only knocks you down 1 or 2 places, which, if you’re a capable driver, is pretty easy to make up.
— Peter Suderman · May 1, 02:28 PM · #
Interesting, Greg and JS, that this has become par for the industry. It would be great to see all of the different test-group responses.
Peter, I agree that all is not lost in first place. But there are definite advantages to being middle-of-the-pack going into the last lap.
I didn’t think this was a particularly controversial post, but admittedly, I didn’t do justice to the banana:
http://fearandloathingingtown.blogspot.com/2010/05/bananas-are-useful-numnuts.html
— Walker Frost · May 1, 02:43 PM · #
sheesh….this is all about the business model and accessibility.
its capitalism in action.
it levels a skillarchy to draw in new players.
flaming hypocrites.
I’d appreciate it you didn’t treat your readers as all having the IQ of a Mark Levin facebook fan.
But i guess that is YOUR business model now.
— matoko_chan · May 1, 03:01 PM · #
Next we need an post complaining about how golf handicaps are taking us down the path to 1984… I assume (hope!) that this post is probably intended as a half joke. But given that there are so many “conservatives” (as someone sympathetic to true conservativism, Oakeshott style, I really don’t think they are entitled to the label) are honestly advancing this argument, it would be much nicer if this article concluded with some sort of actual discussion of the pros and cons.
JS: You are thinking of NBA Jam. The same was true for NFL Blitz. In the gaming world, I much appreciate these eveners. Its really not fun to win at NFL Blitz 104-0 every time you play. Nor is it fun to lose by that much. The “cheating” for the underdog provides incentive for the better player to continue increasing their skill. If you continue to play against a mediocre opponent, you will have no reason to get better. Even more importantly, it encourages the underdog to keep playing. If you know you are going to lose, you check out of the game.
And of course, both of these lessons apply to complaints about social leveling in the real world. A non trivial number of politicians, economists, and philosophers have held that social leveling within a capitalist system (this is not freaking Marxism!) is what keeps everyone playing by the rules, rather than checking out and entertaining much more radical solutions to their hopelessness.
— JWill · May 1, 03:32 PM · #
You guys realize that, somewhere out there, there are hardcore Mario Kart veterans who’ve thought as carefully about how to use this feature of the game to their advantage as professional cyclists have thought about riding the air currents of the guy ahead of them.
— Chris Hallquist · May 1, 03:36 PM · #
Even more importantly, it encourages the underdog to keep playing. If you know you are going to lose, you check out of the game.
wow…i just had an epiphany…aka braingasm.
Accessibility is the Unification Theorem of Social Brain Theory.
In the wowverse right now players are complaining about the proposed Cataclysm changes, where 10mans drop the same loot as 25s. 25man guilds are the aristocracy of wow….the skillarchy.
one reason people beome conservatives in fleshspace because the IQ/elite skillarchy is leveled.
one reason people become liberals is because the SES/race skillarchy is leveled for them!!!!!
Its EGT and evolutionary economics and SBH combined!
It is all competition for entry level players and to keep people Playing the Game.
— matoko_chan · May 1, 03:49 PM · #
was that written by a teenager? seriously?
— paul h. · May 1, 04:09 PM · #
No, quite the opposite – Mario Kart is capitalism, because the point of the power-ups is to be the finger on the scale that preserves that which best benefits the consumer – a balanced, competitive race. Absent the power-up, the race quickly devolves into monopoly (the condition, not the game) where one player has such an insurmountable lead that the race ceases to be in any way competitive.
Mario Kart is structured to preserve the struggle, the competition, and is therefore precisely capitalist, not socialist.
— Chet · May 1, 04:54 PM · #
I’m amazed (and amused) that people thought this post was anything other than a joke.
@JWill: Yeah, that’s the one. My understanding is that such leveling is de rigeur these days in a variety of genres, but especially racers and some FPSs (at least against computer opponents). And you’re right: it makes the game more fun and more interesting for advanced players, which is why they do it.
— JS Bangs · May 1, 05:05 PM · #
its not a joke.
Its the Universal Business Model. Chet is right, its evolutionary economics…how economics presents in-game.
But its not pure capitialism..unless pure capitialism is just consumer driven economics.
The socio-economic capitalism in fleshspace….that maps to polical affiliation among other things for socio-economic leveling…republicans and democrats are consumers.
In the game it levels the skillarchy to prevent a monopoly like chet says.
Its accessibility that the consumer is buying in case of levelling ingame skill or levelling social capitial.
:)
— matoko_chan · May 1, 05:42 PM · #
…the game it levels the skillarchy to prevent a monopoly like chet says……but that is a side effect for skilled players.
Accessibility is what draws entry level players and keeps them playing.
— matoko_chan · May 1, 05:46 PM · #
Calling what happens in Mario cart “socialism” is like calling what goes on at the MPAA “censorship”.
— Tony Comstock · May 1, 09:03 PM · #
matoko_chan,
Some interesting real-life charts.
— Keid A · May 1, 09:12 PM · #
Chet and Matoko, but my socialism that is really your capitalism is actually another layer of socialism! Muhahahahahahah. Because the impact of your organized capitalism is to more evenly distribute wealth in the form of digital trophies. Don’t tell me I can’t triple stamp a double stamp…
Matoko: “In the game it levels the skillarchy to prevent a monopoly like chet says.”
Thank you, James Taggart, for explaining the Anti-Dog-Eat-Dog rule.
If there was a point to this post, which I’m not convinced there was, it was only to highlight the absurdity of uncompromising commitments to broad normative social frameworks. We live in a world where people might actually be unsettled by non-meritocratic wealth distribution in video games. And I find that funny. Which is why I’m glad socialism has found a place in the sun.
— Walker Frost · May 1, 10:02 PM · #
Well tyvm Matt for my social capital epiphany.
I can apply game theory and social brain hypothesis to analyze why an individual might chose a particular political affiliation.
If an individual seeks SES or social justice (non-meritocratic wealth distribution) leveling they would choose a liberal political affiliation.
If an individual seeks intellectual/education leveling they would choose a conservative political affiliation.
Homo sapiens sapiens has deep wiring for playing games.
and….this is just a hypothesis….but extremely high IQ high altruism individuals might seek a super-rational payoff…i’ll have to think about that somemore….that is non-deterministic on political affiliation I think.
“In the game it levels the skillarchy to prevent a monopoly like chet says”
like I said that is a side effect ….accessibility is the driving market force.
Accessibility pays off in ingame capital, w/e that may be.
The game skillarchs or game-aristocrats would be just as happy to stay on the top forever, at least from what i can observe in MMORPGs. In WoW actually it would be very sad if people couldn’t sneer at n00bs and scrubs….players would quit if the playing field was too flat.
So Matt, its a mix of capitalism and socialism.
Which is prolly what evolves in RL, and what we should strive for.
Who is James Taggart?
— matoko_chan · May 1, 11:56 PM · #
Who is James Taggart?
Dagney Taggart’s socialist brother.
Who is John Galt?
— Keid A · May 2, 12:15 AM · #
seriously m_c.
How can you and I have a serious conversation about anything if you haven’t memorised Atlas Shrugged?
— Keid A · May 2, 12:38 AM · #
Just gone through your blog and found it wonderful. It was nice going through your blog. Keep on posting.
— Hampers · May 2, 04:11 AM · #
I loathe Ayn Rand.
i read 2 pages in the fifth grade and never willingly read another word.
i thought because she was Russian she was going to be Dostoevsky or Tolstoy or Nabakov or Bulgakov.
She’s a poseur….its not great literature, its propaganda….and boring propaganda at that.
— matoko_chan · May 2, 12:30 PM · #
matoko,
It doesn’t matter that you loathe Ayn Rand.
According to a 1991 survey by the Library of Congress and the Book of the Month Club, Atlas Shrugged was second to the Bible as the book that made the most difference in American readers’ lives. Wikipedia
This must be even more true for US conservatives. I don’t see how you can hope to understand the conservative mindset if you haven’t at least read and understood Atlas Shrugged. So many US conservatives have been influenced by it.
For that matter I am an atheist. I am bored to death by religious works like the Bible. Could I say that I understood Christianity, if I hadn’t at least read it, and tried to understand it?
Some books are so influential that they permeate a culture.
— Keid A · May 2, 01:03 PM · #
i understand the conservative mindset very well, tyvm.
i understand it through cognitive psych and SBH and third culture philosophy.
Rand is boring and obsolete…..she represents a zombie culture, a failed paradigm…with none of the magical beauty and power of other great literature.
i have far better things to read.
— matoko_chan · May 2, 01:43 PM · #
Let me give you a small example matoko, of how I believe Atlas Shrugged forms a significant part of the narrative of US conservative thought.
Fact: The US right is repelled by President Obama.
The liberal narrative:
The right detests President Obama because they are really racists. They hate him because of race and they hate the progressive reform platform, because it would benefit minorities.
The conservative narrative:
The right detests President Obama, because he is becoming the literal embodiment of Wesley Mouch.
— Keid A · May 2, 01:55 PM · #
Nah….its selection for low IQ and g in the populist republican base….voters that are not smart enough to know a scam, and who are EXTREMELY touchy when someone points that out.
an example.
What Obama SAYS— “[W]hat troubles me is when I hear people say that all of government is inherently bad. One of my favorite signs from the health care debate was one that read ‘Keep Government Out Of My Medicare,’ which is essentially like saying ‘Keep Government Out Of My Government-Run Health Care.’ For when our government is spoken of as some menacing, threatening foreign entity, it conveniently ignores the fact in our democracy, government is us.”
What the conservative base HEARS
“Obama is adept at framing his political opponents’ arguments in an incorrect and extreme way, all the better to bat them down. Conservatives object to expensive, expansive, and big government — not the military, speed limits and roads. Many conservatives also object to elites who think they can govern better than mainstream Americans or as Obama describes us, bitter, clingy Americans:”
— matoko_chan · May 2, 02:24 PM · #
It is just the leveling of IQ/education for accessibility on the right.
They also like Rand because they think quoting her makes them look smarter…like Palin putting fake Plato quotes in book.
She doesn’t shape them…they are cheering her because she is a supposed literary giant that embodies their woldview…..she was the just Mark Levin of the 50s and 60s.
— matoko_chan · May 2, 02:32 PM · #
Suit yourself matoko. I really don’t think I’ve ever convinced you of anything in all the years I’ve known you. I don’t expect this will be any different.
But when I go to some of the other conservative websites you frequent, I see one reference to Atlas Shrugged after another. It’s very clear to me what many conservatives are thinking. For quite a few of them, their understanding of the current economic stagnation is being shaped by the economic scenario of Atlas Shrugged.
It’s like the book has come to life. This (terminal) economic crisis is Atlas Shrugged.
— Keid A · May 2, 02:43 PM · #
pfft
raw populism is shaping conservativism, and fluffing their ideology with Rand quotes is just part of their mortal lack of self-examination.
— matoko_chan · May 2, 03:25 PM · #
It’s not Rand quotes. It’s the whole Atlas Shrugged scenario, minus John Galt – The economic decay – the looters’ government taking over.
— Keid A · May 2, 03:36 PM · #
Why didn’t the tea party movement start under Bush then?
“Selective outrage- Now many of the former Ron Paul supporters in the Tea Party have been pointing this out for years but for many in the Tea Party movement, the outrage at deficits and government spending seem way too partisan. Where were the mass protests in 2004 when a Republican Congress passed Medicare Part D? This bill will cost all taxpayers over the next ten years over $1.2 trillion dollars and was paid for by debt; neither tax increases nor spending cuts were issued to offset the new Medicare program. Former U.S. Comptroller General David Walker has called it “the most fiscally irresponsible piece of legislation since the 1960s.”
— matoko_chan · May 2, 04:04 PM · #
All true matoko. But it was the crash that polarized politics in the US. People might have had their misgivings before, but the collapse has brought all the anxieties to the fore.
It’s also caused the deficits to blow out into the $ trillions per year, which has shocked everyone.
It’s also how the aid has poured into the financial sector and a few other lucky industries, even as millions of middle class lose their jobs and their homes – But for them there is no real help. The banksters continue to make their vast bonuses even as credit to the private sector implodes.
— Keid A · May 2, 04:24 PM · #
jee thnx TAS….i have gleaned 3 paper topics from you this week….
The Two Tea Parties
Game Theoretic Accessibility Models and Political Affiliation
and
Why Quoting Ayn Rand is Isomorphic with Quoting Mark Levin in the 21st Century
/flexes her engineer motie toolarms
— matoko_chan · May 2, 05:54 PM · #
Except that the looters are the same ones threatening to “go Galt”. Hey, I kind of hope they do.
— Chet · May 2, 07:59 PM · #
matoko,
Why Quoting Ayn Rand is Isomorphic with Quoting Mark Levin in the 21st Century
I prefer:
The enduring influence of Atlas Shrugged in the shaping of the political narrative of the US right.
President Obama as Wesley Mouch.
The Wall St/Washington DC, revolving-door crowd as the looters’ circle.
And remember the libertarian – Austrian School end of conservative thought, has always rejected the Federal Reserve/fractional-reserve banking cartel as the very embodiment of socialist corruption of real money – Gold. The hardest Paulites are gold bugs to the core.
— Keid A · May 2, 10:15 PM · #
Except that the looters are the same ones threatening to “go Galt”. Hey, I kind of hope they do.
Me, too, and not just “kind of.” I’ve been advocating for years that conservatives need to get Leviathan to finance the destruction of Leviathan. They should take the government subsidies and use them to finance the removal from office of those people who voted for them. I took a tax credit for installing a high efficiency boiler in our home last year. Guess what that savings is going to be used for.
It drives lefties nuts. But more important than the entertainment value is the destruction of their hegemony.
— The Reticulator · May 3, 01:54 AM · #
It doesn’t so much “drive me nuts” as it leaves me scratching my head, trying to determine the operative principle at work. You’re opposed to efficiency? You hate saving money? I don’t get it, I guess.
Somehow I think the progressive project will probably not be substantially hampered by your $200 donation to the Tea Party PAC, or whatever.
— Chet · May 3, 02:53 AM · #
That’s a good idea, scratching your head.
True, the left controls the nation’s prisons, its wealth, its indoctrination system, the tax system and the police forces. It’s hard to fight all that with a mere $1500 tax credit. But at least we can do a little ankle-biting to annoy them. And it’s useful for them to know that their subjects do not all adore them for their wise and gracious benevolence.
— The Reticulator · May 3, 03:40 AM · #
so good,I like!
— juicy couture · May 3, 09:06 AM · #
Reticulator, deregulation might stimulate innovation and creativity like Dr. Manzi maintains.
But given that raw capitalism is survival of the greediest you also get abuse and soulless rapacious exploitation.
Conservatism is supposed to maintain a tension…..a balance.
But your side is not doing its job.
You have sold out to Kylon and are exploiting populist passions simply to win.
Like I said before, conservatism invited the vampires into the house with the promotion of Sarah Palin.
The leadership of the GOP and the conservative intelligentisia have always known exactly what she is.
But you were happy to look the otherway…as long as she might help you “win”.
Now she is your disease, and she is going to kill your party.
The same with the tea party….you pretend real hard that it isn’t just a populist movement for soon-to-be demographically disenfranchised white conservative christians.
idc.
death rocks and evolution rolls.
the party that emerges from your ashes will be a evolutionary improvement I’m sure.
— matoko_chan · May 3, 12:46 PM · #
But why do the game designers do this? Presumably, because it makes the game better, hence more successful in the marketplace. Maybe the invisible hand of the marketplace is guiding us inexorably in the direction of socialism.
— MarkP · May 3, 01:27 PM · #
MarkP
Maybe the invisible hand of the marketplace is guiding us inexorably in the direction of socialism
Hence the little hammer-and-sickle logo on Koopa Paratroopa’s cute red shoes. (see image at top of page)
— Keid A · May 3, 02:08 PM · #
Hey, even American video games do it. I think NBA Jam is the best example – we always called it “rubber band theory”. The further behind you got, the easier it was to score points.
That’s why it was fun.
— adam · May 3, 03:13 PM · #
because it makes the game better
Well, they think it makes the game better for the Wii’s target audience, which increasingly is children and casual gamers. This sort of game mechanic tends to drive out the most skilled because they won’t necessarily be rewarded for their skill.
— kenB · May 3, 03:35 PM · #
“False” isn’t spelled with a T, my friend. This is tinfoil hat nonsense.
— Chet · May 3, 07:33 PM · #
matoko_chan,
But given that raw capitalism is survival of the greediest
I don’t get that, in a voluntary market in the long run. It’s a bit like the Iterated Prisoner’s Dilemma (IPD) problem. In the long run the system selects for solutions that benefit both parties. Tit-For-Tat emerges because both parties do well out of it.
In a voluntary market no-one participates in a transaction unless both parties feel they are getting an good deal. The purpose of price-negotiation is to discover that sweet-spot.
The only way you can get around that is if you use deception. But in the long run you have to assume deception will be found out. So in the long run the market rewards the parties that manage to profit most, while also delivering the best possible value to their customers. Again it’s just like IPD.
In a competitive market with progress, profit is constantly driven down by competition, so the most efficient producers tend to drive out the competition. This is countered by monopolists becoming complacent and innefficient, opening the door to new competition.
The system becomes wildly distorted, mostly when corrupt institutions tilt the structure. Like when the US government bailed out the banksters. The market had discovered the fraudulent nature of many of the transactions and had shut the market down through a run on the shadow banking system.
At that point the entire shadow banking market would have collapsed, and the system would have been forced to return to traditional banking. Except that the US government intervened to rescue the biggest players in the shadow banking system.
There is no reason to believe that the market’s destruction of the shadow banking system would have harmed the system in the long run. The world managed thousands of years without a shadow banking system. Now you have the worst of all possible worlds – With the perpetuation of a system that is known to be disfunctional – And government trying desperately to find a recipe to prop it up. All because they won’t accept the market’s judgement that the system is disfunctional, prone to gaming, and needs to be shut down.
— Keid A · May 3, 11:50 PM · #
Come on, Keid. You surely can’t be this dumb. The world managed for thousands of years without flush toilets (unfortunately, much of it still does.) Does that mean that if the New York sewer system suddenly catastrophically failed, Manhattanites wouldn’t be up to their eyeballs in shit?
No, of course not. The regular banking system had become hopelessly intertwined with the shadow banking systems; hence the need for the bailout. The idea that one could have failed with no harm to the other is absolutely ridiculous.
— Chet · May 4, 03:17 AM · #
Your problem Chet is you believe you are going to survive this. I don’t.
Letting if fail would have let loose a whole world of hurt, but you might have survived it.
— Keid A · May 4, 03:27 AM · #
Survive what? Loosen the tinfoil hat for a minute, ok? We were headed for a depression greater even than the Great Depression! The economic polices of the left, however, have averted it.
I’m pretty sure I’m not going to be killed by financial sector bailouts, on any timeframe.
— Chet · May 4, 04:30 PM · #
No I’m talking financial survival. I don’t believe anything has been averted. The US has maxed out the private credit card and is now living as long as it can on the government’s credit.
It won’t last long I think. A few years maybe. Less than a decade.
Bankruptcies would have allowed the debt to be written off. It would have enabled a clean start.
— Keid A · May 4, 04:57 PM · #
The other advantage of bankruptcy is that it would have removed the disfunctional wealth-destroying institutions.
— Keid A · May 4, 05:16 PM · #
No, they wouldn’t have. People who had mortgages with Lehman Bros didn’t get free houses.
— Chet · May 4, 11:26 PM · #
Those who are bankrupt have the debts written off. After bankruptcy they can reemerge and try again to rebuild their wealth. Institutions that have failed beyond restructuring, can be liquidated. Their assets if any, sold off to more-prudent players.
Doing it the government’s way, keeping the immense burden of debts in the economy, transferring many losses to the taxpayer, and the rigged way the bank are allowed to pretend remaining debt is not there, via the suspension of mark-to-market accounting rules, means the unpayable burden continues. It is merely shifted around and concealed from view.
It will be a drag on your economy for decades, like Japan. That is the best you can hope for. Your zombie banks are less and less inclined to lend to the private market. They play the dollar carry-trade – borrowing short at the artificial zero-interest rate, and lending long at the deficit-overbloated treasury rate.
David Goldman’s chart shows what is happening.
— Keid A · May 5, 12:16 AM · #
You do realize, of course, that games are supposed to be fun. If a game is not fun for people (ie they always lose) they won’t buy it, and the programmers will lose money. something something free market.
Also, you damn suck at mario kart. You can use a banana to knock people off track and to rob them of boosts. If you don’t know how to do this, you aren’t that good. It usually takes several blue shells to knock me out of first and that rarely happens.
— NutellaonToast · May 5, 05:56 PM · #
If you think that the cause of the financial crisis was that companies got into too much debt, then you don’t understand the cause of the financial crisis. And if you think just disappearing the debts would have made everything better, you’re an idiot. A lot of those “debts” were people’s life savings.
The problem with the financial crisis we experienced that completely obviates your “let them fail” strategy is that the destructive consequences fell disproportionally on the more-prudent players. The crisis wasn’t caused by companies getting in over their heads, it was caused by other companies drowning them on purpose.
— Chet · May 5, 06:14 PM · #
Chet,
And if you think just disappearing the debts would have made everything better, you’re an idiot. A lot of those “debts” were people’s life savings
I understand that perfectly well. The problem is that the money is gone anyway. Nothing can change that. The only question is whose liability? The taxpayer’s? Or the investor who made the bad investment decision?
Actually, I would have had fewer issues if the bailout money had been used to compensate the losing investors. Bailing out the perpetrators is insane. Bailing out the investors would have been like depositor insurance. Maybe not 100 cents in the dollar compensation though.
Also I keep telling you. Your problem is that you (the USA) think you are going to survive this. I don’t. Writing off the debts, allows wealth to be rebuilt. It means facing reality and pricing it in. It is the lesser of two evils.
Letting the wealth-destroying entities survive, through “extend and pretend”, is allowing the black hole at the center of your economy to persist and grow even bigger, while deluding yourself everything’s OK now.
Actually, as I said, the money is gone anyway. This way the USA itself has become a zombie institution. The total collapse of your economy is in fact now the most-likely outcome. Twenty years of zombiehood is the best alternative I can imagine as the wealth is slowly rebuilt. But how can it be rebuilt when the parasites in the center of your economy ARE STILL THERE?
Even now the disfunctional institutions fashion new derivative bubbles. Even now they channel more wealth into obscene bonuses. The thieves are still thieving – your government is facilitating it. Do you really believe that 2008 was the last crash? Those who profit from bubbles/crashes are still there.
— Keid A · May 5, 08:36 PM · #
Pfft
The “honor” system of White Patriarchy Social Cohesion Paradigm took 40 years to collapse.
But the replacement paradigm (Social Justice) is evolving at a much more rapid pace…..FinReg will pass before midterms.
Baby steps, Spock, baby steps.
The market is evolutionary, not revolutionary.
<3
— matoko_chan · May 5, 11:52 PM · #
I’d have been a lot more impressed by that argument, matoko-chan, if the President had put someone other than the usual revolving-door Wall Street crowd into key public office positions.
So far, all I see is the financial regulation legislation, weak as it is to start with, being watered down still further. Legal homeopathy is what I call it. Infinite dilution.
Really the concentration in the financial system has gotten much larger now, because the Too-Big-To-Fails (who engineered most of the risks and skimmed the biggest profits while the going was good) were saved. But the smaller banks are being allowed to go down. This just eliminates competition for the TBTFs. Remember this cartoon?
— Keid A · May 6, 02:32 AM · #
Its not necessarily gone. A lot of it is, but a lot of it isn’t, and we really don’t have any idea, since as you say banks aren’t marking to market. (And good that they’re not, it’s the only thing keeping them afloat and your bank account from evaporating.)
But that’s exactly who it did bailout. What was going to happen to AIG’s counterparties, after all, if AIG was allowed to go belly-up? They were going to lose their shirts. The money paid to AIG went out the door almost immediately, to cover the claims put to them by their counterparties. Bailing out the perpetrators was bailing out the losers.
Because we’re going to. Hey, if you disagree, put your money where your mouth is and start shorting T-Bills.
— Chet · May 6, 05:20 AM · #
Shorting is not really a viable option when your forecast is for around a few years to a decade. Shorter-term I can see situations where Tbills might be the best protection, for a year or two.
An example might be the current environment when the Euro is falling. The focus of current instability is Europe; and so long as the Fed has phased out quantitative easing, the USD can benefit from the resulting deflation. But how long will this dollar strength continue, if the money supply keeps contracting? Not saying it will, but it bears watching. Will the Fed qo back to QE?
How you see the game play out between deflation and inflation strongly influences how you choose to ride out the decline.
— Keid A · May 6, 06:05 AM · #
Chet,
If you are asking me if I believe letting them fail was politically possible in the USA, the answer is probably not. But at the very least, too big to fail should also be: too big to survive.
In practice I think the least worst outcome, given where we are now, might be to break up the larger banks the way Standard Oil was broken up.
If by counterparties of AIG you mean Goldman and UBS I could care less.
— Keid A · May 6, 06:07 AM · #
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— ysl · May 7, 08:21 AM · #
Sorry to be late to the conversation:
Rand = total freedom
Marx = total fairness
Smith = freedom + fairness
Marxism=failure
Randism=failure
Smith = success
— Frank · May 7, 07:14 PM · #