"Also, complaining that the average yokel can't manage their credit is like complaining that users can't deal with a command-line interface. Sure the discipline to learn it would pay off, but most people aren't wired that way."
That is a very, very scary statement. Basically it implies that most people are doomed to live a live in dependency and slavery, because they will always depend on the goodwill of other people to not screw them over. Maybe it even implies that in the long run communism is the only workable system. I can't imagine that the majority of people is THAT bad at maths :-/ I mean it is just basic addition and substraction. Even if you can only count to 5, you could get a rough idea of the state of your credit (number on bank account has less digits than number on credit card debt == bad).
We don't need communism. Just basic protection from loan sharks, con artists, and the worst dishonest business practices.
Libertarians may hate it, but consumer protections make the lives of most people simpler, safer, and more free. They also reward honest businesspeople, rather than rewarding the con artists who are the least detectable.
I'd like to point you to PG's recent article. Additional checks end up biting you in the back.
Also, how are consumer protections supposed to work? I think they would require a hypothetical "perfect" state employee who is 100% honest and 100% omniscient. Even if a few of such people would exist, I doubt that there would be enough of them to monitor ALL kinds of economical transactions.
Rather, I suspect the more regulation there is, the more corruption or hidden taxes will there and be a burden on society. Even today it almost feels as if one can't do anything without the protection of an army of lawyers. More regulations => this only gets worse. Lawyers will be leeching off us, with the support of the state.
Also the current crisis can not simply be blamed on crooks. Everybody was playing the game, down to the average "normal, honest" home owners. Plus, people will always act selfish, and in trades, try to get the better deal of the involved parties.
I think what he said was that additional checks have a cost that must be weighed against the benefits.
Funny, you are the one who is touting himself as able to handle complexity. And yet in this debate you can only perceive black and white. If communism is bad, that means that ALL regulation is bad! And if some people need extra help or training to deal with credit, that means that they're SHEEP who will be the wards of the state forever!
I am sad that nobody has taken up the point that I was trying to make; that we all need some help from time to time. Hackers have an easy time bouncing back from rotten luck, illness, or poor life choices; things that would cause other people to eventually amass an unsustainable debt.
I am all for helping people. I am just not sure who could be trusted - I don't necessarily trust the government to make the best choices for the people. And in this crisis, there is too much scapegoating going on for my taste. And calling for regulations seems to be an extension of that.
If you call for regulations, first tell me why the market failed to regulate itself (that is weed out the crooks, if the crooks are to blame)?
If you are calling for more transparency, maybe I can go with you. But I don't think complex rulesets about who should give credit and who should be allowed to get credit are the way to go forward.
I don't want to claim to understand what pg wrote, but my understanding would be he wrote among other things about something exactly like that: more regulations means it becomes more costly to give somebody credit. Therefore there will be less firms giving credit, and "smaller people" will have more problems getting credit because they are not worth the bother. In the end there will be a monopoly of a few big firms who handle credit.
Also, what if housing prices really would have risen forever, and regulations would have prevented people from gaining from it? Who is to say in advance what course of action is right? Or would you say everybody who took out a mortgage was a crook?
I thought PG's article was pretty spot on. He wanted regulatory actions to be viewed in the broader context with an understanding of the net drag of all the regulations. If we could convince elected officials to do this sort of analysis, we might be able to weed out a lot of the unnecessary inefficiencies.
That said, the solution to an overabundance of regulations is not necessarily to utterly eliminate them, and the lack of perfection should never be an excuse for not performing an action when the consequences of inaction are worse.
I won't pretend to know what should or shouldn't have happened in the current financial crisis. My post was really directed more toward basic consumer protections -- things like truth in advertising, not selling rotten meat, being upfront about the terms of payday loans, etc.
Well... I agree that some people will always be more independent than others. I think you are overstating things when you take it all the way to communism, but in my experience, a more communitarian society simply works better.
Don't think of it like we're taking people's freedom away, think of it like someone pointing out the dangerous ice on the sidewalk, or better yet, cleaning it up before someone slips on it. It's just neighbourly. (Can you tell I'm Canadian?)
I'm not saying all of society has to be nerfed -- that would be totalitarian -- but a world where "caveat emptor" is the last word makes for a crappy and unsustainable society. It's about balance.
Want evidence? Just open any newspaper. In fact, because they refused even modest regulation, the USA is now going to have to get 1970s-style-socialist and probably nationalize a lot of the economy. Which I think is a terrible outcome.
The problem is, it's not addition and subtraction. It's exponents and amortization and, sorry, most folks only think linearly. Beyond that they get frustrated and reach for the next beer.
You don't need exponents if you never go further in debt than your bank account balance. Just pay off your credit card every month. I do, have done so for years, and it is not a rule that is very hard to remember.
So you just need the "count the digits" rule of thumb to decide if you can afford to buy something or not. If you can count to 10, you could even compare the first digit of each number (credit card debt vs bank account balance).
Sure, people know that they shouldn't spend more than they make and --Oh look! There's a sale today at the mall; I have a credit card and it's a good deal, brb.
It's about discipline more than it is being good with numbers. Sometimes I would imagine it would be hard for people to look at their bank account and see enough money in it to purchase X, so they use their credit card to purchase X only to spend the money in their bank account on something like groceries later.
"Basically it implies that most people are doomed to live a live in dependency and slavery, because they will always depend on the goodwill of other people to not screw them over. Maybe it even implies that in the long run communism is the only workable system." - except that communism only makes it harder to survive without "other people", AKA "The Party", screwing you over. With capitalism, you can get out with programs like this and discipline. With communism, you have no such option.
(One of the things I never understand about communists spouting off about capitalistic exploitation... by the same standards you're accusing capitalism of exploiting me, communism only exploits me harder and with no hope of escape. Not progress. The answer to this paradox is that the communists always assume The Party is a magical fairyland group of people which, unlike every other group of people every formed, only has your best interests at heart, whereas they grant no such fairyland powers to anybody else.)
I am definitely NOT a fan of communism. Just saying that the statement "people can't handle credit cards" seems to imply that people are unable to act for their own good. That in turn would imply that the majority of people needs a dictatorship or equivalent to get by.
That is a very, very scary statement. Basically it implies that most people are doomed to live a live in dependency and slavery, because they will always depend on the goodwill of other people to not screw them over. Maybe it even implies that in the long run communism is the only workable system. I can't imagine that the majority of people is THAT bad at maths :-/ I mean it is just basic addition and substraction. Even if you can only count to 5, you could get a rough idea of the state of your credit (number on bank account has less digits than number on credit card debt == bad).