Which of these players can a healthy market do without?

[ColbertWatcher]

[lumberjack_jeff]

1. The answer is multiple.

CEO's and stockbrokers are both, not strictly necessary.

The limited liability corporation is, however.

[ColbertWatcher]

2. PBS is replaying "Ascent of Money" and it got me wondering.

Thank you for your response.

One question: why would you say stock brokers are not necessary?

[lumberjack_jeff]

7. They only act as an intermediary between the company and the investors.

Certainly they add value to the transaction and help to assure liquidity, but they're no more "necessary" than realtors.

A healthy market could function without them.

[ContinentalOp]

11. What exactly does a stock broker provide that a computer program couldn't accomplish? -nt-

[lindisfarne]

19. They also talked about how the Catholic church wouldn't allow interest payments - we've gotten over

that biblical prohibition, haven't we (thanks to the Medicis)? (why aren't the fundies screaming over that violation of god's instructions?)

[Greyhound]

3. The entire "financial industry" is not only unnecessary, but is a net drain

on the real economy.

Banking (as in the issuance and control of currency) is a function of the government (us) and obviates the need for interest.

[ColbertWatcher]

4. Do you know enough about the Federal Rerserve to explain it to someone (me)?

I can't for the life of me understand why the Fed is a private entity.

[TreasonousBastard]

6. It's not, really. it's quasi-governmental and independant...

like the Post Office, the old TVA and other public power companies, and a lot of other stuff is.

There's a lot of nuttery out there about how it's owned by the banks, but that's just some technical stuff going back a hundred years or so.

Banks create money by taking in deposits and lending it out. Central banks, like the Fed, control how that money is lent to avoid monetary crises and also set monetary policy. like interest rates. There's a lot of technical stuff they do trying to control the money supply and inflation.

Sometimes they do it better than other times (they really screwed up during the Depression) but, like the courts, they are supposed to be independant of the President and Congress so they aren't swayed into doing something simply for short-term political gain. Some problems are not the kind they can fix, though.

Before there was a Federal Reserve, we had massive bank failures and monetary crises in the 1800's that almost broke the country. We got the Fed when everyone finally admitted enough was enough.

[ColbertWatcher]

8. Thank you. n/t

[Greyhound]

10. Disparaging remarks aside, the Federal Reserve Act was passed in 1912

under the Wilson administration. The design of this "new" institution is one of those well documented and verified conspiracies that some people just love to hate. I'll let you look into it if you are so inclined. Basically, it allowed the existing banking interests to control our nation's currency because Congress was frequently inept and/or corrupt in the administration of our currency as they are directed in the Constitution (Article 1 Section 8).

The Federal Reserve Bank is a private institution that is owned by it's 12 member banks, which in turn, are owned by their member banks which are among the banks that you and I do business with, B of A, Chase, Citi, etc., which in turn are owned by their stockholders, but that's not important. What is important is who controls, or runs, these banks. The Chairman of the Fed is appointed by the President, but neither he nor the board are government employees. The important distinction to keep in mind is that they act on the behalf of their members, not the American people.

This could get very lengthy, perhaps if you have some specific questions it would be better to ask them, rather than me typing out a very long post which will likely induce a comatose state that you may not recover from. Here are a few salient points of the American monetary system;
Since 1972 (http://en.wikipedia.org/wiki/Nixon_Shock">Nixon), The US dollar is what is called a fiat currency, it is backed by nothing but our word.
Our currency is based on debt, not assets. If the government and consumers did not owe, our currency would literally become worthless.
When any bank makes a loan, that money is created from nothing, it never existed before, except of course for the interest the bank charges.
The origin of all the US dollars lent/created is based on us (the government) issuing bonds which are sold to other governments and investors, in essence borrowing against our citizen's productivity.
The entire system is extremely convoluted and within that complexity is the source of our lost independence.

Also, I am completely biased against this cabal and it is a dead certainty that our own DU parasites that get their paychecks from this fraud will have much to argue about.

[ColbertWatcher]

22. Two questions ...

... if you could change the system, how would you change it?

And, what was behind Nixon's monetary policy "reform"? I have become very suspicious any time a GOPer wants to "reform" something. It never means the previous system was perfect or not in need of real reform, but it almost always means they'll make it worse and to their benefit.

[Greyhound]

24. Too late tonight, but I'll try to get back here tomorrow. n/t

[Greyhound]

25. Second question first; He unilaterally canceled the Bretton Woods system,

ceasing the direct convertibility of the United States dollar to gold. This was done for several reasons, one being the men who put Nixon in office were not making as much money as they thought they should because our strategy in the Middle East was going sideways.

After WWII, the heads of the world's 44 industrialized nations gathered in New Hampshire, and made the Bretton Woods agreement. http://en.wikipedia.org/wiki/Bretton_Woods_system">The Bretton Woods agreement made the dollar the world's reserve currency, and stipulated that all member nations' reserves had to consist of either physical gold or currency convertible into into gold (domestically the private ownership of "monetary" gold remained a felony until 1975, an executive order issued by FDR). These member countries then had a "gold exchange standard" and manipulated their currencies on their national level, often trying to devalue their currencies at the same or slightly higher rates than what the dollar was being devalued, or inflated, at. Eventually the rate of economic production far outstripped the quantity of gold in the world and because there was, essentially, a global monopoly on "monetary gold" held by interests that would not allow the price to rise, the system became completely unstable (Note what happened in 1967 in the linked Wiki entry).

Meanwhile as a result of this recognition, At some point in the 50s - 60s it was decided that oil would be the new gold (the standard on which relative value of currencies is based) and therefore whomever controlled the oil, controlled the world. OPEC, originally founded by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, all of which were controlled by us at the time of that founding, were showing the early signs of disobedience. Particularly the House of Saud started getting all uppity and thinking that the oil they lived on top of was theirs, and they started flexing their muscles.

Without going into all the gory details, we bought them off and maintained the hegemony of the USD until Iran had it's revolution in 1979. The details are fascinating and "The Secret History of the American Empire" is an excellent source.

Back to Nixon, he made the USD an entirely fiat currency. Unfortunately, as we have seen, this gave the banks far too much power and Congress did nothing to counter it. With nothing to back or restrain them and a license to literally print money, they created the chaos of the late 70s and 80s, in came Raygun's owners to take full advantage of it and they stripped the nation of it's means of production and replaced production of things with bookkeeping.

How would I change it?
First, I would re-create the banking industry as a tax or fee supported service and make them either governmental or non-profit. The purpose of a banking is to secure your money and to ensure there is enough currency in the system for the economy to operate, that's all. For a bank to charge you interest on a loan is a net drain on the economy and it isn't their money to lend, they create it with the loan.

Second, a currency has to be backed by something so that there is a baseline. Commodities are too variable, we consume oil and there is a finite amount, gold is likewise finite and too useful in many applications, stones, water, salt, shells, paper, etc. all suffer from the same weakness, the supply is variable and finite. I think that a currency could be based on time, but that entails that we dismiss our prejudices about the relative value of work.

[truedelphi]

30. Ihave heard that the cost to Americans of each gallon of oil has remained

Steady over the past four decades in terms of the oil gallon's price in terms of dollar valuation of gold.

IS that true? (if you know.)

[Greyhound]

31. I don't know, but it seems plausible. Gasoline, OTOH, has continually gone up

regardless of the price of oil. The American consumer has involuntarily and unknowingly financed the rise of the parasite class for over a century.

It goes along with being uninformed, uninterested, and uneducated.

All sheep share a common destiny.

[ColbertWatcher]

33. Fascinating! Thank you.

Just one question, how would time become the new baseline for currency?

How would a system like that work?

[Greyhound]

37. Since all currencies today are completely arbitrary and only measured against each other

in valuations, converting to a single, invariable (non)commodity that everyone posses (more or less) equally would eliminate much of the "slack" that is used to siphon off value from people all over the world. IOW, since an hour in the US is exactly the same as an hour in Indonesia a direct calculation of value becomes possible and without the vagaries of one dominant institution or another influencing those calculations. We would also see a restructuring of costs associated with all products because much of the true costs of those products are hidden through crooked financial arrangements that promote the plundering of resources from those places with no voice.

Another advantage I see in linking currencies to time is that it re-connects people's awareness that they are selling their limited life-span in accepting employment. Now perhaps an Indonesian's life is worth less than an American's life, but I'm pretty sure the Indonesian would object to that position, so an eventual leveling of wages would become inevitable.

The actual functionality is already in place thanks to the global network of central banks.

Of course this kind of system would be anathema to our parasitic overlords, so I'm not holding my breath, but it is an interesting exercise.

[truedelphi]

36. Because certain banking families found it to their

Liking to have it in existence. For example, Goldman Sachs helped create the Great Depression, and has pretty much helped bring on this New Great Depression.

The excuse given for having the Fed is that it would prevent the banking runs that had hurt so many people during the eighteen hundreds. The Fed didn't manage to pull it off though - the Great Depression kicked in just sixteen years after the Fed's formation.

[TreasonousBastard]

5. All are necessary...

It's fun to whine about stockbrokers and other such things, but the joint stock company was invented years ago to raise capital for major ventures without going to the king or the bankers of the time. It's still difficult to imagine an orderly market without brokers, even if they do at times add to the market's disorder.

Same with CEOs. Can't imagine how an IBM would work without someone at the top organizing things. Don't even THINK about committees and other such silliness-- they never have worked to manage large enterprises.

[leftstreet]

13. Why do we need "large enterprises?"

You're not wrong - if you want something as big as IBM you need organization.

But do we need something as big as IBM?

:shrug:

[TreasonousBastard]

15. Would you like to live in a drafty old cabin with oil lights? Look...

around and imagine how much stuff you use, even depend on, that has to be made in a factory. Even if we accept that a world without, say, cars would be nice, the genie is out of the bottle and something else would have to be invented so we could get around. And that something would not be made by a couple of guys working in a garage.

The components of the computer you are using now are made by machines costing millions. Chip houses have "clean rooms" where they focus images of circuitry on silicon wafers through lenses costing over a million bucks apiece just to make the memory. You need a pretty big operation to be able to do that.

Oh, and I mentioned building jet planes somehwere else. Add bridges, office buildings, oil tankers, the Space Shuttle, clothes dryers, light bulbs, digital cameras, phones, cable TV... Yeah, a lot would change without those big companies everyone loves to hate.

[leftstreet]

17. Gosh, maybe undertakings such as these should be nationalized

Volks Computers!

[lindisfarne]

9. Somewhere in the US there's a fairly extensive barter market in a community - all that market has is

customers & someone who does the work (worker-owners?). Can't remember where though. They have their own barter money.

[TreasonousBastard]

14. There are a few places using barter currency, but...

it's not good for anything outside of the locality.

The hilarious thing about barter currency is that everyone who's tried a barter economy found out that it's murder trying to keep ledgers of who got what fillings from the dentist, meat from the butcher, etc. etc. So they came up with this funny money to make things simpler, and assigned values to all the goods and services in the town.

Well, that's exactly why money got invented thousands of years ago, so they just reinvented the wheel. What makes it even funnier is that they can't use any of that stuff outside of the group that agreed to it, so the auto mechanic can't buy parts with it at the parts store, you can't buy a phone or computer, you can't pay your utilities or taxes, invest it anywhere, or do much else with the money. It might even be illegal, and the IRS is always snooping around trying to figure out how to tax you on it.

Barter will always happen in small ways, but I dare anyone to seriously tell me how you can design and manufacture a jetliner in a barter economy.

[lindisfarne]

16. Bartering allows you to avoid a lot of taxes. Although technically, you're supposed to assign a

value to it and pay taxes on it, you don't have to do that if a friend helps you out, so the line gets really fuzzy as to what taxes have to be paid on.

Just as the value of a stay-at-home parent's contribution to the economy isn't included in GDP, neither is barter.

Bookkeeping can be a headache. My local business community does something like this on a very small scale during the winter solstice holiday season - spend so much in a business and you get "reward bucks" you can spend in any participating business.

[napoleon_in_rags]

12. Its good to see corporations is number 1.

That entire business form could be gotten rid of and reworked, and it would be good for all. The corporate concept is a kludge, and it always was.

[Sebastian Doyle]

18. Corporations wouldn't be so bad if they existed only as they did originally

A corporation can only last a finite amount of time (25 years?), and a corporation can only do one thing. (ie. Rupert Murdoch can either print newspapers OR run a TV network, but not both) And of course, overturn that ridiculous Supreme Court decision that misinterpreted the 14th Amendment to say that corporations should be considered "persons".

[ColbertWatcher]

20. What are corporations doing now that they didn't do when they were first started?

Oh, and I don't think there was actually a SCOTUS case that made corporations people, wasn't it that a clerk did some creative lawyering?

[Sebastian Doyle]

21. Yeah that's probably how it started, but the court upheld it ever since

And the corporatist nature of the current court, particularly Roberts himself, doesn't offer much hope of that changing.

As to what corporations can do now that they didn't used to be able to, the example of Murdoch that I mentioned before is a perfect illustration. Though he was also enabled by the Telecommunications act of 1996, which made it possible for him to eventually own two major newspapers in New York (and he tried to buy the Times not long ago) along with several TV networks, and now branching out into cyber media (MySpace) and the "means of distribution" (Direct TV).

And that's just in the US. Murdoch's operation is also multi-national, which also used to be illegal.

[ColbertWatcher]

23. What were corporations allowed to do before, that they don't do anymore, but should be? n/t

[Greyhound]

27. Continuing to exist and entering multiple businesses.

And yes, it was a head note written by the clerk.

[Selatius]

28. In early US history, corporations usually terminated after their charter was fulfilled.

A corporation was chartered to build the Eerie Canal. Once the investors and labor force were assembled to finish the project, the corporation terminated as per charter. Investors got their money. Workers went their separate ways.

The pursuit of profit is an ongoing goal. As a result, a corporation can now be kept in perpetuity. Because of the US' experience with the British East India company and its backers in British Parliament prior to the Revolution, very few legislatures would OK the creation of any corporation specifically only for the sake of profit. Some task had to be begun and ended, not kept open-ended.

However, over the course of the 1800s, the thinking was changed, probably due to people who wanted the protection of limited liability for nothing but the pursuit of profits. They lobbied government and eventually got the right judges in and enough legislators convinced that things changed. It's how our system works. Then a law clerk working on the SCOTUS made the final step and essentially created the idea of corporate personhood. The notion of corporate personhood is perhaps the only legal doctrine in US history that was established not as the result of any ruling by the SCOTUS but by a simple act of a clerk's comments.

To date, the SCOTUS has never ruled directly on the validity of the doctrine.

[ColbertWatcher]

35. Regarding the activist clerk's comments ...

... do you see a way for this to be "overturned"? Or ruled on?

[The Gunslinger]

26. I chose other

Greed would be my answer.

[readmoreoften]

29. corporations, CEOs, shareholders, investors, the market itself.

Keep the workers and consumers (who are also the workers.) Cut out all the scam. Streamline the whole process.

[greguganus]

32. Unions?

:hide:

[ColbertWatcher]

34. Personally, I think you're just kidding, but on the offhand chance you're not ...

... why can't workers have a way to counter management?

Why should a capitalism system favor the investor class?

[Deja Q]

38. On the condition they're all competent and they all help each other when a mistake is made,

ALL are necessary.

[Unvanguard]

39. All are necessary, unless we are adopting a conception of "healthy market"

that would embrace market socialist options such as those of John Roemer or Oskar Lange.

But for healthy market capitalism, you need all of the above.