European Politics
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bearfan
Ancient Mariner
Ahh .. it is different here. There are 2 basic kinds of mortgages
1) Fixed Rate which locks in a certain rate for the length of the contract which are usually 15 or 30 years
2) Variable rates that are tied to the prime rate + some percentage (based on the bank, credit, loan amount, etc)
Usually the fixed rates are between .25% and .50% higher, but you know what your payment will always be and it will not change. In that case it makes no sense to get a variable rate when rates are low, yes you might save a little bit of money, but if rates go up that savings goes away real quick.
People make bad money decisions all the time, especially when it comes to debt.
MindRuler
Ancient Mariner
Bought another pile of comics
Not sure if it´s a bad decision though ´cos I didn´t buy alot the previous months and I can afford it. There was a time (around 2000-2004) I bought CD´s every week! But this is the politics thread so I better be silent.
Yax
Ancient Mariner
Sure, but this is not just people, but a population (and surely not the only one) Swedish households’ debt has increased dramatically in 15 years to the point that they are over-leveraged near the tipping point as energy and other costs of living have soared. It is not looking great.
____no5
Free Man
It’s systemic, not just people make mistakes.
It is systemic, because we allow banks to exploit people's bad decision making.
Yax
Ancient Mariner
In part yes, but it's also the result of active political decisions, like rental-to-condominium conversion, where publicly owned rental properties are converted. This is one of the factors that have driven housing bubble development here in Sweden, because suddenly everyone needs to borrow money to buy their rental, and the prices start to spiral as properties get bought and sold over and over again. There are far, far fewer rentals available here than 25 years ago. I think Stockholm city over time sold like half or a third of their properties.
Yes, very true, but is that not a subject of the government attempting to allow banks to exploit people? I swear, it's like they want us all to become Communists.
GhostofCain
Ancient Mariner
____no5
Free Man
Adding to Yax’s, Capitalism is flawed by design, having the dept embedded in each new money created and thus the need of endless growth, genuine need of big portions of population to be poor and undeveloped plus job insecurity to control them.
See how companies are behaving. Massive lay offs by tenths of thousands because there’s “slow down” in their growth.
See how states are failing in the decades like the game of musical chairs.
My point is that even if people were making the wisest of decisions we will still have crises. You can’t have growth forever, thus crises serve as a kind of reset and we see them happening surely every decade; in my opinion probably even more often from now on.
See how companies are behaving. Massive lay offs by tenths of thousands because there’s “slow down” in their growth.
See how states are failing in the decades like the game of musical chairs.
My point is that even if people were making the wisest of decisions we will still have crises. You can’t have growth forever, thus crises serve as a kind of reset and we see them happening surely every decade; in my opinion probably even more often from now on.
Jer
'Til Tomorrow
Sure. So what's your proposal for a system that's actually better than heavily regulated capitalism, and what's your real world evidence to back up the assertion that it's better?
Jer
'Til Tomorrow
Well, when people beat up on capitalism I'm always curious what they think would work better. As far as I'm aware, real-world evidence seems to suggest that capitalism with social programs and a certain amount of regulation tends to provide the highest overall standard of living.
The state of California in the U.S. is probably a good example of somewhat overly regulated capitalism. You need permits for everything, restaurants have health code scores posted out front, taxes are high, and they're usually on the spear tip for environmental and privacy laws within the U.S. Some of this stuff is good, but some of it is stifling and expensive. Other states have been laboratories for other approaches, which yield good information about the pros and cons of each.
To my mind, any situation where a company's profit or revenue motive would cause them to make a choice that would be dangerous or directly damaging to the population is one that requires governmental regulation. The problem is where you draw that line. Health impact is an obvious one. Economic impact is squishier, but this is where things like anti-trust, anti-collusion, and minimum wage and benefit regulations come in. Social impact is one of the stickiest, as there are competing interests with freedom of speech, etc., and we're only just now dipping our toes into this with potential social media regulation.
The real issue is, without harnessing greed to drive economic growth and increase standard of living, how else are you going to effectively do it? Communism falls apart once a collective gets over about 2 dozen people, because corruption eventually finds its way in, and greedy individuals start doing bad things. Over-the-top socialism strangles the local businesses to the point where they can't compete effectively with foreign ones, and that stunts growth, which limits increases to standard of living. And obviously if you go in the other direction and go "full libertarian" with completely unregulated capitalism, then the rich get richer, the poor get poorer, and standard of living will vary wildly based on economic class.
Understanding that most people's default is to act in their own self-interest, it makes sense to tap that motivation while keeping it under careful control.
____no5
Free Man
Standard of living isn't always the answer, as many hard authoritarian countries have pretty high standard of living. Dubai & Singapore come to mind.
One idea; I'd like to see more collective ventures in the blend, without this being the only and absolute truth as in Soviet times. For instance factories where the workers would be the share holders.
This is precisely what has happened since the 70s. Alan Greenspan has even went so far as to point job insecurity as a key to keep things running well (I think he related it to low inflation among others). This is a deeply flawed system. Surely I cannot provide an alternative how could I, but I can recognise that keeping by design a part (the biggest part) of the society in pariah status is a deeply unhealthy way to go for that society.
Maybe one way to go is city -countries, or generally not too large countries. All the good real-world examples that I can think, democratic or not are not too big population -wise.
Jer
'Til Tomorrow
I think it’s part of a larger cycle in capitalistic democracies. The U.S. had escalating economic class disparity through the robber baron period, culminating in the Great Depression in the 1920s. Then the WWII war economy and a raft of new social programs made things a lot better for a few decades before disparity started getting out of control again. Maybe it will take another massive economic calamity to reset things, or maybe we’ll surprise ourselves and decide to make smaller adjustments in response to smaller calamities instead. But this is the European Politics thread, so I shouldn’t get into all this U.S-specific stuff here…
Just to barge in here, that's not a contradiction. Capitalism and authoritarianism are not exclusive, and by some neoliberal definitions, such as that of Hayek, they effectively necessitate one another. It's a myth that capitalism and democracy are two sides of the same coin. In the best of times, capitalist interests and democratic ideals can co-operate, but neither needs the other to survive.
____no5
Free Man
Yes exactly. Capitalism needs a system to counter-balance it and keep it at check, can be a Democracy or Monarchy even Dictatorship. And going even further how can Democracy be really deep if it's not applied in the workplace where we spend most of our lives? Employees vote every 4 years for their political representatives but have little or zero decision power when it comes to decide anything related to their actual work, like where their company should invest, who will lead etc.
I saw a video the other day of Richard Wolff claiming something like profit is just a number in which you subtract a set of costs -by no means all the costs that are involved- from the revenues and you are left with a result which is called the profit; it's not connected to anything and that no one should imagine that having profit is a requirement for producing anything. And that most of the time of human race there was no profit, as if conceptualised, calculated etc.
It blew my mind. I realised that giving profit a central place in the economical philosophy, something like a universal and unquestionable value is what set Capitalism apart as a (flawed) system. Quite basic stuff really, but still.
It took me time and effort to imagine an ecosystem without profit at the centre stage and I think it is possible but in a small scale, i.e. within a city at best. There, a Democracy in the workplace could be achieved and by extension a more human -centric system.
I saw a video the other day of Richard Wolff claiming something like profit is just a number in which you subtract a set of costs -by no means all the costs that are involved- from the revenues and you are left with a result which is called the profit; it's not connected to anything and that no one should imagine that having profit is a requirement for producing anything. And that most of the time of human race there was no profit, as if conceptualised, calculated etc.
It blew my mind. I realised that giving profit a central place in the economical philosophy, something like a universal and unquestionable value is what set Capitalism apart as a (flawed) system. Quite basic stuff really, but still.
It took me time and effort to imagine an ecosystem without profit at the centre stage and I think it is possible but in a small scale, i.e. within a city at best. There, a Democracy in the workplace could be achieved and by extension a more human -centric system.
Jer
'Til Tomorrow
Care to name any successful democracies that aren’t based on some form of capitalism…?
Obviously I can't, because the modern idea of democracy postdated the modern idea of capitalism. Since any successful modern society is in some form capitalist, there's no proof, but I don't think a democratic society has to be, by definition, capitalist. If we ever live in a post-scarcity world, capitalism will evaporate while democracy needn't, but we are obviously a long way from that.