

A libertarian socialist engineer solves the financial crisis  - TriinT
http://sepwww.stanford.edu/sep/jon/financialcrisis.html

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joshu
So, lawyers and economists are corruptable but engineers aren't?

The only difference between this and a crackpot is that the domain is
stanford.edu and not geocities.com.

There's so much wrong here that I can't even figure out where to begin. Most
points are based on distorted facts, contains fallacies, ignores realities,
and so on.

There are some reasonable ideas (standardized mortgages) that I've heard
elsewhere, but a lot of it is crap.

#1 fixes what, exactly?

#2 is reasonable.

#3 is just ranting about credit cards. the fees may be egregious but someone
does need to get paid to run the machinery. of course, it should be a fixed
cost per transaction and the machinery should be less complicated. but it's
not related to the actual crisis.

#4 just moves the problem.

#5 is just painful.

#7 are you kidding?

#8 is just silly. and I work there.

#9 is more pain.

#10 is not the problem either. It's that there's multiple processes. It was
leverage and VAR that hurt, not the raw gaussian mis-approximation (although
it didn't help.) The markets are gaussian (well, GARCH) short-term, but the
regime shifts and changes are the output of another process.

A more reasonable solution going forward is going to be a) transparency in
financial instruments for consumers, b) strict guidelines about new kinds of
financial instruments, and c) leverage restrictions on financial
organizations.

I think that simultaneous failures of other industries due to lack or loss of
flexibility will have to be dealt with in different ways.

~~~
sengan
It's harder to be corrupt if you have to argue technically why your decisions
will improve the economy.

Engineers and Scientists value the truth, whereas Lawyers value a convincing
argument whether it is true or not. Think about their jobs: you can't convince
reality you're right, but you can convince a jury.

I think you'd find it much harder to create feedback models of the economy
which just happen to predict the best thing to do is to "Give Goldman Sachs a
bonus to fix the economy", than it is to come up with some unprovable scare-
mongering which terrifies the politicians into doing just that.

So yes, engineers or scientists would probably be more trustworthy running the
economy as long as they stay true to the discipline.

~~~
gaius
"Scientific" government is what produced the USSR and is currently operating
in China. There is even a word for it: technocracy.

People who think they know best for everyone else need to be kept far away
from real power, whatever their political flavour.

~~~
TriinT
There's another way of being "scientific" when it comes to policy. Instead of
having a bunch of crooks in positions of power deciding for everyone, why not
have the government designing markets and institutions that work, leaving the
decision-making for the people?

The scientific approach to government should not be the USSR over-
centralization. It should be intelligent design. Create the incentives, set
the rules, and step back when the games begin.

------
donaldc
_New tax bracket, 90% tax bracket for anyone making more than the president of
the USA -- retroactive two years. Rates were higher than that in 1963
(historical rates)._

Bad idea. Besides being in very poor form (changing the rules after the fact),
retroactive taxes will snare people who made perfectly reasonable financial
decisions given the rules at the time, but would now find that they don't even
have the money to pay their (retroactive) taxes.

As for 90% taxes on high income, I'd prefer that they simplified the tax code
and got rid of loopholes.

~~~
lupin_sansei
They tried that in the UK in the 70s. Paul Graham mentions it in one of his
articles. It just serves to drive wealthy and ambitious people overseas or to
spend a lot of time and money looking for loopholes. The net result is that
the size of your "economic pie" gets smaller and smaller.

------
lupin_sansei
You can't be a libertarian and a socialist at the same time. Libertarianism is
against coercion whereas socialism (excepting voluntary socialism - eg hippy
communes) is a forced system of banning voluntary trade.

~~~
jibiki
<http://en.wikipedia.org/wiki/Libertarian_socialism>

~~~
lupin_sansei
Doesn't seem to answer the paradox of who will enforce the socialism in a
libertarian society. What if in this society you want to share my wealth but I
don't?

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ncarlson
I really hate to be "that guy", but his incomplete sentences are killing me.

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rms
The 90% tax bracket is too much, that actually does make people not want to
work. 65-70% would be better, or just actually closing all of the tax
loopholes.

~~~
ncarlson
I think the sensible option is to eliminate income tax completely.

------
snewe
"Institute a 10% tax on landlords that flows into a federal savings account in
the name of the renter. The renter can draw from his account only for a home
mortgage, or at his retirement."

So landlords raise rents 10% (or more) and the effect is simply forced
savings. Why not just make the SS tax rate 10 percentage points higher?
Ridiculous.

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andyleclair
That would be fantastic, you know, if the banks didn't already rule the world.
Do you think that banks are going to let software replace them? I have a hard
time believing that this would come to fruition with anything less thank a
full on revolution.

That said, I would wholeheartedly support such a revolution.

~~~
TriinT
In a way, computers are already replacing a lot of people at investment banks.
Mostly brokers and traders, for sure. Even David E. Shaw himself once wrote
that a lot of stuff in finance that is currently done by humans should be done
by computers.

However, if you take a look at actual _banking_ , like commercial banking and
corporate finance, the sector remains rather low-tech. And there's a reason
for it: there are no new ideas in banking. It's all about packaging and
selling old ideas. That will never be replaced by computers, unfortunately.

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jwb119
am i the only one that read (at least a few of the suggestions) as tongue in
cheek?

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socratees
I agree. Esp running the country with Engineers rather than politicians or
bankers.

