I agree with Rand. It's the duty of the CEO and other executives at any company to maximize return on investment for their shareholders. If Apple executives were to voluntarily increase their tax payments - thereby decreasing profits - they would not be properly executing their office and duties. This is especially true when their competitors choose to maintain the legal advantage.
The entire hearing is a farce and should have been reversed: citizens of the US grilling legislators about why they implemented tax laws so poorly that exploitation of loopholes is common practice. I think many of us have suspicions as to why this is the case.
1. Government does actually know how the Internet works
2. Makes this attempt, knows it will fail
3. Waits until somebody blows themselves - or somebody else - up with a poorly made, 3D printed gun
4. Government points to failed attempt, argues it does not have the necessary power it needs to prevent these tragedies
5. Government passes bill expanding its power
6. Rinse, repeat
Of course my use of "government" here incorrectly suggests a single entity with a plan. Obviously it does really work that way, but bureaucracies sometimes remind me of organisms with memories, immune systems and, above all, a desire to grow.
"The Systems Bible", also known as Systemantics, is a classic and highly recommended. It's probably not what you expect: it covers systems in general, and large complex systems in particular. It's not specific to computer systems let alone any particular flavor of computer system - these are rules which apply to all systems, from a municipal garbage collection program to a supertanker. Yet if you've ever dealt with a real-world distributed system you'll find it surprisingly relevant and timeless.
I suspect Level 4 is to read Distributed Algorithms by Nancy Lynch, who won the Knuth Prize for this stuff. A shorter book that looks good is Distributed Systems: An Algorithmic Approach, by Sukumar Ghosh. I recently bought them both but haven't tackled them yet.
"Enterprise Integration Patterns: Designing, Building, and Deploying Messaging Solutions" is a classic for messaging. It's pretty advanced I guess, but beginners can understand it too.
It would happen if there was enough demand for it, just like the first power plant, the first radio, the first car, the first steam engine, etc.
None of these items were developed in a vacuum; it's almost impossible to separate private and public contributions once you start talking about education and the public safety/infrastructure that created the right environment, but I don't think it's fair to imply SpaceX would never have happened without NASA or other public research. History, at least, has presented some counterexamples.
I got Dr. Sbaitso with my Creative sound card when I was little. I remember asking him all these questions about sex, then printing out the conversation. Then I panicked, thinking my parents would see it, and tore the papers up and hid them in our basement. Good times.
You're asking for more government intervention because of the poor results from the first intervention. If the government didn't bail out the banks in the first place, most of these banks would have been broken up and their assets sold off during bankruptcy. Many of those executives who made big bucks running their companies into the ground would have been out of a job.
You could even go one step back: if the government and its central bank didn't subsidize risk through low interest rates, incentives to lend to people who were massive credit risks, and so on, we may not have had the housing bubble - at least at that scale - to begin with.
Let's go back even further to the easy money .com bubble and the resulting collapse which "excused" the artificially low interest rates mentioned above...
Instead of focusing on more intervention, how about we argue for fixing the real problem: let the market work, end these artificial interest rates, and stop debasing the currency.
I agree absolutely. It really irked me when the government took over Fannie Mae and Freddy Mac( FNMA, FHLMC). As a result, home prices remain ridiculously high given the record number of foreclosures and large numbers of mortgages "underwater".
As expected, government intervention has created obvious winners (the financial industry, people who buy too much home) and losers (almost everyone else) once again. I would prefer your solution.
But structuring the financial industry to prevent it from re-creating known problems is also necessary.
> Every financial asset you own, whether it is paper money or a number in a bank account, is somebody else's liability.
Gold is a form of money with no counterparty risk; if I own gold it's nobody's liability.
One complication is that some central bankers and governments try to suppress gold being used as money through enforcement of fiat money monopolies at gunpoint...
Edit: I am incorrect in saying gold is a financial asset.
Gold is a natural resource, so it's not really a financial asset. Coins containing gold are liabilities of the issuing government just like any other type of coin.
I hope you do not seriously believe that the reason gold is not used for trade is that governments suppress it. The fact is that using gold is actually extremely impractical compared to modern forms of payment.
The use of gold in trade in the past developed naturally because sufficiently stable fiat money systems did not exist. However, once such fiat money systems do exist, they are simply better and there is no reason left to use gold as a medium of exchange (outside of goldbugdom).
I do believe governments and central banks would like to suppress its use, though I wouldn't claim that's the only reason it isn't used in transactions today. It's in their interests to suppress its use because it's one way to spend more than they take in as revenue by issuing new currency. I think we're seeing the results of that globally today.
As to gold being impractical for use in everyday transactions, I don't think that's true anymore. You can look at companies like Goldmoney for a real world example of what is possible. Any trusted third party can hold the physical gold, while allowing electronic transactions of said gold in whatever increments, without any physical exchange taking place. In fact, this is generally how the dollar worked before it went off the gold standard.
I'm not sure why you think fiat money is better. The history of fiat money has been one of short lifespans and dramatic failures, while gold's history of use as money spans over 6,000 years.
Would it? Gold has gone up nearly an order of magnitude in a decade. Has this caused your computers cost to go up dramatically? Are there industrial alternatives to gold? Would stability of the value of your currency be worth an increase in the cost of consumer electronics?
I know no right thinking person, especially with an elite education, would consider a gold standard.
Where are you getting your information? Gold in 2000 was about $400 inflation-adjusted dollars. Gold in 2010 is a little over $1500. That's not even close to an order of magnitude.
However, if you know that there are about 140,000 tons of gold in existence and somewhere around $9(M2) trillion in US money supply in existence, you do the math on how much gold would be worth.
The main point of my post was that this is such an obvious point that is not addressed, meaning that even the idea of moving to a gold standard is not well-thought out. Poor analysis is enough for me to dismiss the idea without a second thought -- only idiots play roulette with a nation's entire money supply.
I'm being a bit hyperbolic, but $2000 gold is around the corner, and the bottom in the early 2000's was well under $400, depending on the market you look at. The move in gold has been hyperbolic. Have you seen that pass through to consumer electronics? Are there alternatives to gold for these industrial uses?
I agree entirely that only idiots play roulette with the nations's entire money supply, which is precisely why we should take the roulette wheel out of the hands of the money printers at the privately owned Federal Reserve.
In your scheme, you are simply trading assets that are reflected by a liability of the organisation that runs the system, so you are not actually using gold for everyday transactions. It's the same as the difference between using gold itself and a gold-backed currency.
As to the question of what is better, my answer to that is two-fold.
First of all, history paints a misleading picture of the strength of gold-backed currencies. After all, when things go seriously wrong economically under gold-backed currencies, ending convertibility is usually one of the first things that governments do. Then the final death of the currency happens after it has become a fiat currency, but of course the failure is ultimately one of a gold-backed currency. Generally, whether a currency fails is not related to whether it is fiat or gold-backed anyway (such as with the failure of the Weimar mark, which happened to be fiat money; but both the move away from gold convertibility and the hyperinflation were caused by the First World War).
Second, while it is obvious that fiat money can be rejected totally, and gold will always retain at least some minimum value based on its use in jewellery and industrial production, this is not a useful measure to decide which system is better.
I claim that the real measure should be: How well does the economy fare, how well does it serve society, under a modern fiat money system vs. older systems.
Here, there is a great amount of evidence in favour of modern fiat money arrangements. Compare the cycle of booms and busts in the 19th century with the relative calm of the second half of the 20th century. In fact, that period was so calm that economists even claimed that the business cycle had been tamed! (They called it the Great Moderation.) Of course, this was hubris as the current crisis has demonstrated, but it should give you a taste of just how successful the combination of modern central banking with fiat money has been.
(I do not think this calmness was purely due to using fiat money, but I would claim that using fiat money certainly helped. The correlation is obvious, one can debate over the causal link of course.)
For one, we use gold in a whole lot of things (like the computer you're typing this on). A gold standard would cause a massive increase in the price of gold, crippling those uses.
I hope you do not seriously believe that the reason gold is not used for trade is that governments suppress it.
Exchange of gold is subject to capital gains tax; exchange of the US dollar is not. It is clearly suppressed as a currency.
(As would any other attempt at private commodity currency, nothing unique about metals).
The fact is that using gold is actually extremely impractical compared to modern forms of payment. [...] However, once such fiat money systems do exist, they are simply better and there is no reason left to use gold as a medium of exchange.
I do not follow your reasoning at all. Are you perhaps confusing paper money (exchange of documents certifying ownership of wealth instead of physical goods, as a logistic convenience), with fiat money (ability of a state actor to create money and force its creditors to accept it as payment of debt, as a variation of its power to impose taxes)?
There's nothing inconsistent between gold and paper money -- in fact the US dollar was at one point both at the same time, paper bills backed by gold. You have a dollar bill, you have gold; you want it in your physical possession, you trade in your dollar bill and the US redeems your gold. But for convenience you trade in paper bills.
You have a dollar bill, you have gold; you want it in your physical possession, you trade in your dollar bill and the US redeems your gold. But for convenience you trade in paper bills.
How is that inherently better than fiat money? You are essentially trusting that the government will provide you with the gold on demand. The government could overprint & not actually have enough in reserves to cover all gold requests.
Additionally silver/gold certificates were redeemable for silver or gold dollars. The world gold market started making these coins worth more than the face value. You started to get speculators who would cash in & then sell the gold for more than the currency was worth. This also happened to Britain with their gold standard. Not to mention the overhead required to maintain & store large volumes of gold as well as punching out expensive gold coins.
I can see the nice concept of having a currency independent of government, but when you boil it down, money is all about trust. Even if we were on a world gold standard we would have to have faith that gold will keep a stable value & that other players in the market are being truthful about their reserves.
Yes, you are right that I was looking at gold vs. fiat money without considering gold-backed paper money. I was in a biased frame of mind because the GGP was saying that with gold, there is no corresponding liability. With paper money you have such a corresponding liability, whether gold-backed or not.
About the US tax system, which I don't know too well: what about exchange of foreign currencies? Are they subject to capital gains or some other form of tax? Does the capital gains tax actually apply if you use gold for payment, and not just if you sell the gold in exchange for US$?
On the GP's point, isn't a gold certificate a debt instrument? If you use a gold certificate for convenience, then you are introducing counterparty risk.
Most people are willing to pay a few cents on the dollar (whether that rears its head as actual risk of theft, risk of default or risk of inflation, or as insurance against those possibilities) in order to be able to trade things with other people.
The modern economy is very good about keeping its costs stable and low, while steadily increasing the speed and ease with which we complete transactions. I'd say that's a pretty good thing.
So a bank being able to create an unlimited amount of currency is bad, obviously, but limiting your currency growth to how fast you can mine gold out of the ground isn't much better.
Let's take a very simple example. Say there are two people on an island. The first can build boats, the latter can fish. There is no currency. What should happen?
Case 1: No transaction. Both die.
Case 2: The first builds a boat (boats are very resource intensive!) and gives it to the second. The second fishes and has fish. The first dies because he has no fish.
Case 3: The first agrees to build a boat and rent it to the second in return for part of the first's weekly catch for the next 10 years.
To support Case 3, you basically need contract law. But the contract in question is very inflexible. Does the boat maker enter into similar contracts to cover his needs for clothes, etc? Ideally the boat maker could just sell the fisherman the boat and use the money to buy fish or clothes or anything. So you need currency.
The key question is: how much currency do you need?
Obviously, you need enough to be able to serve as a proxy for the goods and services in your economy and promises thereof. The Fed may not be great at estimating that amount, but pegging it at how quickly you can mine gold out of the ground doesn't make any sense either.
Would miners pull gold out of the ground more quickly (and start more projects) if the price of gold increased?
Would new entrants in the market attempt to find more efficient ways to extract gold?
Would alternatives to gold as a currency arise?
I'm not convinced that a gold standard would be perfect. I am quite convinced that the current private exponential issuance of debt-based fiat currency by a money printing madman is insane.
I really don't know. I just don't think that our academic betters know either, despite their pretenses. I tend to think that any idea that our friends in economics dismiss is worth considering carefully, given how wrong they've been in the last decade plus.
The U.S. grew at its fastest rate under a hard money gold standard, with heavily restricted immigration and almost no government, financed with tariffs, of all things. Does that mean we should adopt those policies? I dunno man. I do know we were industrializing at the time and, hey, look at that, there was a literally unbelievable explosion of goods, services and promises thereof.
I'll add one more reason I don't think we're in a gold bubble: as long as countries around the world continue devaluing their currencies, the nominal price of gold will continue to rise. While it's possible that the inflation-adjusted price of gold could fall, I can't imagine that happening in an environment where fiat currencies globally are being debased. I should say that this isn't just true for gold, but for any hard asset that hasn't seen an explosion of supply (like apartments in Nevada or China for example).
When central banks worldwide stop printing and start raising interest rates, that's when I'll start scrutinizing further accumulation...
I'd actually disagree. The constitution explicitly enumerates the powers of the federal government. Many (most?) modern federal programs, departments, and laws aren't _explicitly_ listed. The government has gotten around this limitation by claiming that the constitution grants the federal government the right to regulate interstate commerce, which can be interpreted as narrowly or widely as you like. Up till now, the courts have allowed this wider interpretation.
I think it's every citizen's right - even duty - to be questioning these things rather than leaving it to some "Constitutional expert".
I'd encourage the original poster to drop the loaded term "ObamaCare" and instead explain why he believes the health care bill is not allowed under the interstate commerce clause. In my opinion, it isn't a very difficult thing to argue.
If congress is constitutionally allowed to tax then the individual mandate is constitutional. Imagine a law where they would raise your taxes and give you a health insurance policy, it would be effectively the same as a mandate.
Every American has the right to question whether or not a law is constitutional. However, without expertise in constitutional law and elections, it is speculative to make claims that senators were ousted because voters believed a law to be unconstitutional.
The entire hearing is a farce and should have been reversed: citizens of the US grilling legislators about why they implemented tax laws so poorly that exploitation of loopholes is common practice. I think many of us have suspicions as to why this is the case.