Happened to remember the thread name?  I'll just check out the forum history. 

> twosidedeath wrote:

> i was never exited about suing the banks. in fact most of the effects i described in my first post were about negative long and short term effects versus the one positive reason of proper business terms. and the reason i have said "bank-run" a dozen times now is the exact reason banks SHOULD NOT be handing out money that isnt thiers at least to the extent that you demand. a bank run is simple, a bank loans out cash, the lender, or the original depositors decide they want thier cash elsewhere, oh look the bank cant get that cash, and thats a very lame form of a bank-run. its basically defaulting on a payment.

1: I was only using that statement to point out an inconsistency (Why is $4 billion considered a positive relative to US debt, yet not $1 trillion?  Seems odd...)
2: Bank runs haven't happened since the 1930's, and for good reason.  Ever since the 1930's, the US developed a large banking infrastructure to create safeguards which safeguard a person's assets.  The FDIC insures up to $250,000 (was only $100,000 until 2008) of each depositor's cash, so all the people with small accounts will still have their money in the event of a bank collapse.  The bank reserve requirements are meant to ensure some money is there for depositors.  If those reserves fall below legal levels, banks can obtain short term loans from the Federal Reserve (that's actually the loan referenced when we discuss interest rate changes made by the Federal Reserve).
I'd say the current financial crisis sort of proves that bank runs don't happen in the US anymore.  If there was ever a time in which depositors would be running to a bank to pull out their deposits, it would have been in the fall of 2008, when most every bank was asking the government for a bailout and the government actually failed to pass the first bailout.

> secondly heavy fractional banking creates inflation, which also means thier money is worth less. odd eh? but when a bank loans out cash that is not infact thiers, in the belief that only 10% of thier investors will withdrawn thier cash at any given time, there becomes an excess of cash in the monitary system.

You're right here.  However, for one, that doesn't mean a bank should just be sitting on those massive reserves.  They're still a business which could make profits by expanding their market share within the economy in excess of inflationary trends.

Second, and more important, the US economy could actually use a little inflation.  The Federal Reserve's been doing anything it can to encourage lending, and thus inflation, in our economy.  Interest rates are at historic lows, and Bernanke has said he'll be keeping those rates at those lows for I believe at least a year.  If this was a normal economy with those interest rates, inflation would easily surpass 10%.  The only reason we're not seeing any inflation, and thus any recovery is because so much of the cash the Federal Reserve is injecting into the economy is sitting idly in bank vaults, as mentioned before.

Third, inflation and growth rarely occur on a 1%-1% basis.  In reality, unless the monetary policy is having significant problems, a healthy economy can outpace inflation...

Fourth, this inflationary worry is pretty much inevitable.  The moment the banks start to recover, these funds will inevitably return to the economy... and we'll see an inflationary trend again.  Then it will be the Fed's job to step in and try to prevent too big a price shock.  It's like a bandaid we're inevitably going to have to rip off. 

> last i dont believe that loaning out $1 trillion dollars even creates a GDP of 1 trillion, more likely that whatever return will be simply a fraction of that and even less significant then the possibility of banks collapsing, which would put thousands of companies out of business.

Here's a couple graphs of importance:
http://research.stlouisfed.org/fred2/data/MULT_Max_630_378.png

One more focused on the past decade.
http://images.tradingmarkets.com/2009/Howto/0309Hansen2.jpg

The graph indicates the strength of the money multiplier effect in the US for each period of time, relative to M1 currency.  Okay, so I was slightly off regarding the strength of the multiplier... we're normally at... about 1.7%, not 2%.  Anyway, the multiplier effect is exactly as I described it: that increases or decreases in the M1 supply will pass through the economy in a given year, expanding the economy by that amount.

As you can see, this multiplier completely dropped like a rock with the start of the financial crisis.  The reason is very simple: The most important piece in creating the multiplier effect of currency, the bank distributing the money in the form of loans, just isn't happening.  Once the money gets deposited in a bank... the bank's portion of the multiplier effect doesn't happen.  It just sits there.  Meanwhile, the Federal Reserve's been injecting currency into the money supply to hopefully stimulate growth, to no avail (liquidity trap).  Hence why, on average, there's no multiplier effect in our economy anymore.

EDIT: Oh, right... one final note: If we're in an inflationary period, it's stupid for the banks to be holding those reserves anyway.  With no other reinvestment or lending, that cash doesn't actually produce any growth, which means the only change in value of that currency is inflation.  The result: the bank just ate a net loss in buying power of anywhere from 1-4% for the year.

Fair enough.  I just wanted to make it clear that an alternative energy shouldn't be rejected just because it doesn't work under certain circumstances. 

@... well, everyone else debating alternative energy here

Just curious... why do we always assume only one energy tool can be used?  Yeah, there are flaws with each energy system.  However, each system has strengths which are best used in different parts of the world.  Where I live, solar power is the clear best choice, even in winter time  Other large-scale energy systems accommodate for energy use when solar power is less than optimal (such as at night).  In regions with high winds (high-altitude regions), wind power... another region may have a better geothermal environment.

Long story short, debating the merits of any single system ignores the benefit of the energy system: that different energy systems can be adapted to different regions for maximum efficiency.  It's not up to us to determine what is the best cookie cutter solution to every place on the planet.  Otherwise, you ignore, and thus fail to utilize, the resources each region has.

@Pixies

I'm getting to you... I actually had a post... but it got erased in a random backspace error.  X(

> Pixies wrote:

> Zarf, I am trying to put forward an argument that allows us decide what to do/not do even though we don

@Pixies

I'll wait for your complete post... because long story short, you answer pretty much none of my initial argument in your post.  No harm done, but I'm waiting intently...

Oh, also... I knew I recognized CERN!  They're the people that may or may not destroy the universe by inadvertently causing the universe to fall out of the quantum vacuum state!  That means we should ignore them because they're evil, right? 

> Pixies wrote:

We do not know how significant our effect on the climate is. If it is worse than we hope, and we do nothing to prepare, we are in a heck of a lot of trouble. If we do something and it turns out that the Earth just happens to be more of a sustaining regulatory systems than we imagined, then relative to the potential catastrophic loss, we spent some pocket change and developed a few useful technologies. Oh dear.

While I'm not in any way qualified to make any sort of judgment call on global warming itself, there's two things I need to say regarding this specific notion:

1: Depending on what sort of climate change solutions we're talking about, your risk analysis may not be entirely accurate.  Now, if the only policies you advocate are, for example, alternative energies, there aren't many people who would have a problem with it because the technologies have alternate uses.  I'm pretty sure most of us, regardless of political ideology or stance on global warming, would have no problem with alternative energy because it has external benefits.

However, there's a separate class of proposed solutions which I, and others would claim are uniquely dangerous.  Let's say, for example, a business has a factory in the US which emits 1 ton of CO2 into the atmosphere each year (I actually have no idea of how air emissions are measured... science is someone else's field, not mine), earning $1 million per year in profits.  Assume the government places a cap which limits that business to .5 tons of CO2 emissions each year, requiring a structural adjustment.  How does the business solve this?

The business could cut production.  In this case, our model business would need to cut production by actually more than 50%, because factories actually produce greater profit with larger quantity of production (factories have a fixed cost of maintaining the factory that must be paid regardless of production... a concept called economies of scale).  So you're actually cutting its production by more than 50%.  Add to this the ripple effects (employees that made those additional goods would be fired, a sudden, short-term shortage would occur for that product).  This may not matter for the market as a whole if a single business has the problem, but for every polluting industry in an economy simultaneously, that's a pretty big economic shift.

Alternatively, perhaps there's some technology which could cut the business' emissions.  Assuming the technology exists, the cost is still going to factor into production.  First of all, the cost would have to be cheaper than the cost of simply cutting production by that amount.  Any additional cost for the cleaning effort would effectively act as a tax on production, cutting production similarly to the effects of just cutting production entirely.  Whether these technologies exist in a fashion which could effectively offset emissions is still up for debate, as is the question of how much such an offset would actually cost, relative to production.

The third option is to simply outsource.  Not all countries will have the same environmental regulations.  Even the Kyoto Treaty put a giant exception in for developing nations to allow them to pollute.  With the growth of skilled and unskilled labor in East Asia, there's no reason a polluting company can't simply move its operations to another country to dodge the law entirely.  Considering the only temporary expenses an expanding interconnected nature of commerce, this is a relatively simple way a business can abide by the legal requirement.  Not only would this have absolutely no net effect on emissions, it would cost jobs through outsourcing created not as a result of comparative advantage but instead as a result of a race to the bottom, the bad form of outsourcing.

There may be some research possible to develop emission-reducing production methods.  However, research is a long-term solution.  The company would still need to adopt a short term solution, and would also need to find a way to pay for the additional costs of research (further magnifying the economic impact on the industry).

2: The very act of your risk calculus is a practice in bad science.  You could, in theory, post counter-examples and say "Well, Flint, your article on global warming may be wrong for X, Y, and Z reasons... here's a scientific study to disprove your scientific study..."  You know... actually debate global warming.  Instead, you resort to precautionary principle risk calculation.  That's a terrible idea for a couple reasons.

First, we're no better off in knowing whether or not to buy the global warming issue.  So we're just shooting dice at this point.

Second, I'd say you undercalculate the risk of economic downturns, especially now in an interdependent planet.

Third, and most important, your principle justifies ignoring argument claims in favor of precaution.  In effect, it justifies policy actions based not in truth value but on the most extreme possible action that may result if one side is true.  It's essentially fearmongering.  It also justifies the following:

We should establish a series of orbital nuclear weapons platforms to fight an alien invasion, because if aliens exist and we're not ready, they could wipe out humanity.

We should all become Catholic, because if you're not Catholic and Catholicism is correct, you're going to hell (Yes, the ever-famous Pascal's Wager).

We should stop all development of nanotechnology because nanotechnology research may trigger a gray goo reaction, destroying the planet.

See the problem?  I don't have to prove the existence of aliens, God, or gray goo.  The mere threat is enough to justify policy action.  Good policy?  Hell no.  And yet these and other risk calculus scenarios.  In fact, I didn't make up any of those...

EDIT: Oh, right... if you buy the precautionary principle, you shouldn't be advocating development in nanotechnology since it might destroy the world through self-replicating nanobots.  I'm gonna be honest... some animals may be able to adapt to higher temperatures, even if it requires serious evolution... but it's hard for biology to adapt to machines turning all matter into more matter-eating robots. 

Nigeria:
You have 0 cows.  You send emails to thousands of Americans claiming that a Nigerian prince has died and left them with 3,000 cows, but they need to give you the keys to their farm so you can put all the cows in their farm.  You steal all the cows and become a Nigerian prince.

Soviet Russia:
Two cows have you.

Fail

xara?

One more question: How erratic will we see the prices?  For example, if the price of iron is 10 to buy before the program changes the price, is the price equally likely to to be anywhere on the price spectrum, or is there a limit to how far in one direction or another the price can fluctuate?

@EmperorHez

1: Don't forget my asymmetrical warfare arguments above and the argument regarding differing force needs.
2: You're forgetting the circumstances of WW2 development.  The US and USSR committed to a total warfare doctrine, in which most, if not all, production goes to the war effort.

It takes a year to produce an aircraft carrier today because the US isn't throwing 100% of its production into military development (which they shouldn't... we're not in any wars).  With total warfare military production, parts for a single aircraft carrier could be mass produced at dozens of different factories, where they would be assembled at the final port, just like how we manufacture a modern computer, aircraft, or car.

You're comparing a wartime WW2 production level to peacetime production.  That's flawed.  Instead, compare it to a theoretical circumstance under which politicians committed to total war production networks, using current infrastructure.