Altruisme

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Altruisme

Innlegg Panther 23 Mar 2009, 18:08

En veldig bra historie som viser altruismens sanne ansikt.

http://www.capmag.com/article.asp?ID=5472

James Long jumped out of bed and into his clothes. While rushing from his tiny bedroom plastered with photos of Steve Jobs, Bill Gates and King's Quest, he grabbed a bag of computer disks off his work desk. James was 13, black and a young man in a hurry. He flew through a living room littered with junk food wrappers, and past his snoring father crashed on the couch. He was almost out the front door when he heard, "James Long, get your big head back in here." It was his mother. She needed a drink. James skidded to a halt at the doorway, thought for a moment, then dashed outside. His mamma called, "Who do you think you are, boy? Git here."

James shook the words from his mind as he ran toward school. He ran past welfare bums sitting on stoops, past drug dealers hustling on street corners, and past gang members leaning against graffiti-splattered walls.
Ken-G. Johansen.
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Altruism: The Moral Root of the Financial Crisis

Innlegg Panther 27 Apr 2009, 17:47

http://www.capmag.com/article.asp?ID=5503

by Richard M. Salsman (April 27, 2009)


The usual greed-blaming, anti capitalist interpretations cited above have fueled massive interventions in the U.S. financial sector in recent months, including partial nationalizations. America’s largest bank (Citigroup) and largest insurance company (AIG) are now effectively owned and controlled by the U.S. government, through the Federal Reserve and Treasury Department. Since October Washington has sunk nearly $500 billion of taxpayer funds into the shares of America’s four hundred largest banks, failing and healthy alike—often against the will of senior management.7 By March 2009, the money sunk into America’s ten biggest banks constituted 45 percent of their stock market value, twice the proportion of October 2008; in the process, politicians and bureaucrats have increasingly dictated the banks’ policies on lending, dividends, mergers, and executive pay.8 In another intervention, the Federal Reserve has guaranteed more than $2 trillion in shaky short-term business loans and mortgages—and will purchase or guarantee an additional $1 trillion in 2009. Meanwhile the Federal Deposit Insurance Corporation (FDIC), which guarantees bank checking deposits in the event of bank failures, has vastly increased the scope of its coverage, from $100,000 to $250,000 per bank account—and now also insures trillions of dollars in bank bonds and money market mutual funds, a gargantuan liability that it had never assumed before 2008. The FDIC now guarantees about 70 percent of all bank checking deposits, up from 50 percent a decade ago.

The usual greed-blaming, anti capitalist interpretations cited above have fueled massive interventions in the U.S. financial sector in recent months, including partial nationalizations. America’s largest bank (Citigroup) and largest insurance company (AIG) are now effectively owned and controlled by the U.S. government, through the Federal Reserve and Treasury Department. Since October Washington has sunk nearly $500 billion of taxpayer funds into the shares of America’s four hundred largest banks, failing and healthy alike—often against the will of senior management.7 By March 2009, the money sunk into America’s ten biggest banks constituted 45 percent of their stock market value, twice the proportion of October 2008; in the process, politicians and bureaucrats have increasingly dictated the banks’ policies on lending, dividends, mergers, and executive pay.8 In another intervention, the Federal Reserve has guaranteed more than $2 trillion in shaky short-term business loans and mortgages—and will purchase or guarantee an additional $1 trillion in 2009. Meanwhile the Federal Deposit Insurance Corporation (FDIC), which guarantees bank checking deposits in the event of bank failures, has vastly increased the scope of its coverage, from $100,000 to $250,000 per bank account—and now also insures trillions of dollars in bank bonds and money market mutual funds, a gargantuan liability that it had never assumed before 2008. The FDIC now guarantees about 70 percent of all bank checking deposits, up from 50 percent a decade ago.


The Troubled Housing Market
Given the broad scope of government intervention in the U.S. home mortgage sector through the GSEs, the maze of other agencies—such as the Department of Housing and Urban Development (HUD), the Federal Housing Finance Board (FHFB), the Federal Housing Administration (FHA), the Federal Home Loan Bank (FHLB), and the Office of Federal Housing Enterprise Oversight (OFHEO)—and the cascade of Congressional acts—such as the Fair Housing Act (1968), the Equal Credit Opportunity Act (1974), the Community Reinvestment Act (1977), the Home Mortgage Disclosure Act (1975), the National Affordable Housing Act (1990), the Community Development and Regulatory Improvement Act (1994), the Home Ownership and Equity Protection Act (1994), and the American Dream Down Payment Act (2003)—it is simply ludicrous for anyone today to speak of the U.S. mortgage sector as having been a fully “free” market before the latest crisis. Only more ludicrous is the claim that the few free elements still remaining, but not the interventions, caused the crisis. Armed with its allegedly “noble” goal of increasing home ownership for the needy, the U.S. government has riddled the mortgage market with perverse incentives and unjust interventions that either compel or induce banks to lend to less-than-creditworthy borrowers, and thus to put themselves at greater risk of insolvency.

Today the concept of “moral hazard”—whereby a public policy necessarily engenders risky and reckless behavior by people and companies that otherwise simply would not arise (or not arise systemically) in a free market—is nearly ubiquitous. Some people now sense what economists (who coined the phrase) have long argued, that Washington’s interventions in home mortgages have created such a “moral hazard” and thus contributed to the crisis. Yet few dare to name the real moral hazard at the root of all the recklessness: the hazard posed by the morality of altruism.

Altruism has motivated the utter debasement of lending standards in the past decade. Mortgage lenders joked that the Bush administration’s crazed push to increase home ownership among blacks and Hispanics led to a proliferation of so-called “NINJA” loans—those granted to borrowers with “No Income, No Job, or Assets.” Altruism commands service to the needy—and NINJA “borrowers” fit the bill perfectly. Highlighting the legal-coercive backing of Washington’s altruistic credit policies, the Federal Reserve Bank has for years distributed a booklet to mortgage lenders—Closing the Gap: A Guide to Equal Opportunity Lending—which includes sidebar reminders that fines and jail terms await those found to be deficient in fighting “discrimination” by lending to the less-than-creditworthy. The booklet, still distributed today, derides as “arbitrary and unreasonable” such traditional credit standards as a 20 percent down payment (or loan-to-value ratio of 80 percent), an above-par credit score, a history of paying one’s bills on time, and a steady job yielding an income sufficient to make monthly mortgage payments.


Acceptance of altruism as a legitimate guide to financial decision-making was rampant at the GSEs. In 2004, Fannie Mae chairman Franklin Raines followed the president’s lead by promising a continuation and intensification of the agency’s multiyear mission—to close “America’s homeownership gaps” via “underwriting experiments that redefine creditworthiness”:

In almost every respect, 2003 was the greatest year for housing in America’s history. . . . Much more needs to be done, however, to deliver the American Dream . . . . Fannie Mae must expand its “American Dream Commitment” to undeserved families, especially minority Americans. We are committed to creating six million new homeowners (including 1.8 million minority families) over the next ten years . . . . We’ve launched a groundbreaking consumer outreach effort . . . developed new mortgage products and devised underwriting experiments that redefined creditworthiness. . . . Fannie Mae and its many housing partners around the nation are determined to close America’s homeownership gaps.19

Altruism-driven politicians and bureaucrats demanded that long-recognized credit standards be ignored or jettisoned in order to adhere to a standard of need over greed. Armed with an ethic that was unquestioned by almost everyone, and with access to taxpayer wallets, the GSEs went on a spending spree. Whereas in 1995 the sum of all home mortgages, guarantees, and mortgaged-backed securities held by GSEs represented 39 percent of all residential mortgages in the United States, by 2007, just prior to the crisis, the GSE’s share had risen to 52 percent. By then (and even today, as insolvents) the GSEs participated in 80–90 percent of all new home mortgages, or twice the rate of 1995. The GSEs by now have almost completely overwhelmed and contaminated America’s residential mortgage market and, with defaults rising, are fast becoming the largest national landlord to the needy. And, of course, the “compassionate” GSEs now demand a moratorium on home foreclosures, so as to convert credit deadbeats into squatters. This indicates the evil and poverty to which altruistic lending invariably leads—and the injustice to all those who must finance the fiascoes that it necessarily condones.


For years Mozilo won praise (and awards from the Fannie Mae Foundation) for being socially conscious—until, at the end of 2007, the weight of bad loans dissipated his firm’s net worth, bringing other firms down with it. Even so, a CNBC reporter praised Mozilo for his “good intentions” and “noble initiatives.” “Democrats and Republicans alike wanted to extend home ownership to people who did not have credit,” he added, and “although it ended disastrously, it was a noble aspiration.”25

How did Washington respond to this? Instead of ushering Countrywide into bankruptcy court, it intervened and strong-armed a then-healthy Bank of America into absorbing the firm’s toxic portfolio (as it did with Merrill Lynch), thereby weakening the acquirer. But (practically) no one—not even Bank of America’s executives—protested, because (practically) everyone accepts the altruistic notion that the successful must sacrifice for the needy.

Altruism-driven politicians and businessmen inexorably demand such strong-arm tactics, even while acknowledging that they render rational, self-interested banking impossible. According to billionaire George Soros, “the public interest would dictate that the banks should resume lending on attractive terms,” but “this lending would have to be enforced by government diktat, because the self-interest of the banks would lead them to focus on preserving and rebuilding their own equity.”26 On the principle of altruism, today’s troubled bankers must sacrifice their selfish goal of “preserving and rebuilding their own equity” and be forced to further damage their health by resuming lending on whatever terms the government deems “attractive” to “the public interest.”


It should surprise no one that the altruism-infested “credit market” has been impractical—and impractical even as regards the altruistic goal of helping the needy to own homes. Washington pushed to raise the national home ownership rate from 65 percent to 70 percent and to narrow the “gap” in ownership rates between white and nonwhite households, but in the wake of that push—as mortgage defaults and home foreclosures skyrocketed—the home ownership rate, after rising a bit, is now slipping below 65 percent, while the “gap,” having narrowed in years before 2002, has been widening since 2007. Home ownership rates among blacks and Hispanics, those who were targeted by the Bush administration, have dropped precipitously, in many cases to below the prior peaks that were deemed unsatisfactory by the social planners.

Who is to foot the gargantuan bill for this altruism-induced mess? Just as altruism would have it: the innocent—the innocent taxpayers and the 93 percent of all American home owners who pay their mortgages on time but now will be forced to pay other people’s mortgages and to bail out businesses they did not botch and do not own.


The Century-Long Erosion of American Banking
The Fed was granted a monopoly on the issuance of currency; all other bank currencies were deemed illegal. Within twenty years (in 1933), the Fed reneged on the gold standard and began issuing fiat paper money—money unmoored to any objective standard of value—as it does to this day. With this privileged, pet bank at their side in the decades since, Washington’s politicians were better able to finance the burgeoning American welfare state. Had Americans objected to this monopoly and its nonobjective money at the outset, we would be thriving in a very different America today. But Americans did not object. Why?

Few people have ever objected to the Fed’s role as financier of the welfare state because so few object to the welfare state itself. The welfare state is the political ideal of altruism; it facilitates the sacrifice of the successful to the needy. Indeed, defenders of the welfare state defend the Fed no matter how irresponsible its policies or actions, precisely because it is so integral to the welfare state. And Fed officials excuse their own irrational behavior in the ether of moral superiority, seeing themselves as duty-bound to help the needy, even if indirectly, through the funding of mathematically and economically ridiculous Congressional schemes. They willingly finance (by printing fiat money) the welfare schemes that Congress cannot finance via direct taxation. Paul Volcker, head of the Fed from 1979 to 1986 and now an economic advisor to Mr. Obama, admitted that “central banks are not exactly harbingers of free market economies,” primarily because they have always been “looked upon and created as a means of financing government [projects].”29

(As America has moved toward a more socialistic money and credit system in the past century, few people have acknowledged how closely it has reflected and codified avowedly altruistic premises. Karl Marx, the preeminent altruist and socialist of the 19th century—who enjoyed renewed acclaim during the alleged “breakdown” of capitalism and the gold standard in the 1930s—argued that in a truly socialist world, wealth would be perpetually transferred “from each according to his ability, to each according to his need.” Toward this altruistic ideal, plank five of his Communist Manifesto [1848] demanded a “centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” This is exactly the role of the U.S. Federal Reserve.)

Motivated as they are by altruism, the Fed’s monetary policies have inflicted significant damage over the years. In sabotaging America’s banking system in the early 1930s, the Fed (together with punitive tax policies) caused the Great Depression. Today’s Fed chairman, Ben Bernanke, who specialized in the Great Depression when he taught at Princeton, admitted as much in 2002, after summarizing a 1963 book by Milton Friedman and Anna Schwartz that showed definitively that Fed officials (not free markets) were to blame: “As an official representative of the Federal Reserve, I would like to say to Milton and Anna, regarding the Great Depression: You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”30


While encouraging risky lending on the part of banks, America’s altruistically motivated interventionist policies have discouraged depositors from scrutinizing the safety and soundness of their financial institutions. Consequently, sound banks have a greater difficulty outcompeting reckless ones—especially when, in addition, they are taxed to replenish the FDIC deposit fund after it is depleted by the depositors of the reckless, failed banks. Financial regulations have instilled a false sense of security in depositors and investors alike, encouraging risky behavior and thereby increasing the likelihood of financial crises.

Given the array of perverse incentives infecting and undermining the U.S. financial system, today’s bank nationalizations were wholly predictable. As I wrote in 1993:

Consider the options available to a government that says it will guarantee the deposits of the banking system, a government that considers the majority of banks too big or too important to a community to fail, a government that, in making these assurances, and otherwise intervening in the money and credit system, ends up undermining the financial condition of the banking system. There is only one option available to such a government and that is to take over failed banks and run them as part of the government.32

This is precisely what has been happening since late 2008, when Washington began to purchase shares in hundreds of America’s top banks for the first time in American history. And this lunge toward socialist money and banking will have further dire consequences. When the Fed, Treasury, or FDIC take bad bank assets onto their own balance sheets—as they have done in spades over the past year—they further corrupt the credit system, prevent lenders and investors from accurately identifying and pricing loans and securities, and ensure future financial catastrophes.


The Moral Cause and the Moral Cure
From a state monopoly on money, to state guarantees of bank liabilities, to state sponsorship of mortgages, to state ownership of banks—the progression in the past century has been to move away from free markets toward socialist banking. Why? The fundamental answer is: altruism. The fitful, halting lurches toward ever greater government intervention in American finance follow logically from the altruistic premise that permeates our culture and resounds throughout the halls of power—the premise that being moral consists in self-sacrificially serving those in need. The welfare state and its main financier, the Federal Reserve, are ultimately “justified” on the grounds that the government has a moral duty to provide the needy with goods and services—from education to health insurance to mortgages.

On the premise that a free banking system inadequately served the poor, the Federal Reserve was formed. On the premise that welfare spending is too important to be tied down to an objective system of money, the gold standard was abolished. On the premise that taxpayers have a moral duty to bail out needy banks and careless depositors, the FDIC was established. On the premise that we all have a moral duty to help needy, low-income families “achieve the American dream,” the GSEs were established. On the premise that Americans have a moral duty to preserve America’s financial institutions, Washington is now nationalizing them—ensuring the full politicization of lending, a perpetual flight of private capital, and an endless drain on taxpayers’ wallets.

The fact that each of these interventions has caused (and continues to cause) financial-economic turmoil and wealth destruction is, to those who believe the interventions were moral, simply beside the point. By demanding that one consider the needs of others above all else, altruism morally forbids one to consider the facts of reality that conflict with that mandate. Thus, in the case of a banker who embraces altruism, the fact that a loan applicant is not creditworthy matters not; the fact that default rates are rising matters not; the fact that his bank is nearing insolvency matters not. These are mere economic facts, whereas altruism speaks of moral truth—and in any contest between economics (or common sense) and morality, morality always wins.

Acceptance of altruism leads people to abandon their self-interest, the profit motive, the basic principles of economics, and the basic principle of America: the principle of individual rights. But these values are essential to good living, to wealth creation, to a healthy economy, and to a just society. America’s financial market is suffering not because of greed or freedom, but because of the widespread acceptance of altruism and the consequent government intervention in banking.

The financial crisis is, fundamentally, a moral crisis. The extent to which Americans accept that they have a moral duty to sacrifice for the sake of others is the extent to which they will allow our government to compel us all to do so—by means of further interventions, further subsidies, further controls. To end the crisis, we must acknowledge that government intervention caused it, and we must demand that the government begin removing its coercive hands from the economy. With an eye to the short term, we must demand that it scale back the powers of the GSEs, the Federal Reserve, and the FDIC; and with an eye to the long term, we must demand that the government abolish these agencies entirely and restore a gold standard run by private, currency-issuing banks subject solely to the objective commercial and bankruptcy codes.33 But in order to advocate these reforms, Americans must reject the moral code that stands in the way. We must reject altruism. We must defend each individual’s right to exist, not as a slave to the needs of others, but for his own sake—bankers included.

Originally published as a special online article at The Objective Standard. © 2009 Craig Biddle.
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Altruism: Why The Republicans Will Lose The Budget Cut Battl

Innlegg Panther 14 Apr 2011, 16:26

http://www.capitalismmagazine.com/politics/6372-altruism-why-the-republicans-will-lose-the-budget-cut-battle.html

8 April 2011 Harry Binswanger

The reason for the Republicans' capitulation (what it is) couldn't be clearer: altruism. Altruism confers ownership rights on the needy. Under altruism, if the haves withhold things from the have-nots, that's physical force—it's literal theft—and government force in redress is retaliatory force, seizing “stolen” possession to return them to their rightful owners: the needy.

Bilde

Late-breaking: contrary to the spin I fell for, the Paul Ryan budget plan is a fraud. Karl Rove reports that the proposed budget does not cut a single dime.

It's the oldest trick in the book: pass off a slowed increase as a cut. Ryan's “Path to Prosperity” budget proposal would raise spending, preserve and strengthen all the entitlements, and once again genuflect before “the safety net.”

Karl Rove:

Mr. Ryan would have the government spend $40 trillion over the next 10 years, $6.2 trillion less than Mr. Obama's budget plan of $46 trillion. This an overall reduction in what the government plans to spend, not a cut from what it is spending today. [my emphasis]

It's also easy to be taken in by statements about Ryan's budget rolling back spending to 2008 levels. That's not spending he's talking about, it's only one minor category of spending: “discretionary” spending. It's not the entitlements. Spending, under Ryan's plan, will go up, up, and up.

Are you thinking: “Maybe it's a cut in real not dollar terms: maybe the rise in spending will be less than the rise in the price-level”? Well, remember: spending won't rise more slowly than prices, not for long anyway, because the spending is to be financed by inflation, and that's what creates the price-rises.

Here's the only hope for our optimists: if the even worse Obama budget is already priced into current business plans and investment decisions, then passing the Path to Prostration budget would have beneficial results: it would increase economic activity, generate more tax revenue, shrink the deficit, and thus not raise prices.

But, fundamentally, hopes for real change in the next 5 to 10 years were illusory.

The reason for the Republicans' capitulation (what it is) couldn't be clearer: altruism. Rove, for instance, wrote the above not to call out a fraud but to defend Ryan's budget. He aims to reassure us when he writes: “Under Mr. Ryan's proposal, for example, health-care spending would still rise for both Medicaid . . . and Medicare.” Rove, like everyone else, thinks the “safety net” has to be preserved at all costs.
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Altruism vs. Google

Innlegg Panther 25 Sep 2011, 13:24

http://www.capitalismmagazine.com/markets/antitrust/6591-altruism-vs-google.html

24 September 2011 Harry Binswanger

As the assault on Google shows, the real goal of altruism is not the betterment of the recipient of sacrifices but the suffering of the giver. We are all immeasurably better off due to Google. But Google is prospering, not suffering, and that cannot be countenanced. The government trust-busters mean to remedy Google’s moral imperfection.

Bilde

Incredibly, there’s antitrust action going on against Google. Google, which gives away its expert services!

Search engines, led by Google, have revolutionized our lives. I noted this phenomenon back in 2003. It’s only 8 years ago, but it seems like a different era, because what I was noting was the dawn of a new era, an era of unlimited access to the world’s accumulated knowledge. Here’s the relevant part of my post from 2/3/2003.


What is Google’s crime? Google is accused of “dominance”—in enriching our lives at no charge.

Here’s the whole ugly story in one sentence, a sentence from a news story in Thursday’s Wall Street Journal.

“Because it controls the great majority of searches, Google can steer users toward its own services at the expense of rivals, potentially starving them of vital internet traffic, competitors say.”
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Re: Altruism vs. Google

Innlegg Flammekaster 25 Sep 2011, 14:51

Jeg vil nok tro at den som uttalte det siterte til Wall Street Journal faktisk mente at sluttbrukerne kanskje ikke ville ha godt av at Google kvelte konkurransen mot sine produkter som ikke var direkte relatert til søkemotoren, gjennom manipulering av søkemotoren sin. Konklusjonen om altruisme tror jeg derfor er feil.
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