Comments on: How insurance improves living standards http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: fresnodan http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29129 Mon, 01 Aug 2011 09:19:34 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29129 “If only capital levels hadn’t been raised, says Greenspan, then the banks could be lending out that money instead!”
I think both Greenspan and you fall into the Jimmy Stewart school of banking – everything would be OK if only banks lent. Lending only works if you get paid back with interest and some profit.
http://research.stlouisfed.org/fred2/ser ies/MULT

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By: sherryk http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29109 Sun, 31 Jul 2011 07:06:14 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29109 Not trusting anything Greenspan or anyone from the FED says.

Clearly, we need to question not only whether to insure (which probably should be answered yes),

but also who insures (and that should probably be answered NOT the FED, NOT the government).

Why? Too much waste, too much incompetence.

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By: lauradeen http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29105 Sun, 31 Jul 2011 01:16:27 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29105 Poor quixcap. Not only lacking in the ability to read and think critically, but also unable to hone his skills as a troll well enough to mask his fundamental illogic.

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By: QuixCap http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29100 Sat, 30 Jul 2011 19:43:42 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29100 It’s fair to assume that the caricature presented above in chopped-up context-less quotes does not accurately represent Alan Greenspan’s conclusions, or the arguments he uses to support them. Which calls into question Salmon’s honesty, and makes his post worse than worthless.

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By: jomiku http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29093 Sat, 30 Jul 2011 15:39:48 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29093 Think about this in model terms. The economic models he has built into his brain have great trouble accepting demand side issues. They are essentially supply oriented models coming in the Ricardian heritage. All the stuff he’s written has been a variation that them: business lacks confidence, business resources are engaged by government restriction. This is the only way it makes sense to him because he can’t grasp – and neither can many others – that their models aren’t working because they’re woefully incomplete. It’s very difficult to accept that fundamental a blast to one’s intellect. Greenspan and these other try to breathe life into their models by finding impediments to supply. These can be expectations of future tax increases or future regulation or reductions in overall risk taking (which isn’t even lending for banks, but involves their trading activities). It’s utter nonsense, but their world view is under pressure so they are doubling down on what they believe.

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By: MainStreetMuse http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29092 Sat, 30 Jul 2011 14:47:05 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29092 What’s the difference between “idle resources” and “adequate capital reserves”? Curious that Greenspan can criticize one while recognizing the need for the other. Ahh… the divided mind!

Greenspan seems not to understand that the devastation of a tsunami or hurricane are acts of nature. The collapse of the global economy is the result of the failures of men. His strong defense of the failed ideology that led us to the economic crisis ensures that his legacy will be one of blindness and failure.

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By: hsvkitty http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29084 Fri, 29 Jul 2011 22:30:55 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29084 DWJ said: “I do think that some of Greenspan’s article can be read simply as making the reasonable point that insurance does have a cost, and that it would be possible to buy more than we want for the price it costs. ”

While that is the premise of the article, he is trying to rewrite history and have us make his hand in the pie, invisible. He can’t be the hero in the Fountainhead if we all believe he is fallible and regulations he fought so rigourously to end, skewed, softened or not be implemented at all, are necessary.

As he ages he wants his legacy to fit his fantasies. Self-preservation isn’t just for the market, so he will be back with more analogies.

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By: dWj http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29075 Fri, 29 Jul 2011 14:43:55 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29075 I do think that some of Greenspan’s article can be read simply as making the reasonable point that insurance does have a cost, and that it would be possible to buy more than we want for the price it costs. When he asserts that we do buy more than we want, he should include evidence to that effect.

As for the part of the Japanese economy that comprises “companies and individuals engaged in manufacturing and installing precisely those expensive building materials”, the question is what those individuals would be doing if they weren’t in that business. There is on some level a broken-windows fallacy here, played out in advance; in particular, suppose we knew for certain that this was it for Japan and earthquakes for the next 200 years — they just filled their quota — in which case we know that it’s a waste of real economic resources to continue to use more expensive materials than necessary. That nobody believes Japan has run out of earthquakes means that there is value in using those materials, but does not mean that this is no longer a cost; it is simply one to be weighed against real benefits.

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By: Kamekon http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29068 Fri, 29 Jul 2011 13:55:47 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29068 It’s also useful to note Martin Wolf’s comment on/below Greenspan’s article: “Bank capital is lent. Mr Greenspan seems to be confusing the two sides of the balance sheet. Equity capital is just another way of funding lending.”

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By: a.soffronow http://blogs.reuters.com/felix-salmon/2011/07/29/how-insurance-improves-living-standards/comment-page-1/#comment-29067 Fri, 29 Jul 2011 13:50:12 +0000 http://blogs.reuters.com/felix-salmon/?p=9159#comment-29067 Not that I agree with Greenspan, but you can’t dismiss his point about insurance out of hand. Resources used to insure against once-in-a-century events have an opportunity cost, like everything else. It’s not outside the realm of possibility that more lives could be saved by using that money in healthcare, or to replace coal power plants. The traumatic and media-attention-heavy nature of these rare events does suggest that there will be an over-allocation of resources toward insurance against them.

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