Keynes: History Lesson for Bo and Chris M

Discussion in 'Bill Archer's Guestbook' started by Microwave, Apr 16, 2009.

  1. Microwave

    Microwave New Member

    Sep 22, 1999
    There are things that are opinions, theories and idealogies that are debatable. Just merely a difference of opinions. Then there are facts. Keynes was wrong about most of what he said - fact. This isn't debatable. Keynesian economic does not work, period. Only the far left believes in Keynesian economics....well ok the far left and Barack Obama. Though I am sure Obama knows his policies will cause unsustainable debt and just wants short term gains.

    Anyway, Bo, your views on economics are beyond silly and it's unbelievable that you go to the University of Chicago and still spout the shit you do. It's almost as if you've never read (or do you just ignore?) what happened after 'The Economic Consequences of the Peace'?

    The book, since apparently you have never read it, is about the Treaty of Versailles. By 1944 the book was discredited by economists all over the world. But people don't understand economics so they blame capitalism when things go wrong and then Keynesian theories return every few years and we never solve the root problems (bad monetary policy, central banks manipulating credit)

    Keynes predicted:

    -Germany would never recover to a pre-war economy due to the treaty. He was wrong.

    - German coal output would never recover to pre-war levels. He was wrong.

    - European steel output would decline. He was wrong.

    - The treaty of Versailles would lead to famine. He was wrong.



    In the book 'General Theory' Keynes writes in the preface that his policies are compatible with a totalitarian state. He freely admits it in the beginning of the freaking book!

    He also claims in GT:

    - Recessions are caused by insufficient aggregate demand. This is false. Recessions are caused by Central Banks lowering interest rates below market demand (as taught in Econ101). Every recession of the past 100 years can be traced to this, including the depression which was caused by bad monetary policy.

    - Keynes answer to recessions is deficit spending. How on earth is borrowing money that doesn't exist a good idea? (Obama and Bush STILL think this is a good idea). You can't artificially create demand without reporcussions (sp?). So public sector jobs is artificial. In Michigan Obama's stimulus money is going to repair roads that don't need repair. Tax payer money (er, I mean Chinese money) is paying for these road repairs. Bo even YOU know history shows that deficit devalues currency. History has shown this over and over and over and over and over. This alone refutes Keynes theory.


    Real world Evidence that Keynes was wrong:

    - Herbert Hoover raised taxes on the rich from 1925 to 1933. Herbert Hoover engaged in deficit spending. Central banks lowered interest rates (Keynes favored liquidating credit). Depression ensued.

    - Roosevelt raised taxes on the rich, engaged in deficit spending, Unemployment was over 15% for several years and inflation rose steadily.

    - Japan as a Nation needed a bailout after engaging in taxing the rich and deficit spending (this is the most clear cut example). Japan's debt is still extremely high.

    - France and Germany recently opposing Obama's stimulus. If even France is opposed then you know deficit spending isn't the answer.

    -Keynes said stagflation was impossible when "stimulus plans" were put into effect yet Gerald Ford raised taxes on the rich and sent tax rebates to the taxpayers and stagflation rose.

    - Europe 2009. Paul Krugman (who says Keynes was proved correct by today's crisis) stated that England....yes England...would be the best suited to handle the situation we face today. He was obviously wrong. Bo you talk about how wrong Kristol was about Iraq, why no mention of how wrong Krugman was about England/Gordon Brown? And why is Europe in such bad shape now? The aggregate demand only slowed in the big bad capitalist nation and I think you know that.

    You don't have to be a Milton Friedman fan. He was wrong about alot too. But to pretend Keynes was correct flies in the face of factual evidence.

    http://fearistyranny.wordpress.com/2009/03/13/keynes-and-the-intellectuals-v-america/


    After reading The Road to Serfdom, F.A. Hayek’s criticism of J.M. Keynes’ General Theory, Keynes admitted, “morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement.” Keynes was praising a book, morally and philosophically, that championed laissez-faire over his own theory. It warned that Keynes’ theory would lead to the enslavement of all mankind (save a small governing elite), and Keynes agreed with “virtually the whole of it,” morally and philosophically.
    Keynes was a unique figure, brilliant enough to recognize his own wrongs, and proud enough to refuse to set them right. A supporter of eugenics, he was an arrogant man who always thought himself the most clever person in the room, and on this one point, it is likely that he was always correct. His mind, however, was poisoned by the Old World belief that there must always be two classes of people, the rulers and the ruled, but Americans believe that these classes are neither natural nor necessary, and that every man is his own ruler. Keynes knew his theory would be, on a free people, an immoral imposition, and even admitted its ability to increase economic instability (which it has done), but like a contemptible, soul-selling politician, he dismissed an economic system of justice, honesty, and freedom for “light and transient causes,” to become a ruler, gathering fortune and fame while providing the most efficient immediate remedy to those most in need; and while all this rottenness may be crafty politics, it is bad economics.
    A good economist considers not only a strategy’s short-term effects on interested groups, but its short- and long-term effects on all groups. To joke that “in the long run we’re all dead,” as Keynes did, is an assault on posterity, and indicates his intent to rob their liberties and fortunes for the sake of temporary splurging. We know individuals that live beyond their means are destined to live beneath them, and this is no less true of nations. Until now, U.S. production and national wealth have increased in spite of government, because capitalism is still operating to some extent, and because by luck, a slow waitress is handling the bill for all this “aggregate demand”. I don’t expect the Department of Treasury will leave her a tip.
    There is a lot of bad economics abroad, being taught in universities, being preached in the halls of Washington, and being recorded for wiser generations to lampoon. As Louis XIV had his divine right, Paul Krugman has his Nobel Prize. Bad economics tells us that the government must make us better off (limit our choices), inflate the currency (steal our savings), save the X industry (kill the Y industry, and harm everyone not closely related to the X industry), increase the minimum wage (increase prices), protect our industry with tariffs (limit choices and increase prices) increase credit (increase debt), increase public works (increase taxes), create more jobs (impossible), stop technology from stealing jobs (lose opportunity for increased standard of living), achieve “full employment” (instead of full production), bail out unions (tax all others), stop foreclosures (undermine the price mechanism that guarantees short recessions), increase the velocity of money (tempt hyperinflation), and give away “free” pensions, healthcare, houses, food, and money (remove all incentives for production). But one thing we must never, ever do, under any circumstances (according to this “economics”), is save. There is no rhyme to bad economics. It cherishes credit, and although savings is the only true source of credit, savings is, in their muddled minds, the bane of all good society; the only use of savings is as actual wealth that, in the absence of a gold standard, the government can steal through inflation.
    The economic ideas I prefer are what Barack Obama calls “the stale political arguments which have consumed us for so long,” which “no longer apply.” By the context of this quote in his inaugural speech, it appears Obama is attacking arguments in favor of individualism, the philosophy of John Locke, upon which the United States was founded and became prosperous. John Locke died over three hundred years ago, so–though collectivism is much older–individualism may now be called a “stale” argument, but this is totally irrelevant. It matters not whether an idea is new or old, but whether it is right or wrong. I believe that collectivism is wrong and individualism is right, and as it is better to repair a wrong than persist in it, I will halt discussion of contemporary leaders to return to the informative purpose of my writing you.
    Bad economics insults reason, starving and torturing the mind, and causing anxiety; but good economics informs reason, satisfying the mind’s natural appetite. I may feed that appetite with my own words, but others have prepared portions so tasteful as to make my own attempts bland. Morsels to follow:
    “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.” - Adam Smith
    ““Dying industries absorb labor and capital that should be released for the growing industries. It is only the much vilified price system that solves the enormously complicated problem of deciding precisely how much of tens of thousands of different commodities and services should be produced in relation to each other. These otherwise bewildering equations are solved quasi-automatically by the system of prices, profits and costs. They are solved by this system incomparably better than any group of bureaucrats could solve them. For they are solved by a system under which each consumer makes his own demand and casts a fresh vote, or a dozen fresh votes, every day; whereas bureaucrats would try to solve it by having made for the consumers not what the consumers themselves wanted, but what the bureaucrats decided was good for them. Yet, though the bureaucrats do not understand the quasi-automatic system of the market, they are always disturbed by it. They are always trying to improve it or correct it, usually in the interests of some wailing pressure group.” - Henry Hazlitt
    “It may be that he who bestows the largest amount of time and money on the needy is doing the most by his mode of life to produce that misery which he strives in vain to relieve.” - Henry David Thoreau
    “The evil is inflation. Its weapon of defense is an invisible vapor, the effect of which is to cause people to become economic alcoholics, afflicted with the delusion that they can get rich by destroying the value of money.” - Garet Garrett
    “A government that has arrived at the ultimate goal of total power may dispense with inflation. The power to command obedience enables it to achieve directly what formerly it could only achieve indirectly by inflation. The consuming delusion is that because of what Americans were, this may not or cannot happen.” - Garrett
    “Wealth brings with it its own checks and balances. The basis of political economy is non-interference. The only safe rule is found in the self-adjusting meter of demand and supply. Do not legislate. Meddle, and you snap the sinews with your sumptuary laws. Give no bounties, make equal laws, secure life and property, and you need give no alms. Open the doors of opportunity to talent and virtue and they will do themselves justice, and property will not be in bad hands. In a free and just commonwealth, property rushes from the idle and imbecile to the industrious, brave and persevering.” - Ralph Waldo Emerson
    “Anyone who has observed how aspiring monopolists regularly seek and frequently obtain the assistance of the power of the state to make their control effective can have little doubt that there is nothing inevitable about this development.” - Hayek
    “The money rate can, indeed, be kept artificially low only by continuous new injections of currency or bank credit in place of real savings. This can create the illusion of more capital just as the addition of water can create the illusion of more milk. But it is a policy of continuous inflation. It obviously is a process involving cumulative danger. The money rate will rise and a crisis will develop if the inflation is reversed, or merely brought to a halt, or even continued at a diminished rate.” - Hazlitt
    “Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to ‘buy’ houses that they cannot afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in the long run they do not increase overall national production but encourage malinvestment.” - Hazlitt (1946, if heeded, we may have avoided current recession)
    “There is no subtler, no surer means of overturning the existing basis of society than to debauch its currency. By a continuing process of inflation, governments can confiscate secretly and unobserved an important part of the wealth of their citizens. By this means they not only confiscate, but confiscate arbitrarily, and while the process impoverishes many it actually enriches some.” - Keynes
    “As to the assumed authority of any assembly in making paper money, or paper of any kind, a legal tender, or in other language, a compulsive payment, it is a most presumptuous attempt at arbitrary power. There can be no such power in a republican government: the people have no freedom, and property no security where this practice can be acted: and the committee who shall bring in a report for this purpose, or the member who moves for it, and he who seconds it merits impeachment, and sooner or later may expect it.” - Thomas Paine
    “Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” - Alan Greenspan
    “What is called economic power, while it can be used as an instrument of coercion, is, in the hands of private individuals, never exclusive or complete power, never power over the whole life of a person. But centralized as an instrument of political power it creates a degree of dependence scarcely distinguishable from slavery.” - Hayek
    “You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services he is capable of rendering. In brief, for a low wage you substitute unemployment. You do harm all around, with no comparable compensation.” - Hazlitt
    “The question is not whether we wish to see everybody as well off as as possible. Among men of good will such an aim can be taken for granted. The real question concerns the proper means of achieving it. And in trying to answer this we must never lose sight of a few elementary truisms. We cannot distribute more wealth than is created. We cannot in the long run pay labor as a whole more than it produces. The best way to raise wages, therefore, is to raise marginal labor productivity. This can be done by many methods: by an increase in capital accumulation–i.e., by an increase in the machines with which the workers are aided; by new inventions and improvements; by more efficient management on the part of employers; by more industriousness and efficiency on the part of workers; by better education and training. The more the individual worker produces, the more he increases the wealth of the whole community. The more he produces, the more his services are worth to consumers, and hence to employers. And the more he is worth to employers, the more he will be paid. Real wages come out of production, not out of government decrees. So government policy should be directed, not to imposing more burdensome requirements on employers, but to following policies that encourage profits, that encourage employers to expand, to invest in newer and better machines to increase the productivity of workers–in brief, to encourage capital accumulation, instead of discouraging it–and to increase both employment and wage rates.” - Hazlitt
    “‘Adequate’ relief will cause some men not to seek work at all, and will cause others to consider that they are in effect being asked to work not for the wage offered, but only for the difference between the wage and the relief payment.” - Hazlitt
     
  2. Microwave

    Microwave New Member

    Sep 22, 1999
    http://online.wsj.com/article/SB123137375313762735.html

    "The Congressional Budget Office released its latest budget forecast yesterday, and we now really do have red ink as far as the eye can see. Thanks to a 6.6% decline in revenues due to recession, a spending increase of some $500 billion or 19%, and assorted federal bailouts, the U.S. deficit for fiscal 2009 (ending September 30) will nearly triple to $1.19 trillion. That's 8.3% of GDP, which CBO says "will most likely shatter the previous post-World War II record high of 6.0 percent posted in 1983." It certainly blows away any deficit this decade, not to mention the Reagan years when smaller deficits were the media cause celebre.

    But there's more. None of that includes the new fiscal "stimulus" that President-elect Obama has promised to introduce upon taking office in two weeks. The details aren't known, but Mr. Obama and Democrats have been talking about at least $800 billion, and probably $1 trillion, in new spending or various tax credits and reductions over two years. Toss that in and add more expected bailout cash, and if the economy stays slow the deficit could reach $1.8 trillion, or a gargantuan 12.5% of GDP. That 2006 Democratic vow to pass "pay as you go" budgets seems like a lifetime ago, which in political terms it was.

    We've long argued that deficits per se are not worth losing sleep over, though we do recall when Robert Rubin and Larry Summers claimed that reducing them was itself an economic virtue because it reduced interest rates. With their acquiescence in the magnitude of these deficits, we trust they will now admit to burying Rubinomics as a serious economic philosophy. Democrats are once again all Keynesians now -- at least until they want to use the deficits as an argument to raise taxes in a year or two."
     
  3. bojendyk

    bojendyk New Member

    Jan 4, 2002
    South Loop, Chicago
    So have *you* read any of the books you're dissing? Because I haven't, and I really doubt that you have.

    Bullshit: the 1982 recession didn't have this cause.

    Public sector jobs are *not* artificial, and the Keynesian multiplier has been demonstrated to be true when public sector employment increases in recessionary circumstances.

    It took me five seconds on Google to discover that you've got this wrong: taxes went down during the 20s. They weren't raised until 1932, at which point the depression was well underway. This is the exact opposite of Keynesian intervention.

    Good god, there's so much bad history here that I don't even know where to start. First, the private sector unemployment decreased almost consistently during FDR's tenure, except for in 1937, when FDR raised taxes--a tax increase that Keynes opposed and warned him against!!!

    I can't comment on Japan. France and Germany are also both ruled by conservatives now, so it's no surprise that they're opposing Obama's stimulus plan, even though they indirectly benefit from other countries taking action.

    Indeed, this is correct, from what I understand.

    I'm not going to address the blog post you cut-and-pasted here, other than it tickles me to see Thomas Paine mentioned in this context--Thomas Paine, who supported a 100% estate tax rate.
     
  4. Smiley321

    Smiley321 Member

    Apr 21, 2002
    Concord, Ca
    I'm no expert on the subject, but my recollection is that Ford had inflation way down by the time he got booted. He got booted for pardoning Nixon, not for mismanaging the economy.

    And what does Thomas Paine have to do with anything? I believe that Adam Smith believed in that also. People can hold opinions that are dubious and still hold very solid opinions on other things. Even maybe you, bo. The 100%estate tax is one of those that makes sense in a dream world but not in the real world.
     
  5. bojendyk

    bojendyk New Member

    Jan 4, 2002
    South Loop, Chicago
    I just checked, and indeed, you're right. It dipped under Ford and stayed relatively low, at first, under Carter before spiking again in 1979.

    Including people like . . . wait for it . . . Keynes!

    For the record, I don't support the 100% estate tax or a tax rate even close to that.
     
  6. Smiley321

    Smiley321 Member

    Apr 21, 2002
    Concord, Ca
    I'm no economist, in fact I never even had a class on it in college, so I'll let you guys debate the theories of Keynes and Friedman.

    The spending underway and further spending contemplated by Obama, for healthcare and energy and such, does worry me. And the dust hasn't even settled yet on the main problem of toxic debt. Stimulus now is one thing, stimulus into the forseeable future seems to me to be reckless and more an article of ideology than practicality. And it may be the thing that gets Obama into enough trouble to get bounced in four years.

    It seems to me to be common sense (to use a line from Paine) that trickle down from private sector activity has more long-term promise than trickle down from government sector activity. Government-sector spending is parasitic, and encouraging the parasite to grow is a bad practice.
     
  7. bojendyk

    bojendyk New Member

    Jan 4, 2002
    South Loop, Chicago
    Microwave isn't actually taking the Friedman side of the debate. He's taking the Hayek/von Mises side, which is actually more radical and, from what I understand, less empirical.

    My feeling is that there is a lot to learn from both Keynes and Friedman. Both wrote and studied a wide range of economic topics, and neither can be reduced to their most popular proposals. Ted's view that Keynes has been totally discredited exists only in the blogosphere and on the Wall Street Journal editorial page. Hell, even Friedman saw value in Keynes, much like Paul Krugman sees value in Friedman!

    For the record, I haven't read primary texts by either Hayek or Keynes, save for a few short excerpts; I've read some Friedman. Economics is like the sciences, though, in which it isn't necessary to read primary texts. However, I've heard that Keynes is actually quite fun to read.

    The big concern about government projects is what happens when they're instituted during economically healthy times: they crowd out the private market. This is a legitimate concern. I also share your concern re: the entrenchment of projects past their sell-by date. The military industrial complex is a perfect example of this entrenchment. No rational, indifferent observer on the planet would argue that our defense programs should have remained the same once the Cold War ended, but look at how hard it's been to readjust the priorities of the Pentagon.

    But I also think that there are really legitimate projects that needed to be undertaken, and a recession is the perfect time to undertake them. For example, improvements on the electricity grid, investments in alternative energy, health care, road and bridge repair--all worthy, all stimulative, and all geared toward future improvements in the GDP.
     
  8. Smiley321

    Smiley321 Member

    Apr 21, 2002
    Concord, Ca
    Except that one about investments in health care. You threw that one in like it's just building some roads or high-tension lines. Taking over health care would be a major expansion in government, and my suspicion is it would be even worse than the current insurance-driven system we have now.

    Alternative energy is another very difficult one - I would be very open to good strategies to get us to stop funneling money to the Saudis and Iranians. But my fear is that the current braintrust would waste time and money on the task of addressing the dubious notion of man-made global warming.
     
  9. bojendyk

    bojendyk New Member

    Jan 4, 2002
    South Loop, Chicago
    Pretty clever of me, no?

    The beauty of most (but, obviously, not all) sensible alternative energy/improved energy efficiency proposals is that they're objectively good, without even having to appeal to the issue of climate change.
     
  10. Smiley321

    Smiley321 Member

    Apr 21, 2002
    Concord, Ca
    If Obama just does things that are objectively good, I would overlook a few bows and apologies to middle east kings and vote for him again. He's only been in office a few months, so we'll see. I'm bracing myself for amnesty for illegal aliens, that would break the camel's back for me.
     
  11. Microwave

    Microwave New Member

    Sep 22, 1999
    Um, I did, most Keynes books are required in econ courses in College.



    Of course it did. Are you serious? You are saying the 1982 recession was not caused by Central banks?

    Interesting because the federal reserve even admits it, but hey nice try Bo!
    http://www.federalreserve.gov/pubs/ifdp/1985/272/ifdp272.pdf



    Link?

    If what you are saying is true then European countries wouldn't carry so much debt. But they do so again nice try the facts and your opinions are again at odds.


    Um, there were zero income taxes before the 1920's. What the hell are you talking about?



    Link?

    Here's one, you might want to look at actual data before talking shit
    http://ingrimayne.com/econ/EconomicCatastrophe/GreatDepression.html


    incorret


    The blog post where Keynes admitted he was wrong?
     
  12. Microwave

    Microwave New Member

    Sep 22, 1999
    Or the over 250 economists who signed the Cato objection to Obama's budget, but hey you never seem to let facts get in the way.
     
  13. Microwave

    Microwave New Member

    Sep 22, 1999
    According to one of Obama's advisors if you raise taxes, you hurt economic output
    http://www.econ.berkeley.edu/~cromer/RomerDraft307.pdf

    according to another of his advisors, Obama's plans are pretty dumb!
    http://www.openmarket.org/2009/05/14/adviser-admits-obamas-tax-increases-may-kill-economic-recovery/

    and even Volcker has his doubts
    http://www.wsws.org/articles/2009/mar2009/volc-m12.shtml

    Add this to the fact that the non partisan CBO has agreed with every Obama projection he has come out with. Obama's own people don't agree with you Bo.

    Jesus Christ, are you going to defend this reckless spending in all seriousness? Really? Even alot of left wing economist are admitting they are getting worried.
     
  14. Microwave

    Microwave New Member

    Sep 22, 1999
    I can't believe we actually agree on something....but I would take it a step further and say we spend too much DURING the cold war as well.

    And we're back to normal. You can not create fictitious jobs unless you can pay for them, which we can't. If it was that simple then every economist alive would support it and we can have 0% unemployment and just make up jobs for everyone, yay! Obama himself said we have to stop pretending like deficits don't matter, I wish he knew what was in his own spending bills...he would think it's crazy!

    By the way Bo, look into the state of Michigan's economy. We make up these fake road repair jobs all the time and have been since the Democrats took over and we've had the highest unemployment in the U.S. for most of the decade and are running huge budget deficits and have a huge debt. You know what Obama's stimulus money is going to? Making I-94 a six lane expressway instead of a four lane expressway. Yay for made up jobs!
     
  15. bojendyk

    bojendyk New Member

    Jan 4, 2002
    South Loop, Chicago
    Good Christ, there's so much goalpost moving in your reply that you've turned a grassy pitch into muddy slop.

    Here's what you wrote in your original post: "Recessions are caused by Central Banks lowering interest rates below market demand." The 1982 recession was definitely caused by the Central Bank, but it raised interest rates; you implied that it lowered rates. You are 100% wrong on this, which is why you moved the goal post.

    The amount of debt carried by European countries is moot; after all, I specifically mentioned recessionary circumstances here. As far as the multiplier, I'm not going to dig out my textbooks, but here's Mark Zandi's (of Moody's) take on the matter.

    Once again, you're full of it. The income tax was enacted in 1913. Here's a history of the top marginal rate in the 1920s.

    When the federal income tax was enacted in 1913, the top rate was just 7 percent. By the end of World War I, rates had been greatly increased at all income levels, with the top rate jacked up to 77 percent (for income over $1 million). After five years of very high tax rates, rates were cut sharply under the Revenue Acts of 1921, 1924, and 1926. The combined top marginal normal and surtax rate fell from 73 percent to 58 percent in 1922, and then to 50 percent in 1923 (income over $200,000). In 1924, the top tax rate fell to 46 percent (income over $500,000). The top rate was just 25 percent (income over $100,000) from 1925 to 1928, and then fell to 24 percent in 1929.

    Anyway, you were first arguing that the rate went up; now you're arguing that there was no rate at all (or something like that). You're wrong. Again.

    Judas priest, look it up yourself. :rolleyes: The rates are here. The fact that unemployment declined after FDR took office isn't even controversial. It's fundamentally dishonest to ignore the direction in which the unemployment rate moved, as is done in statements like "it remained above 15% for many years." Data on the tax increases in the mid-1930s

    Oh, come on, of course the indirectly benefit from other countries' actions. I know you want to return to the Ron Paul Golden Age on the 19th century, with protectionist trade laws, the gold standard, deflationary spirals, and recessions that occurred twice as frequently and lasted twice as long as they do now, but we don't live in that world now.
     
  16. bojendyk

    bojendyk New Member

    Jan 4, 2002
    South Loop, Chicago
    I didn't realize that there were only 250 economists in the entire world, Ted, and that 100% of them see no value in Keynes.

    Which economics professor of yours taught you that the plural of "anecdote" is "data"?
     
  17. VFish

    VFish Red Card

    Jan 7, 2001
    Atlanta, GA
    Club:
    Atlanta
    The criticism of the stimulus package wasn’t that Keynesian stimulus doesn’t work, it was that the Obama/Pelosi plan doesn’t contain much Keynesian stimulus. The liberals used the crisis to ram a bunch of long term pet projects through, projects that have no simulative effect but we will be paying for for years.
     
  18. bojendyk

    bojendyk New Member

    Jan 4, 2002
    South Loop, Chicago
    Now this may be a legitimate criticism. I don't particularly agree, but it's a reasonable position. But keep in mind, Vfish, you're arguing against somebody who saw the effect of Lehman's failure and believed that even bigger firms should have emulated it. You're arguing with somebody who believes that the Fed should have tightened the money supply in response to the recession. (Clearly, they should have tightened it years ago.)

    Critics of Keynes are always going to face the paradox of WWII. It astonishes me how often I've seen people hold the mutually exclusive views that (1) Keynesian stimulus doesn't work, and (2) what ended the Great Depression was spending on WWII-related projects.
     
  19. Smiley321

    Smiley321 Member

    Apr 21, 2002
    Concord, Ca
    Something in this business about WW2 spending ending the depression doesn't make sense. If that was all it takes to get an economy humming, why don't we just build alot of tanks, put them on ships and send them to the pacific and sink them?

    Does it matter that in WW2, all of our economic competitors were flattening each other and the US was the only country to emerge intact?
     
  20. VFish

    VFish Red Card

    Jan 7, 2001
    Atlanta, GA
    Club:
    Atlanta
    Not to mention 16 million Americans entered the military, quickly doing what FDR couldn’t, ending a decade chronic unemployment.
     

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