In 20 years, the history books will call this the 2nd depression. We are in a liquidity trap, according to Paul Krugman, nobel-prize economist. That’s central to the problem.
“The term liquidity trap is used in Keynesian economics to refer to a situation where monetary policy is unable to stimulate an economy, either through lowering interest rates or increasing the money supply.” Wikipedia
Modest inflation in our economy is normal and healthy. Inflation means that – relative to goods –your money will be worth LESS tomorrow than it is today. To a capitalist, thats’s incentive to MOVE money because hoarded money is shrinkng money. Normally – not now.
We are in a deflationary mode – the opposite condition. Money hoarded today will buy MORE widgets tomorrow than they did today. Even at 0% interest your money is growing, while the *stuff* you could buy might be worth less in the future. So big business is sitting on their capital - hoarding money in huge quantites.
The overall economy is shrinking. Business has cut back and laid off, so fewer people have money, which causes sales to slump, which causes businesses to lay off and pull back even more. Which feeds a downward spiral.
Which brings us back to the ‘liquidity trap’. In a normal economy, the Fed uses the twin controls of interest rates and money supply to hype the economy, but those controls are flat against the peg. Money that would ordinarily be spent or invested is being hoarded almost as fast as it can be put in circulation.
How do we get out? In economic terms, it’s obvious. You put large amounts of money in the hands of people who will spend it all – namely the unemployed and the poor. You increase consumption. You’re baiting capitalists into increasing production (and hiring). Second, you penalize (heavily tax) businesses and individuals for ‘hoarding’ large amounts of capital, and provide economic incentives (tax breaks) for investing in funds that will ‘work’ that capital – and create jobs.
The problem is that most people prefer a root canal without anesthesia to thinking about economics. The solution would be spun by conservatives as 'socialism' despite the fact it’s intent & result would be to preserve the free market system and restore a healthy economy quickly. But I see no way to ‘sell’ the solution to an electorate or Congress who won’t use sound economics to guide policy.
Very true. "Common sense" about the national debt doesn't provide the correct answer in our current situation. Hysteria about the national debt is putting us in danger of a prolonged and deep recession or depression.
...which can only foment more anti-incumbent feeling, which can only help the Republicans. Which is why the GOP is creating as much anger about the debt and incumbents as it possibly can.
Fear and ignorance are the fuels that drive the GOP.
Be that as it may, this thread had some kind of chance of developing into a discussion. How about it?
Bottom-up bail-out has got to be at least as sensible as top down. At least then the money can rise through the system, passing through many hands en route. Whereas money added to the top stays at the top.
I don't see that working, but I suppose it depends which taxes.
What type of bottom-up are you suggesting?
None. I'm merely observing that since top down doesn't work, bottom up is worth considering. We don't know that it doesn't work because it has never been tried.
Bottom-up - Put money in the hands of the unemployed and poor. Money will almost all be spent, not shoved under the mattress. Money spent gets re-spent - in economics the 'multiplyer effect'. In Keynesian economics the multiplyer effect ceases when money gets saved (and stops working).
The conservative formula is top-down - tax breaks for businesses. That money goes straight under the mattress and creates no economic activity - no new jobs. It does make rich people richer.
That's not completely true - the rich do tend to invest the money, which means it's put in the hands of production. Arguably not as effective as putting it in the hands of consumers, but certainly more effective than stuffing the money in a mattress.
There's no such thing as a multiplier effect, Keynes has misinformed the whole world.
Why is it that "choosing to hold on to your money for future use" is seen as a bad thing? Doesn't everyone (except keynesians) in the universe agree that saving money for the future is a good thing?
Keynes actually argues that saving money is a bad thing! And nobel prize winners across the globe agree!!!! It's mind boggling!
TRUE wealth is generated when you say "I value what I'm purchasing much more than the price that the other person is asking for it".
For example, I valued my new mattress (and the TV, and bedsheets that came with it) more than I valued $1800. I gained wealth - I now have something I value more than the money I had before.
And - Keynes, are you listening? - I BOUGHT THE DAMN THINGS AFTER I SAVED UP MY MONEY!!! SUCK IT!
I'm living proof that Keynes is wrong about the Paradox of Thrift. I saved up, together with my Fiance, over $60k while in Japan, and now we are able to live while I go to Graduate school and spend most of my free time reading (i come to hubpages to have run, believe it or not). The money i saved up is also supporting us while we look for jobs that will fit our schedules.
...you might even say that ... I was saving my money and that it was an INVESTMENT in our future....
... Keynes is such a moron.
I like that term, "bottom-up bailout." It's a short, accurate description that is easily understood.
common sense is to stop spending money and stop spending money on stimulus, and to stop inflating ourselves into poverty.
And... lo and behold, it's the correct answer: Obama's talking about another stimulus!
I wish we were in a deflationary economy! I'm living on savings and the interest on savings. My money buys less at the grocery store every day.
You want to print more money and give it to other people so they can spend away what I have? How dare you!!
I don't make this stuff up.
"June 17, 2010
On a seasonally adjusted basis, the CPI-U declined 0.2 percent in May after falling 0.1 percent in April."
From http://www.bls.gov/cpi/ - the government web site that measures the Consumer Price Index. I'm not suggesting that the price of corn flakes may have gone up at Safeway. But what I said about deflation is true and has been for several years now.
Economics requires objectivity - things aren't what you want - they are what they are. The economic circumstances have not been this bad in my lifetime. They aren't likely to get better any time soon. They will get MUCH worse under conservative economic philosophy.
deflation, from my current experiences, is actually what's happening - AND I LOVE IT!!!
i just got a free 32 inch tv, free installation of internet, a BRAND NEW Sports car for $17k, and a huge discount on my new apartment.
It won't last, however. The monetary base has tripled in the past 10 years or so - it's going to blow sometime.
Spoken like a true Keynesian. Increasing the Supply of Goods and Services by cutting costs of production should help. I'd then look to depreciate the currency to give you larger returns for your exports.
this is absolute nonsense.
not only is Economics NOT the "dismal" science, it is also not the dismal "science".
Check out my "Evan's Easy economics" for a full refutation of this nonsense, and read Henry Hazlitt's Economics in One Lesson to understand why Krugman doesn't deserve his Nobel Prize... or maybe it's that nobel prizes don't mean anything -- after all, Obama is still involved with 2 wars and got one for peace...
Here is a slightly bastardized version of the Austrian argument against this COMPLETE nonsense in a nutshell (It is known as the Austrian Theory of the Business Cycle):
Printing money leads to the problem where people think they have more "wealth" than they really do - thus more people bid for limited resources. I.e. - If everyone in the world found $1,000,000 under their pillow from the "Krugman-Keynesian-Bernanke Fairy", then everyone would think "oh my god! I'm a millionaire!" ... Then they'd rush out and start buying things.
Many people would put their money in the bank, thinking they could save it for the future: after all, they're millionaires!
Then the banks' interest rates would PLUMMET! People would think "Hey, now's a great time to invest in building a Ski/Snowboard park in Central texas!! I could buy hundreds of snow machines for really cheap, shift all the land around and build mountains, and clear out enough land to make it awesome!" ... the bank has more money than it knows what to do with, so it lends out the money (also, if Chase Bank doesn't lend the money out, then surely PBC will! - then PBC will earn profits on the interest!).
during this time, all the Keynesians and Krugmans, and Samuelsons quickly hand over their reports to the Obama (or whoever) administration and say "LOOK!!! investment and unemployment have plummeted!! Our plan worked!!", and they get nobel prizes.... ... ...
Unfortunately, however, the DRAMATIC increase in money IN NO WAY MEANT THAT THERE WERE MORE RESOURCES TO BE HAD!!! -- Everyone was fighting over the same number of snow machines, the same amount of steel to make the trucks to plow the land, and there was no dramatic increase in employable-people. Thus, all that happens is ... you guessed it... PRICES SKYROCKET!!!
Why would you sell steel to A when B could give you more, then A bids more, then B bids more, Then A... etc - finally a chunk of steel costs thousands of dollars!!!
What ends up happening? Wages skyrocket, prices skyrocket, and the entire economy says "WHOOOOAAA!!! This can't continue!" and all those "good-for-the-economy" projects fail and go bankrupt.
Then the Keynesians, Krugmans, Bernankes, and Samuelsons say "We needed to spend even more money!!! 0% interest rates were too high - We want BANKS to give investors money ON TOP OF the money that they lend out!"
Then when people say "shut the hell up", Obama comes out and says "Yes, we spend over $787 billion on stimulus, and things are still bad. But they COULD HAVE BEEN WORSE!!"
... and all that happens is an increase in prices, a depreciation of the money, and a much poorer economy.
More money is NOT what we need.
Argh - I just noticed you used the word "hoarded"!!! You actually bought that "people are hoarding their money" line?
Let me translate "hoarding" for you: When I hoard something, all that means is that I'm saving more money than YOU think I should be saving.
Why don't we agree to leave it alone? Let's not bail anybody out, rich or poor, debtors or creditors, let's treat all the same. The currency may retain its worth, and the economy may stabilize.
Kind of like Japan? That's worked wonders for its economy over the past 20 years.
I'm not familiar with the economy of Japan. Care to elaborate?
Krugman explains it well:
http://www.nytimes.com/2010/05/21/opini … ugman.html
In far greater detail here:
http://janelanaweb.com/novidades/lesson … recession/
Japan's economic woes aren't the result of doing too much or doing nothing. The prolonged weakness is the result of doing just enough to drag things out without either letting them fail and creating anew or making radical changes to reset the game.
Japan is where it should be - it was riding an inflationary bubble for some 20 years, and then they finally stopped. Now they have a stifling government that thinks that giving everyone 70 bucks is more valuable than just giving out tax rebates.
Spoken like Herbert Hoover.
(Google him if you don't know.)
Not likely according to nearly all economists.
Baffling there are still people who think that you can spend your way out of a depression.
When you flood the market with currency you create inflation. So you have 2 scenarios.
1. Deflation as people realize the impending collapse and spend on nothing including the currency flood.
2. Inflation as the ignorant borrow and spend more before the inevitable collapse. You can not increase the value of currency by introducing more currency based on nothing. That's just the way it is.
Either way there is simply too much debt to revive the economy.
Has anyone here been paying any attention at all to what is going on in Greece?
Greece is the model for what is coming for the average American as the Wealthy Elite claim title to Americas Assets.
Baffling that you think the time to rein in spending is during a recession, and the time to spend like crazy is during an economic expansion.
A big part of the problems Greece is in were caused by a consevative legislature thet was not collecting taxes from the rich. A big part - not all. But connected business entities found it easy to build in tax loopholes from politicians in bed with the fat cats.
That's a big part of the problem with our deficit problem - we are giving away about 4 Billion per year in subsidies and tax breaks to the Oil Industry alone - effectively corporate welfare that you don't hear the GOP screamng about. (But we can't afford to extend unemployment benefits.)
isn't it amazing? People with NOBEL PRIZES actually think that "hey, printing sheets of paper out of thin air can make society's ills go away!"
I would laugh, if I didn't know that we're headed for a triple dip recession.
Isn't there a majority of Democrats in both houses of Congress?
I think you have a Democrat President.
Democrats can pass any law they want, enough Democrats obviously don't want to extend benefits to the unemployed.
Sounds like the Democrats are the ones to blame.
You don't understand the procedures of the Senate.
Filibuster - google it
Democrats are still to blame, introduce a bill that doesn't add to the deficit and it would pass!
Thank God for the filibuster.
You backtrack very well..
You're not playing right. When I guess who you are socking for, you have to say either "hit" or "miss" like the game Battleship.
I went through this the other day.
You may want to read my legitimacy hub.
No sock puppet.
I googled your answer and could find no supporting evidence for your claim...
You're supposed to say, "you sunk my puppetship"
You are as paranoid as the rest, its the internet its all an illusion.
I came for the gummibears
I say TK/Sab Oh (who lied about not having any other accounts in an earlier thread with Randy).
No, this one doesn't lose his temper so quickly. He has Texan's demeanor.
I'm gonna post Skynard lyrics til he fesses up.
No, Texan overuses exclamation points and underuses every other form of punctuation.
TK/Sab Oh/Jim has an obsession with "insulting" behavior. The calmer demeanor is part of the ruse; notice he boils over a bit when he can't control himself.
Let me know how it all turns out I'm just dying to know who I am.
Who was that heavy-set guy who always agreed with Brenda and Tex..
It could be him.
I would say that this trolling family is around eight at last count, some come and go a bit and it is getting better at writing in differnet styles but not enough to cover up completely I think. There may also be many more but I feel there are at least two people at it and it confuses the issue to their advantage.
I have had him pegged as Texan since he came on, although I gave him the benefit of the doubt for awhile. The exclamation points give him away.
THIS is what some of y'all choose to waste time and space here with? Didn't we talk about raising the level of discourse around here?
Right, and not play 'who are you, who are you,' right?
A pack of liberals?
No, packs are for your kind. We run off in different directions and if we do happen to congregate, we bite each others tails.
TK, you don't understand. Sock puppets hate being identified. It comes too close to making them an actual person, accountable for their actions - they can't stand that!
Extending unemployment benefits could in fact lower the deficit, due to the negative effects of decreased consumer spending (i.e. decreased economic activity). See here: http://krugman.blogs.nytimes.com/2010/0 … austerity/ and here: http://blogs.wsj.com/economics/2010/07/ … n-deficit/ .
Im not sure what size your CAD is but reducing your deficit doesn't get you out of a recession. Look at Australia, our current account has been in defecit for years but we aren't in a recession or is it our main target to reduce it.
Oh, I have no delusions as to whether reducing the deficit gets you out of a recession. It's just that the usual argument against further spending (i.e. extending unemployment) is that it increases the deficit. So if further spending would both aid the economy and end up reducing the deficit (or debt), then there really isn't an argument against it.
Not extending unemployment benefits would be likely to add more to the budget than will extending them because failing to extend the benefits or provide other stimulus may well lead to a double dip recession which would reduce tax revenues substantially.
Sure! More and more unrestrained spending will reduce the deficit! That sounds like some standard obamanomics alright!
No, it sounds like standard real economics, as in the kind espoused by actual professional, trained economists. It also sounds like common sense and logic. Extending unemployment benefits means more money in the economy, because it goes to people who will spend it. More money in the economy means an improving economy, which means increased revenue.
"No, it sounds like standard real economics"
"It also sounds like common sense and logic."
Great news! I'm gonna go max out all my credit cards so my debt will go away! Why didn't someone tell me this sooner?
That is not remotely the same, to look at economics you have to get your mind out of your own wallet as a good start.
Your willful ignorance is impressive. You totally disregarded my point, did you even read what I wrote?
You are not a national economy/national government. What is true of those things is not true of you.
LOL! Math and common sense don't apply to governments I guess. LOL @ the lengths some will go to...
This is really funny, you keep pretending that I'm the one being ridiculous, even though you are the one who keeps ignoring my arguments. For instance, I explained to you how extending unemployment benefits, in addition to helping the economy, could also aid in reducing the debt. You ignored it and continued your condescending unjustified ranting. You, however, have yet to explain to me how you, in any way, resemble a national government/economy.
For your benefit, here again is my explanation of the benefits, to the government and to the economy, of unemployment compensation:
"Extending unemployment benefits means more money in the economy, because it goes to people who will spend it. More money in the economy means an improving economy, which means increased revenue."
To add: And increased revenue means the ability to decrease the debt.
Don't waste your breath. He is right about everything all the time
"This is really funny, you keep pretending that I'm the one being ridiculous"
How outrageous of me to suggest so when you are only arguing that the national debt is reduced by greatly increasing the national debt. That's before we even get into the brilliant notion of reducing the ability to spend of those most likely to spend as a stimulus to consumer spending.
It's absolutely outrageous (and funny, and ridiculous, etc.) because you keep ignoring my arguments in favor of bland unsupported statements (like those below). Not once in your replies have you ever engaged with my arguments, you just keep repeating the same vacuous things over and over again.
That's not even slightly what I'm arguing, which you would know if you bothered to actually pay attention to my arguments. See, one argument about decreasing the national debt (supported and Paul Krugman of the New York Times) is that money spent on unemployment benefits is immediately spent in the economy, leading to an improved economy which leads to higher government revenues, ergo decreasing the debt.
There's another argument (supported by Sara Murray of the Wall Street Journal) which argues that extending unemployment benefits will have a positive effect on the deficit because it will keep older workers (who generally have to search longer to find a job) feeling like part of the work force and will keep them from dropping onto other programs, like disability, which are more expensive and which they are less likely to get off of.
Not to mention, extending unemployment would not "greatly increase the national debt," it would increase it by a minute amount.
Wait, are you arguing that "those most likely to spend" are the rich? Because if so, that's just ludicrous. This is obviously true, for one simple reason: the rich can save if they want to, the unemployed can't. If you give money to the unemployed, they will spend all of it (or nearly so), because they need to do so so that they may eat. If you give money to the rich, they will likely save some, which means that it is not acting in the economy "as a stimulus to consumer spending."
It's an upside-down world when allowing people to keep more of their own damn money is called "giving them money."
Economics isn't your strong suit, Sab Oh. In economics, opinions are like assholes. Everybody's got one.
And here you do it again: ignoring my argument. If it makes you feel any better, imagine I wrote "not taxing them." Either way, it doesn't change the fact that those most likely to spend are those in need of the basics. In fact, your snipe above changes nothing in the face of my arguments, it just allows you to pretend you've engaged with my arguments, when in fact you continue to ignore them.
What insults? I have posted none. I have made some objective observations about your arguments which might be less than charitable (i.e. that they are "ludicrous" etc.) or about your tactics of argument ("outrageous," "funny," ridiculous," etc.) but I have not leveled a personal insult. In fact, you seem to be the only one of the two of whose playing personal politics: you may not be using personal insults (for which I do commend you), but you keep complaining about them, instead of engaging in actual debate (which may be fair occasionally, but as I pointed out, I have not insulted you).
What he's trying to explain to you is elementary economics. You should read up on it a bit, and you might change your opinions.
Ralph et al - Conventional economics certainly seems to say that you have to stimulate/spend your way out of recession and back to growth. What it isn't telling me is how permanent growth is supposed to be sustainable in a closed system. And by definition a global economy is a closed system, until we find a way to trade competitively with Martians.
At some stage, don't we need to move to an entirely different model? (I don't pretend to know what that might be, of course).
What exactly could stop economic growth? I think you're making an assumption that either economic growth always depends on material goods or that people's demand for goods and services never changes. In reality, services comprise a growing percentage of economic activity, and people's demand for them continues to grow. And growing productivity enables it.
Possibly my impression is coloured by location. The sort of growth I've seen first hand in UAE & Qatar, if rolled out across India & China would definitely have disastrous consequences. Shouldn't we be looking seriously at different social organisation?
Why would it? Really, I'm not trying to be glib, but I don't understand why raising the living standards to Gulf state levels in China and India would be bad or even impossible (of course, it will take a while, and the way it's achieved materially might be different...).
I don't think the Earth could sustain it. I think the water consumption alone would be unsustainable, to say nothing of the energy equation.
I think it could. Water conservation would have to be part of what sustains the growth, as it naturally would as the cost for it rose.
You could easily argue that based on the perspective of 1950 technology, that the entire planet could not have refrigerators, because the steel and freon required would be too much, to say nothing of the energy. In the meantime, though, we've moved to plastic and non-freon refrigerants, and energy consumption for refrigeration has dropped tremendously.
I agree that better technologies are crucial, but there are theoretical limits, mostly derivable from classical Mechanics and Thermodynamics, to what is achievable. I think a change of course is inevitable and I'd rather it was in some degree planned, rather than forced on us by disasters, famines, wars, which I think are the inevitable outcome of trying to fix the present mess for more of the same.
I still don't understand the point you're trying to make. What thermodynamic limits would need to be violated by a growing economy?
Economic activities have always been the result of necessity (response to disaster, epidemics, etc) as well as the simple desire for better living standards, amusement, etc. I don't see either of these diminishing ever: we will always have challenges beyond our control, and we will always want new things and novelties to enjoy.
Thermodynamics quantifies the gap between energy in and work out in any motor or engine. It also quantifies theoretical limits to the efficiency of freezers, AC units, etc. Let's just say 500 Million people are using n Mega Joules of energy each with optimised technologies. Roll that out to 10 Billion, and where are your 20n Mega Joules going to come from? If not readily available, do we just say tough shit - you can't have what we had, or do we start a few more wars over diminishing resources?
Do you believe energy is a finite resource that will always require battling over?
I'm not saying all of it will be "readily available" but the trend seems to be moving away from what can be drilled out of the ground...
It is, and not before time, but whether quickly enough is far from clear.
It certainly won't be fast enough, but that's no reason to slow economic growth. Economic growth has allowed more people to live, and allowed more to enjoy a higher standard of living, than at any other time in the past.
I understand that. But traditionally it has been at the expense of 'remote' countries, of which there are none in a globalised economy. My point is that restarting the machine is not enough. We need to redesign the machine, and not just by trimming the side hairs. A machine that meets the reasonable expectations of the many, not the excessive demands of the relatively few, still seems to be eluding us.
I agree we're not "there" yet, but I disagree that we haven't been moving in that direction for quite some time. The percentage of the world living in abject poverty has dropped tremendously over the past century, European colonialism of the world is all but completely over, and useful technology is in the hands of more people than ever before.
I don't believe anything needs to be torn down and restarted from scratch. If you think things have really gotten worse overall, I can maybe understand why you feel the way you do (without agreeing with you), but I don't get the sense that you believe that either.
Most economic growth is not dependent on access to material things, and those countries with material wealth do not necessarily have strong economic growth. But those countries with strong economic growth seem to advance in other ways that we generally appreciate. Poverty and even economic stagnancy breed regressivism.
I agree that a smaller proportion lives in abject poverty, but that could have been achieved without the creation of a super-rich elite. Most of what passes for economic growth in recent years has been overall growth at the expense of middle & working class people. And this overall growth has produced nothing of value, except money, debt and derivatives. Pensions evaporate, retirement age rises, etc. I invite you to read SufiDreamer's new article on Greece, on http://dropoutnation.blogspot.com to see the difference between what is really happening and what is spun in the media.
Privately owned banks have growth assured. The people get the austerity.
That's why I say the machine should not be restarted.
I read Sufi's excellent piece and tried unsuccessfully to leave a comment along the following lines--
"Making the banks eat their bad loans and bonds would be fair. However, it would not solve the underlying problem of how to pay for unwise, costly pensions at an early age for people in good health and able to work, short work weeks, long holidays (France, not sure about Greece) and other generous benefits in the face of a growing ratio of retirees to workers who support them."
The "creation of a super-rich elite" undermines the faith of the majority of citizens in their government and threatens democracy in many countries including the United States.
Not sure why the comment wouldn't stick, but thanks for the visit. The retirement problem is also about what sort of retirement one expects. I'm sure that a better life plan might involve more people doing less full-time work but doing it for longer, instead of the artificial distinctions between school/college age, working age, retirement age.
Well, my comment went to what conventional economics has to say about how to get out of the current recession, not whether our current world economic order (disorder?) characterized by failure to conserve and replace depleting energy and other resources, widespread poverty in many countries, increasing income disparity in the U.S. and other countries, etc, is sustainable. When I drive around the Detroit inner city wasteland and the endless, deteriorating suburbs I'm becoming increasingly pessimistic about the future. (Not to mention the Tea Party ignorance with which our country (and HubPages) are increasingly infected. And developments in Dubai call to mind Keats' poem Ozymanidias and Eliot's "The Wasteland."
Ozymandias by John Keats
I MET a traveller from an antique land
Who said:—Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shatter'd visage lies, whose frown
And wrinkled lip and sneer of cold command 5
Tell that its sculptor well those passions read
Which yet survive, stamp'd on these lifeless things,
The hand that mock'd them and the heart that fed.
And on the pedestal these words appear:
"My name is Ozymandias, king of kings: 10
Look on my works, ye mighty, and despair!"
Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.
From Eliot's "The Wasteland
The river’s tent is broken: the last fingers of leaf
Clutch and sink into the wet bank. The wind
Crosses the brown land, unheard. The nymphs are departed.
Sweet Thames, run softly, till I end my song.
The river bears no empty bottles, sandwich papers,
Silk handkerchiefs, cardboard boxes, cigarette ends
Or other testimony of summer nights. The nymphs are departed.
And their friends, the loitering heirs of city directors;
Departed, have left no addresses.
By the waters of Leman1 I sat down and wept …
Sweet Thames, run softly till I end my song,
Sweet Thames, run softly, for I speak not loud or long.
But at my back in a cold blast I hear
The rattle of the bones, and chuckle spread from ear to ear.
A rat crept softly through the vegetation
Dragging its slimy belly on the bank
While I was fishing in the dull canal
On a winter evening round behind the gashouse
Musing upon the king my brother’s wreck
And on the king my father’s death before him.
White bodies naked on the low damp ground
And bones cast in a little low dry garret,
Rattled by the rat’s foot only, year to year.
But at my back from time to time I hear
The sound of horns and motors, which shall bring
Sweeney to Mrs. Porter in the spring.
O the moon shone bright on Mrs. Porter
And on her daughter
They wash their feet in soda water
Et O ces voix d’enfants, chantant dans la coupole!
Twit twit twit
Jug jug jug jug jug jug2
So rudely forc’d.
The choice of poems is apt, especially for Dubai. The rest of the UAE is not quite as extreme, but it's still hugely extravagant and wasteful and certainly not a pattern that could be sustained.
I take your point that it is the economists' job to fix the economy, just as it was Arjuna's job to fight his cousins. Sometimes though, the honourable course is to step off the bus. I had hoped that the financial crisis might have caused a rethink of the monetary system, but I see no evidence that it has.
Since you mention the Tea Party, may I offer a slight diversion?
http://paranormal-hotel.blogspot.com/20 … ology.html
Ha! That's a good one. I'll send it to a few of my Tea Bagger friends.
Please do. But with some you might have to add in block capitals SATIRE ALERT, or they might simply agree with it
Some conservatives are able to laugh at ourselves. I happen to be one of them.
Liberals never seem to see the humor in our stereotypes of them.
Great poem, Paraglider. The first time I read it I didn't notice that you are the author.
This is the key point in all of this. The myth of continuous growth undercuts any economic model at its base, at one level it is childish in its necessary acceptance that money, value, will just keep appearing in its pocket so it can buy candy every day. At another level it is the reality of greed as the mechanism by which 'profits' are removed from the sysem, milked from society.
The myth of continuous growth results in the vicious crusades for profit, through physical wars and trade wars, and the virtual colonisation of many countries, and it is the lie that feeds all right wing ideologies.
Is this the same old 'Capitalism is the root of all evil' bit again?
THANK YOU SAB!! YOU ARE MY HERO!!! Because you will murder yourself in debt, SPENDING HAS INCREASED!!!
C+I+G = HAPPINESS!!! Thank you!!
... god I'm amazed that anyone can defend Krugman! (I may disagree with you on a lot of things Sab, but we seem to agree on economics!)
Maybe they are all the same person Maybe there are only 10 real people on the forums
He doesn't like me. Does that narrow it down?
Watch it Jim, someone might write a hub and tell you not to read it!
The thing is - wingnuts are the ones who write whiny hubs whenever they get suspended. MadamX did - Buck (Texan) did - Arthur did.
It's all a conspiracy - boo-hoo. Poor me. I have been suspended - twice. I know of other liberal hubbers who were. And they didn't write whiny hubs complaining.
When wingnut hubbers go over the top and get permanently banned - they come back with a new name and the same message. And they loose it again when confronted by liberals with facts, which are such inconvenient things.
"Man invented language to satisfy his deep need to complain."
"We are so accustomed to disguise ourselves to others that in the end we become disguised to ourselves."
Francois de La Rochefoucauld
I'm such a quote geek.
You are so right, libtards just write hubs that so overwhelm you with their brilliance that the reader just chokes on the words...from laughter!
"When wingnut hubbers go over the top and get permanently banned - they come back with a new name and the same message. And they loose it again when confronted by liberals with facts, which are such inconvenient things."
Speaking of conspiracies.
Lets take a look at the Keynesian theory in its most simplistic form.
Take twenty people and put them in a room, fill the right pocket with money and have them take half and put it in their left pocket.
Are they richer for having done that?
Jim - I DID study Keynesian theory in college. Macroeconomics was required - what you suggested was in no way, shape or form related to economics. Did you get that from Rush Limbaugh?
You went to college and yet know nothing about how the judicial system works?
I'm going to have to call you on that.
... i thin Jim summed up the Argument quite nicely, actually.
"If you want to make life better, have the government take all your money and spend it for you without your direct consent" might be another way to do it.
You and Sab Oh both, you both do this thing where you ignore the points made against you in favor of false "reductio ad absurdum," straw man arguments, and other fallacies as though they were legitimate arguments.
On this specific point: I'll give you a more reasonable reduction of Keynesian economics, using the specific example of unemployment benefits:
Let's say we have twenty people, 5 rich and well employed, 5 middle class, 5 lower class, and 5 unemployed. As it stands, the unemployed are spending nothing, because they have no money. The lower and middle class are both spending most/all of their incomes to meet their expenses. The rich, however, are spending comparatively little of their incomes, because it only takes a small portion to meet their needs and they're saving a fair part of the rest, because the economy sucks, so they don't want to spend now. The government comes in, taxes the rich and pays benefits to the unemployed. Suddenly, the money which was being held in reserve, out of the economy, is immediately infused into the economy by the unemployed, who have no choice but to either spend it or starve.
Well done. I'm almost impressed at your stubbornness. Even as I point it out you continue to do what I accuse you of doing: ignoring my points by using a variety of invalid argument tactics. Well, in fairness, asking about the stimulus is semi-valid, since we were discussing Keynes, but it's also invalid insofar as you are completely ignoring my point about unemployment benefits.
In any case, on the subject of the stimulus:
"The Congressional Budget Office said in May that as of the end of the first quarter of 2010 the Recovery Act has “[i]ncreased the number of people employed by between 1.2 million and 2.8 million,” raised inflation adjusted GDP “by between 1.7 percent and 4.2 percent,” and lowered the unemployment rate." from: http://thinkprogress.org/2010/07/01/boe … s-one-job/
and a nice graphic to go with it:
Well Said, Strophios. But you left yourself wide open with a logical, well documented argument to be devastated by the wingnut counter-argument that always works - They will annihilate your facts with a photoshopped picture of Obama as King Tut or Che Guerva - which proves?....
something, doesn't it.. because it's where they always go when facts fail these morons..
Why do you feel the need to include insults like that?
Most people do it because you invite the insults with your illiterate vague and pointless posts.
Sag Oh - There have been several threads opened up which were venues for posting photoshopped pictures of Obama. I haven't noticed that you object to those insults, or how they add nothing to the discussion.
I am even handed here - I have seen photoshopped Palin posters that add nothing to the discussion. This runs down the chance to actually exchange ideas, which my OP did. A lot of people added to the discussion, and I observed how one astute comment would probably be rebutted since there was no rational counter-argument.
What I was saying was not a personal insult - it was a general observation about where conservatives run when they can't deal with facts and evidence that are well assembled.
"There have been several threads opened up which were venues for posting photoshopped pictures of Obama."
None posted by me. I am not talking about insulting politicians and other public persons, I am talking about insulting each other here in our exchanges. Why not avoid that and improve the tone around here - if only a little?
Is that tactic similar to the one that is constantly used by you and the rest?
Your a troll
Your a sock puppet
I understand the Keynesian theory well enough to know it isn't working.
So put up a graph that proves your point and I will look at it and smile.
I have never once said any of these things. So what's your excuse for consistently ignoring me?
Although, in fairness, I will say that accusations of sock puppetry and trolling hardly contribute any more to the conversation than the very sock puppetry and trolling they accuse you of, arguably even less. On the other hand, when faced with an opponent who refuses to actually argue, I can at least understand resorting to the same level of tactics.
No, you understand Keynesian theory well enough to, apparently, ignore every argument I've made in favor of empty platitudes like "I understand Keynesian theory well enough to know it isn't working."
Wait, you mean a graph like this one:
Or how about a quotation? Maybe one like this:
"The Congressional Budget Office said in May that as of the end of the first quarter of 2010 the Recovery Act has “[i]ncreased the number of people employed by between 1.2 million and 2.8 million,” raised inflation adjusted GDP “by between 1.7 percent and 4.2 percent,” and lowered the unemployment rate." from: http://thinkprogress.org/2010/07/01/boe … s-one-job/
These, you may note, I posted earlier in this thread. You just ignored them both.
Also, I think it's really amusing that you should be asking for evidence when you have not only provided none yourself for your own statements but, as far as I can tell, have never provided evidence for any of your arguments, ever. It's just sort of funny, is all.
I didn't ask for proof. I just said put up the graphic so I could smile.
Since links get you all excited I will give you some.
http://www.americanthinker.com/2010/05/ … _bill.html
http://blogs.ajc.com/kyle-wingfield/201 … ulus-bill/
Have a wonderful day.
You actually believe that BS? Those links were a tour de force in political bias and ignorant arguing, in addition to simple lies. For instance, the American Thinker article cites unemployment which "continues to rise towards %10," which is just blatantly untrue, given that unemployment is in fact decreasing, for instance, I believe the most recent figure is %9.5, lower than their cited figure of 9.9. Then you have the fact that none of these cites any actual facts or figures, they just shout "More spending, oh no!" over and over again. Nor do any of the three engage the wider economic theory, they just assume Keynesian theory is wrong (with no backing evidence) and go on shouting some more about deficit spending. Now that I know that this is where you get your information/viewpoints/arguments/rhetorical tactics from, suddenly everything makes so much more sense.
I expected nothing less from you.
Your links good my links bad.
That would just about do it don't you think?
But see, there are actually manifold differences: I read your links and they were idiotic drivel, foolish mounds of punditry buffed up by indignant anger at "GOVERNMENT SPENDING OMG!!!one!1!1!oneoneone." Neither evidence nor argument. By contrast, of the four sources which I cited, two did not even provide argument or opinion, they simply provided objective facts and figures, which is why they were the Congressional Budget Office and the Bureau of Labor Statistics. I used these objective facts as proof to my argument, as opposed to you, who simply provided links to more baseless statements, as though those were evidence for your statements. The other two sources I cited did argue, but they argued with evidence and rationality. In addition to having actual qualifications which, although they do not a priori make their arguments better, it is reason to give them some credence when they discuss their chosen field, i.e. economics.
I read about 10 words of what you write and always come to the same conclusion.
I just think its better if we don't try and converse.
So, for the love of God leave me alone..
Wow, it's now gotten to the point where you're not even making the pretense of reading my arguments, you're just going to ignore me wholesale. I mean, I understand, it's hard enough to actively deny reality without someone constantly asserting it to you.
I can't guarantee that I'll stop though; I still naively hold out hope that I may have a positive impact. The ability to critically examine your beliefs, realize when they are wrong or in error, and change them is hugely important skill, and is the first one necessary for a free mind. Also, one which you have yet to learn, apparently.
By the by, ten words wasn't even the first sentence of that last post, nor of this one.
I got if off the Internet. It must be true!
Can you distinguish between a leading newspaper or magazine or the Lehrer News Hour who apply standards and check facts and sources before publishing and a right-wing opinion blog?
Not exactly. We use the proper form of "you're".
I don't usually make that mistake, you're very kind for pointing that out.
I also appreciate it when people catch my grammar/spelling mistakes. It's an area we can all improve on....
(catch the mistake?)
the same people (Austrian Economists) predicted Stagflation, the Great Depression, The stock bubble burst, the current housing mess, the next recession we get hit with (in ten or so years), the failure of the bretton-woods system, the abandonment of the gold standard, and many other economic disasters...
You just called them all morons. Whereas the people you highly revere thought that the USSR would over take the US all the way up to 1989.
... I'm gonna go with history on this one and have to call you the moron.
If you don't like being called a moron, don't call others the same thing.
your argument COMPLETELY ignores WHAT the people are buying - You say that the middle class people are spending their money "on expenses" - You CAN choose to reduce your expenses - we're not all mindless zombies.
If you want to save money, You choose to spend less - like me and my fiancee did - and then you can choose to spend that money later - like me and my fiancee.
It's called "investing" not "hoarding"
Mises was much more thorough than Keynes was.
youd like my trickle up effect...
and its the velocity of money that creates growth, ... so how many times it changes hands.
@Doug and/or Ralph - My question above was a genuine one, because while I agree with you on the best way to get the economy 'back on track', I'm really not sure that 'on track' is where wen should be going. Politically it makes sense because of such factors as the length of a term of office, but isn't perpetual growth unsustainable in a global economy?
http://hubpages.com/forum/topic/47821?p … ost1098034
Thanks for trying to hold a proper discussion
Not an expert here, much of the preceeding is fairly well Greek to me, maybe that's part of the prob. Average folks gen. don't know a lot of the theoretical voodoo called "economics" but my short laundry list would be that over the past fifty years, and before, we in the U.S. let the unions hold us hostage to higher wages and benefits, forcing the government to raise minimum wage levels, so non-union workers would be able to survive because w/ the union raises (usually because of a gen. strike) caused across the board increases in the cost of goods and services. The raise in the wages of lower non-union jobs caused mose across the board raises, which caused more gen. strikes. A very vicious circle, which has forced us into an economic cul-de-sac. Now we are the highest paid workers in a declining marketplace. Why is the market declining? Our market is because we eliminated middle and lower level blue collar jobs, by allowing them to go to other MARKETS! Could be wrong, but it sounds like we've made our own bed here.
I'm from UK, not US, but I believe US salaries are quite a bit lower than European counterparts. Not that everything's rosy in Europe either of course!
Keynesian economics is complete nonsense: "Saving money is bad!", "If you spend money you are creating wealth out of thin air - it matters not what you buy!", "printing sheets of green paper with a number on them will make everyone better off!"
These are the idiotic lessons you learn from Keynesian economic (that which is taught in schools).
Check out this one single book: "Economics in One Lesson" by Henry Hazlitt. Compare the lessons Hazlitt teaches with the lessons that Keynes teaches, and make your own decision.
(For those with the limited attention span there is a light summary of the book on youtube - it's kind of long, but is divided into about 15 minute chunks, each chunk is a different topic that the one lesson is applied to.)
How do you expect anyone to take heart to anything you say if you are condescending and trying to point to people and tell them they are stupid. There is one problem with the arguments you present and you want no government yet you are trying to force your opinion on everyone. If libertarianism is apolitical, why are you so political in the name of the aforementioned?
Hazlitt has some good points but he is more of a philosopher than a economist. I too do not believe that the government should spend to create an economy. His theories are cyclical though and not mathematical and are more in support of a political scheme.
Keynesian economics was right for the times in many peoples minds at the time of WWII. I don't think we should spend ourselves out of the current economic blight. I don't however think all his ideas are bunk.
Evan, you have very idealistic views. The economy is a man made event. It does not have a complete basis in science and mathematics because it is dynamic and it changes with the worlds mindset. Some parts of the economy are cause and effect like our housing market driving the economy. We see what happened. Others are not.......Like theories on why and how we spend or save.
You may think I am picking on you. I am not. I do admire your enthusiasm but what I don't like is that you are actually being nasty to a lot of people. You are trying to convince people by calling them stupid and talking to them very angrily. That drives people away and accomplishes nothing.
You might feel that you have the better side of the argument but all you are doing is convincing people to take an opposite stance. You are actually telling people not to listen to you. You do have some good ideas and if you can learn to discuss them (that means to listen to what others are saying also) more people will listen to you.
by John 7 years ago
How do you think cutting the federal spending will help the economy?
by Moderndayslave 9 years ago
With the income gap between the wealthiest American's and the soon to be decimated middle or working class ever increasing. How much more proof do you need that tax cuts for the wealthy isn't creating jobs or supplying wages that are holding their own against inflation....
by lady_love158 10 years ago
http://www.huffingtonpost.com/dan-dorfm … 67131.htmlThe action by the Fed to counterfeit a trillion new dollars will make the rich richer and the poor, poorer. Inflation will spark, your savings already earning nothing will be worth less, your paycheck will buy less, and everything will cost...
by jerryl 11 years ago
What's your opinion, and the reasoning behind it?
by ga anderson 7 years ago
I stole this from another thread, so the topic could be discussed without further hijacking the thread it was on. I hope that was OK.John, I am not putting forth criticisms for you to defend. I do not know enough about MMT to hold an intelligent conversation about it. I was merely pointing to...
by Ralph Deeds 12 years ago
Paul Krugman's column in the NYTimes today 1-5-08 is entitled "Fighting Off Depression." In it he called the recent economic numbers "terrifying," not just in the U.S. but around the world. Manufacturing in particular is plunging everywhere; banks aren't lending; businesses and...
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