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You debate with what you think someone is about, not what they are saying.
Of course, after all you'd never accuse someone of being "left-wing" debating from a "play book", etc. It must be nice to be completely delusional.
The only thing I have suggested you adhere to is "free market dogma" and your comments after I said this have done nothing to suggest otherwise rather you keep polling more and more views from this source. Now this does not mean you're wrong, but its a bit silly trying to deny the obvious.
Quote:
Originally Posted by hilgi
Yes, your Robin Hood utopian scheme is not political at all, thanks for keeping it above politics.
Your line here is both tiresome and ridiculous. Stating a view that happens to also be commonly believed by folks with a particular political ideology does not make the issue itself "political" nor does it mean the person stating it is reducing themselves to the sort of political banter you seem to enjoy. After all, every issue is going to fall under some political ideology. What distinguishes debate about political philosophy and "politics" is a focus on the actual issues versus reducing the discussion to "you're a liberal" and merely stating and repeating your point of view. Everyone has a point of view that they tend to agree with, that is true in political philosophy as well as anything else, the important question is how willing one is to change their views in light of conflicting information/arguments.
Of course, after all you'd never accuse someone of being "left-wing" debating from a "play book", etc. It must be nice to be completely delusional.
The only thing I have suggested you adhere to is "free market dogma" and your comments after I said this have done nothing to suggest otherwise rather you keep polling more and more views from this source. Now this does not mean you're wrong, but its a bit silly trying to deny the obvious.
Your line here is both tiresome and ridiculous. Stating a view that happens to also be commonly believed by folks with a particular political ideology does not make the issue itself "political" nor does it mean the person stating it is reducing themselves to the sort of political banter you seem to enjoy. After all, every issue is going to fall under some political ideology. What distinguishes debate about political philosophy and "politics" is a focus on the actual issues versus reducing the discussion to "you're a liberal" and merely stating and repeating your point of view. Everyone has a point of view that they tend to agree with, that is true in political philosophy as well as anything else, the important question is how willing one is to change their views in light of conflicting information/arguments.
I make one joke about you being the forum left winger and you get all bent. I must have hit home because you realize you are as you state, parroting commonly held political beliefs, I would emphasis very common, as in not original or deep thinking at all.
What about reforming corporate charters is anything close to "free market dogma". I would say such dogma would be doing away with regulations, keeping corporate personhood and allowing corporations more control and power. Al things I do not believe in.
Face it, I say things that don't fit into your normal type of condescending debate and you can't handle it so you continue to accuse me of politicizing (even though I did once, maybe twice) and you say it every post.
I know it is difficult for open minded free thinkers such as yourself to imagine other people may have very well researched UNCOMMON economic and political beliefs that don’t fit into the left/right dichotomy.
So accuse away, I don’t care, you are a dime a dozen, every forum has 100 versions of you spouting “commonly believed” rhetoric in a condescending and authoritative way and the other 99 belivers bow down in lock-step agreement.
I make one joke about you being the forum left winger and you get all bent.
Again the delusion thing, it was not one comment nor was it said jokingly. What bothers me is the politicizing, not being called left-wing. Whenever I debate with right-winger I get called "liberal" and whenever I debate with liberals I get called "right wing". I'm use to it, my views in both cases are not partisan enough to fit in with either group.
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Originally Posted by hilgi
Face it, I say things that don't fit into your normal type of condescending debate and you can't handle it so you continue...
Its funny that you think you don't type-cast people when you do it in the extreme. You have convinced yourself that your ideas are so apolitical and uncommon that anybody that disagrees with them are doing so because they "can't handle them". The reality is I know the source of most of the ideas you are parroting...err stating because I've read them.
Anyhow, there is a real simple empirical test here though. Look at my post history, you'll find little consistently along partisan lines nor will you find me involved in any political name calling, etc.
Quote:
Originally Posted by hilgi
So accuse away, I don’t care, you are a dime a dozen, every forum has 100 versions of you spouting “commonly believed” ....
Right, you're like a teenager rebelling against the "mainstream". My views are not based on how commonly or uncommonly believed they are, they are based on the underlying logic. Perhaps one day when you grow up a bit you'll focus on the underlying issues and logic instead of the banter.
Anyhow, this is all off-topic nonsense anyways. Feel free to have the last word.
Create jobs now with stimulus spending (which would increase the deficit) and pay down the deficit once the economy starts to recover.
This is much different than your "tell us government debt is actually a good thing" straw man.
It is unfortunate that things are being distorted for political reasons, the economy is not going to fix itself and paying down the deficit now will result in higher unemployment. I find it amazing that some people seem to think you get an economy to grow by reducing demand. Why in the world is a business going to invest in new infrastructure, hiring employees, etc when demand is declining?! Perhaps people think you can magically reduce the deficit without reducing spending and/or increase taxes though.... Is that what you think Jim? Do you think Obama has a magic wand? You must.
You can hang on to your straw man argument as long as you want but you are really not convincing anyone. The words are right there in print. The basic problem with the Keynesian viewpoint is that it like you said, reasons that the economy cannot fix itself. This is false and shows a basic misunderstanding of what the problem really is to begin with. The economy cannot be "fixed" by deficit spending propping up artificially high asset values and government sponsored bail out programs supporting businesses with failed models. The economy has to be allowed to establish its own values for assets and labor based on actual fundamentals. Markets must be allowed to crash in order for investors to return and to establish a floor. Once the floor is in, the economy can begin to grow again. Putting off the crash will not prevent it, it will only postpone it and result in huge public deficits. Had the government not interfered with the natural process we would have already bottomed and would be now in recovery. Instead we are looking at decades of high unemployment, and slowly declining asset values as the government unsuccessfully tries to fight the inevitable in the same way Japan has been doing for 30 year. That road may very well end in sovereign default.
You can hang on to your straw man argument as long as you want but you are really not convincing anyone.
In what way did I construct a straw man? I'm merely pointing out what people are really saying.
Quote:
Originally Posted by jimhcom
The basic problem with the Keynesian viewpoint is that it like you said, reasons that the economy cannot fix itself.
Keynes did not suggest that the economy won't fix itself, rather it suggests that an economy under certain conditions won't recover from a recession rather the new baseline will be on of reduced economic activity.
Quote:
Originally Posted by jimhcom
The economy cannot be "fixed" by deficit spending propping up artificially high asset values and government sponsored bail out programs supporting businesses with failed models.
No where does Keynes suggest that the government should prop up asset values, bail out individual businesses, etc.
Quote:
Originally Posted by jimhcom
Markets must be allowed to crash in order for investors to return and to establish a floor. Once the floor is in, the economy can begin to grow again.
Its amazing that people think this sort of stuff when there is a very obvious historic counter-example. This was tried during the depression and the result was persistent unemployment topping 25%, the economy did not start to recover until the government started stimulus spending. Interesting, due to the same sort of short-sightedness you hear today the stimulus was stopped in 1936 and the government tried to start paying down the deficit...the result? The recession of 1937. More stimulus was implemented after this recession and of course the war effort made talks of deficit reduction null and void for a few years.
Anyhow, before you can try to argue against an idea you have to first understand the idea. You are still just distorting what Keynesians think. None of the well known Keynesians supported TARP and the bail-out of the financial industry, rather they advocated that the government take over failing financial institutions (like the FDIC does banks) and wipe out the share-holders, etc.
Keynes did not suggest that the economy won't fix itself, rather it suggests that an economy under certain conditions won't recover from a recession rather the new baseline will be on of reduced economic activity.
To be fair to Keynes, many of the people driving economic policy who are refered to as Kenesians, truly do not follow his model, and he himself would be dismayed at what modern day economics are doing in his name.
Quote:
Its amazing that people think this sort of stuff when there is a very obvious historic counter-example. This was tried during the depression and the result was persistent unemployment topping 25%, the economy did not start to recover until the government started stimulus spending. Interesting, due to the same sort of short-sightedness you hear today the stimulus was stopped in 1936 and the government tried to start paying down the deficit...the result? The recession of 1937. More stimulus was implemented after this recession and of course the war effort made talks of deficit reduction null and void for a few years.
This is kind of a revisionist view of history isnt it? To deal with the crash in October 1929, Hoover increased spending by nearly 10% in 1930, by 20% in 1931 and another 15% in 1932. All told, Federal spending increased by 50% in just three years, while revenues dropped. FDR then increased deficit spending expodentianly and the reality and the FACTS are that even after seven years of bloated deficit spending, we were WORSE off then when the whole thing began.
Quote:
Anyhow, before you can try to argue against an idea you have to first understand the idea. You are still just distorting what Keynesians think. None of the well known Keynesians supported TARP and the bail-out of the financial industry, rather they advocated that the government take over failing financial institutions (like the FDIC does banks) and wipe out the share-holders, etc
The real issue is that deficit spending does not address the root causes of the economic problems. Deficit spending only addresses the symptoms, and therefore cannot deal with the fundamental causes. When the private sector engages in deficit spending they are laying the groundwork for recession or depression. When the public sector engages in deficit spending they are laying the groundwork for sovereign debt crises. The recession was not caused by a lack of government spending; therefore it cannot be solved by an increase in government spending. The recession was caused by income gains being concentrated at the top of the income brackets while at the same time an unreasonable easing of credit and overconfidence in a falsely inflated economy. These combined to inflate asset prices to justify increase debt levels. We basically had an economy built on lies. The only way to correct that is to allow the market to once again set asset values based on what people can really afford to pay. Failed businesses must be allowed to fail and successful business models to take their rightful place as leaders. To rid the marketplace of failed CEO's and Politicians and to allow people who can demonstrate leadership and initiative take their rightful place. Recessions/Depressions are a natural cleansing part of a free market economy. They get rid of the people who no longer belong where they are, and set the stage for a new period of growth. In the economy super cycle there is a pattern that can be identified by the people in charge. It begins with the Innovators; they are followed by the Imitators, who in turn are followed by Incompetents. The Incompetents must be allowed to fail in order for the new cycle to begin with the Innovators who will have to find the solutions for the mess their predecessors have created. Allowing the Incompetents to survive thru bail outs and government spending only delays the inevitable.
This is kind of a revisionist view of history isnt it? To deal with the crash in October 1929, Hoover increased spending by nearly 10% in 1930, by 20% in 1931 and another 15% in 1932.
No, rather it is what happened. I'm not sure where you are getting your numbers from but government debt did not increase between 1929 and 1931, see here:
It was not until 1932 that the government increased the deficit to stimulate the economy.
Quote:
Originally Posted by jimhcom
The real issue is that deficit spending does not address the root causes of the economic problems. Deficit spending only addresses the symptoms, and therefore cannot deal with the fundamental causes.
This is not an argument against Keynes. The purpose of fiscal policy is not to try to solve structural problems in the economy, but rather to boost aggregate demand. Whether or not the government should try to solve structural problems is an entirely different debate, but trying to solve structural problems when the economy is filled with over capacity is like trying to steer a boat when its taking on water.
Keynes disagreed with one key aspect of classical economics, namely that the free-markets would reach a full-employment equilibrium by themselves. He argued that under certain conditions (i.e., great depression and today) you can have persistent unemployment. Put in modern terms, the economy can reach a Nash equilibrium at less than full employment. When this occurs only an exogenous force (i.e., the government) can pull the economy out of the equilibrium. Once the economy reaches a new equilibrium government invention is no longer needed.
Quote:
Originally Posted by jimhcom
The recession was not caused by a lack of government spending; therefore it cannot be solved by an increase in government spending.
This is silly reasoning, just because a recession was not caused by X does not mean that X can't help.
No, rather it is what happened. I'm not sure where you are getting your numbers from but government debt did not increase between 1929 and 1931, see here:
It was not until 1932 that the government increased the deficit to stimulate the economy.
Hmm he said deficit you show debt??
1929 deficit was a surplus of .48 B
1932 deficit was 1.63 B
1933 was 1.84B
Deficit to GDP
1929 -.46
1932 + 2.78
1933 + 3.27
1936 pre war peak 4.76
Hit 28% in 1943.
Federal spending 1929 was $3.81 b on $103 b GDP or 3.6% of GDP. 1932 spending was 4.27B on 58 B of GDP or 7.3%. 1933 spending was $5.10 on a $56 B GDP or 7.3%.
(FDRs pre war high spending to GDP ration was 10% of GDP. )
Other things Hoover did to help was a small tax cut (equivalent to approximately $22 billion today). He met with the business leaders of the day to make sure they would not lay off workers or reduce wages. He pushed for cheaper credit from the Fed and also set out on a massive spending spree.
Time Magazine wrote a great article about the early Hoover stimulus plan in December 1929 titled “Prosperity Pledgers”.
Hoover also Established a Reconstruction Finance Corporation, which would use Treasury funds to lend to banks, industries, agricultural credit agencies, and local governments. Create a Home Loan Bank discount system to revive construction and employment. Expand government aid to Federal Land Banks.
Set up a Public Works Administration to coordinate and expand Federal public works. And pushed to end immigration, started a sharing-the-work program to save jobs and helped to "save" bankrupt railroads… just to name a few.
He hardly sat on his hands. (maybe he should have)
Right, the debt tells you more about government stimulus than the deficit. The deficit would increase even if spending was held constant.
Quote:
Originally Posted by hilgi
He met with the business leaders of the day to make sure they would not lay off workers or reduce wages.
Oh gee, did he tickle their feet too? I guess business leaders did not listen much huh? Who would've known.
Anyhow, Hoover did not ignore the recession but he did not implement a major stimulus program either. Hoover thought that the recession would recover with mild government action, that is after all what most people thought in that period. Both the Bush and Obama administration seem to have similar ideas and hence why more aggressive stimulus was not implemented. Hoover did not create the great depression, he just did little to prevent it. Hoover's actions were understandable, what is sad is that the same debates that occurred in the 30's are being repeated again today. Keynes, Fisher, etc may as well never existed.
Right, the debt tells you more about government stimulus than the deficit. The deficit would increase even if spending was held constant. .
But spending increased, especially as a percentage of GDP. Debt as a percentage of GDP started off very small, so the spending did not have to worry about servicing massive amounts of debt as we do now.
Quote:
Originally Posted by user_id
Oh gee, did he tickle their feet too? I guess business leaders did not listen much huh? Who would've known.
Actually it did help, in 1930 the unemployment rate ended the year at 8.7%.
Quote:
Originally Posted by user_id
Anyhow, Hoover did not ignore the recession but he did not implement a major stimulus program either. Hoover thought that the recession would recover with mild government action, that is after all what most people thought in that period. Both the Bush and Obama administration seem to have similar ideas and hence why more aggressive stimulus was not implemented. Hoover did not create the great depression, he just did little to prevent it. Hoover's actions were understandable, what is sad is that the same debates that occurred in the 30's are being repeated again today. Keynes, Fisher, etc may as well never existed.
I do agree to an extent about Hoover.
I do feel that we need look more at the underlying demographics and business cycles then we do. The 1919-1921 stock crash, real estate crash, commodity crash etc. was very fast and deep, yet the government did next to nothing and we quickly went back into growth mode, very similar to the tech crash of 2000.
I think stimulus can help in the off cycle drops but major ones like 1929 and 2008 is just pushing on a string.
Do you mean Irving “permanently high plateau” Fisher? Some good stuff but I am not a fan of the “Rational Market” theory that he started.
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