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I agree with the poster that said bailing out the financiers was only rewarding bad behavior I do not require some incomprehensible mathematical proof only understood by the high priests of conservative economics to realize without the recent Keynesian spending this economy would have actual unemployment in the 30+% range and the collapse of home prices below 25% of the peak.
Stimulus spending helps the entire economy while bailouts only favor the hyper wealth market manipulators aka Wall Street thieves.
hnsq - Incomprehensibility does not always require mathamatics. What were you trying to say? That you are smarter than all the rest of us except the guy that agrees with you?.
My advice to our government would be: Limit the booms with specific high taxes and fill the recessions with deficit spending.
hnsq - Incomprehensibility does not always require mathamatics. What were you trying to say? That you are smarter than all the rest of us except the guy that agrees with you?.
My advice to our government would be: Limit the booms with specific high taxes and fill the recessions with deficit spending.
I gave my honest opinion about how to create a sustainable economic system. Solutions to complicated problems are rarely simple.
Economics IS math, whether you like it or not. Mathematical models (coupled with a gut check) give better results than a pure 'gut feeling' decision every minute of the day.
Let me ask you this: How exactly do you know when something is a boom, and when it is simply natural growth?
I was responding to a poster who turns every thread into a pro-liberal, anti-conservative chant. That is annoying, at best, and was what I was responding to.
But fine, you win. EinsteinsGhost - lets have a reasoned conversation about this.
As I said previously in this thread, both mentioned schools of economic thought are useful, and both are incorrect when standing independently. Personally? I tend to believe in a monetarism policy (I lean more freshwater) where government is needed in a post-commodity based monetary system for the pure purpose of price-control. Economic stimulus on the part of the government is simply not effective when compared to allowing the natural boom/bust cycles to occur (which is obviously why I reject the Austrian school of thought).
Keynesian economics also fails as it assume macro-level models of the economic system, which grants the mathematical option to violate general equilibrium. There are useful parts of the school of thought, but a better example of a working system can be defined by rigidly following the Chicago school, however including combination of the pricing policies of Keynesian economics with macro level models of the new-classical school to account for the black swan events which cause the fat-tails seen for decades in traditional free market economic evaluation.
Its not about scoring a win. It is about engaging in a debate.
Anyway, besides the rantings on what you feel should be done, you and I aren't far off. We both seem to believe in pragmatism being the best option, rather than going one way or the other.
Having said that, you must agree that in the real world, you can't really complain about the perfect solutions. We can, however work for the best solution.
Check the third derivative of the price time curve. When it becomes positive a surge (boom) is occurring. I would suggest trying to keep the growth exponential (positive second derivative) but steady at a slightly higher rate than population growth with a control policy designed to place the economic growth in the bottom 50%.
The entire, nearly, society is damaged by rampant speculation in houses, tulips, Lithium salt or anything else. The speculation can be controlled by highly progressive taxes on specific markets, or for commodities, selling from government reserves. The crashes can be minimized by employment on government projects or government purchase of commodities. In the worst cases the government can impose “windfall profits taxes” during booms and unlimited unemployment payments during busts.
The sacred market is supposed to be a place where capital is most efficiently allocated (I have read that about a thousand time) but fails when it becomes a casino.
Its not about scoring a win. It is about engaging in a debate.
Anyway, besides the rantings on what you feel should be done, you and I aren't far off. We both seem to believe in pragmatism being the best option, rather than going one way or the other.
Having said that, you must agree that in the real world, you can't really complain about the perfect solutions. We can, however work for the best solution.
I was trying to be a bit facetious with the 'you win' comment...but tone doesn't come across that well on a forum!
In the real world, everything is a shade of gray...which is why economics is such a fascinating field to study. I agree with the last part you posted...I view economics the same way I view politics, have never voted for a democrat or republican in a national election, as both extremes are equally incorrect (in different ways). A real solution to economic issues is not as simple as one policy that can be explained in a 30 second sound bite on TV...real solutions are a lot of hard work, a lot of hardcore data analysis, and a lot of learning before any reasonable policy can come into place.
In my mind, one of the big problems with economic issues is that even if an economist knows a good solution, it has to go through the modern political system before any action can be taken, and more often than not, the politics sincerely detracts from the economic modeling.
Check the third derivative of the price time curve. When it becomes positive a surge (boom) is occurring. I would suggest trying to keep the growth exponential (positive second derivative) but steady at a slightly higher rate than population growth with a control policy designed to place the economic growth in the bottom 50%.
The entire, nearly, society is damaged by rampant speculation in houses, tulips, Lithium salt or anything else. The speculation can be controlled by highly progressive taxes on specific markets, or for commodities, selling from government reserves. The crashes can be minimized by employment on government projects or government purchase of commodities. In the worst cases the government can impose “windfall profits taxes” during booms and unlimited unemployment payments during busts.
The sacred market is supposed to be a place where capital is most efficiently allocated (I have read that about a thousand time) but fails when it becomes a casino.
So would you have called the last 25 years of Brazil's economy a boom?
And are you comfortable with the net losses which happen when a large portion of an economy is government spending (whether hiring or purchasing of goods)? Are you comfortable lowering the net level of GDP simply for the sake of smoothing the curve?
I was trying to be a bit facetious with the 'you win' comment...but tone doesn't come across that well on a forum!
In the real world, everything is a shade of gray...which is why economics is such a fascinating field to study. I agree with the last part you posted...I view economics the same way I view politics, have never voted for a democrat or republican in a national election, as both extremes are equally incorrect (in different ways). A real solution to economic issues is not as simple as one policy that can be explained in a 30 second sound bite on TV...real solutions are a lot of hard work, a lot of hardcore data analysis, and a lot of learning before any reasonable policy can come into place.
In my mind, one of the big problems with economic issues is that even if an economist knows a good solution, it has to go through the modern political system before any action can be taken, and more often than not, the politics sincerely detracts from the economic modeling.
If smoothing the curve avoids the eventual crash certainly I would limit the rate of growth. I think it is proper to limit growth to avoid disasters. I am not a gambler and do not want my economic fate to be determined by gamblers.
If the society wants to avoid the inevitable crash that will happen when the resources necessary for life become too expensive the society should limit the rate of population increase although greater prosperity seems to do that if left alone. IIRC Brazil still has nearly uncontrolled population growth while we are effectively achieving the same with unlimited immigration. IMHO the eventual steady state world population will be about 4 billion people concentrated into efficient mega cities and fed by a very highly mechanized and efficient worldwide agricultural system.
If smoothing the curve avoids the eventual crash certainly I would limit the rate of growth. I think it is proper to limit growth to avoid disasters. I am not a gambler and do not want my economic fate to be determined by gamblers.
If the society wants to avoid the inevitable crash that will happen when the resources necessary for life become too expensive the society should limit the rate of population increase although greater prosperity seems to do that if left alone. IIRC Brazil still has nearly uncontrolled population growth while we are effectively achieving the same with unlimited immigration. IMHO the eventual steady state world population will be about 4 billion people concentrated into efficient mega cities and fed by a very highly mechanized and efficient worldwide agricultural system.
But what if the economic level at the low point in the crash is still higher than what the economy would be like in your smoothed curve?
An example of this is private investment rates vs. returns on social security. Even with the recent crash, rates of return on overall stock market rates are still eight times higher than the rate of return with social security. Isn't it worth it to endure crashes if you are better off economically (even DURING the crash)?
Regarding Brazil, what do you think has allowed them to grow GDP several points beyond such population growth over the last quarter century?
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