The Glade 4.0

LOL! Now you're getting the spirit of it!

My guess, Khross, would be that RD believes largely in a "free-marketish" (tm) (compare to "truthiness") economy, and while agreeing that Keynes was wrong, he doesn't nessecarilly believe that Ayn Rand was right. He has too much faith in man. yet not enough faith in men.

Oh, and welcome back, RD. You've been missed.

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Ezekiel 23:19-20 

Except when his principles drive the vast majority of the world's successful economies, and even when used in a half-assed fashion can turn an economy from disaster to growth (sluggish though it may be) in less than a year. I'd say this year was a resounding endorsement of Keynesian economic theory.

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It feels like all the people who want limited government really just want government limited to Republicans.
---The Daily Show

Necrophiliac.

Keynes has been dead for almost 64 years.

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The U. S. Constitution doesn't guarantee happiness, only the pursuit of it. You have to catch up with it yourself. B. Franklin

"A mind needs books like a sword needs a whetstone." -- Tyrion Lannister, A Game of Thrones

You know there was a certain investor who started a company that everyone clamored to join because his investing business was so successful. Then it was found out it was all a house of cards. Were the people who invested all their money wise before it came down or were they always foolish?

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Not so much as you want to believe. The United States still isn't showing growth despite the fallacious claims of the BLS, the Fed, and the Whitehouse. The durable goods growth for last October has been revised downward three times, with the January revision placing it at negative 0.7% vs the original 0.9% claimed. Durable goods inventory accumulation is still problematic as production continues to wind down and the economy hemorrhages jobs. More importantly, if you needed any proof that we had no growth, even by Keynesian's metrics, last December was it. Aggregate demand was down because inflation (as stated) didn't account for the chained dollar difference in spending from 2008 to 2009. There are all sorts of problems with claiming growth, especially since the basic fundamentals of a stable economy are in horrendous shape in the U.S. right now.

The United States is in the grip of a depression. We're nowhere close to recovery, and things are only going to get worse as unemployment rises and the wage force continues to shrink. There are some natural corrections that CAN come out of the situation, but we'll have to wait until stated unemployment reaches 30-35% before we see that happening. The United States also needs to fundamentally rethink its jobs model and employment paradigms.

That said, the last 3 years have been proof that the Keynesian implementation of the Paradox of Thrift is absolutely invalid. Personal and national savings continue to decline and capital mobility has not produced substantial levies against the cash exodus out of the United States. Even as personal savings rise, the increase in government spending depletes the real capital gains possible in the economy right now. Quite simply, when you throw 1.7 trillion dollars at a problem in 12 months time with no real benefit, no tangible benefit, and no longterm probability of benefit, especially when its all deficit spending, you can pretty much bet that you're backing the wrong horse. The problem with Keynesian political economy has always been the shell game it plays: sooner or later you will ALWAYS outstrip the ability of your currency to inflate beyond the real business cycle.

And, far be it from me to invoke the name of Paul Krugman positively, but that's exactly what his early work showed: Keynesian economics only works if you can export your inflation checks to poor countries. It was an unintended consequence of his work on economies of scale. Now that the U.S. can no longer export its material goods inflation and the rising cost of production to developing nations, it has to eat the full brunt of its inflation on its own. And that means ... we're ****.

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Yet Krugman still argues for more stimulus and was very upset at the news that Obama was foating a spending freeze: http://krugman.blogs.nytimes.com/2010/0 ... s-himself/

As for Keynes I wouldnt go so far as to say he's completely wrong, just that his methods are incomplete and inferior. At least that's how it seems.

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“Strong people are harder to kill than weak people, and more useful in general”. - Mark Rippetoe

Dashel:

That's because Krugman is an outright Keynesian. Of course, the irony of all of this, as I have shown before, is that Obama spent 3 times what Krugman suggested and Krugman still said it wasn't good enough.

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Yet he and Obama both have nobel prizes and we have none. It's a strange world out there =(

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“Strong people are harder to kill than weak people, and more useful in general”. - Mark Rippetoe

The rap in the OP was rather entertaining.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
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Do you really think we're going to hit 35% "stated" unemployment (which would mean over half the country isn't working) anytime in the near future?

Xequecal:

Institutional workforce population is currently less than 50% of national population according to BLS Numbers. Half the country is already not working.

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Ok, but that's counting everyone under 18, everyone over 65, plus the unemployed and the people who have stopped bothering to look for work. The "stated" unemployment rate is 10%, that means shrinking the labor force by a minimum of one-fourth and probably a lot more than that to get it to 35%.

Xequecal:

Institutional Work force includes everyone to 72 now, since the youngest people contributing to SSI can't get full benefits until then. But, yes, unemployment is going to keep rising. They shrunk the workforce by a little less than 600,000 in December just to keep the unemployment at 10%.

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Well, yes, it's going to keep rising, but 35% "unemployment" would be higher than it's ever been in all of US history. According to the BLS the employment/population ratio is currently 58.2%

Xequecal:

And in reality, it's probably less than 50%, since only 137,000,000 people are working, a good 20% of which are underemployed.

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Is that figure accounting for those too old, too infirm or too young to work? I don't think unemployment statistics should include 3-year-olds.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Unemployment statistics should only include those of working age who are confirmed to be either looking for work, or taking some form of government or external assistance in lieu of work. (although not disability insurance.) So chronic welfare types should really be included in unemployment numbers, but homemakers/dependants, those who have chosen to remove themselves from the workforce, etc, and those incapable of working should not.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

Diamondeye:

Those capable of working are probably closer to 85 or 90% of the population. The BLS, however, is contracting that number at an alarming rate. It's currently 50% of the population.

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How does "capable of working" compare to "legally permitted to work"?

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Sorry for not responding sooner, but work has been pretty busy. Anyway, many of the points made in that article are in agreement with my own understanding of the unintended negative effects that certain parts of the New Deal had during the Great Depression. And I don't think many contemporary economists, Keynesian or otherwise, would argue in favor of NIRA and so forth.

However, the article glosses over some pretty major points that are inconvenient for its thesis - e.g. the benefits of the social safety net and banking reform aspects of the New Deal (which the article acknowledges and moves away from rather quickly), the role that fiscal and monetary belt-tightening played in the double-dip of the late 1930s, and of course the enormous fiscal stimulus (i.e. Keynesian intervention in the economy) that was World War II. I also think it assumes far too much when it implies that "wholesale government intervention" a la the New Deal is what caused our current banking system to take on too much risk.

In short, I don't dispute the narrow point that some New Deal policies were counterproductive and thus provide a useful cautionary tale, but at the same time, I don't think that point leads to a broader conclusion that all government intervention is equally problematic or that Keynesian theory in general is wrong.

RangerDave:

It doesn't gloss over anything. Were it not restricted to academic databases, I had linked the 15,000 word peer reviewed version from an economics journal for you. FDR's policies pretty much guaranteed we were suffering a lot longer than we should have. More importantly, World War II didn't solve The Great Depression either. The U.S. immediately dropped into a massive recession as soon as it was over. Temporary capital mobility problems demonstrate that the Monetarist approach is also flawed. As for banking reforms, they haven't helped. In fact, it's precisely those banking reforms that caused the current Depression. They created the shell game that is the U.S. financials industry and economy right now. The long term implications are pretty catastrophic, since the working class is further marginalized with each passing year and the Middle Class (by flawed, common use definition) continues to evaporate.

I realize a lot of smart people disagree with that assessment, but the long term consequences of such market manipulation will have us all paupers soon enough. We've been fighting a liquidity crisis for almost 2 decades: it's still not done catching up to us.

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http://www.bloomberg.com/apps/news?pid= ... QQ8g&pos=1

5.7% growth last quarter with 3.4 from restock.

Just voodoo economics, I guess, even though it continues to show signs of actually working.

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It feels like all the people who want limited government really just want government limited to Republicans.
---The Daily Show

Voodoo economics employ voodoo techniques to make something that isn't occurring appear as though it is. You do realize that ultimately all economic metrics are flawed or limited in some way, right?

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

Montegue:

Except the economy didn't grow at all last quarter.

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