The Glade 4.0

It didn't really work out well for anyone. I say we go ahead and nuke them now as a precaution.

Hopwin: If you (or anybody) can predict markets, why aren't we all rich? Or why aren't you?

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

If terrorists crash a plane into the Willis Tower in Chicago tomorrow, what will happen to the markets?

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Hopwin:

You obviously aren't interested in anything other than your preconceived notion of what praxeology happens to be.

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Markets are irrational. Do you want to make a guess? Do you want to put down an over/under? You seem to think you've somehow defeated the only behaviorially empirical approach to economics because Hume says empiricism has to be inductively repeatable?

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They, like the plane, will crash.

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Holy shitsnacks!

I doubt it.

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Khross:

Your counter to my original post is essentially, "It's more complicated than that." That's fine; I never said it wasn't. Yes, the specific causes of the crisis were somewhat different in each country, but even your own post notes ways in which they were related. And the economies of these countries were linked even then, so the economic impacts and policy effects spilled over from each country into the others. In other words...contagion. As for my second point, you still haven't denied that there was a strong correlation between when a country abandoned the gold standard and when its recovery began. It's virtually a 1:1 relationship, in fact, and you know it. Now, you can (and do) argue that the explanatory and predictive value of that correlation is outweighed by other factors, but I didn't go into any of that in the first place. I simply noted the correlation. You presumed the rest.

Having said that, I'll let the point go, as I don't have time to properly argue it further. I just think your intense reaction to my original post has more to do with your thoughts on standard contemporary economic theory than it does with anything I actually said.

RangerDave:

Except, I denied both of your claims. The burden of proof is on you. Your bare assertion that they're both undeniable is simply that, a bare assertion. I've demonstrated indicators that invalidate your assertion, but you continue to make the same bare assertion. So, since you seem to think you're right: defend Eichengreen and Hamilton and Krugman and anyone else who has ever argued the Gold Standard caused/exacerbated the Great Depression and stagnated recovery.

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Like I said, there was a strong correlation between staying on the Gold Standard and the severity of a country's downturn.

RD - you cannot state that anything is true without evidence (except for a moral a priori which is always an assumed position).

That being said lets use this example of the irrationality of markets.

Historically for thousands of years and dozens of cultures (before they had contact with each other) silver has traded at a narrow range of 15:1 to 16:1 of gold. Ignoring the few attempts at manipulation to hoard silver and inflate the price this has held steady for almost all of history.

In the last two years despite silver being a consumed commodity and gold not be, the ratio has been from 50:1 to 63:1. Why hasn't every rational investor bought silver? Why in the last two weeks where its been leaked that JP Morgan has over leveraged their ETFs of silver to a 100:1 margin not caused a massive rush to return to normalization?

This information exists within a 10 minute google window.

A rational actor will see a commodity very far below historic prices and buy so they can turn a twenty dollar investment into an 80 dollar one, or simply preserve wealth as a hedge against inflation.

If markets existed outside the scope of human behavior this situation could not exist.

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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

RD: Hamilton attributes causation to his noted correlation. Is that a standard you want to become common on the glade?

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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

RangerDave:

Funny, since I specifically address Hamilton and noted that his observations ignore actions and history contrary to this thesis. By the way, there's no indication of correlation, causation, or relation in Hamilton's argument. It's one of his major flaws. But, since you seem to think quoting someone whose argument was made suspect long before you quoted him wins you this debate ...

Well, that's just more bare assertion fallacies. Afterall, Hamilton doesn't substantiate growth anywhere; he simply asserts other countries had growth. You should pay attention to his lack of specificity in his comparatives, since the three countries he mentions as going into recovery were actually in sustained L-shaped depressions into the 1950s; and, ironically, two of them were on the losing side of the War.

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Lol! The fact that you critique an argument does not render it "suspect", Khross. And besides, neither Hamilton nor any of the other economists and economic historians who note the connection between the Gold Standard and the onset/intensity of the Great Depression suggest that it's the only cause or that it accounts for everything. Hell, Hamilton's own article says it was only one factor among many, and an exacerbating rather than causal one at that.

And as for bare assertions, dude, you haven't provided backup for anything you've said! Pot/kettle, etc.

Anyway, look, I already said I don't have time to debate this properly, so I'll just yield the floor at this point.

RangerDave:

1. Hamilton ignores the fact that United States, France, Belgium, Switzerland, and Japan continued to increase their gold reserves during the 1930s.

2. The supposed correlation between Gold Standard adherence in France and the United States during the 1930s ignores documented price fixing and government currency contraction during the same period. That is to say, despite increasing the readily available supply of money, the national governments of both France and the United States shrank their currency in circulation and used legislative power to force deflation onto the public. But, he doesn't mention that, does he? No, of course, because it's politically inconvenient.

3. Again, Hamilton ignores the Decade of Austerity, which he states would have been impossible under any circumstance.

So, why is not he suspect? Because he's James Hamilton, has a blog, and works for a University? Of course, the best irony of all is that without government manipulation of markets in France and the United States, the Dollar/Franc would have contracted naturally as they increased the supply of commodity money backing their paper currencies. Instead, both governments acted in such a way as to make repaying individual and business debt nearly impossible while government level liquidity crises wracked the planet.

But, sure, there's obviously a distinct correlation between the two, despite the fact Hamilton is outright omitting information.

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Ok, one last thing, in the interest of ending my participation on a lighter note:

I give you the Gold Bug ATM of the future...today!



I have to admit, that's kinda cool.

Come on, RangerDave. I want you to defend your position, since it's obvious to me that James Hamilton is continuing to make the same erroneous arguments he was 20 years ago.

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Thats better consistency than Krugman at least who contradicts himself in 9 month cycyles.

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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

Honestly, I know this sounds like a cop-out, but I really can't spare the time for full-on Glade debates like that anymore, so I have to decline. The problem is that I find it extremely frustrating and time-consuming to debate an issue when my counterpart and I don't even agree on the foundational concepts involved, the persuasiveness of expert sources, etc. And unfortunately, that's the way you and I are on economics, Khross - we just come at it from such vastly different perspectives that we have to hash out a thousand core disagreements before we can even get around to discussing the topic at hand. So, once we start getting into the weeds, as appears to be happening in this thread, the effort involved just becomes too significant.

That's because we had to split the prize with Russia. This time, they come pre-defeated.

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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."

You obviously aren't interested it telling me what your idea of it is. I posted my source, you've just been sitting back skipping stones.

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Hopwin:

I've explained why your source is wrong, especially in its conflation of Humesian Empiricism with observational reality. The fact that praxeology attempts to understand the system from the bottom up indicates it is in fact more empirical, in any sense, than a top down imposition of inductive structures. You can't predict what will happen without knowing why the individual components of the system act. You can only know that they act or, as is most often the case, they acted. Consequently, the predictive qualities of macroeconomics are almost non-existent. Economics is not a simple system, it is the holy grail of behavioral science and behavioral psychology. And, ultimately, that's what von Mises worked toward.

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RangerDave:

You mean the fact that I argue Economics as Economics instead of Political Economy? That I reject the notion that the government must manage what is fundamentally the aggregation of trillions of individual transactions from the top down? And the persuasiveness of expert sources? I am an expert in Economics. I give lectures, attend conferences, publish papers on the subject to this day. I use my knowledge of Economics to make quite a nice private living that allows me to pursue my avocation of literary criticism and social theory.

But, yes, I do reject your foundational assumptions because they are contrary to the actual science of economics. It's not an issue of perspective; it's an issue of actual knowledge. And I find it amusing that after nearly a decade, you still haven't read one book on economics I've suggested.

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Interesting, what are some of your published papers?

Aizle:

Sorry, I protect my anonymity for a wide variety of reasons.

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