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Thread: Libertarianism/Anarchism - Page 25







Post#601 at 06-17-2009 04:22 PM by playwrite [at NYC joined Jul 2005 #posts 10,443]
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Quote Originally Posted by Kurt Horner View Post
If Keynesianism is even remotely correct, the recession should turn around this year or early next as long as stimulus isn't relaxed (a policy choice which strikes me as extremely unlikely). But if, instead, the situation continues to worsen despite all of this stimulus . . . I think economic policy may take a decidedly different turn in this 4T.
And I'm sure Krugman will argue that the stimulus was woefully short and thereby the measure failed.

Hell, 70-80 years later, people still argue vehemently on whether FDR helped or hurt the last time the country went through this.
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Post#602 at 06-17-2009 04:26 PM by independent [at Jacksonville - still trying to decide if its Florida or Georgia here joined Apr 2008 #posts 1,286]
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Quote Originally Posted by playwrite View Post
Just to clarify - the mention of Andrew Sullivan as a member of the "strain of intellectual Toryism" was not from Krugman, it was from the author of the article, Daniel Gross.
Exactly, its a defense by a fellow partisan ally. The main thrust of argument is to discredit disagreement as partisanship.

There's a little bit of good info in the opening paragraphs - why neither doomsday scenarios nor infinite spending bliss are likely - but it quickly devolves into an inquisition of the messengers and an attempt to draw battle lines around shallow talking points.

With friends like these...who needs enemies? With limited parameters like this... who needs debate?
Last edited by independent; 06-17-2009 at 04:34 PM.
'82 iNTp
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question." -Jefferson







Post#603 at 06-17-2009 05:10 PM by Kurt Horner [at joined Oct 2001 #posts 1,656]
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Quote Originally Posted by Brian Rush View Post
Ten years after, to be exact.
I'm talking about the first New Deal in 1933. I realize that Keynesians regard it as having not been enough, but the rebound at the time made it look like FDRs policies were working. The perception that the first New Deal was beneficial (even if not fully adequate) came about because of the subsequent improvement in conditions (whether or not those two things had a causal link).

So, if serious stimulus is used early this time (as it is and likely will continue to be) and the economy continues to worsen, then we're going to see different types of policy in this 4T because Keynesian polices will be perceived to have failed (again, regardless of whether those two things have a causal link).







Post#604 at 06-17-2009 05:18 PM by haymarket martyr [at joined Sep 2008 #posts 2,547]
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Or that will be the Austrian party line at any rate. And results will have little to do with it.







Post#605 at 06-17-2009 05:23 PM by independent [at Jacksonville - still trying to decide if its Florida or Georgia here joined Apr 2008 #posts 1,286]
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Results eh?

'82 iNTp
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question." -Jefferson







Post#606 at 06-17-2009 05:31 PM by Brian Rush [at California joined Jul 2001 #posts 12,392]
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Quote Originally Posted by Kurt Horner View Post
I'm talking about the first New Deal in 1933. I realize that Keynesians regard it as having not been enough, but the rebound at the time made it look like FDRs policies were working.
The first (and second) New Deal didn't have much at all in the way of stimulus spending, and what they did have was accidental. Roosevelt didn't believe in it, but he did believe in helping people somewhat who were hurting, and he also got some pet projects going like the TVA.

So, if serious stimulus is used early this time (as it is and likely will continue to be) and the economy continues to worsen, then we're going to see different types of policy in this 4T because Keynesian polices will be perceived to have failed (again, regardless of whether those two things have a causal link).
Possibly true. However, I don't see the economy continuing to worsen in the short term. What I do see is that unless some fundamental problems are fixed, we will have a limp recovery and be in danger of further collapses down the road. I do think some Keynesian spending is necessary, but I have never regarded it as sufficient.
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Post#607 at 06-17-2009 05:31 PM by Kurt Horner [at joined Oct 2001 #posts 1,656]
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Quote Originally Posted by playwrite View Post
Yes, he does that in this March 2008 blog that is just a few months away from the Oct nearly-going-over-the-cliff moment. But, what I'm looking for is statements earlier, say prior to 2007, that would indicate that he is the one-armed economist that only pulls on the 'more fiscal stimulus' handle that some accuse him of.
Now you're asking me to prove a negative (that Krugman has never balked at stimulus). The Krugman Broken Record Theory (KBRT) is falsifiable, though. You just have to provide an example of Krugman making a before-the-fact admonition against monetary stimulus. I've never seen one myself -- thus KBRT.

Quote Originally Posted by playwrite View Post
I think he is much more nuanced.
I don't deny that. Like all Keynesians he dislikes the monetarist one-trick pony where all the focus is on monetary stimulus. However, this niggle is irrelevant to me, as I'm not a monetarist and I'm criticizing the policy advice that both major schools advocate -- monetary stimulus. The fact the Krugman advocates other stimulus as well doesn't change the fact that he supports monetary stimulus.







Post#608 at 06-17-2009 05:33 PM by haymarket martyr [at joined Sep 2008 #posts 2,547]
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Independent.... So your definition of the words RESULTS and PREDICTIONS are the same thing? WOW!!!!! I generally wait for 2014 to actually appear before I begin screaming about the problems then. But thats just me. I am old fashioned like that.

Do you have a chart with tomorrows lottery numbers on it? Forget about years away.... just the numbers in the next Power ball drawing will be enough.







Post#609 at 06-17-2009 05:40 PM by independent [at Jacksonville - still trying to decide if its Florida or Georgia here joined Apr 2008 #posts 1,286]
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(BTW, the lines are the predictions, the triangles are the real results)

Quote Originally Posted by haymarket martyr View Post
Independent.... So your definition of the words RESULTS and PREDICTIONS are the same thing? WOW!!!!! I generally wait for 2014 to actually appear before I begin screaming about the problems then. But thats just me. I am old fashioned like that.

Do you have a chart with tomorrows lottery numbers on it? Forget about years away.... just the numbers in the next Power ball drawing will be enough.
You're almost getting it!

We're supposed to trust these economists to spend our future wealth, but the results are worse than their own official predictions of what would have happened without extra intervention.

And as an added bonus, we get to pay for it later too!
'82 iNTp
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question." -Jefferson







Post#610 at 06-17-2009 05:52 PM by Kurt Horner [at joined Oct 2001 #posts 1,656]
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Quote Originally Posted by Brian Rush View Post
The first (and second) New Deal didn't have much at all in the way of stimulus spending, and what they did have was accidental. Roosevelt didn't believe in it, but he did believe in helping people somewhat who were hurting, and he also got some pet projects going like the TVA.
Whether the spending qualified as stimulus, spending did increase and the perception was of vast increases in federal influence on the economy. Then, as the increase occurred, the economy improved (somewhat). This reinforced the perception that said policy direction was the correct one.

Quote Originally Posted by Brian Rush View Post
Possibly true. However, I don't see the economy continuing to worsen in the short term.
I guess that provides a test, then. I'm expecting the situation to go right back into panic within the next year, probably sooner. If that doesn't occur, then in all likelihood Keynesian policy will persist during the Crisis.







Post#611 at 06-17-2009 07:34 PM by Brian Rush [at California joined Jul 2001 #posts 12,392]
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Kurt, let me explain the reasoning behind that prediction. We have (in part) a fairly normal demand-based recession happening, and those follow a common pattern. They reach a bottom in a year or two, and then enter a period of growth. Even during the Great Depression that happened: the economy bottomed out in 1932, and then began to grow again. But it never grew back to 1929 levels until the 1940s, when a combination of rule-changes and stimulus spending did it. The "business cycle" pattern was still followed within the years of the Depression itself; the years from 1933 to 1937 were years of economic growth, not recession -- but it was piss-poor growth.

That things will get better, rather than worse, over the coming years is an easy prediction, almost certain to be true. But there are a couple of reasons why I don't think this will solve our problems, why I think we will see the recovery dampened.

First off, we have a set of government policies implemented beginning in the 1980s -- trade policy, labor policy, immigration policy, tax policy -- which have been aimed at transferring wealth from the working class to the rich. This creates a fundamentally depressed economy that operates on a reduced baseline of consumer demand and consequently reduced capital investment. Unless we reverse these policies, the recovery will be dampened by them, with investment bleeding away to poor countries with oppressed labor forces, or being frittered away in bubble-blowing.

Secondly, we face peak oil. Right now, the slack economy has dropped demand for oil and reduced the price, but as the economy recovers demand for oil will increase, without any ability to increase production to compensate. The resulting surgein oil prices will also dampen recovery.

No amount of stimulus spending will correct these problems. They require, in typical 4T fashion, major reworking of our economic and political institutions. But that doesn't mean stimulus spending isn't needed; it is. Just not good enough all by itself.
"And what rough beast, its hour come round at last, slouches toward Bethlehem to be born?"

My blog: https://brianrushwriter.wordpress.com/

The Order Master (volume one of Refuge), a science fantasy. Amazon link: http://www.amazon.com/dp/B00GZZWEAS
Smashwords link: https://www.smashwords.com/books/view/382903







Post#612 at 06-17-2009 10:26 PM by haymarket martyr [at joined Sep 2008 #posts 2,547]
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Independent --- I believe you are grossly misusing the word RESULTS. I define that word to mean the outcome of things or the end product when an event is concluded. If it is all the same to you, I will wait until after 2014 to conclude if the predictions for 2014 are indeed accurate. Until then, its hard to get too worked up about it.







Post#613 at 06-17-2009 11:13 PM by playwrite [at NYC joined Jul 2005 #posts 10,443]
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Quote Originally Posted by Kurt Horner View Post
Now you're asking me to prove a negative (that Krugman has never balked at stimulus). The Krugman Broken Record Theory (KBRT) is falsifiable, though. You just have to provide an example of Krugman making a before-the-fact admonition against monetary stimulus. I've never seen one myself -- thus KBRT.
No, actually I was asking where it is clear that he has recommended fiscal stimulus as the one-trick pony as you had suggested earlier. These guys actually come close to finding such advocacy on the part of Krugman -
http://blog.mises.org/archives/010153.asp

- although they seem to generally confuse fiscal stimulus that Krugman advocates today with the monetary stimulus he advocated for the previous recession in 2002 (I must note, however, that you did note the difference in the next paragraph of your post). There is also the matter of their cherry-picking quotes and not providing the context that would have Krugman's view's much more nuanced and attuned to the conditions of the time rather than looking backwards 6, 8 or more years latter.

But rather than go through and trash their predetermined conclusions (as I did with those who hold up Krugman's "Dubya Double Dip" piece as his advocating the housing bubble), let's actually lay out THE basic belief system underlying the motivation for attempts at discrediting Krugman - and see how we (or actually, our coming circumstances) can test that belief system.

That basic belief system is that socioeconomic conditions would be better off without the government intervention prescribed by Keynesian for a major recession.

Now, if we slip further into a deeper recession (either continually or some double-, triple- dip), that doesn't necessarily prove Keynesian was harmful; in fact, Krugman et al will certainly just argue that not enough stimulus was undertake or was prematurely tempered as in 1937.

No, what you have to show is that somehow the stimulus impacted aggregate demand to the point that deepened the contraction or extended the recessionary period. That would seem counter to the very purpose of the stimulus, but one can make the argument along the lines of increased government borrowing due to the stimulus crowding out private borrowing that would have underpinned increased aggregate demand (note, however, not increased investment in production that would actually just make worse the supply/demand imbalance). Would not the measure of that be significant and sustained hikes in interest rates? If we remain in a recessionary environment without significant hikes in interest rates, would you be willing to accept that Keynesian intervention (that Krugman promotes and Obama has rather timidly attempted) was at least not harmful? If not, why not?

Now the other possibility is that economy grows to some greater or lessor extent but with inflation. What level of inflation, attributable to the Keynesian approach of stimulus, would you consider too harmful? Or do you take the position that any resulting inflation from such government intervention is unacceptable regardless of any proven benefits of such stimulus (e.g. avoiding unemployment, tent cities, food riots)?

In other words, can we set a test of the belief system?

For me, markedly sharp and sustained interest rates at least on par with the 1980s or sustained inflation at least on par with the 1970s would have me rationally questioning Keynes and Krugman.

And you? Or, is this more, for you, a matter of unquestioning faith?
Last edited by playwrite; 06-17-2009 at 11:16 PM.
"The Devil enters the prompter's box and the play is ready to start" - R. Service

“It’s not tax money. The banks have accounts with the Fed … so, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money.” - B.Bernanke


"Keep your filthy hands off my guns while I decide what you can & can't do with your uterus" - Sarah Silverman

If you meet a magic pony on the road, kill it. - Playwrite







Post#614 at 06-18-2009 03:20 AM by Kurt Horner [at joined Oct 2001 #posts 1,656]
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Quote Originally Posted by Brian Rush View Post
Kurt, let me explain the reasoning behind that prediction. We have (in part) a fairly normal demand-based recession happening, and those follow a common pattern. They reach a bottom in a year or two, and then enter a period of growth. Even during the Great Depression that happened: the economy bottomed out in 1932, and then began to grow again.
I see us as more in the 1930-31 range and we still have a bit further to fall, thus my differing prediction. Definitely there was a growth period within the Depression (1933-37), but full recovery failed to materialize.

Quote Originally Posted by Brian Rush View Post
First off, we have a set of government policies implemented beginning in the 1980s -- trade policy, labor policy, immigration policy, tax policy -- which have been aimed at transferring wealth from the working class to the rich.
That goes back a bit further than the 1980s. One might argue that actually existing capitalism (as opposed to the free market ideal) has been defined from the very beginning by upward redistribution. The effects of those policies were dampened by a strong social safety system and cheap oil. As those factors were removed, the negative effects became more visible again.

Obviously, cheap oil is unlikely to be restored and energy usage will have to change. So that factor is forever removed as a support for the current system.

As for the other factor, there are a number of reasons why the social safety net of the High cannot actually be restored since the costs of doing so are higher. First, pension systems don't work in a perpetually aging society. Second, our social safety system can no longer cheat by providing primarily for whites. Third, most non-governmental social safety systems have disintegrated (for example, churches no longer take up the slack left by the state). So the High represented a narrow window when a New Deal type welfare state could be functional.

So, that leaves fundamental reform or permanent economic decline as our only options. I think a 4T will prevent the latter, so I expect that certain major facets of the upward redistribution system to be curtailed. Monetary reform and IP reform seem the most likely candidates.







Post#615 at 06-18-2009 03:22 AM by Kurt Horner [at joined Oct 2001 #posts 1,656]
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Quote Originally Posted by playwrite View Post
No, actually I was asking where it is clear that he has recommended fiscal stimulus as the one-trick pony as you had suggested earlier.
I didn't mean to suggest that. I just meant that Krugman never finds flaws in monetary stimulus other than to criticize it as not enough for the job.

Quote Originally Posted by playwrite View Post
But rather than go through and trash their predetermined conclusions (as I did with those who hold up Krugman's "Dubya Double Dip" piece as his advocating the housing bubble), let's actually lay out THE basic belief system underlying the motivation for attempts at discrediting Krugman - and see how we (or actually, our coming circumstances) can test that belief system.
Excellent idea. Keep in mind that I'm mainly arguing that despite HM's economic fundamentalism canard, Krugman isn't really any less faith-based than the Austrians. Krugman seems fairly immune to contrary evidence himself.

Quote Originally Posted by playwrite View Post
Now, if we slip further into a deeper recession (either continually or some double-, triple- dip), that doesn't necessarily prove Keynesian was harmful; in fact, Krugman et al will certainly just argue that not enough stimulus was undertake or was prematurely tempered as in 1937.
No, it doesn't. However, it will reduce the number of people who buy his argument. His argument is certainly less plausible given that context, just as stimulus seemed more plausible as a good strategy given the context of the last Crisis.

Quote Originally Posted by playwrite View Post
No, what you have to show is that somehow the stimulus impacted aggregate demand to the point that deepened the contraction or extended the recessionary period. That would seem counter to the very purpose of the stimulus, but one can make the argument along the lines of increased government borrowing due to the stimulus crowding out private borrowing that would have underpinned increased aggregate demand (note, however, not increased investment in production that would actually just make worse the supply/demand imbalance). Would not the measure of that be significant and sustained hikes in interest rates? If we remain in a recessionary environment without significant hikes in interest rates, would you be willing to accept that Keynesian intervention (that Krugman promotes and Obama has rather timidly attempted) was at least not harmful?
In terms of availability of credit, yes I would agree that such policies were not harmful. However, I would still feel free to critique specific stimulus spending (say, transportation subsidies) as contributing to the structural problems that have caused the recession. Incidentally, I don't think fiscal stimulus was particularly awful in the Depression either. The worst part of the first New Deal wasn't the upswing in spending so much as the micromanaging of prices and wages done by the NRA system.

Quote Originally Posted by playwrite View Post
Now the other possibility is that economy grows to some greater or lessor extent but with inflation. What level of inflation, attributable to the Keynesian approach of stimulus, would you consider too harmful? Or do you take the position that any resulting inflation from such government intervention is unacceptable regardless of any proven benefits of such stimulus (e.g. avoiding unemployment, tent cities, food riots)?
That's a tough call, since high inflation can cause under-employment, riots, etc. as well. Modest inflation is preferable, but this scenario seems very unlikely to me. The banking system is in terrible shape and any attempted monetary stimulus primarily goes toward repairing balance sheets and not creating new credit, so it's doubtful whether anything short of outright money printing could cause inflation in this environment.

Most people who favor the Austrian approach are predicting a huge future wave of inflation. However, I think they are underestimating just how long it will take for that to materialize. Base money supply has exploded in the last year, but overall money and credit has declined. (The same thing happened in the Depression, btw. The government hit the gas but nothing happened. The monetarists claim the Fed didn't try hard enough. Bernanke is currently testing that theory.)

Quote Originally Posted by playwrite View Post
For me, markedly sharp and sustained interest rates at least on par with the 1980s or sustained inflation at least on par with the 1970s would have me rationally questioning Keynes and Krugman.

And you? Or, is this more, for you, a matter of unquestioning faith?
The absence of either of those scenarios would make me wonder. Actually, as noted above, I would be surprised by the latter as well. Interest rates have been rising and unemployment continues to rise despite substantial stimulus both monetary and fiscal. The monetary stimulus is definitely unprecedented and the fiscal stimulus is quite large as well. For me, I'm betting on a deflationary situation that will continue to worsen well into 2010.







Post#616 at 06-18-2009 09:02 AM by Brian Rush [at California joined Jul 2001 #posts 12,392]
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Quote Originally Posted by Kurt Horner View Post
I see us as more in the 1930-31 range and we still have a bit further to fall, thus my differing prediction. Definitely there was a growth period within the Depression (1933-37), but full recovery failed to materialize.
Well, what I meant was actually very close to that. I think that we are at or near the bottom and that the economy will begin growing again, sluggishly, within the next year or two. Since the next presidential election is three years away, it will be taking place in a time of recovery. Sort of.

That goes back a bit further than the 1980s. One might argue that actually existing capitalism (as opposed to the free market ideal) has been defined from the very beginning by upward redistribution.
Well, yes. What I meant was that this function of capitalism was seriously compromised in the period from about 1938 until the political sea change of 1980. Of course, the same philosophy as we have now governed from the end of the Civil War until the 1930s, arguably in even starker form. So 1980 was a restoration of an old economic philosophy rather than something new. Still, it was new in my lifetime.

The effects of those policies were dampened by a strong social safety system and cheap oil. As those factors were removed, the negative effects became more visible again.
The social safety system was never fully removed, and the effects of cheap oil persisted from the early 1980s (when the OPEC embargo was broken) until recently, which included the main years in which the system changed. So I disagree that these were the reasons for the change. I would say that while Social Security, unemployment insurance, etc. were of some importance, much more important were progressive taxation (which discouraged very high incomes and forced wealth back into the productive economy), and support for labor unions (which pushed up wages), together with trade and immigration policies that also encouraged high wages. The system of the Golden Age was far from perfect, but a big improvement over what had gone before, and it happened because government tilted its support to the side of labor and away from capital, more so than in the past or presently.

The Reagan administration did not attempt to reverse all of the New Deal, but rather reversed parts of it that were outside the public eye at the administrative level, while flattening the tax system and encouraging an end run by removing the barriers to outsourcing of labor. Also, the current wink-and-nod immigration policy, which encourages illegal immigration and so provides an exploitable labor force, was implemented. These changes were the heart of the new regime, and they persisted, with only minor tinkering, through the three subsequent administrations.

Obviously, cheap oil is unlikely to be restored and energy usage will have to change. So that factor is forever removed as a support for the current system.
Agreed, with qualifications. The replacements will not be as cheap or convenient as oil, either. But with improvements in energy efficiency and an end to population growth, the net effect per capita could be the same; that is, in terms of cost per unit of use, we could have abundant cheap energy perpetually. But an end to population growth also forces certain other changes.

As for the other factor, there are a number of reasons why the social safety net of the High cannot actually be restored since the costs of doing so are higher.
As I said, I disagree that the New Deal's social safety net was its primary effect on the economy. It was only the most visible effect. Much more important was the shift in governing philosophy away from siding with capital and towards siding with labor, implemented in some legislation (e.g. the Occupational Safety and Health Act and the National Labor Relations Act) but also in countless administrative decisions. There is nothing whatever to prevent a re-implementation of this philosophical approach.

As for supporting a social safety net, which of course we will still want (and another layer of it is about to be implemented actually, in the form of a national health care system), the main change may be that we can no longer try to eat our cake and have it, that is, pretend that we are a nation in which a person can become ridiculously wealthy and at the same time one in which the wealth is broadly distributed. Those two goals are incompatible and we will have to recognize and accept that fact.

So, that leaves fundamental reform or permanent economic decline as our only options. I think a 4T will prevent the latter, so I expect that certain major facets of the upward redistribution system to be curtailed.
Yes, I completely agree. That, along with environmental and resource reform, and changes in the international order, will I believe be the bulk of how we redefine ourselves in this Crisis.
"And what rough beast, its hour come round at last, slouches toward Bethlehem to be born?"

My blog: https://brianrushwriter.wordpress.com/

The Order Master (volume one of Refuge), a science fantasy. Amazon link: http://www.amazon.com/dp/B00GZZWEAS
Smashwords link: https://www.smashwords.com/books/view/382903







Post#617 at 06-18-2009 10:24 AM by independent [at Jacksonville - still trying to decide if its Florida or Georgia here joined Apr 2008 #posts 1,286]
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Exclamation Labor, Capital, Slow Motion Mega Crash

Even the 1980s can't be fairly compared to the 1910s or 1840s - its so extreme in relation to its historical/cyclical counterparts.

The tax system is most obvious: capital gains at 15% max and payroll tax starts at ~14% as the absolute minimum. Add actual income taxes on top of that and it isn't hard to see who is paying the larger part of their income into the system.

In 2008, the rate of wealth transfer hit a new, unprecedented peak. Trillions of dollars were summoned up from the ether in order to feed the banking classes - and they didn't even waste time explaining trickle down, they just threatened us with doomsday if we resisted.

Taking sides between labor and capital is a bit more than a social safety net (which I'm not against) but this is an important component of it. International analysis suggests without a doubt that a single-payer system that locks out lawyers & lawsuits delivers the best health result for the lowest cost, but our "new net" will almost certainly be designed to protect the legal jobs and investments of the capital class. When debating the educational system of our states to that in Ireland, the young Irish teacher asked us: "Do they really just intend to keep the working class down? Surely no one is learning in such a place." Schools and hospitals are not being designed for students and patients, but rather lawyers, administrators, and investors.

Further, the unwinding of debt appears to be completely missing - and as a percent of GDP we are now tipping up over the edge of the worst of the great depression. Even compared to other modern nations, we look bad unless next to UK or Japan. (Not nations whose last 80 years I would enjoy reliving)

An important component of mollifying the labor class is the expansion of prisons and the militarization of law enforcement. Being poor may not yet be a crime, but it sure as hell is treated with suspicion.

What's important to note then, is not that we've moved toward labor's interests, but rather that we have accelerated cash transfers to the investment class at the same time we've expanded federal policing powers aimed at keeping labor passive. We have Democrats in Congress who want to make a first offense with high quality marijuana into a 25 year federal felony - are you ready to hunt down and imprison 30 million Americans for the next 25 years? Does Massachusetts police need rocket launchers and assault rifles? These latest measures would be unnecessary if the government were just truly concerned with the welfare of those who need help most. It is only those with nothing left to lose who create instability...

Today in England, you can walk through any public space and see fully armed infantry on the streets. Photography of law enforcement and military is completely banned. Social housing and prisons overflow, and all of the cameras can't do much but watch the final social crises of a dying empire.

Unfortunately, I fear this is our future - I see the pieces being laid into place and there's no organized opposition.

Playwrite asks if it is a question of unshakable faith in Keynesian failures - and when I look back on my years 2000-2005 in university studying political economy, I feel again like a Catholic school kid graduating to a life of agnosticism. I still have these textbooks that praise the housing bubble as the final salvation of our economy, I have others that explain how we can redefine economic metrics until they fit our political aspirations and the polling numbers we need. They sit dusty on the shelf, next to other texts promising eternal life and joy if we will indulge in the holy sacrements of communion and confirmation...

These econ. textbook writers are also the authors of our current recovery - and the reality is already proving itself worse than their most dire predictions. They make the rounds for PR purposes: "But but, we are the consumer of the world!" And why, exactly, does the world feed our consumption if its not the guns we've pointed at them?

As the American empire unravels - as BRIC replaces the Monroe Doctrine and we prove ourselves unable to bring stability to greater Persia and Arabia - as the EU unites and pushes our infantry back home - we will only have domestic police jobs left for these brave soldiers. As the empire crumbles, the militarization of the state becomes local.

This crisis may be a last chance to skip the bleakest phase of the mega-cycle, but we are not choosing to use it as such. By clinging to the corrupt legacies of our past, we will usher in a darker future so slowly and subtley that few will realize the chains they've inherited.

The prophets will not ever feel the chains, death will release them before they see the binds. Artists and new prophets will be born into it much as the civics have been. And unfortunately, the nomad voice will continue to be mocked or ignored. On this trajectory, only the next nomads and prophets can create the disorder and open rebellion necessary to propel the next civics to revolution - and there won't be much left worth saving at that point in the oh-so-distant future.
Last edited by independent; 06-18-2009 at 10:27 AM.
'82 iNTp
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question." -Jefferson







Post#618 at 06-18-2009 10:36 AM by herbal tee [at joined Dec 2005 #posts 7,116]
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Quote Originally Posted by independent View Post
But still, a "Hack" would be lying through the closet doors...

The whole argument is that these are people who don't think for themselves and merely toe the party line for partisan gains. Advancing individual opinions and breaking with the team over principle is about the opposite of what I'd define as a hack.
Okay, I'm going to try to not veer too far off topic here , but I see a lot of selective compassion especially on the political right. For example, "pro lifers" who start to back stem cell research after a relative of theirs need bleeding edge medical care. And don't get me started on Limbaugh and drug war hypocracy- he had a medical problem, yet he's fine with anyone else in a similar condition being treated as a criminal. Back during the 80's, some Republicans appealed to the gay community on economic grounds. This was because many gays, though by no means all, do tend towards professions that provide a high income. If it weren't for the culture war interviening many currently pro Democrat gays would be Republicans today.
Quote Originally Posted by Indie
Anyway, America and her economy have basically become a laughingstock from what I've seen overseas.

I am going to listen to Obama's regulatory proposals here (live now)
From what I've heard of the proposals, I'm less optimistic. It seems that the Geithner meme of bigger is better no matter what is being favored. :
Quote Originally Posted by Indie
We have serious problems of overspending due to inefficiency. Essential components of life are too expensive because everyone is afraid to ruffle the feathers of large interests (AMA, insurance, lawyers)

Refusal to address inefficiency and insistence on inflating out of ever-more debt will lead us to be the loser in an international scale.
No doubt hyperinflation is a big risk.
If we can eliminate rent seeking behavior from the medical profession, it would help lower some of our built in internal costs. Of course actually taking on the AMA, big pharma and big insurance is a tall order-a 4T sized order. And this is what concerns me. We are so early in the 4T that postseasonal scare tactic appeals to the middle class about losing their family doctor may still be effective.
I see no easy way out. There's going to be a lot of pain before the comfortable illusions that were possible to build up after 1945 are swept away.







Post#619 at 06-18-2009 10:52 AM by independent [at Jacksonville - still trying to decide if its Florida or Georgia here joined Apr 2008 #posts 1,286]
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Quote Originally Posted by herbal tee View Post
Okay, I'm going to try to not veer too far off topic here , but I see a lot of selective compassion especially on the political right. For example, "pro lifers" who start to back stem cell research after a relative of theirs need bleeding edge medical care. And don't get me started on Limbaugh and drug war hypocracy- he had a medical problem, yet he's fine with anyone else in a similar condition being treated as a criminal. Back during the 80's, some Republicans appealed to the gay community on economic grounds. This was because many gays, though by no means all, do tend towards professions that provide a high income. If it weren't for the culture war interviening many currently pro Democrat gays would be Republicans today.
I think what you're describing is generational, too. The younger right never got caught up in the culture war - and that's why the social conservatives are losing it. Sure it looks hypocritical for the right to re-brand itself, but many of the newer voices never adopted the old brand in the first place. Today, there are probably more socially liberal fiscal conservatives than there are true social-cons like you're used to. I felt we give that socially conservative minority too much influence on the GOP - and now I'm worried they have achieved disproportionate influence on the national scale in the name of compromising with a small fringe.

From what I've heard of the proposals, I'm less optimistic. It seems that the Geithner meme of bigger is better no matter what is being favored. :
No doubt hyperinflation is a big risk.
If we can eliminate rent seeking behavior from the medical profession, it would help lower some of our built in internal costs. Of course actually taking on the AMA, big pharma and big insurance is a tall order-a 4T sized order. And this is what concerns me. We are so early in the 4T that postseasonal scare tactic appeals to the middle class about losing their family doctor may still be effective.
I see no easy way out. There's going to be a lot of pain before the comfortable illusions that were possible to build up after 1945 are swept away.
See my last post for an analysis of why we are not going to accept the pain this time around and what happens next
'82 iNTp
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question." -Jefferson







Post#620 at 06-18-2009 11:22 AM by playwrite [at NYC joined Jul 2005 #posts 10,443]
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Quote Originally Posted by Kurt Horner View Post
No, it doesn't. However, it will reduce the number of people who buy his argument. His argument is certainly less plausible given that context, just as stimulus seemed more plausible as a good strategy given the context of the last Crisis.
My sense is we are currently in the calm eye of the hurricane; or, the lower 9th Ward of New Orleans, after the storm but just before the levies broke; amd most likely, a combination of both. It may be the Alt-A mortgages coming due in 2012 or it might be some black swan that tips us over the cliff. Whatever, it will make last October's panic seem like a warm-up excercise. People have the luxury now of worrying about deficits, inflation, high interest rates; they'll look back on this time and question the naitivity. In the panic, people will swing to Krugman's view and question why more wasn't done to a much greater degree than last October - check the news headlines, opinion pieces, blogs and even the posts on this forum from that time

Quote Originally Posted by Kurt Horner View Post
In terms of availability of credit, yes I would agree that such policies were not harmful. However, I would still feel free to critique specific stimulus spending (say, transportation subsidies) as contributing to the structural problems that have caused the recession. Incidentally, I don't think fiscal stimulus was particularly awful in the Depression either. The worst part of the first New Deal wasn't the upswing in spending so much as the micromanaging of prices and wages done by the NRA system.


That's a tough call, since high inflation can cause under-employment, riots, etc. as well. Modest inflation is preferable, but this scenario seems very unlikely to me. The banking system is in terrible shape and any attempted monetary stimulus primarily goes toward repairing balance sheets and not creating new credit, so it's doubtful whether anything short of outright money printing could cause inflation in this environment.

Most people who favor the Austrian approach are predicting a huge future wave of inflation. However, I think they are underestimating just how long it will take for that to materialize. Base money supply has exploded in the last year, but overall money and credit has declined. (The same thing happened in the Depression, btw. The government hit the gas but nothing happened. The monetarists claim the Fed didn't try hard enough. Bernanke is currently testing that theory.)


The absence of either of those scenarios would make me wonder. Actually, as noted above, I would be surprised by the latter as well. Interest rates have been rising and unemployment continues to rise despite substantial stimulus both monetary and fiscal. The monetary stimulus is definitely unprecedented and the fiscal stimulus is quite large as well. For me, I'm betting on a deflationary situation that will continue to worsen well into 2010.

So, again, where would be the measurable harm in Keynesian stimulus?

The knee-jerk Austrian answer is of course, "deficits, deficits, deficits" (and in turn, debasing the currency, hyper inflation, government black helicopters, yaddi-yaddi) If those deficits, however, neither raise inflation nor interest rates to unsustainable levels, where is the harm?

If, and when, we get S&H’s 1T, Kondratieff’s Reflation ‘Spring,’ Schumpeter's exponential tech innovation/adoption/dispersion growth, and the Dow marching to 50-100K in constant dollars, won't that make a lot of people seem pretty silly? It happen before - check the 1950s.

Oh, it would be nice in the process, if universal health care, a strong middle class, reasonable income disparity, optimal employment, and peace in the world also emerged. I might even stop drinking!
Last edited by playwrite; 06-18-2009 at 12:22 PM.
"The Devil enters the prompter's box and the play is ready to start" - R. Service

“It’s not tax money. The banks have accounts with the Fed … so, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money.” - B.Bernanke


"Keep your filthy hands off my guns while I decide what you can & can't do with your uterus" - Sarah Silverman

If you meet a magic pony on the road, kill it. - Playwrite







Post#621 at 06-18-2009 11:29 AM by independent [at Jacksonville - still trying to decide if its Florida or Georgia here joined Apr 2008 #posts 1,286]
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Quote Originally Posted by playwrite View Post
Oh, it woudl nice in the process, if universal health care, a strong middle class, reasonable income disparity, optimal employment, and peace in the world also emerged. I might even stop drinking!
You might need to stop drinking now if you think sending trillions to the bankers and building new prisons for the poor is going to achieve this. Now that we've brought peace (lol) to Iran and Pakistan, where shall we bring it next?

Quote Originally Posted by playwrite View Post
So, again, where would be the measurable harm in Keynesian stimulus?

The knee-jerk Austrian answer is of course, "deficits, deficits, deficits" (and in turn, debasing the currency, hyper inflation, government black helicopters, yaddi-yaddi) If those deficits, however, neither raise inflation nor interest rates to unsustainable levels, where is the harm?
Its called opportunity cost, and it doesn't come from a secret underground bunker. Its part of this dismal science they teach in schools but not so much on TV.

If the deficits don't raise interest rates or inflation, they will require additional payments in the future.

If you're expecting some major technological breakthrough, we might want to open up immigration wider with some countries who have actually trained significant amounts of engineers over the last few decades. Either way, this debt spending isn't aimed at funding those breakthroughs, so it doesn't justify eating into the presumed wealth they'll generate.

Measurable costs? Hardly, they're missing for the same reason the measurable benefits can't be defined.
Last edited by independent; 06-18-2009 at 11:35 AM.
'82 iNTp
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question." -Jefferson







Post#622 at 06-18-2009 12:08 PM by playwrite [at NYC joined Jul 2005 #posts 10,443]
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Quote Originally Posted by independent View Post
....
Its called opportunity cost, and it doesn't come from a secret underground bunker. Its part of this dismal science they teach in schools but not so much on TV.

If the deficits don't raise interest rates or inflation, they will require additional payments in the future.

If you're expecting some major technological breakthrough, we might want to open up immigration wider with some countries who have actually trained significant amounts of engineers over the last few decades. Either way, this debt spending isn't aimed at funding those breakthroughs, so it doesn't justify eating into the presumed wealth they'll generate.

Measurable costs? Hardly, they're missing for the same reason the measurable benefits can't be defined.
Opportunity costs? How would you measure that?

Most economists can infer it when an event (e.g., stimulus) crowds out borrowing or inflates prices to a point that diminishes demand or production (although the latter is not currently an issue in a recession where supply exceeds demand), but you seem to want to exclude these measures.

Instead, you want to put forth that any future payment for current stimulus is a detriment to our socioeconomic well being. That 'detriment,' however, can't be today because it is not being paid today (you might have argue that it is leading to increases in interest rates due to anticipation, but, well, you decided to leave interest rates out of the analysis).

Is there a level of future payment that you would consider de minimus and rationally acceptable or is this more just a question of dogma for you?

Also, I think I should point out it is simply (if not sophomoric) disingenuous to the discussion to suggest that there are no overt benefits to the stimulus (e.g. roads, sewage treatment, drinking water plants are being build and employing people). You might be able to argue that there is no net socioeconomic benefit, but then you would have to identify what the socioeconomic costs are for the comparison and mass balance - and that, big I, puts you back to the question above.

Are you interested in seeing how events might test your belief system or should we just leave this as something between you and your Maker?
Last edited by playwrite; 06-18-2009 at 12:24 PM.
"The Devil enters the prompter's box and the play is ready to start" - R. Service

“It’s not tax money. The banks have accounts with the Fed … so, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money.” - B.Bernanke


"Keep your filthy hands off my guns while I decide what you can & can't do with your uterus" - Sarah Silverman

If you meet a magic pony on the road, kill it. - Playwrite







Post#623 at 06-18-2009 12:21 PM by playwrite [at NYC joined Jul 2005 #posts 10,443]
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Just a little more on this "detriment" notion, big I -

Apparently, the socioeconomic detriment you see is opportunity costs. Again, this isn't being paid today (outside of perhaps anticipated inflation leading to higher rates, but again, you took that off the table), but will be paid tomorrow, i.e., somewhere in the future, taxes will need to be paid to payoff the debt created by the stimulus and those funds used for tax paying could have been spend/invested in some private opportunity.

However, we are always paying taxes to the government, so it isn't an absolute notion of any dollar going to government is bad, it is a matter of degree. So, at what degree does tax paying create opportunity lost?

And from an aggregate socioeconomic point, is there a point where opportunity lost to individuals actually provides some "good?" Are you familiar with asset inflation? You should be given the last decade or so.
"The Devil enters the prompter's box and the play is ready to start" - R. Service

“It’s not tax money. The banks have accounts with the Fed … so, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money.” - B.Bernanke


"Keep your filthy hands off my guns while I decide what you can & can't do with your uterus" - Sarah Silverman

If you meet a magic pony on the road, kill it. - Playwrite







Post#624 at 06-18-2009 12:27 PM by independent [at Jacksonville - still trying to decide if its Florida or Georgia here joined Apr 2008 #posts 1,286]
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Quote Originally Posted by playwrite View Post
Opportunity costs? How would you measure that?
...
Is there a level of future payment that you would consider de minimus and rationally acceptable or is this more just a question of dogma for you?
Considering the 90%-95% of the wealth transfers have been to the investment class, I would say that no future payment is rationally acceptable.

Also, I think I should point out it is simply (if not sophomoric) disingenuous to the discussion to suggest that there is no benefits to the stimulus (e.g. roads, sewage treatment, drinking water plants are being build and employing people). You might be able to argue that there is no net socioeconomic benefit, but then you would have to identify what the socioeconomic costs are for the comparison and mass balance - and that, big I, puts you back to the question above.
Or, just keep an eye on the other few trillions flowing from the government into commodity speculation and how that pushes foreign capital out of the dollar.

Are you interested in seeing how events might test your belief system or should we just leave this as something between you and your Maker?
We're talking about investment and return on investment. A very little bit of this borrowed investment is going to projects that create real wealth - the rest of it is going back to the casino.

Now, its a world of difference between taking out a mortgage to fix your house and maxing out the credit cards to gamble some more...

Of course, only time will tell
'82 iNTp
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question." -Jefferson







Post#625 at 06-18-2009 12:39 PM by independent [at Jacksonville - still trying to decide if its Florida or Georgia here joined Apr 2008 #posts 1,286]
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Quote Originally Posted by playwrite View Post
Just a little more on this "detriment" notion, big I -

Apparently, the socioeconomic detriment you see is opportunity costs. Again, this isn't being paid today (outside of perhaps anticipated inflation leading to higher rates, but again, you took that off the table), but will be paid tomorrow, i.e., somewhere in the future, taxes will need to be paid to payoff the debt created by the stimulus and those funds used for tax paying could have been spend/invested in some private opportunity.

However, we are always paying taxes to the government, so it isn't an absolute notion of any dollar going to government is bad, it is a matter of degree. So, at what degree does tax paying create opportunity lost?

And from an aggregate socioeconomic point, is there a point where opportunity lost to individuals actually provides some "good?" Are you familiar with asset inflation? You should be given the last decade or so.
Here are several opportunity costs:


  • Inability to deal with future waves of the crisis (ARMageddon, derivative clearings)
  • Inability to afford transition costs for infrastructure and medical improvement
  • Inability to create new permanent employment
  • Loss of Confidence in Foreign Investors
  • The opportunity cost of "wasting" a crisis and failing to address root causes

Taxes can be a net economic benefit if they're going to manage sectors with high external costs and benefits: education, medicine, transportation - these are essential components of a well functioning society. Of course, there has to be a stable financial system as well, but we're investing "whole-hog" in one that's responsible for a global economic disruption.

There's also political capital. When Obama rushed in to put the final props under the banking class, he spent a lot of the peoples' support for deficit spending. While medical reform and educational reform are more important for defining the character of our 1T, they will face more resistance and diminished resources if we even get around to really addressing them.

Based on who the interested parties are and how Congress tends to vote when forced to choose sides, I don't see anything changing yet or in the foreseeable future.

Of course - I could be proven wrong if unemployment stops rising and prices at the grocery store come back down. I figure we'll lose another 25-35% on the dollar and 5-10% of jobs before the 2011-panic clears up. I don't know if there's anything we could do to stop that in the short run, but I'm pretty confident that we could be making better choices for the longer term.
'82 iNTp
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question." -Jefferson
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