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Obama killing the economy and stock market? Huh? (pg. 11)
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| pkcRAISTLIN |
| quote: | Originally posted by occrider
I mean what current macroeconomic factors are you basing your opinions on? |
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| Capitalizt |
The big picture pk..real life. Step back and take a look at things logically and you will see it. ;)
One of the fun things about economics, sociology, or any subject that studies human behavior is that see patterns better at a distance. There there are an infinite number of microeconomic things that take place every day blend together and almost form something like a predictable 2D cartoon when you look at them from a afar. I was thinking about this when responding to oc... I tried imagining what the chaotic and desperate actions being taken by governments around the world would look like from a bird's eye view.. Guess what popped into my head?
lol..This is the abominable snowman.. Let's call him "Depression”. Take a few steps back from the world and squint your eyes a bit.. When I do this, I see a collection of world governments and central banks on a playground like a bunch of children..and they are throwing snowballs (stimulus, bailouts, deficit spending, nationalization, monetary injections) at a giant ice monster of their own creation.
The beast shudders and pauses as the snow hits him..and the kids might even halt his progress temporarily.. Every snowball that hits him causes the children to cheer..but what they don't realize that each impact is only making him making him larger and more menacing.. Every snow particle that sticks to him just increases his mass and momentum...and once they run out of snowballs, God help them..
and God help us. The world has only postponed the inevitable. We have bought a little time through these government actions, but the debt/depression monster is larger and ever because of them, and we are all going to pay the price in the future through crushing inflation.
The ice monster can't be stopped now. He's the juggernaut bitch! :) |
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| pkcRAISTLIN |
| well, at least you're holding true to your 'austrian' beliefs by deliberately avoiding specific economics related questions :p |
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| Capitalizt |
| Everything I've been talking about is econ pk. ;) Austrian economics is common sense real world economics. It doesn't take a rocket scientist to figure out when every country in the world is creating and borrowing trillions of dollars that there is going to be a day of reckoning and we will be in a world of inflationary pain in the future. You don't need a PHD to understand that major governments growing at double digit rates while their private economies shrink is not sustainable. You don't really need to be a biologist to see that cancer-like growth do you? Step back and take a common sense view of the world..and you will see that the "establishment" big government bastards who got us into this mess are completely full of sh!t. |
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| occrider |
| quote: | Originally posted by Capitalizt
Wow..talk about the fox guarding the henhouse! These so-called experts have had free reign over policy for the past 70 years...absolute world dominance by the Keynesian school of economic thought..complete dominance. And look where it has led us...to a global financial catastrophe and the near bankruptcy of every major government. Forgive me if I don't have much respect for their opinions.
I noticed all these academic economists are quick to criticize the fed's actions after the crash, but they never mention the fact it was the expansionary policies of the Federal Reserve during the 1920's that led to the collapse of the banking system in the early 1930's. The low margin requirements and easy money policies are what led to the huge levels of speculation and malinvestment. The fed's solution to every recession since has been the same...bail out the economy by printing more money. Paper over the mistakes with credit expansion.
Always in the past, there has been a recovery after a recession. Always in the past, the bailouts have worked to cover up the underlying malinvested capital. Always in the past, the Federal Reserve has inflated, and the economy revived. We are doing this on such a huge scale today however that I don't think it is going to work much longer. We have reached the upper limits of the fed's abilities and the system is eventually going to collapse under it's own weight.
Ah yes, Geithner stated the same thing a few weeks ago...that government should replace the demand lost by the private sector. However, those with even a marginal grasp of economics know that demand is unlimited. It is the ability to spend that is not. While Americans still want all the things they wanted years ago, they have made the rational choice that they can no longer afford to buy at the same levels they once did. Using a printing press to replace this lost ‘demand’ will simply cause consumer prices to rise. Printed money does not create new purchasing power, but merely redistributes it from savers to borrowers. The one thing we know about Keynesians is that they loathe savers and love people who borrow and spend.
I don't discount some of their ideas completely though. I do think infrastructure and investments in science and technology are fantastic ideas for the long run. Unlike some hardcore libertarians, I recognize that some things are unprofitable for private industry and the government has a role to play for the long term benefit of the country. Unfortunately that is not what we are seeing today. Only a tiny part of the trillions spent over the past year is going to things like these. Most is being blown on corporate welfare, wasteful pork projects, and nationalization. The spending we've seen amounts to capital consumption...not investment. It is taxpayer money being sent into a black hole.. Savings and private investment are the only foundation for healthy economic growth..and we are not going to get that with people like Bernanke in charge.
Well first of all, I'm never going to defend Bush.;) He did more to grow the government than any president since FDR, but Obama is acting no better. As for deflation being our problem? Frakkin ridiculous in my opinion. What we are experiencing not true deflation.. It is a correction back to normality from dramatically OVERINFLATED levels. You know that the world economy of the past decade (or two) was built on rapid credit expansion and overleveraging.. It was a phony economy, so bubble popped prices began to fall. This was to be expected. It is a natural process..a healthy process. The Keynesians disagree with this.. For reasons known best to themselves, they think things should be kept at a constant upward trajectory at any cost..borrow borrow borrow spend spend spend inflate inflate inflate...keep prices going up..otherwise terrible things will happen! I couldn't disagree more. Falling prices send vital signals through the economy that make people and businesses change their behavior...but Bernanke & his comrades around the world refuse to let this happen. I get the impression that they want their little lemmings to be on a constant spending spree from birth till death to keep the cogs of the state running smoothly. They only have one tool at their disposal to fight the correction and keep people spending, currency devaluation. They view market correction at the primary enemy..but I see devaluation as the greater of two evils.
Yes...the old flight to safety trade is still in effect (for now). But I'm afraid there will be nowhere to hide in the end. With trillion dollar deficits adding up over the next few years, our debt will eventually reach the point where it simply can't be paid down in strong dollars. We will have no choice but to let the fed monetize the debt, and many other governments are in the same situation. We're all in the same boat now. All governments have embraced the ideas of interventionism and fiat money..and we all are swirling down the toilet together. I believe Keynesianism is in it's death throes and we are witnessing it's last great hurrah today...One more multi-trillion dollar party..perhaps one final decade of artificial prosperity built on a mountain of debt and credit expansion..and then the game is up. The next flight to safety will not be paper. It will be gold, oil, food, and guns. Hopefully we can learn from our mistakes and a new system will rise from the ashes before too much damage is done. |
Dude ... let's get this out of the way, Friedman is not a Keynesian economist. If you read A Monetary History of the United States 1867-1960 you would understand this. If you read Bernanke's 20 page paper you would have a pretty good inkling of this based upon his references to Friedman's tome. If you took ANY economics history class taught by any teacher with some self respect you would understand this. If you can't distinguish the differences between monetarism and keynesianism then I have no interest whatsoever in continuing this discussion.
As it stands right now, I won't continue this discussion unless you start relating current macroeconomic indicators with inductive, axiomatic arguments based on past history. If you want an ivory tower, vague as hell, philosophical discussion about broad based economic concepts then I'm not the person you want to debate because I just don't give a about such esoteric arguments. We could spend a lifetime running circles around one another without the use of any facts whatsoever.
Yea yea, you, I, and my plants know that budget deficits are theoretically bad and could lead to inflation. If things were so simplistic as that then everyone could be an expert economist in about 2 hours. In other words, this isn't that simple in real life. Now if you could tell us exactly why Japan went through a decade of massive fiscal stimulus whereby public debt attained 100% of GDP but underwent negative inflation for much of that time period then you might win a nobel prize ... assuming you used hard data, mathematical proofs, and not some blog.
I referred to specific economic data in some of my arguments. If you don't care to directly contradict that data with hard data of your own then I see no point in continuing this discussion. |
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| occrider |
| quote: | Originally posted by Shakka
This is KEY and is so often overlooked or completely forgotten when people discuss Keynesian economics. Sadly, the U.S. hasn't had a real surplus in decades. |
Indeed. It's why I supported the first set of Bush tax cuts but not all the subsequent bull to follow. Completely unnecessary. |
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| Capitalizt |
Replace the word Keynesian in all of my posts with interventionist.. That's what they all are oc (Friedman, Keynes, etc)..and it is government interventionism that led us to the mess we are in today.. The idea that the fed or congress have a primary role to play in influencing the economy has led to the acceptance of state/federal governments sucking 40-50% of the wealth from major countries every year. This is the root of all of our problems and all of the negative numbers rolling in...the global embrace of interventionism and the fixing of the price and quantity of money at a central location. That is the point I'm getting at.
You say you won't debate further until I present numbers of my own.. I say we CAN'T have a debate because the numbers are largely meaningless. If you took a step back you would realize that it is the artificial creation of money and credit that leads to structural imbalances that precipitate crashes in the first place. Adding to the money stock only compounds the error and prevents a much-needed correction from occurring. Lassiez faire is the only reasonable approach when it comes to economics. Japan didn't get this in the 90's and Bernanke doesn't get it today. The fed is distorting everything on a such a grand scale that any debate about what economic policy is best is pointless until they are bound in shackles.
Keynes, Friedman, Bernanke, and every other mainstream economist has deluded themselves (and apparently you) into thinking by shifting money from the left pocket (future taxpayers) to the right pocket (today's taxpayers) can enhance the total amount. They don't see deficit spending and controlling the money supply for what they really are..the enemies of capitalism..forces that chisel away at the foundation of free markets and the laws of supply and demand. All government intervention distorts price signals, making retailers look like profiteers and deceiving workers into thinking their wages have gone up. It pushes families into higher income tax brackets without increasing their real purchasing power..In short, it undermines capitalism by destroying the rationale for dedicating a portion of today's earnings to savings. Accumulated savings provide the capital that finances projects that generate higher future returns; it's how an economy grows, how a healthy society reaches higher levels of prosperity.
THE INTERVENTIONISTS DONT SEE IT THIS WAY. Bernanke (and nearly every fed chairman before him) has convinced himself that we can grow the economy over long periods purely on credit expansion...that credit expansion can be a substitute for true capital (Bernanke said this himself during his recent congressional testimony). Men like these have created a system where our money has lost its capacity to serve as an honest measure, a meaningful unit of account. So as long as the value of money is arbitrarily controlled at a central location, any chart posted or argument made about "policy x" vs "policy y" is moot. |
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| Krypton |
| quote: | Originally posted by Capitalizt
Replace the word Keynesian in all of my posts with interventionist.. That's what they all are oc (Friedman, Keynes, etc)..and it is government interventionism that led us to the mess we are in today.. The idea that the fed or congress have a primary role to play in influencing the economy has led to the acceptance of state/federal governments sucking 40-50% of the wealth from major countries every year. This is the root of all of our problems and all of the negative numbers rolling in...the global embrace of interventionism and the fixing of the price and quantity of money at a central location. That is the point I'm getting at. |
The Fed and Congress have a regulatory role to play. Whoever said they have a primary role? And where did you get this 40-50% figure of wealth from? The root of all our problems is government policy? That is utterly ridiculous.
| quote: | | I say we CAN'T have a debate because the numbers are largely meaningless. |
So because you can't come up with hard facts to support your radical libertarian ideology, the debate is meaningless?
| quote: | | If you took a step back you would realize that it is the artificial creation of money and credit that leads to structural imbalances that precipitate crashes in the first place. Adding to the money stock only compounds the error and prevents a much-needed correction from occurring. |
If YOU took a step back you would realize that without a standardized currency and credit, we would be still stuck in the Middle Ages. Seems you still haven't realized how archaic this ideology you'r espousing really is.
| quote: | | Lassiez faire is the only reasonable approach when it comes to economics. |
Already been tried and failed. Laissez-faire capitalism is like North Korean communism, bound to collapse in economic ruin. So, you'd like to see 9 year olds working 12 hours a day? Sweat shops? People making $1 an hour? When huge asset bubbles appear and collapse, you want the entire economy to be dragged down with it? Again, we come back to my traffic regulation metaphor. Capitalizt advocates no traffic laws, and trusts that motorists will regulate themselves. A very ridiculous idea.
| quote: | | The fed is distorting everything on a such a grand scale that any debate about what economic policy is best is pointless until they are bound in shackles. |
All you have to say to OCC is, "this debate is pointless"? As of now, he is pwning you in this debate. I mean, gee, hard facts? Peer-reviewed, highly researched, papers. THE MONETARY HISTORY OF THE UNITED STATES!? My God, he's using facts!
| quote: | | Keynes, Friedman, Bernanke, and every other mainstream economist has deluded themselves (and apparently you) into thinking by shifting money from the left pocket (future taxpayers) to the right pocket (today's taxpayers) can enhance the total amount. They don't see deficit spending and controlling the money supply for what they really are..the enemies of capitalism..forces that chisel away at the foundation of free markets and the laws of supply and demand. |
Deficit spending and control of the money supply is not the enemy of capitalism. It is an integral part of a stable prosperous capitalistic society. Supply and demand still reign far supreme, and if you can provide anything to the contrary, please do so.
| quote: | | All government intervention distorts price signals, making retailers look like profiteers and deceiving workers into thinking their wages have gone up. It pushes families into higher income tax brackets without increasing their real purchasing power..In short, it undermines capitalism by destroying the rationale for dedicating a portion of today's earnings to savings. Accumulated savings provide the capital that finances projects that generate higher future returns; it's how an economy grows, how a healthy society reaches higher levels of prosperity. |
Accumulated savings do provide lots of capital but is far insufficient to fund the vast economic growth we have enjoyed in the last 60 years. Apparently, you'v completely ignored the fact that millions upon millions of Americans have been lifted out of poverty in the last 100 years because of the system which you so radically want to change.
| quote: | | THE INTERVENTIONISTS DONT SEE IT THIS WAY. Bernanke (and nearly every fed chairman before him) has convinced himself that we can grow the economy over long periods purely on credit expansion...that credit expansion can be a substitute for true capital (Bernanke said this himself during his recent congressional testimony). Men like these have created a system where our money has lost its capacity to serve as an honest measure, a meaningful unit of account. So as long as the value of money is arbitrarily controlled at a central location, any chart posted or argument made about "policy x" vs "policy y" is moot. |
When there is a huge car accident, do you not expect the police, ambulances, and fire trucks to arrive? That system, is the reason our country is the economic powerhouse of the world, and why millions have been lifted out of poverty. Have you studied the effects of an unstandardized monetary system, such as what we had in the 1800's? You seriously need some education in economics because your arguments are almost totally void of logic and reason. And when OCC or anyone else debunks your wild claims, all you'v got to say is... "any chart posted or argument made about "policy x" vs "policy y" is moot."
Having fun plugging your ears and singing "la la la". |
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| Capitalizt |
| quote: | Originally posted by Krypton
The Fed and Congress have a regulatory role to play. Whoever said they have a primary role? And where did you get this 40-50% figure of wealth from? The root of all our problems is government policy? That is utterly ridiculous. |
Absofrakkinlutely. Add up city/state/local + federal spending at it easily takes up 35% of GDP in America.. If you factor in the hidden cost of tariffs and excise taxes that get indirectly passed on to consumers, it is well over 40%...and even higher in more socialist countries.
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If YOU took a step back you would realize that without a standardized currency and credit, we would be still stuck in the Middle Ages.
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We won't know until alternatives to fiat notes are legal now will we? ;)
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Already been tried and failed. Laissez-faire capitalism is like North Korean communism, bound to collapse in economic ruin. So, you'd like to see 9 year olds working 12 hours a day? Sweat shops? People making $1 an hour? When huge asset bubbles appear and collapse, you want the entire economy to be dragged down with it? Again, we come back to my traffic regulation metaphor. Capitalizt advocates no traffic laws, and trusts that motorists will regulate themselves. A very ridiculous idea. |
Nonsense x 1000...and we've been over this 1000 times it seems. Reducing government power has not been tried on any meaningful scale in a modern economy. We have been on an inexorable trend towards socialism for the past 70 tears. As for sweat shops.. We've been over that entire argument as well.. I thought we concluded that the need for sweatshops naturally disappears once an economy's infrastructure is developed and the population stabilized.. Sweatshops are part of a developing economy with little infrastructure and a large influx of immigrants (like America a few hundred years ago). This situation exists in Chinese cities today, but no longer exists in America..so even if minimum wage laws and every other lefty ideal were abolished today, we would not see a return to $1/hr labor in America.. And don't start that traffic light strawman again krypt. We've been over this..and you know even the most wacked out libertarian favors laws that protect people from theft and physical violence. Traffic laws certainly apply.
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All you have to say to OCC is, "this debate is pointless"? As of now, he is pwning you in this debate. I mean, gee, hard facts? Peer-reviewed, highly researched, papers. THE MONETARY HISTORY OF THE UNITED STATES!? My God, he's using facts!
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Like I said..the fox guarding the henhouse. Those arguments are based on an incorrect interpretation of history..and is sorely lacking when it comes to addressing the ROOT CAUSE of depressions and slowdowns. All Keynesian/monetarist arguments conveniently overlook what causes them in the first place, and this puts their credibility less than 0% in my book. They don't recognize that the fault lies mainly with government and central bank policy..and this ignorance was proven when the very experts who wrote those glorious "peer reviewed studies" didn't have a frakkin clue what was going to happen in 2007-08. They didn't see the tremendous bubble being created by the easy credit and artificially low rates set by the fed. The only school that accurately predicted these bubbles subsequent bursts was the Austrian school, and it's the only school that recognizes the futility of central planning an economy on anything larger than a tribal scale.
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Deficit spending and control of the money supply is not the enemy of capitalism. It is an integral part of a stable prosperous capitalistic society. Supply and demand still reign far supreme, and if you can provide anything to the contrary, please do so.
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We are talking about the supply and demand of MONEY..the price of MONEY..the price of the unit of account that everything else revolves around.. When a small group of people has complete power over the price of money, they control the markets..they practically control the world. They have the power to change minds and behavior..influencing millions of people on a whim.. That is decidedly anti-capitalistic in my book.
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Accumulated savings do provide lots of capital but is far insufficient to fund the vast economic growth we have enjoyed in the last 60 years. Apparently, you'v completely ignored the fact that millions upon millions of Americans have been lifted out of poverty in the last 100 years because of the system which you so radically want to change.
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Indeed..and what we are seeing today is that we went too far, too fast. The market is trying to adjust to that reality, and as always the fed is refusing to let it happen. I wouldn't object as much if they just OCCASIONALLY allowed the excesses to correct and malinvestments to be purged..if they just allowed markets to work every once in a while, but they never do. They inflate inflate inflate every single time without exception..devalue the currency to cover up the malinvestment and get things moving again. It's not a healthy thing. The root causes are not being addressed. If you and oc want to ignore this...If you are content to watch Bernanke giving aspirin to a cancer patient then plugging his ears and singing "la la la" and pretending all is well, go for it. |
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| Krypton |
| quote: | Originally posted by Capitalizt
Absofrakkinlutely. Add up city/state/local + federal spending at it easily takes up 35% of GDP in America.. If you factor in the hidden cost of tariffs and excise taxes that get indirectly passed on to consumers, it is well over 40%...and even higher in more socialist countries. |
Can I get some source for your data figures?
| quote: | | We won't know until alternatives to fiat notes are legal now will we? ;) |
...there are alternatives...You can buy gold/silver, bonds, real estate, at any time, as much as you want. What are you complaining about?
| quote: | | Nonsense x 1000...and we've been over this 1000 times it seems. Reducing government power has not been tried on any meaningful scale in a modern economy. We have been on an inexorable trend towards socialism for the past 70 tears. As for sweat shops.. We've been over that entire argument as well.. I thought we concluded that the need for sweatshops naturally disappears once an economy's infrastructure is developed and the population stabilized.. Sweatshops are part of a developing economy with little infrastructure and a large influx of immigrants (like America a few hundred years ago). This situation exists in Chinese cities today, but no longer exists in America..so even if minimum wage laws and every other lefty ideal were abolished today, we would not see a return to $1/hr labor in America.. And don't start that traffic light strawman again krypt. We've been over this..and you know even the most wacked out libertarian favors laws that protect people from theft and physical violence. Traffic laws certainly apply. |
Reducing government power? In what way? Abolishing the Federal Reserve? :haha:
Sweatshops did not disappear because the economy's infrastructure was developed. It disappeared because government came in and passed legislation outlawing child workers, instituting minimum wage, protecting unions, and limiting the work day to 8 hours in some industries like auto manufacturing. If you believe the corporations did this themselves, then you'v got a lot to learn. Again, you'r believing that motorists will police themselves, not speed down the highway, not drive in the opposite lanes...it's a ludicrous assumption.
| quote: | | Like I said..the fox guarding the henhouse. Those arguments are based on an incorrect interpretation of history..and is sorely lacking when it comes to addressing the ROOT CAUSE of depressions and slowdowns. All Keynesian/monetarist arguments conveniently overlook what causes them in the first place, and this puts their credibility less than 0% in my book. They don't recognize that the fault lies mainly with government and central bank policy..and this ignorance was proven when the very experts who wrote those glorious "peer reviewed studies" didn't have a frakkin clue what was going to happen in 2007-08. They didn't see the tremendous bubble being created by the easy credit and artificially low rates set by the fed. The only school that accurately predicted these bubbles subsequent bursts was the Austrian school, and it's the only school that recognizes the futility of central planning an economy on anything larger than a tribal scale. |
What makes your interpretation of history so far and above men like Bernanke? The root cause of recessions is moot. Every economy, whether laissez-faire capitalist or marxist-communist has asset bubbles. If you believe that adhering to some radical libertarian ideology is going to do away with asset bubbles, then I'd have to seriously question your understanding of economics.
Government and regulators certainly do take some fault for the mortgage bubble but that is a far too simplistic view. There were many actors, lenders, brokers, borrowers, regulators, ratings agencies, whose actions all culminated in the collapse we now see. Nobody held a gun to the banks head to force them to make subprime loans. Nobody held a gun to the subprime borrowers head to sign on the dotted line.
Additionally, the Fed does not "centrally control" the economy. They control the money supply.
| quote: | | We are talking about the supply and demand of MONEY..the price of MONEY..the price of the unit of account that everything else revolves around.. When a small group of people has complete power over the price of money, they control the markets..they practically control the world. They have the power to change minds and behavior..influencing millions of people on a whim.. That is decidedly anti-capitalistic in my book. |
Again, you'r throwing out completely wrong assumptions. The Fed does not control the price of money. It controls the SUPPLY of money. The FOREX markets control the price of money. Additionally, the Fed is accountable to Congress, and by extension, the American people. Whoever you'r getting this "information" from, their paranoia is rubbing off on you.
| quote: | | Indeed..and what we are seeing today is that we went too far, too fast. The market is trying to adjust to that reality, and as always the fed is refusing to let it happen. I wouldn't object as much if they just OCCASIONALLY allowed the excesses to correct and malinvestments to be purged..if they just allowed markets to work every once in a while, but they never do. They inflate inflate inflate every single time without exception..devalue the currency to cover up the malinvestment and get things moving again. It's not a healthy thing. |
We went too far too fast...Yea, that's the normal business cycle.
The market is trying adjust itself...Yea, it's been doing that quite well for the past year. Have you seen the 50% drop in stock values? How about the collapse of real estate values? How about the huge drop in commodities values? Sounds like a market adjusting to me. The Fed has been stabilizing the banking sector. Even though they are a bunch of crooks, if we let the banking sector collapse, they will take all of us down with them. In essence, we are their hostages.
Mal-investments are being purged. How many trillions of dollars have been written off balance sheets?
Allowing the market to work once in a while? Hmmm....IT IS WORKING...actually, it's working specifically because the Fed kept it working by infusing liquidity into the system. Thank you Feds.
Inflation is a normal effect in a capitalist economy. IT'S NORMAL. Now, currently, we are more in a deflationary economy, than inflationary. Asset prices have plummeted substantially. Deflation. This caused a dangerous lack of liquidity in the system, thus, the Fed was obliged to, shall we say, inject a blood transfusion into the body of the economy. Thank god they did it. Are we going to have higher inflation in the future. Maybe. But a large part of that is offset by the huge deflation we'r suffering at the moment. Looking at the Dow Jones, prices there have fallen an average 50%.
| quote: | | The root causes are not being addressed. If you and oc want to ignore this...If you are content to watch Bernanke giving aspirin to a cancer patient then plugging his ears and singing "la la la" and pretending all is well, go for it. |
The root causes? What are the root causes. Tell us, oh, all knowing economist. Because we are specifically addressing every single point you make, and you'r the one who tells us, "this debate is pointless." It appears that you are the one plugging your ears singing "lalala", not us. We'r not ignoring you. We strongly disagree with you and see many flaws in your arguments. Most alarmingly, your understanding of the role of the Federal Reserve. I mean, you just said the Fed controls the price of money, which is clearly wrong. |
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| Capitalizt |
You asked where I got the 40% figure..I'm honestly not sure. It was in a report by Cato a few years back..but if history is any guide it certainly hasn't shrunk. I googled and found this page..It seems fairly close to 40%: http://www.usgovernmentspending.com/
2009 GDP: $14.29 trillion
Government spending (federal + state + local): $6.383 trillion.
and krypt, as for asset bubbles..Yes they can happen in a pure capitalist economy..but in a free market, there are always forces at work to correct these things quickly. Fads go in and out of fashion in the real world. You used CROX as an example a few months ago in your investors club I think.. Once a high flier with a blazing $20+ stock price..then the fad for those shoes died and..the euphoria dissolved and the stock crashed to $1.
Crox was priced incorrectly. This was the result of a market bubble..and fortunately in that case the damage was contained. It was contained because market forces were allowed to work and act on the bubble. Because Crox operated in a free market, market forces had the ability to correct the problem and relatively few people were hurt in the process. But as far as the fed is concerned, there are NO market forces to work with. An authoritarian group controls the cost of money and people can't voice their dissatisfaction with the product. When the fed increases the money supply, there is no recourse among dollar holders and no instantaneous feedback mechanism like the stock market. Instead everyone in the world must either suck it up and accept the devaluation or rush to place risky bets in hoping of outpacing the loss of purchasing power. When this happens..when something like the value of money is controlled by non-market forces, the malinvestments and bubbles are INSTITUTIONALIZED. They are fused into the system and guaranteed to be immeasurably larger and more dangerous than anything the private sector could dream of.
You are a market man krypt.. You've studied markets. You know they are the most efficient means of allocating resources...of exhanging products, information, and ideas.. Why are you so against the idea of putting a little market pressure to bear on the fed? Perhaps if competition were legalized they'd be a bit more open to the public and less likely to hand out trillions of dollars to their corporate buddies. |
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| occrider |
| quote: | Originally posted by Capitalizt
Replace the word Keynesian in all of my posts with interventionist.. That's what they all are oc (Friedman, Keynes, etc)..and it is government interventionism that led us to the mess we are in today.. The idea that the fed or congress have a primary role to play in influencing the economy has led to the acceptance of state/federal governments sucking 40-50% of the wealth from major countries every year.
This is the root of all of our problems and all of the negative numbers rolling in...the global embrace of interventionism and the fixing of the price and quantity of money at a central location. That is the point I'm getting at.
You say you won't debate further until I present numbers of my own.. I say we CAN'T have a debate because the numbers are largely meaningless. If you took a step back you would realize that it is the artificial creation of money and credit that leads to structural imbalances that precipitate crashes in the first place. Adding to the money stock only compounds the error and prevents a much-needed correction from occurring. Lassiez faire is the only reasonable approach when it comes to economics. Japan didn't get this in the 90's and Bernanke doesn't get it today. The fed is distorting everything on a such a grand scale that any debate about what economic policy is best is pointless until they are bound in shackles.
Keynes, Friedman, Bernanke, and every other mainstream economist has deluded themselves (and apparently you) into thinking by shifting money from the left pocket (future taxpayers) to the right pocket (today's taxpayers) can enhance the total amount. They don't see deficit spending and controlling the money supply for what they really are..the enemies of capitalism..forces that chisel away at the foundation of free markets and the laws of supply and demand. All government intervention distorts price signals, making retailers look like profiteers and deceiving workers into thinking their wages have gone up. It pushes families into higher income tax brackets without increasing their real purchasing power..In short, it undermines capitalism by destroying the rationale for dedicating a portion of today's earnings to savings. Accumulated savings provide the capital that finances projects that generate higher future returns; it's how an economy grows, how a healthy society reaches higher levels of prosperity.
THE INTERVENTIONISTS DONT SEE IT THIS WAY. Bernanke (and nearly every fed chairman before him) has convinced himself that we can grow the economy over long periods purely on credit expansion...that credit expansion can be a substitute for true capital (Bernanke said this himself during his recent congressional testimony). Men like these have created a system where our money has lost its capacity to serve as an honest measure, a meaningful unit of account. So as long as the value of money is arbitrarily controlled at a central location, any chart posted or argument made about "policy x" vs "policy y" is moot. |
Led to the acceptance of the state/federal governments sucking 40-50% of the wealth? Ummm yea you might want to brush up on your tax (or wealth sucking as you put it) history. Tax rates are, for all intents and purposes, at their lowest in the current period than they were ever just going back to 1913. Try going back to the 50s and 60s when marginal tax rates for the highest brackets were at 91%. Here are tax rates going back to 1913:
http://www.taxfoundation.org/files/...ry-20080107.pdf
Gee I suppose there should be clear correlation of GDP growth with less “wealth sucking” if one were to analyze the numbers.
Or how about this … since the Fed was only created in 1913 and we have 200+ years of economic history before a fiat currency, before a central bank with the following slew of recessions:
Panic of 1797
Depression of 1807
Panic of 1819
Panic of 1837
Panic of 1857
Panic of 1873
Long Depression (1873-1896)
Panic of 1893
Panic of 1907
Post WW1 Recession
Great Depression
Recession of 1953
Recession of 1957
Recession of 1960-61
1973 oil crisis
1980-82 recession
90-91 recession
2001-2003 recession
Now given this 200+ years of economic data available from periods before the Federal Reserve and periods of increasing/decreasing government intervention, CLEARLY you should have a wealth of data that corroborates correlation of greater intervention with negative GDP growth … however since you believe numbers to be meaningless, which is remarkably convenient since you don’t have to find ANY empirical evidence whatsoever to support your theories, that is why I consider a continuation of this argument to be pointless. I could throw a wealth of economic data at you, outline the mathematical proofs for the economic theories I’m referring to, or possibly even provide an affidavit from God and you would simply disregard all of it as “meaningless”. Blah blah austrian school, whatever. Give me something I can dig my teeth into that's NOT a blog or ideological trite. There's a REASON why economics is a PHD level study that requires understanding not only of sociology but higher level math. To quote one of my favorite lines from a movie ... this ain't checkers it's ing chess. Give me something ... ANYTHING published in a god damned peer reviewed journal that I can actually refute. I’ve participated in these types of “debates” in the past; they’re reminiscent of past debates on evolution with creationists, and quite frankly I learned that I can be far more productive doing other things with my time. So that being said, until you start deferring to ALL economic data to support or detract from your arguments, as opposed to selectively cherry picking whatever data supports your ideology and disregarding all the rest (another habit creationists love to do), I’m done with this debate. |
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