Despite the overwhelming evidence of history, of personal experience, and of serious research it appears that Congress believes they can solve an undefined, ongoing, complex set of economic and political problems by burying it in money that someone else will have to pay back.
muirgeoFebruary 13, 2009 at 4:50 pm
Makes sense to me. In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class. Yeah.. it should work.
Martin BrockFebruary 13, 2009 at 5:27 pm
… that someone else will have to pay back.
Since the Fed and the Federal government itself holds most of the Federal debt, it's more like a tax than something we literally "pay back". The problem is that we're organizing ourselves to produce whatever politicians decree rather than organizing ourselves to produce what we choose to consume.
DJBFebruary 13, 2009 at 6:02 pm
"Makes sense to me. In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class." Excellent, now just produce the evidence. I mean you do practice evidence based medicine (I would hope), show me how you practice evidence based economics.
Marty SFebruary 13, 2009 at 6:45 pm
Muir, you gutless freak. You just didn't have the facts to take up the challenge, did you?
muirgeoFebruary 13, 2009 at 9:09 pm
Bush gave the equivalent of a 2 trillion dollar tax break to the wealthiest over his administration.
Now the bill has come due because he was too cowardly to try to cut the equivalent in spending. In fact, he increased spending.
The Republicans are cowards who offer us 2 Santa Clauses. Of course things seem ok for a while when they are making irresponsible decisions. How hard is it OT to look bad when you cut taxes massively and increase spending massively.
Now its the democratic party who has to clean up the mess and look like the bad guys for trying to be responsible.
Muir,
You sick lying buffoon. You are a devious and deceptive creature.
MnMFebruary 13, 2009 at 9:58 pm
"Now its the democratic party who has to clean up the mess and look like the bad guys for trying to be responsible."
You mean by cutting taxes and increasing spending? Oh, I'm sorry! That was Republicans. My mistake.
"You sick lying buffoon. You are a devious and deceptive creature."
Posted by: Marty S | Feb 13, 2009 9:17:40 PM
Marty, to be deceptive one must first know the truth, and then be intelligent enough to deflect attention from it.
Both seem to be pretty big assumptions in this case.
JoanFebruary 14, 2009 at 4:43 am
Muir,
You sick lying buffoon. You are a devious and deceptive creature." No, actually, he is an idiot. Look this:
"In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class. Yeah.. it should work."
This seems to me like first rate comedy or satire, as if someone tried to mock liberals and show how they are stupid. But,this guy thinks that seriously…
seanooskiFebruary 14, 2009 at 7:12 am
The top frame of the cartoon is disingenuous. There were a lot of causes for the economic collapse. Greed is only one reason. The biggest reasons have to do with forcing lenders to lower their standards for risk. Once the predictably bad loans started caving, it was only a matter of time. It was not a free market that caused that, but one that was/is quite fettered. Soon the Golden Goose will be dead, then all the rent-seekers can fight over the carcass.
vidyohsFebruary 14, 2009 at 9:16 am
Thanks for muirpidity number 29, the list still grows:
#29From the Economist (HT: Gonzalo Schwarz):
((Cartoon not printed))
Makes sense to me. In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class. Yeah.. it should work.
Posted by: muirgeo | Feb 13, 2009 4:50:30 PM
muirgeoFebruary 14, 2009 at 9:44 am
The biggest reasons have to do with forcing lenders to lower their standards for risk.
Posted by: seanooski
If you believe this you are a zombie person imprisoned by the media you access and completely void of free-thought or independent thinking… but at least your expressive speech centers and your brains area postrema (vomit control center) are intact as you are clearly capable regurgitating and parrotting things others have drilled into your brain.
"If you believe this you are a zombie person imprisoned by the media you access and completely void of free-thought or independent thinking"
Yeah but isn't that what the left is pushing us towards? Completely mind numb pawns to move as they see fit around the gameboard? Look around. Listen to your political allies speak. Individual thought leads to chaos and the inability for your ilk to CON-trol. Get it…
MWGFebruary 14, 2009 at 1:34 pm
"ush gave the equivalent of a 2 trillion dollar tax break to the wealthiest over his administration.
Now the bill has come due because he was too cowardly to try to cut the equivalent in spending. In fact, he increased spending.
Now its the democratic party who has to clean up the mess and look like the bad guys for trying to be responsible."
-Muir
The dems are gonna CUT spending??? I don't know what's more ridiculous. You're idiotic comments, or the fact that people here (myself include) keep responding to them.
muirgeoFebruary 14, 2009 at 1:55 pm
The dems are gonna CUT spending??? I don't know what's more ridiculous. You're idiotic comments, or the fact that people here (myself include) keep responding to them.
Posted by: MWG
You're simply showing a lack of understanding of Keynesian economics and the current state of the economy.
The belief right or wrong is that the government is the only one capable of kick starting the economy by spending. If in so doing we blunt the degree of job losses the money spent doing so today will pay for itself as the economy gets running back on private enterprise sooner.
Nothing that complicated, nothing communistic just pragmatic realism applied to our real world circumstances.
People who believe cutting spending now, cutting taxes (alone) or doing nothing will return us to economic health sooner are swimming against the tide of historical evidence.
Bush cut taxes and increased spending. But all the benefit went to wealthy people on top who have more then they can spend. The middle class was starved out, flat broke, in debt and used their last penny of home equity… now there is no one to spend money and the economy is frozen and will remain so for a very Hoover long time if nothing is done.
andyFebruary 14, 2009 at 2:46 pm
If in so doing we blunt the degree of job losses the money spent doing so today will pay for itself as the economy gets running back on private enterprise sooner.
And if we don't – which according to Bastiat's principle "1-1=0" seems very likely – then what?
People who believe cutting spending now, cutting taxes (alone) or doing nothing will return us to economic health sooner are swimming against the tide of historical evidence.
Are they? 1945 nothing? 1921 nothing? Oh…the evidence…..
Can YOU provide evidence Kyenessian approach works? 1930's? It didn't. Japan 1990's? Didn't work either. When DID it work?
seanooskiFebruary 14, 2009 at 5:38 pm
May as well give up responding to him Andy. He repeats the same old tired canards, as if you never said anything at all. He completely disregards reality. He's just a typical rent-seeking "doctor". I wouldn't trust him with a hang-nail.
Marty SFebruary 14, 2009 at 5:55 pm
Muir, you loser. go look for the missing pair.
muirgeoFebruary 14, 2009 at 6:27 pm
Can YOU provide evidence Kyenessian approach works? 1930's? It didn't. Japan 1990's? Didn't work either. When DID it work?
Posted by: andy
First, by measurements of job growth and GDP (pretty standard mainstream economic indicators FDR's policies DID work.
Second, Japan did NOT respond to its recession in a Keyensian way. They raised taxes and cut or leveled spending and that's why it took so long to recovery.
Go to NPR: Planet Money and listen to the discussion on Japans 1990's economy or read here;
Or read here. But don't just pretend like you know what you are talking about if you really have read both sides with an open mind. Otherwise you are simply doing as seanooski is doing… regurgitating crap you've been spoon fed.
Let me ask you to clarify one thing. Are we in a recession now? How can you tell?
muirgeoFebruary 14, 2009 at 6:28 pm
Oh the Planet Money podcast is free and the one on Japan is from 2/2/09
Oil ShockFebruary 14, 2009 at 6:52 pm
Here is the evidence that Keynesian Economics works. Straight from the horse's mouth.
“We have tried spending money. We are spending more than we have ever spent before and it does not work. I say after eight years of this administration, we have just as much unemployment as when we started, and an enormous debt to boot!"
- Henry Morgenthau Jr., Treasury secretary to President Franklin Delano Roosevelt. May 1939 before the House Ways and Means Committee..
Oil ShockFebruary 14, 2009 at 6:59 pm
From CNN/Fortune comes this excuse from a Keynesian apologist.
As for what took so long for the unemployment figures to come back up, some economists who are sympathetic to Roosevelt point out how low the economy had fallen. "It was a broken economy on a scale we have never seen anything like," says Eric Rauchway, a history professor at the University of California, Davis and the author of "The Great Depression and the New Deal: A Short History." "To repair an economy that's that broken you have to figure it's going to take some time. That's a homely explanation but that's the best explanation I can do."
If you want something to compare against, here is an example. Charlie or George are unlikely to post a comment on this following one. Because it pours 10 buckets of cold water from the "warming" North Pole on his theories. Yes, I am talking about that SHARPEST and SHORTEST depression of 1921.
According to J.R. Vernon in "The 1920-21 Deflation: The Role of Aggregate Supply," the one-year deflation of this time is the largest ever recorded: “This is true whether the Department of Commerce [ 1986 ] estimates or the recently provided Balke and Gordon [ 1989 ] or Romer [ 1989 ] estimates are used. These estimates produce one-year deflation figures of 18 percent, 13.0 percent, and 14.8 percent, respectively. The closest competitor is the 11.5 percent deflation recorded for 1931-32, the third year of the Great Depression.” Furthermore, the "ratio of the percentage decline in the GNP deflator for 1920-21 to the percentage decline in real GNP is 2.6 using the Department of Commerce figures, 3.7 using the Balke and Gordon data, and 6.3 using the Romer data." But "the ratios of the percentage decline in GNP prices to the percentage decline in real GNP for 1930-31, 1931-32, 1932-33, and 1937-38, the other Great Depression years in which real GNP declined, were 1.0, 0.9, 1.2, and 0.3, respectively, all well below the 1920-21 figures."
vidyohsFebruary 14, 2009 at 9:42 pm
Don't you all think it is odd that the same people that one year ago were saying no to drilling in ANWR because it would take time for the oil to come on line and show up as a benefit, are the same people that are now saying that spending a trillion will take years to show effect?
Cut 'em if they stand, shoot 'em if they run! Drain the cesspool, fill it in, sod over it, and scorch the earth so that nothing ever lives inside the beltway again.
Oil ShockFebruary 14, 2009 at 11:02 pm
Theme of FDR's campaign against Hoover (From wikipedia):
Franklin D. Roosevelt blasted the Republican incumbent for spending and taxing too much, increasing national debt, raising tariffs and blocking trade, as well as placing millions on the dole of the government. Roosevelt attacked Hoover for "reckless and extravagant" spending, of thinking "that we ought to center control of everything in Washington as rapidly as possible," and of leading "the greatest spending administration in peacetime in all of history." Roosevelt's running mate, John Nance Garner, accused the Republican of "leading the country down the path of socialism".
We all know how well FDR kept his campaign primises
Even so, New Dealer Rexford Tugwell[34] later remarked that although no one would say so at the time, "practically the whole New Deal was extrapolated from programs that Hoover started."
andyFebruary 15, 2009 at 5:21 am
First, by measurements of job growth and GDP (pretty standard mainstream economic indicators FDR's policies DID work.
average unemployment: 17%. The DID work, right? Can you explain, why do you think that the unemployment would be HIGHER if FDR did NOTHING?
As of Japan: YOU are against lowering taxes. Seems to me that Japanese did exactly what you want, didn't they?
Anyway: Please explain depression of 1921. The slump was comparable (or even bigger) then 1929. Harding did nothing. Depression ended within a year or so. Actually, this is probably one rare example where government really did almost nothing – and it is perfect counterexample to the Great depression and your thesis.
andyFebruary 15, 2009 at 8:38 am
muriego, I started reading the essay. Couple of problems:
1) why does he distinguish between structural and discretionary? The only difference is the first spending is written somewhere in the law, the second is decided ad-hoc. Why should it make any difference?
2) The government spending is counted in GDP in expenditure prices. This is wrong – it should be counted as market prices, which will be considerably lower. Therefore the GDP growth in 1996 is probably overstated.
3) When Japan stimulated, it had positive effect. When Japan stopped stimulating, it had negative effect. That would imply that if you want economy to work this way, you would have to stimulate indefinitely. That is impossible.
4) Considering the way GDP is computed and the reactions of the people, it may perfectly happen that GDP will rise. There are many ways to doctor GDP numbers, see Higgs and numbers from WWII.
5) There were certainly OTHER FACTORS that influenced the GDP apart from fiscal stimulus. Implying that the 96' growth was because of the stimulus is bad science. Correlation is not causality.
6) Bastiat's 1-1=0 rule doesn't imply that the '-1' must appear immediately. If you want to consider the stimulus positive, you have to consider the long-term effects – which, with all respect, 1 year statistics does not. I know that to the Keynessians we are all dead in the long term, therefore they can claim that 1-1=1.
7) I am fascinated how one could use the word 'contractionary' for a budget with quite a sizable deficit. Although there might have been some theory that if the government tax and spends more, it produces more (aka 1-1=1.74). the article is from 1998. Not sure how does this reflect the whole spending of 90's and early 2000'.
However, it seems to me that the article proves one thing well: Japan is NOT the proof of fiscal policy working. What is today proposed was not tried there and concluding from one year experience that anything like this 'works' is bad science.
Muriego – do you have any reasonably conclusive example of fiscal policy working?
If Hardings policy of doing nothing was so great how come we had a Great Depression 8 years later?
That question has been answered a gazillion time on this blog. It is kind of tiring to hear you conveniently bring up the same lies, damn lies and statitstics day after day. I expected nothing less from you, While not addressing why FDRs policies were so disastrous.
If progressive Woodrow Wilson was so wonderful, why did Harding inherit the sharpest depression ever in AMerican depression? WHy did it end so quickly?
If unemployment rates 8 years after a person leaves office can attributed to that person, will you give George Bush the credit for unemployment 8 years from now?
Oil ShockFebruary 15, 2009 at 3:48 pm
See how muirgeo sees things 70 years after the fact, where as FDR's own treasury secretary saw New Deal as a disaster. LOL.
muirgeoFebruary 15, 2009 at 4:53 pm
Oily,
You are the one proclaiming 24% is better then 55 and 14% is worse then 24% so don't tell me I'm the one lacking logic.
You do have the numbers for the 1921 "Depression" right?
Let me see them. Mainly I'd like to see government spending, GDP and employment figures from the time.
I know you must have them, surly you've seen them….please share them so we can compare them to the numbers I gave you to support the Harding/Coolidge/ Hoover First Republican Great Depression and the FDR recovery from The First Republican Great Depression.
Marty SFebruary 15, 2009 at 5:20 pm
Muir,
You lying sick joker. Grow a pair, and take me up on the challenge you nincompoop.
timbuck3February 15, 2009 at 5:21 pm
This cartoon equivocates between two different types of
greed: one is the greed of capitalists who aim to produce
wealth, and the other is the greed of thieves who aim to
steal it by political means.
The cartoon is accidentally right in assigning the starring
role to money – the crisis is fundamentally a monetary
crisis, one ignited by money and credit expansion by the
Federal Reserve. For details, please see the following paper by economist Roger W. Garrison: http://www.auburn.edu/~garriro/fedmess.pdf
MnMFebruary 15, 2009 at 7:01 pm
Marty, calm down. He isn't worth it.
Muirgeo, Shock claimed no such thing and you know it. This is either a direct attempt at obfuscation or you need to work on your critical reading skills.
vidyohsFebruary 15, 2009 at 7:05 pm
LOL – timbuck3,
I suggest you really look at what you wrote.
"one is the greed of capitalists who aim to produce
wealth, and the other is the greed of thieves who aim to
steal it by political means.
Posted by: timbuck3 | Feb 15, 2009 5:21:18 PM"
Greed – by those who you acknowledge are the producers of wealth? How does that happen? Somehow you manage to call those producers, greedy greedy producers, captialist as if greed and captialism are joined at the shoulder and hip, one and the same. Tsk Tsk, sloppy thinking.
Think, my good man, capitalism is simply a tool, greed is an emotion. I may use my rachet wrench in a greedy manner but the greed is mine not that of the wrench.
I am a capitalist and I challenge one single person to come and identify one time I have ever acted in a greedy manner. I am willing to bet of the billions of capitalist on this planet the majority are just like me, the only thing is that being honest just isn't news that people are interested in.
First, by measurements of job growth and GDP (pretty standard mainstream economic indicators FDR's policies DID work.
That's an outright lie. There was GDP "growth" only because when you hit bottom, there's nowhere to go but up. Even so, the economy still didn't get anywhere near the baseline growth it should have achieved. The chart was posted here some weeks back. Didn't you get the memo?
Now, explain Morgenthau's admission about having all that new debt and nothing to show for it.
Second, Japan did NOT respond to its recession in a Keyensian way. They raised taxes and cut or leveled spending and that's why it took so long to recovery.
You're lying again. Japan lowered interest rates to zero, while embarking on massive government spending. If Japan "cut or leveled spending," then explain how its national government's debt massively increased during the time period?
The New York Times reported on this last week; the link was posted here. Didn't you get the memo?
If Hardings policy of doing nothing was so great how come we had a Great Depression 8 years later?
This is your third lie — or are you asking this seriously? Are you so completely ignorant of history that you don't realize the economy recovered and had several years of prosperity before the Crash of 1929? Do you know why they're called the "Roaring Twenties"?
You must be one of those "doctors" who flunks out of American medical schools, then goes to the Dominican Republic or other Third World nation for the MD.
timbuck3February 15, 2009 at 8:15 pm
vidyohs,
Thank you for taking the time to respond to my comment.
Are you of the opinion then that there is something
in the nature of greed that precludes a greedy person
from also producing wealth?
As I understand it, 'greed' is used as a pejorative term
for the same thing as 'desire', mainly by people who are
of a nihilistic bent, and who are therefore threatened
by the pursuit of values.
vidyohsFebruary 15, 2009 at 9:43 pm
timbuk3,
Put out any new material lately? I have two of your CDs and enjoy both.
But, I digress.
Nice try on getting the discussion off focus, but t'ain't gonna work. Let's look at what you said and see if my response was appropriate.
"This cartoon equivocates between two different types of
greed: one is the greed of capitalists who aim to produce
wealth, and the other is the greed of thieves who aim to
steal it by political means.
Posted by: timbuck3 | Feb 15, 2009 5:21:18 PM"
That is a direct quote from above.
Correct me if I am wrong, but I do believe that I read there where you said, ""This cartoon equivocates between two different types of
greed:", is this not true? Why yes of course it is.
So, we agree you were specifically speaking of the cartoon that shows two viewpoints of greed.
Now you connected the top portion with captialism and said, "one is the greed of capitalists who aim to produce
wealth". To which I replied, "Think, my good man, capitalism is simply a tool, greed is an emotion. I may use my rachet wrench in a greedy manner but the greed is mine not that of the wrench."
Let's get honest, your post reflected the terminology that is standard in those who are socialist believers, or unwitting tools of the left.
In that culture, capitalism = equals greed and greed = capitalism, you seem to use the two terms tied together just as muirduck and Karl Marx would.
I point out to you that the equation is false and one of those typical leftist denigrations of things they hate.
But, no, there is nothing in the nature of greed that preculdes a greedy person from producing wealth, happens all the time, greedy people just sometimes never have the opportunity to indulge their greed and in the meantime they work.
But, acquisition of wealth primarily through greed is not production it is theft. What was done by the people who manipulated loans and mortgages was not a creation of wealth but a stealing of wealth. That was a criminal act not a capitalist act.
Are you of the mind that any act of capitalism is an act of theft?
timbuck3February 16, 2009 at 12:51 am
vidyohs,
And I'm a fan of some of your material too, especially: "Cut 'em if they stand, shoot 'em if they run! Drain the cesspool, fill it in, sod over it, and scorch earth so that nothing ever lives inside the beltway again."
But, I too digress.
Above you said: "Correct me if I am wrong, but I do believe that I
read there where you said, ""This cartoon equivocates between two different types of greed:", is this not true? Why yes of course it is.
So, we agree you were specifically speaking of the cartoon that shows two viewpoints of greed."
Permit me to correct your interpretation of what I said.
I did not say that the cartoon shows two viewpoints of greed.
It wouldn't constitute an equivocation if the cartoon
was equating two alternate viewpoints of the same thing.
What we have in the cartoon are two materially distinct
activities made to appear the same by defining them
visually by a non-essential. By focusing on the ardent
pursuit of money, what goes into eclipse is the
different means used to obtain money – namely, either
acting to produce money vs. using political means to
steal it.
I'm well aware of the dishonesty of some businessmen
in this crisis, but the driving force can't be explained
by greed.
The necessary and sufficient conditions at the root of
this bust are to be found only in the credit expansion
boom caused by the Federal Reserve.
vidyohsFebruary 16, 2009 at 6:17 am
timbuk3,
Ok, my subtle attempt at humor didn't come through. Your tag timbuk3 reminds me of the band by the same name. Don't know if your musical tastes go to non-mainstream rock but Timbuk3 has a couple CDs out that I liked most of the material on. Look 'em up. I believe that the group put out their material in the 1990s, haven't heard from 'em since.
Now, your correction. My friend, that was a direct quote of your post, how could I be wrong in its wording and interpretation when the words dictate only one interpretation.
However, its no matter because I believe that we pretty much see it the same way. Now if that last sentence is wrong, correct me, flog me, and I'll see if I can survive with a reasonable answer.
vidyohsFebruary 16, 2009 at 6:22 am
timbuk3,
BTW, the "cut 'em if they stand, shoot 'em if they run." I'd love to take credit for that line but it isn't original with me. That is a line out of an old blues tunes from the Big Mama Thornton era. Had more to do with how to treat a cheatin' man than politicians; but, oh yes it fits the bill in the context I used it.
timbuk3February 16, 2009 at 11:36 pm
vidyohs,
Thank you for the pointer to the band Timbuk3. I've
enjoyed one of their songs in the past ("The Future's
So Bright, I Gotta Wear Shades") but didn't know the
band until now. Thanks!
vidyohsFebruary 17, 2009 at 7:14 am
Timbuk3,
I like 'em because they are such good musical storytellers.
If you like them you might make a note that the local Pacifica (communist) radio station KPFT 90.1 does live streaming over the internet, and particularly on Saturdays their line-up gives you some great music. 6 to 9 AM is PTs Cajun bandstand, 9 to noon is the Lonestar Jukebox mostly singer songwriter but with a great mix thrown in, noon to 3 is the Spare Change show same kind of mix as the LSJB but can be more lefty political,
then 3 to 6 is Joe's Road house, which is blues/Rythm & Blues,
6 PM to 7 is The Bluegrass Zone.
I get a lot of good leads on new musical material from listening to those. The guys that do the shows have an extremely broad knowledge of music. They may be mostly lefty loonies on politics but they know their stuff musically.
Bon Appetit!
MezzanineFebruary 17, 2009 at 12:55 pm
I told you people – muirduck is mentally ill.
timbuk3February 17, 2009 at 2:57 pm
vidyohs,
Thank you for the music tips! KPFT's lineup sounds like a natural follow on to the ZZTop and Stevie Ray Vaughan music I've been listening to recently.
If you like musical storytellers and your tastes extend to jazz, you might like Micheal Franks – in particlar the song "B'wana-He No Home" comes to mind as one of his best. His stories are told obliquely and between the lines with considerable ingenuity.
Your vidyohs handle reminds me of a storytelling pop song, the haunting and tightly engineered "Video Killed the Radio Star" by The Buggles.
muirdiot is stupid (or in Perry's words, an embicile). Exhibit 1023549784:
Muirdiot: Makes sense to me. In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class.
vidyohsFebruary 17, 2009 at 7:01 pm
timbuk3,
Thanks for sharing, I'll look up your Michael Franks and check out the link.
Love music and my collection runs from Yo Yo Ma's Silk Road series through to an occassional hard rock.
One artist that is pretty much an unknown but I recommend highly is Ted Hawkins. He put out two CDs of original stuff and a couple of CDs of cover tunes, but it is his original stuff that is great. His first CD is Happy Hour and the second one I think is the The Next Hundred Years. He died of a heart attack just as he was hitting some exposure.
Any other tips pass 'em on.
The vidyohs relates to my means of making money these days as my twilight settles in upon this old body.
Share
{ 50 comments }
Despite the overwhelming evidence of history, of personal experience, and of serious research it appears that Congress believes they can solve an undefined, ongoing, complex set of economic and political problems by burying it in money that someone else will have to pay back.
Makes sense to me. In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class. Yeah.. it should work.
Since the Fed and the Federal government itself holds most of the Federal debt, it's more like a tax than something we literally "pay back". The problem is that we're organizing ourselves to produce whatever politicians decree rather than organizing ourselves to produce what we choose to consume.
"Makes sense to me. In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class." Excellent, now just produce the evidence. I mean you do practice evidence based medicine (I would hope), show me how you practice evidence based economics.
Muir, you gutless freak. You just didn't have the facts to take up the challenge, did you?
Bush gave the equivalent of a 2 trillion dollar tax break to the wealthiest over his administration.
Now the bill has come due because he was too cowardly to try to cut the equivalent in spending. In fact, he increased spending.
The Republicans are cowards who offer us 2 Santa Clauses. Of course things seem ok for a while when they are making irresponsible decisions. How hard is it OT to look bad when you cut taxes massively and increase spending massively.
Now its the democratic party who has to clean up the mess and look like the bad guys for trying to be responsible.
http://en.wikipedia.org/wiki/Jude_Wanniski
Muir,
You sick lying buffoon. You are a devious and deceptive creature.
"Now its the democratic party who has to clean up the mess and look like the bad guys for trying to be responsible."
You mean by cutting taxes and increasing spending? Oh, I'm sorry! That was Republicans. My mistake.
"You sick lying buffoon. You are a devious and deceptive creature."
Posted by: Marty S | Feb 13, 2009 9:17:40 PM
Marty, to be deceptive one must first know the truth, and then be intelligent enough to deflect attention from it.
Both seem to be pretty big assumptions in this case.
Muir,
You sick lying buffoon. You are a devious and deceptive creature." No, actually, he is an idiot. Look this:
"In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class. Yeah.. it should work."
This seems to me like first rate comedy or satire, as if someone tried to mock liberals and show how they are stupid. But,this guy thinks that seriously…
The top frame of the cartoon is disingenuous. There were a lot of causes for the economic collapse. Greed is only one reason. The biggest reasons have to do with forcing lenders to lower their standards for risk. Once the predictably bad loans started caving, it was only a matter of time. It was not a free market that caused that, but one that was/is quite fettered. Soon the Golden Goose will be dead, then all the rent-seekers can fight over the carcass.
Thanks for muirpidity number 29, the list still grows:
#29From the Economist (HT: Gonzalo Schwarz):
((Cartoon not printed))
Makes sense to me. In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class. Yeah.. it should work.
Posted by: muirgeo | Feb 13, 2009 4:50:30 PM
The biggest reasons have to do with forcing lenders to lower their standards for risk.
Posted by: seanooski
If you believe this you are a zombie person imprisoned by the media you access and completely void of free-thought or independent thinking… but at least your expressive speech centers and your brains area postrema (vomit control center) are intact as you are clearly capable regurgitating and parrotting things others have drilled into your brain.
Now its the democratic party who has to clean up the mess and look like the bad guys for trying to be responsible.
The new boss looks and acts an awful lot like the old boss.
Money is not wealth. Distributing money via the political process will inhibit wealth production.
Muir,
You lying crook, grow a pair.
and make the poor worse off.
"If you believe this you are a zombie person imprisoned by the media you access and completely void of free-thought or independent thinking"
Yeah but isn't that what the left is pushing us towards? Completely mind numb pawns to move as they see fit around the gameboard? Look around. Listen to your political allies speak. Individual thought leads to chaos and the inability for your ilk to CON-trol. Get it…
"ush gave the equivalent of a 2 trillion dollar tax break to the wealthiest over his administration.
Now the bill has come due because he was too cowardly to try to cut the equivalent in spending. In fact, he increased spending.
Now its the democratic party who has to clean up the mess and look like the bad guys for trying to be responsible."
-Muir
The dems are gonna CUT spending??? I don't know what's more ridiculous. You're idiotic comments, or the fact that people here (myself include) keep responding to them.
The dems are gonna CUT spending??? I don't know what's more ridiculous. You're idiotic comments, or the fact that people here (myself include) keep responding to them.
Posted by: MWG
You're simply showing a lack of understanding of Keynesian economics and the current state of the economy.
The belief right or wrong is that the government is the only one capable of kick starting the economy by spending. If in so doing we blunt the degree of job losses the money spent doing so today will pay for itself as the economy gets running back on private enterprise sooner.
Nothing that complicated, nothing communistic just pragmatic realism applied to our real world circumstances.
People who believe cutting spending now, cutting taxes (alone) or doing nothing will return us to economic health sooner are swimming against the tide of historical evidence.
Bush cut taxes and increased spending. But all the benefit went to wealthy people on top who have more then they can spend. The middle class was starved out, flat broke, in debt and used their last penny of home equity… now there is no one to spend money and the economy is frozen and will remain so for a very Hoover long time if nothing is done.
If in so doing we blunt the degree of job losses the money spent doing so today will pay for itself as the economy gets running back on private enterprise sooner.
And if we don't – which according to Bastiat's principle "1-1=0" seems very likely – then what?
People who believe cutting spending now, cutting taxes (alone) or doing nothing will return us to economic health sooner are swimming against the tide of historical evidence.
Are they? 1945 nothing? 1921 nothing? Oh…the evidence…..
Can YOU provide evidence Kyenessian approach works? 1930's? It didn't. Japan 1990's? Didn't work either. When DID it work?
May as well give up responding to him Andy. He repeats the same old tired canards, as if you never said anything at all. He completely disregards reality. He's just a typical rent-seeking "doctor". I wouldn't trust him with a hang-nail.
Muir, you loser. go look for the missing pair.
Can YOU provide evidence Kyenessian approach works? 1930's? It didn't. Japan 1990's? Didn't work either. When DID it work?
Posted by: andy
First, by measurements of job growth and GDP (pretty standard mainstream economic indicators FDR's policies DID work.
Second, Japan did NOT respond to its recession in a Keyensian way. They raised taxes and cut or leveled spending and that's why it took so long to recovery.
Go to NPR: Planet Money and listen to the discussion on Japans 1990's economy or read here;
Or read here. But don't just pretend like you know what you are talking about if you really have read both sides with an open mind. Otherwise you are simply doing as seanooski is doing… regurgitating crap you've been spoon fed.
Let me ask you to clarify one thing. Are we in a recession now? How can you tell?
Oh the Planet Money podcast is free and the one on Japan is from 2/2/09
Here is the evidence that Keynesian Economics works. Straight from the horse's mouth.
“We have tried spending money. We are spending more than we have ever spent before and it does not work. I say after eight years of this administration, we have just as much unemployment as when we started, and an enormous debt to boot!"
- Henry Morgenthau Jr., Treasury secretary to President Franklin Delano Roosevelt. May 1939 before the House Ways and Means Committee..
From CNN/Fortune comes this excuse from a Keynesian apologist.
As for what took so long for the unemployment figures to come back up, some economists who are sympathetic to Roosevelt point out how low the economy had fallen. "It was a broken economy on a scale we have never seen anything like," says Eric Rauchway, a history professor at the University of California, Davis and the author of "The Great Depression and the New Deal: A Short History." "To repair an economy that's that broken you have to figure it's going to take some time. That's a homely explanation but that's the best explanation I can do."
If you want something to compare against, here is an example. Charlie or George are unlikely to post a comment on this following one. Because it pours 10 buckets of cold water from the "warming" North Pole on his theories. Yes, I am talking about that SHARPEST and SHORTEST depression of 1921.
According to J.R. Vernon in "The 1920-21 Deflation: The Role of Aggregate Supply," the one-year deflation of this time is the largest ever recorded: “This is true whether the Department of Commerce [ 1986 ] estimates or the recently provided Balke and Gordon [ 1989 ] or Romer [ 1989 ] estimates are used. These estimates produce one-year deflation figures of 18 percent, 13.0 percent, and 14.8 percent, respectively. The closest competitor is the 11.5 percent deflation recorded for 1931-32, the third year of the Great Depression.” Furthermore, the "ratio of the percentage decline in the GNP deflator for 1920-21 to the percentage decline in real GNP is 2.6 using the Department of Commerce figures, 3.7 using the Balke and Gordon data, and 6.3 using the Romer data." But "the ratios of the percentage decline in GNP prices to the percentage decline in real GNP for 1930-31, 1931-32, 1932-33, and 1937-38, the other Great Depression years in which real GNP declined, were 1.0, 0.9, 1.2, and 0.3, respectively, all well below the 1920-21 figures."
Don't you all think it is odd that the same people that one year ago were saying no to drilling in ANWR because it would take time for the oil to come on line and show up as a benefit, are the same people that are now saying that spending a trillion will take years to show effect?
Cut 'em if they stand, shoot 'em if they run! Drain the cesspool, fill it in, sod over it, and scorch the earth so that nothing ever lives inside the beltway again.
Theme of FDR's campaign against Hoover (From wikipedia):
Franklin D. Roosevelt blasted the Republican incumbent for spending and taxing too much, increasing national debt, raising tariffs and blocking trade, as well as placing millions on the dole of the government. Roosevelt attacked Hoover for "reckless and extravagant" spending, of thinking "that we ought to center control of everything in Washington as rapidly as possible," and of leading "the greatest spending administration in peacetime in all of history." Roosevelt's running mate, John Nance Garner, accused the Republican of "leading the country down the path of socialism".
We all know how well FDR kept his campaign primises
Even so, New Dealer Rexford Tugwell[34] later remarked that although no one would say so at the time, "practically the whole New Deal was extrapolated from programs that Hoover started."
First, by measurements of job growth and GDP (pretty standard mainstream economic indicators FDR's policies DID work.
average unemployment: 17%. The DID work, right? Can you explain, why do you think that the unemployment would be HIGHER if FDR did NOTHING?
As of Japan: YOU are against lowering taxes. Seems to me that Japanese did exactly what you want, didn't they?
Anyway: Please explain depression of 1921. The slump was comparable (or even bigger) then 1929. Harding did nothing. Depression ended within a year or so. Actually, this is probably one rare example where government really did almost nothing – and it is perfect counterexample to the Great depression and your thesis.
muriego, I started reading the essay. Couple of problems:
the article is from 1998. Not sure how does this reflect the whole spending of 90's and early 2000'.
1) why does he distinguish between structural and discretionary? The only difference is the first spending is written somewhere in the law, the second is decided ad-hoc. Why should it make any difference?
2) The government spending is counted in GDP in expenditure prices. This is wrong – it should be counted as market prices, which will be considerably lower. Therefore the GDP growth in 1996 is probably overstated.
3) When Japan stimulated, it had positive effect. When Japan stopped stimulating, it had negative effect. That would imply that if you want economy to work this way, you would have to stimulate indefinitely. That is impossible.
4) Considering the way GDP is computed and the reactions of the people, it may perfectly happen that GDP will rise. There are many ways to doctor GDP numbers, see Higgs and numbers from WWII.
5) There were certainly OTHER FACTORS that influenced the GDP apart from fiscal stimulus. Implying that the 96' growth was because of the stimulus is bad science. Correlation is not causality.
6) Bastiat's 1-1=0 rule doesn't imply that the '-1' must appear immediately. If you want to consider the stimulus positive, you have to consider the long-term effects – which, with all respect, 1 year statistics does not. I know that to the Keynessians we are all dead in the long term, therefore they can claim that 1-1=1.
7) I am fascinated how one could use the word 'contractionary' for a budget with quite a sizable deficit. Although there might have been some theory that if the government tax and spends more, it produces more (aka 1-1=1.74).
However, it seems to me that the article proves one thing well: Japan is NOT the proof of fiscal policy working. What is today proposed was not tried there and concluding from one year experience that anything like this 'works' is bad science.
Muriego – do you have any reasonably conclusive example of fiscal policy working?
Here you go Oily,
Explain away…
Now if you could lets see some similar numbers for 1921. I don't know where to find them.
If Hardings policy of doing nothing was so great how come we had a Great Depression 8 years later?
8 years after Harding did nothing unemployment went from 5% to 24 %. Then 8 years later for FDR it was down to 14%.
Link doesn't work.
It shows government spending and receipts through The First Republican Great Depression.
http://www.huffingtonpost.com/hale-stewart/the-great-depression-pt-i_b_155181.html
Muirgeo,
If Hardings policy of doing nothing was so great how come we had a Great Depression 8 years later?
That question has been answered a gazillion time on this blog. It is kind of tiring to hear you conveniently bring up the same lies, damn lies and statitstics day after day. I expected nothing less from you, While not addressing why FDRs policies were so disastrous.
If progressive Woodrow Wilson was so wonderful, why did Harding inherit the sharpest depression ever in AMerican depression? WHy did it end so quickly?
If unemployment rates 8 years after a person leaves office can attributed to that person, will you give George Bush the credit for unemployment 8 years from now?
See how muirgeo sees things 70 years after the fact, where as FDR's own treasury secretary saw New Deal as a disaster. LOL.
Oily,
You are the one proclaiming 24% is better then 55 and 14% is worse then 24% so don't tell me I'm the one lacking logic.
You do have the numbers for the 1921 "Depression" right?
Let me see them. Mainly I'd like to see government spending, GDP and employment figures from the time.
I know you must have them, surly you've seen them….please share them so we can compare them to the numbers I gave you to support the Harding/Coolidge/ Hoover First Republican Great Depression and the FDR recovery from The First Republican Great Depression.
Muir,
You lying sick joker. Grow a pair, and take me up on the challenge you nincompoop.
This cartoon equivocates between two different types of
greed: one is the greed of capitalists who aim to produce
wealth, and the other is the greed of thieves who aim to
steal it by political means.
The cartoon is accidentally right in assigning the starring
role to money – the crisis is fundamentally a monetary
crisis, one ignited by money and credit expansion by the
Federal Reserve. For details, please see the following paper by economist Roger W. Garrison:
http://www.auburn.edu/~garriro/fedmess.pdf
Marty, calm down. He isn't worth it.
Muirgeo, Shock claimed no such thing and you know it. This is either a direct attempt at obfuscation or you need to work on your critical reading skills.
LOL – timbuck3,
I suggest you really look at what you wrote.
"one is the greed of capitalists who aim to produce
wealth, and the other is the greed of thieves who aim to
steal it by political means.
Posted by: timbuck3 | Feb 15, 2009 5:21:18 PM"
Greed – by those who you acknowledge are the producers of wealth? How does that happen? Somehow you manage to call those producers, greedy greedy producers, captialist as if greed and captialism are joined at the shoulder and hip, one and the same. Tsk Tsk, sloppy thinking.
Think, my good man, capitalism is simply a tool, greed is an emotion. I may use my rachet wrench in a greedy manner but the greed is mine not that of the wrench.
I am a capitalist and I challenge one single person to come and identify one time I have ever acted in a greedy manner. I am willing to bet of the billions of capitalist on this planet the majority are just like me, the only thing is that being honest just isn't news that people are interested in.
Muir, you're a lying imbecile.
First, by measurements of job growth and GDP (pretty standard mainstream economic indicators FDR's policies DID work.
That's an outright lie. There was GDP "growth" only because when you hit bottom, there's nowhere to go but up. Even so, the economy still didn't get anywhere near the baseline growth it should have achieved. The chart was posted here some weeks back. Didn't you get the memo?
Now, explain Morgenthau's admission about having all that new debt and nothing to show for it.
Second, Japan did NOT respond to its recession in a Keyensian way. They raised taxes and cut or leveled spending and that's why it took so long to recovery.
You're lying again. Japan lowered interest rates to zero, while embarking on massive government spending. If Japan "cut or leveled spending," then explain how its national government's debt massively increased during the time period?
The New York Times reported on this last week; the link was posted here. Didn't you get the memo?
If Hardings policy of doing nothing was so great how come we had a Great Depression 8 years later?
This is your third lie — or are you asking this seriously? Are you so completely ignorant of history that you don't realize the economy recovered and had several years of prosperity before the Crash of 1929? Do you know why they're called the "Roaring Twenties"?
You must be one of those "doctors" who flunks out of American medical schools, then goes to the Dominican Republic or other Third World nation for the MD.
vidyohs,
Thank you for taking the time to respond to my comment.
Are you of the opinion then that there is something
in the nature of greed that precludes a greedy person
from also producing wealth?
As I understand it, 'greed' is used as a pejorative term
for the same thing as 'desire', mainly by people who are
of a nihilistic bent, and who are therefore threatened
by the pursuit of values.
timbuk3,
Put out any new material lately? I have two of your CDs and enjoy both.
But, I digress.
Nice try on getting the discussion off focus, but t'ain't gonna work. Let's look at what you said and see if my response was appropriate.
"This cartoon equivocates between two different types of
greed: one is the greed of capitalists who aim to produce
wealth, and the other is the greed of thieves who aim to
steal it by political means.
Posted by: timbuck3 | Feb 15, 2009 5:21:18 PM"
That is a direct quote from above.
Correct me if I am wrong, but I do believe that I read there where you said, ""This cartoon equivocates between two different types of
greed:", is this not true? Why yes of course it is.
So, we agree you were specifically speaking of the cartoon that shows two viewpoints of greed.
Now you connected the top portion with captialism and said, "one is the greed of capitalists who aim to produce
wealth". To which I replied, "Think, my good man, capitalism is simply a tool, greed is an emotion. I may use my rachet wrench in a greedy manner but the greed is mine not that of the wrench."
Let's get honest, your post reflected the terminology that is standard in those who are socialist believers, or unwitting tools of the left.
In that culture, capitalism = equals greed and greed = capitalism, you seem to use the two terms tied together just as muirduck and Karl Marx would.
I point out to you that the equation is false and one of those typical leftist denigrations of things they hate.
But, no, there is nothing in the nature of greed that preculdes a greedy person from producing wealth, happens all the time, greedy people just sometimes never have the opportunity to indulge their greed and in the meantime they work.
But, acquisition of wealth primarily through greed is not production it is theft. What was done by the people who manipulated loans and mortgages was not a creation of wealth but a stealing of wealth. That was a criminal act not a capitalist act.
Are you of the mind that any act of capitalism is an act of theft?
vidyohs,
And I'm a fan of some of your material too, especially:
"Cut 'em if they stand, shoot 'em if they run! Drain the cesspool, fill it in, sod over it, and scorch earth so that nothing ever lives inside the beltway again."
But, I too digress.
Above you said:
"Correct me if I am wrong, but I do believe that I
read there where you said, ""This cartoon equivocates between two different types of greed:", is this not true? Why yes of course it is.
So, we agree you were specifically speaking of the cartoon that shows two viewpoints of greed."
Permit me to correct your interpretation of what I said.
I did not say that the cartoon shows two viewpoints of greed.
It wouldn't constitute an equivocation if the cartoon
was equating two alternate viewpoints of the same thing.
What we have in the cartoon are two materially distinct
activities made to appear the same by defining them
visually by a non-essential. By focusing on the ardent
pursuit of money, what goes into eclipse is the
different means used to obtain money – namely, either
acting to produce money vs. using political means to
steal it.
I'm well aware of the dishonesty of some businessmen
in this crisis, but the driving force can't be explained
by greed.
The necessary and sufficient conditions at the root of
this bust are to be found only in the credit expansion
boom caused by the Federal Reserve.
timbuk3,
Ok, my subtle attempt at humor didn't come through. Your tag timbuk3 reminds me of the band by the same name. Don't know if your musical tastes go to non-mainstream rock but Timbuk3 has a couple CDs out that I liked most of the material on. Look 'em up. I believe that the group put out their material in the 1990s, haven't heard from 'em since.
Now, your correction. My friend, that was a direct quote of your post, how could I be wrong in its wording and interpretation when the words dictate only one interpretation.
However, its no matter because I believe that we pretty much see it the same way. Now if that last sentence is wrong, correct me, flog me, and I'll see if I can survive with a reasonable answer.
timbuk3,
BTW, the "cut 'em if they stand, shoot 'em if they run." I'd love to take credit for that line but it isn't original with me. That is a line out of an old blues tunes from the Big Mama Thornton era. Had more to do with how to treat a cheatin' man than politicians; but, oh yes it fits the bill in the context I used it.
vidyohs,
Thank you for the pointer to the band Timbuk3. I've
enjoyed one of their songs in the past ("The Future's
So Bright, I Gotta Wear Shades") but didn't know the
band until now. Thanks!
Timbuk3,
I like 'em because they are such good musical storytellers.
If you like them you might make a note that the local Pacifica (communist) radio station KPFT 90.1 does live streaming over the internet, and particularly on Saturdays their line-up gives you some great music. 6 to 9 AM is PTs Cajun bandstand, 9 to noon is the Lonestar Jukebox mostly singer songwriter but with a great mix thrown in, noon to 3 is the Spare Change show same kind of mix as the LSJB but can be more lefty political,
then 3 to 6 is Joe's Road house, which is blues/Rythm & Blues,
6 PM to 7 is The Bluegrass Zone.
I get a lot of good leads on new musical material from listening to those. The guys that do the shows have an extremely broad knowledge of music. They may be mostly lefty loonies on politics but they know their stuff musically.
Bon Appetit!
I told you people – muirduck is mentally ill.
vidyohs,
Thank you for the music tips! KPFT's lineup sounds like a natural follow on to the ZZTop and Stevie Ray Vaughan music I've been listening to recently.
If you like musical storytellers and your tastes extend to jazz, you might like Micheal Franks – in particlar the song "B'wana-He No Home" comes to mind as one of his best. His stories are told obliquely and between the lines with considerable ingenuity.
Your vidyohs handle reminds me of a storytelling pop song, the haunting and tightly engineered "Video Killed the Radio Star" by The Buggles.
And lastly, here's a free site that has some great classic rock concert recordings: http://concerts.wolfgangsvault.com
Enjoy!
muirdiot is stupid (or in Perry's words, an embicile). Exhibit 1023549784:
Muirdiot: Makes sense to me. In the top frame all the wealth is accumulating amongst an elite few, actually very unproductive people, in the finance industry. In the bottom frame the money is being recirculated into the economy with more jobs and better wages for the working class.
timbuk3,
Thanks for sharing, I'll look up your Michael Franks and check out the link.
Love music and my collection runs from Yo Yo Ma's Silk Road series through to an occassional hard rock.
One artist that is pretty much an unknown but I recommend highly is Ted Hawkins. He put out two CDs of original stuff and a couple of CDs of cover tunes, but it is his original stuff that is great. His first CD is Happy Hour and the second one I think is the The Next Hundred Years. He died of a heart attack just as he was hitting some exposure.
Any other tips pass 'em on.
The vidyohs relates to my means of making money these days as my twilight settles in upon this old body.