Hayek’s influence

by Russ Roberts on April 29, 2011

in Politics

Some commenter on my rap video with John Papola claims that policy has “followed Hayek since Reagan” meaning that since the 1980s, we’ve been living in Hayekian paradise. dchris1990 responds:

Really, I had no idea we eliminated the Federal Reserve, the income tax, farm subsidies, corporate subsidies and about 5000 government agencies. Government spending is up a lot since Reagan and the number of regulations and regulatory institutions are up too. Yes, those regulators we’re taken over by corporate interests… which is, of course, exactly what the free market supporter expects to happen, which is exactly why we oppose them.

Be Sociable, Share!

Comments

comments

149 comments    Share Share    Print    Email

{ 149 comments }

Jake S. April 29, 2011 at 10:07 am

Nice! Great work you two are doing… :-)

Greg Ransom April 29, 2011 at 10:08 am

Hayek was even a critic of tax cuts unsupported by spending cuts.

In print he reported a conversation almost certainly with Milton Friedman laying out Friedman’s “Starve the Beast” theory — the idea that large tax cuts would lead to large gov. & spending cuts — which Hayek pointed out was not proving itself in the data.

vikingvista April 30, 2011 at 10:38 am

True. Voters have a demand curve for deficit spending.

John V April 29, 2011 at 10:13 am

My guess was that this was why you showed Hayek losing even after winning.

It’s a very convenient fiction to pretend we live in Hayek’s world based a smattering of poorly thought out anecdotes.

What’s so Hayekian about the world we live in? How is his philosophy guiding policy? It’s truly astounding. The Anti-Hayekian world view is so ubiquitous that many don’t even see it….kinda like a fish in water. But OH NO! Someone sees an air bubble somewhere and it’s Hayek’s world. Yeah. Real cute.

Daniel Kuehn April 29, 2011 at 10:22 am

“Anti-Hayekian” is an interesting way to put it.

I don’t think there are many people out there with an “Anti-Hayekian” worldview… maybe a few… but mostly just people who differe with Hayek on some things.

These sorts of “we live in X’s world” statements are always pretty dumb no matter who they’re directed at. We live in a little bit of everybody’s world and nobody’s ever completely happy. That’s the world we live in, and that’s life.

Both parties are calling for deficit reduction of some sort or another and no one is running on the idea of increasing the deficit in the midst of a major downturn. And yet their are people out there who will actually tell you we live in a Keynesian world and we have Keynesian politicians. It’s nuts. It’s crazy.

People see that the world doesn’t perfectly mirror what they want and so make audacious claims that it’s what the other guy wants. That’s how you get “Hoover was a liquidationist”, “The last twenty years were Hayekian”, and “politicians are Keynesians”. It’s all wrong.

John V April 29, 2011 at 10:39 am

“I don’t think there are many people out there with an “Anti-Hayekian” worldview… maybe a few… but mostly just people who differe with Hayek on some things.

These sorts of “we live in X’s world” statements are always pretty dumb no matter who they’re directed at. We live in a little bit of everybody’s world and nobody’s ever completely happy. That’s the world we live in, and that’s life.”

Fair enough. However, if you just take the core foundational concepts that form the root for most of what he is known for based on the pretense of knowledge, knowledge in society, the fatal conceit and all that, it’s very hard to argue that that way of thinking is very influential in public policy.

“Both parties are calling for deficit reduction of some sort or another and no one is running on the idea of increasing the deficit in the midst of a major downturn. And yet their are people out there who will actually tell you we live in a Keynesian world and we have Keynesian politicians. It’s nuts. It’s crazy.”

Yes, but the enormous increase in deficit spending since the downturn IS, in no small part, due to a general and ubiquitous Keynesian worldview…as is the incredible resistance to really cutting in anything during a downturn. The talk about cutting spending was smoke and mirrors that barley changed anything. They bit off crumbs at the margins….barely.

Daniel Kuehn April 29, 2011 at 10:54 am

Biting off crumbs at the margin is… ummm… not very Keynesian.

This is my point. Clearly they’re not being Hayekian. It doesn’t follow at all that they’re being Keynesian.

And on these question of pretense of knowledge and “Hayekian micro”, etc. – you have lots of Keynesians agreeing with Hayek. I certainly do. Karl Smith pointed this out as well.

It’s all a lot messier than people want to make it.

John V April 29, 2011 at 11:11 am

Let’s not start this cuteness, DK. Don’t be fair and generous in your reading only when it suits you. You can very easily see what I mean. Look at all the spending increases during the downturn. And the reason those massive increases in spending over the past years are not coming off is, in no small part, due to the Keynesian dominated worldview that government spending boosts demand and that you can’t slash spending during a downturn. And we haven’t really cut spending and that’s my point. The so-called cuts are exaggerated and marginal at best and have little to do with spending that supposedly creates demand.

Don’t look for air bubbles in the ocean as I described in the first comment above.

Daniel Kuehn April 29, 2011 at 11:23 am

If you’re just going to do this thing again where you call me ungenerous instead of addressing my point, forget it. I and many others are not happy with fiscal policy and if you think that’s a rhetorical dodge, that’s your problem.

John V April 29, 2011 at 11:40 am

What? I did address your point. I address them every time…and in a straightforward manner that addresses both what you say and what you mean without ever looking for creases in the words to be coy.

So, in light of what I said in my posts in this thread:

“Biting off crumbs at the margin is… ummm… not very Keynesian.”

…isn’t really fair or honest. The enormous increases in spending as a result of the downturn are pare for the course in what I am describing. And the fact that spending has not even come back down to even our stratosphere is, in part, due to the this insistence that spending cannot be cut during a downturn. IOW, the Keynesian view on spending is so ubiquitous that spending at insanely high levels cannot be seriously cut. The pressure to maintain spending to stimulate the economy is too strong for real budget-cutting. And for all intents and purposes, yes, it was not cut. That charade of fiscal restraint a few weeks ago with the threats of shut-down was just that: a charade that claimed to be a lot more than it was. All sizzle and no steak.

So, saying that biting crumbs off the margins isn’t really keynesian is quite coy when the broader context is considered. The incredible about of noise and effort that produced those cuts in a few crumbs is a testament to how strong the basic Keynesian view on government spending really is. Without a GOP-dominated house intent on scoring points with a show for fiscal conservatism, God knows what kind of budget we would have gotten. Scary.

John V April 29, 2011 at 11:46 am

DK, in summary to my previous post, the minimal cuts in a few crumbs was the result of a strong desire to cut spending on the part of the GOP some spending at all costs vs. an overwhelming consensus by the Dems to not only maintain…but increase spending in spite of ballooning deficits and dizzyingly high spending levels So when these two forces clashes, it was basically stalemate. IOW, the strong Keynesian mindset prevented large cuts and settled for a cutting a few crumbs.

muirgeo April 29, 2011 at 4:12 pm

“Yes, but the enormous increase in deficit spending since the downturn IS, in no small part, due to a general and ubiquitous Keynesian worldview…”

There has been NO ENOURMOUS increase in deficit spending. Your world view and the sources you use have convinced you of that but have you ever really looked at the numbers?

The biggest reason for the huge deficit is an aging population and a poor economy and the Bush tax cuts…
Krugman takes on Taylor and wins the day on just that subject.

http://krugman.blogs.nytimes.com/2011/04/27/2021-and-all-that/

John V April 29, 2011 at 5:02 pm

Yeah. Do you ever wonder why Krugman puts it that way? One percent of GDP is A LOT of money. But he puts it in a way so as to make it seem like mere percentage points and hide how much we are talking about. Where are the dollars. The deficit went from huge before Obama to more huge after.

When something like this involving data isn’t presented in a straightforward, it’s to obfuscate. And let’s not forget Obamacare is figured into that.

Either way, the deficit is way up no mater how you sugar coat it.

kyle8 April 29, 2011 at 5:38 pm

Now you are just spouting off down right easily provable lies.

I suppose the several trillion dollars increases since 2008 over what was already a bloated budget is not “huge”enough for you.

You seem to be getting ever more stupid with your comments. It’s not pretty.

muirgeo April 29, 2011 at 9:19 pm

kyle8 April 29, 2011 at 5:38 pm
Now you are just spouting off down right easily provable lies.

No Kyle YOU WILL NOT BE ABLE to prove it a lie. I’ll do like Krugman did and simply ask you to name the most expensive new program that Obama has passed and how much does it add to the yearly deficit?

BRING IT!

Captain Profit April 30, 2011 at 8:58 am
Marcus April 29, 2011 at 11:06 am

“Both parties are calling for deficit reduction of some sort or another and no one is running on the idea of increasing the deficit in the midst of a major downturn. And yet their are people out there who will actually tell you we live in a Keynesian world and we have Keynesian politicians. It’s nuts. It’s crazy.”

There you go judging politicians, and by extension their policies, by their stated intentions rather than results.

What will actually happen is that the deficit will not be reduced and the government will continue to consume more and more of the economy.

Daniel Kuehn April 29, 2011 at 11:08 am

No I don’t do that, Marcus. I’m displeased with their results and their words. Neither are Hayekian. It does not follow that they are Keynesian.

Daniel Kuehn April 29, 2011 at 11:09 am

I was trying to point out that lots of people do this all the time. When things don’t go how we want we have a tendency to think things are going how “the other guy” wants. It’s nonsense.

After Russ’s post I didn’t figure that would be controversial. I guess the point didn’t sink in.

Marcus April 29, 2011 at 11:19 am

That’s not controversial. It’s also not what you wrote.

Sam Grove April 29, 2011 at 4:33 pm

When things don’t go how we want we have a tendency to think things are going how “the other guy” wants. It’s nonsense.

I don’t think things are how most people want it, but I do think how things are is a result of people thinking their intentions suffice in creating desired results.

It is a common habit of the left to suppose that we haven’t been able to reach something approaching “progressive” nirvana because others criticize the progressive agenda.
If we would all just fall into line, then everything would work out so well.

We many of us realize that incentives in a system matter much more than intention driven policy.

Sam Grove April 29, 2011 at 4:33 pm

Well, many of us…

carlsoane April 29, 2011 at 11:54 am

I think you get “Hoover was a liquidationist” because the Democrat narrative for the Great Depression has been accepted. And, you get “politicians are Keynesians” because, regardless of what they say, most of our politicians vote as though they believe in multipliers and deficit spending.

Daniel Kuehn April 29, 2011 at 1:11 pm

You and I must be reading different news sources.

carlsoane April 29, 2011 at 1:44 pm

Or merely drawing different conclusions.

Martin Brock April 29, 2011 at 11:56 am

Both parties are calling for deficit reduction …

The parties are debating the difference between astronomical deficits and merely gargantuan deficits. They’ve already created incredible deficits in the midst of a major downturn. Now, you tell me that only larger deficits qualify as a Keynesian policy. By this reckoning, no policy is ever Keynesian enough, and the video makes precisely this point, of course. Keynesian trees obscure your view of the Keynesian forest all around you.

People see that the world doesn’t perfectly mirror what they want and so make audacious claims that it’s what the other guy wants.

No. I see deficits exceeding $1.5 trillion with no world war and no great depression and nothing similar on the horizon, until the statesmen create something. I see these deficits preceding an unprecedented demographic transition placing unprecedented pressure on state spending even without these deficits, and the deficits certainly are Keynesian. They are avowedly, explicitly, deliberately counter-cyclical, according to their champions, from John McCain to Paul Krugman. These claims are not remotely audacious.

John V April 29, 2011 at 12:35 pm

Very, very well said. Perhaps of clearer way of stating was trying to above.

Especially here:

“They’ve already created incredible deficits in the midst of a major downturn. Now, you tell me that only larger deficits qualify as a Keynesian policy. By this reckoning, no policy is ever Keynesian enough, and the video makes precisely this point, of course. Keynesian trees obscure your view of the Keynesian forest all around you.”

Daniel Kuehn April 29, 2011 at 1:08 pm

Most of the federal stimulus just filled the hole the states were digging. There was much less total government spending than the headlines suggested (and even looking just at the federal spending it was about half of what non-politically-connected economists were calling for) I understand you’re unhappy with even that. Your distaste does not make something Keynesian any more than dchris1990′s distaste makes it Hayekian.

re: “By this reckoning, no policy is ever Keynesian enough”

Give me a break. Most Keynesians not connected with politicians (ie – most Keynesians who did not have a politician telling them that their numbers were too big) zeroed in on roughly the same figure. THAT would have been “Keynesian enough” and would have helped tremendously. No silver bullet, but a big help.

I could say the same for you. When is any policy ever enough to be certifiably Hayekian? You’ve gotta dismantle huge swaths of the government and close down the central bank. My “enough Keynesian” is considerably less radical and more plausible than your “enough Hayekian”.

Sam Grove April 29, 2011 at 1:31 pm

For a start, how about when government spending actually declines?

yet another Dave April 29, 2011 at 3:27 pm

Most of the federal stimulus just filled the hole the states were digging.

Do you think federal government “filling in” was motivated by Keynesianish thinking that government spending is somehow beneficial, so a reduction in government spending would be harmful? If not, what?

Martin Brock April 29, 2011 at 4:20 pm

Daniel,

Most of the federal stimulus just filled the hole the states were digging.

Of course. Statesmen look out for other statesmen. It’s always the same.

There was much less total government spending than the headlines suggested …

As Russ notes in his video, enough government spending can always employ resources and create “GDP” as long as you don’t care about satisfying consumer demand. We can always busy ourselves following five year plans and stand in line for rations. History is full of it.

… (and even looking just at the federal spending it was about half of what non-politically-connected economists were calling for) …

So the $1.8 trillion deficit in ’09 wasn’t enough? We really needed $4 trillion? If my prescriptions are impossible enough to implement, I can never be wrong.

I understand you’re unhappy with even that. Your distaste does not make something Keynesian any more than dchris1990′s distaste makes it Hayekian.

People quoting Keynes and Keynesian formulations while advocating “stimulus spending” make themselves Keynesians. I didn’t put the words in anyone’s mouth.

Give me a break. Most Keynesians not connected with politicians …

This statement is absurd. Anyone advocating trillions of dollars of additional state spending annually is connected with politicians. They’re advocating trillions of dollars of additional spending by politicians.

… (ie – most Keynesians who did not have a politician telling them that their numbers were too big) …

Someone advocating state spending is a politician prescribing a political solution himself, so this statement is also absurd. You might say, “Keynesians who did not have other politicians telling them that their numbers were too big.”

… zeroed in on roughly the same figure. THAT would have been “Keynesian enough” and would have helped tremendously. No silver bullet, but a big help.

Help what? You can spend a trillion dollars and “help” something, and I don’t even need to know how you’ll spend it? That’s some trick.

Hayekian enough? Offer small (in Federal government terms) but substantial loans to many entrepreneurs willing to spend a few years trying to start a business employing mostly idle resources. Allow the entrepreneurs to incorporate. Don’t simply hand cash to bureaucrats at every level of government to continue spending programs already bleeding the productive economy.

I could say the same for you.

That’s a laugh. You hardly know me.

When is any policy ever enough to be certifiably Hayekian?

The $1.9 trillion addition to the national debt in 2009 alone certainly doesn’t qualify.

You’ve gotta dismantle huge swaths of the government and close down the central bank.

No. I don’t. A few thousand, maybe tens of thousands, of productive people could congregate somewhere, like New Hampshire or the Lakotah nation, and drop out of the Federal system. No sudden realignment of the political system across central North America is necessary. I don’t expect such a thing without bloody revolutions on the scale of the collapse of the Soviet Union, because central authorities would shoot people left, right and center to avoid it.

My “enough Keynesian” is considerably less radical and more plausible than your “enough Hayekian”.

Nonsense. You don’t even know what my “enough Hayekian” is. You’re bickering with your own straw man here. I’m discussing op eds in the New York Times, and the widely reported statements of politicians actually making policy today.

Marcus April 29, 2011 at 9:07 pm

Martin Brock wrote, “This statement is absurd. Anyone advocating trillions of dollars of additional state spending annually is connected with politicians. They’re advocating trillions of dollars of additional spending by politicians.”

That’s a very good catch that I looked right past when I read his post.

muirgeo April 29, 2011 at 4:14 pm

Martin is confusing deficits with spending.

Martin Brock April 29, 2011 at 4:21 pm

A deficit is spending exceeding revenue by definition. No confusion is required.

Sam Grove April 29, 2011 at 4:37 pm

Martin is confusing muirgeo.

kyle8 April 29, 2011 at 5:39 pm

life is confusing muirgeo

muirgeo April 29, 2011 at 9:38 pm

Again the deficits have increased MOSTLY for reasons other then spending.

You won’t be able to name one program that Obama passed that adds greatly to long term spending.

muirgeo April 29, 2011 at 9:48 pm

Martin Brock April 29, 2011 at 4:21 pm
A deficit is spending exceeding revenue by definition. No confusion is required.

The point is a keyensian response means increased spending… confusing increased deficits as a keyensian response is incorrect when MOST of the increase in deficits is occurring due to decreased revenues.

If revenues were increasing at a constant rate and we were now spending enough to create a 1 trillion dollar deficit THAT would be keynesian… and THAT would have this economy growing. But we choose NOT to go that route following the neoliberal recommendations for austerity… and austere it will be.

Methinks1776 April 30, 2011 at 12:39 am

Muirdiot, we already know you’re a complete effing idiot. You needn’t feel compelled to provide more proof.

muirgeo April 30, 2011 at 3:23 am

Methinks… child…did you have another bad day?

Martin Brock April 30, 2011 at 4:25 am

Again the deficits have increased MOSTLY for reasons other then spending.

This statement is nonsense. You could say that deficits increased mostly to sustain established spending programs, as opposed to creating “new” spending programs. So what? State spending is state spending. A small committee of ill-informed authorities dictate it to a hierarchical bureaucracy. That’s what I need to know about it, not who conceived it or when they conceived it.

ARRA is clearly a Keynesian spending program, but it doesn’t exhaust the Keynesian spending logic.

You won’t be able to name one program that Obama passed that adds greatly to long term spending.

This fact is irrelevant. Keynesian spending programs are not long-term anyway, and continuing an established spending program despite falling revenue, as a counter-cyclical economic policy, is still a Keynesian response. That your heroic leader in the driver’s seat only continues to follow his predecessor’s program without reengineering it much is beside the point.

I don’t give a flip about Obama. I’m not playing your simple-minded, dualistic game of Good Guys vs. Bad Guys. Obama and Bush are two sides of the same coin.

Martin Brock April 30, 2011 at 4:43 am

The point is a keyensian response means increased spending…

No. A Keynesian response means counter-cyclical spending. The nominal volume of spending is irrelevant. Even if nominal state spending falls, the response is still Keynesian if state revenue is falling faster as a consequence of economic contraction.

… confusing increased deficits as a keyensian response is incorrect when MOST of the increase in deficits is occurring due to decreased revenues.

No. Maintaining the spending level regardless of falling revenue, to avoid a downward spiral in demand, is precisely a Keynesian response. Sustaining spending is the whole point of a counter-cyclical program. Increased spending as revenue falls is an even stronger Keynesian response. This policy further substitutes the busybodiness of a few men with guns for the business of countless common people.

If all the farmers drop dead tomorrow, we can’t feed everyone by hiring more accountants in the Department of Agriculture.

If revenues were increasing at a constant rate and we were now spending enough to create a 1 trillion dollar deficit THAT would be keynesian…

This statement is nonsense. If revenue was constant or growing, at given tax rates, we wouldn’t be in a recession.

… and THAT would have this economy growing.

No. Simply increasing state spending does not grow anything worth growing.

But we choose NOT to go that route following the neoliberal recommendations for austerity… and austere it will be.

Austerity for the lords of forcible propriety, including Obama’s sponsors on Wall Street, is the prescription I favor.

Ken April 30, 2011 at 5:55 pm

muirgeo,

“Again the deficits have increased MOSTLY for reasons other then spending.”

A 30% increase in federal spending isn’t the main contributor to the deficit? You really are just dumb, aren’t you?

Regards,
Ken

yet another Dave April 29, 2011 at 2:41 pm

And yet their are people out there who will actually tell you we live in a Keynesian world and we have Keynesian politicians. It’s nuts. It’s crazy.

I agree with you here. I suspect very few politicians are truly Keynesian – rather most love Keynesianism because it gives them an excuse to meddle in things economic. Then, as night follows day, politicians do what politicians do and all manner of horrible results inevitibly follow.

So, even if the theory of Keynesianism is 100% correct (a patently ludicrous assumption), the reality of politics makes it an epic fail. If that’s not enough reason to abandon Keynesianism what would it take?

Daniel Kuehn April 29, 2011 at 2:45 pm

re: “most love Keynesianism because it gives them an excuse to meddle in things economic”

What do you mean by this? They’re clearly not jumping at the opportunity to tell their constituents they like deficit spending. That doesn’t play well. But that’s the only “meddling” Keynesians advocate – and yet that’s the very sort of “meddling” that kills candidacies.

All the other “meddling” that politicians like to do for votes – throwing up trade barriers, subsidizing farmers, bolstering unions etc., etc. – all of this is not a part of any sort of Keynesianism.

So what are you talking about exactly?

yet another Dave April 29, 2011 at 3:21 pm

Maybe you missed the “politicians do what politicians do” part? The specific meddling Keynesians’ advocate is irrelevant to my point. I agree with you that few politicians are Keynesians – I’m talking about politicians and the reality of politics. Politicians love Keynesianism because it justifies economic intervention. It does not follow that the meddling they do using this excuse will necessarily align with the recommendations of Keynesians – in fact, it’s quite unlikely that it will. That’s the point!

WRT your list of examples, where exactly did I say the Keynesianism-as-excuse meddling was the only meddling politicians do?

Daniel Kuehn April 29, 2011 at 3:31 pm

I agree politicians do what politicians do.

I was a little curious about this: “Keynesianism because it gives them an excuse to meddle in things economic”

It seems odd to cite Keynesianism as an excuse when it provides no such excuse. The only meddling that Keynesianism excuses is precisely the meddling that politicians have been weak and tepid about and it’s precisely the meddling that they disavow in stump speeches. So I’m not sure how you think “Keynesianism provides an excuse”.

Daniel Kuehn April 29, 2011 at 3:32 pm

re: “WRT your list of examples, where exactly did I say the Keynesianism-as-excuse meddling was the only meddling politicians do?”

You didn’t, but I’m trying to understand what you’re saying. You also didn’t say what meddling Keynesianism excuses that they’ve really done to town with.

yet another Dave April 29, 2011 at 3:37 pm

@dk
Politicians love Keynesianism because it justifies economic intervention. It does not follow that the meddling they do using this excuse will necessarily align with the recommendations of Keynesians – in fact, it’s quite unlikely that it will. That’s the point!

Daniel Kuehn April 29, 2011 at 3:40 pm

yet another dave -

Yes I read that.

Are you saying that if you advocate any intervention you provide an excuse for every intervention? You can’t be serious. Anyone short of anarchists advocate some form of intervention, do they not? By your logic Hayek would be as good as Keynes for that purpose.

Daniel Kuehn April 29, 2011 at 3:41 pm

Let me rephrase that – you might be serious. I can’t take that logic seriously.

Daniel Kuehn April 29, 2011 at 3:45 pm

If anything Hayek is better for that purpose – he doesn’t require the akward “I want to increase the deficit” in the stump speech but he still advocates some intervention (and by your logic that means he offers an excuse for meddling more generally).

Daniel Kuehn April 29, 2011 at 3:46 pm

Notice I don’t actually use that argument against Hayek because I think it’s a bad argument.

It’s obnoxious how often the same bad argument gets used about Keynes and politicians.

yet another Dave April 29, 2011 at 4:11 pm

Are you saying that if you advocate any intervention you provide an excuse for every intervention?

No. As you correctly point out, that would be a bad argument. (I hope me agreeing with you twice on the same thread doesn’t freak you out too much :o ) My apologies for any confusion there – I’m not sure how what I wrote gave the impression that was my argument.

Keynsianism argues specifically for government spending, does it not? Politicians love that, because they love to spend government money – it helps them politically. Politicians, being not truly Keynesians, couldn’t care less that true Keynesians only advocate certain spending under certain circumstances. They have an excuse to spend, so they run with it.

IOW, your sticking point is irrelevant to the reality of the situation because of the politics. No doubt politicians rely heavily on the ignorance of voters, so the finer poiints of what spending / meddling would be truly Keynsian just don’t matter. The politicians spout Keynsianesque rhetoric to “justify” the spending they do.

Daniel Kuehn April 29, 2011 at 4:19 pm

OK I suppose I just have a different sense of what politicians are in reality than you. I think:

1. Politicians hate to say they will spend money. They love to say they won’t spend money. Keynes is not ideal for this. Of course, we all know politicians don’t do what they say. Spending on certain things is convenient for them, but

2. Keynes is inconvenient (or at least a non sequitor) for that too. I know you don’t think Keynes advocates agricultural subsidies. My point is that faking Keynesianism is no help in advocating agricultural subsidies. You don’t need to convince the Iowa farmer to take money from the Treasury. They are convinced! The politician’s interest is in (a.) funnelling money to farmers and other interests that can help them politically, and (b.) hiding the fact that they’re funnelling money from voters at large. Keynes is unnecessary and irrelevant for (a.) and he is counter-productive for (b.).

3. Finally, the one sort of spending where Keynes is helpful is spending that Congress has (thankfully) done some of – but not all that much. In this sense they have accepted the basics of Keynesianism during their hearings, etc. This is good. This is good economics and it was good to see they were talking like that at least to a limited extent. But (a.) it was way, way less than any actual Keynesian would advocate it, and (b.) they cut it off and started talking about deficits, and (c.) they’re taking an anti-Keynesian stance before voters. Even Obama and many Congressional liberals are doing this!

Now – maybe you don’t accept these three points about politicians. But that’s how I see them and that’s why I think it’s absurd for anyone to advance the case that Keynesianism is good for politicians or that politicians are predominantly Keynesians. It should be embarassing that any public choice theorist advances these sorts of arguments.

There was a brief, tepid, resistant embrace of Keynsianism in early 2009 that was very, very quickly disavowed. That’s absolutely all I’ll grant you. On the whole, Keynes is very, very bad for politics and politicians.

Martin Brock April 29, 2011 at 4:29 pm

Politicians hate to say they will spend money. They love to say they won’t spend money.

Most of all, politicians love spending money while saying the won’t spend money.

Politicians lie for a living. So what? People (including countless “scientists”) stand in line to tell them what they want to hear. So what?

Daniel Kuehn April 29, 2011 at 4:30 pm

Martin – you might want to read on to my very next point.

yet another Dave April 29, 2011 at 5:24 pm

You’re way too focused on what Keynesians actually advocate – that’s why you’re missing my point. What Keynesians actually advocate has nothing to do with my point – nothing at all. All of your replies seem to be ignoring this key detail.

Again, I agree with you that most politicians are not Keynesians – but they are opportunists (among other things) and feed on ignorance and misconceptions. Many (most?) voters have no idea what is or isn’t truly Keynesian and these opportunist politicians benefit from this ignorance.

Keynesianism legitimizes government spending based intervention, at least under certain circumstances. Politicians ignore the inconvenient (for them) limitations and use this legitimization of government spending as cover to do all manner of things that may bear no resemblance to truly Keynesian policy. The fact that many of them are not what true Keynesians advocate is perfectly consistent with my point, so please stop thinking pointing that out addresses what I’m saying in any way – the politicians don’t care if the spending is really Keynesian or not.

If government spending on economic intervention was seen (correctly IMO) as inappropriate, politicians would not have the convenient cover Keynesianism provides to get away with it. Further, once a spending program is implemented it quickly becomes institutionalized because of the incentives. Without the cover of Keynesianism, politicians would lose credibility if they claimed stopping the spending would harm the economy as a whole rather than simply defund a group of parasites. (Again – I’m not talking about pure Keynesian theory here. Perhaps the term vulgar Keynesianism is appropriate?)

By point:
1) A self-refuting point, so why bring it up?
2) See above – it matters not one whit if Keynes is inconvenient for this since plenty of voters don’t know that. I’m talking about political reality, not Keynesian theory. (I also disagree with Keynesian theory, but that is not the point I’m making here.)
3) It is impossible to overestimate how much I disagree with your first 4 sentences here, but that is a separate argument. My point here is, even if implementing pure Keynesian theory would be the be-all/end-all bringer-of-absolute-nirvana to the entire world for all time, the reality of politics and politicians makes that impossible.

It is possible that if large portions of the population understood Keynesianism as you describe it here the political cover Keynesianism provides would not work. Only then could any of your counter arguments be applicable.

Matt M April 29, 2011 at 6:00 pm

I think the difference would be that Keynesian economists actively support government intervention as a necessary catalyst of growth and stability. Thus Making it much easier to justify the “meddling”. Hayekians, on the other hand, generally see intervention as a last resort only when benefit can be proven and other market options have been exaughsted . I think Milton Freidman went over this in the first chapter of Capitalism and Freedom. But sorry to interrupt.

Matt M April 29, 2011 at 6:01 pm

I started typing and by the time I was done there were more posts I haven’t read so maybe that is out of context now.

carlsoane April 29, 2011 at 6:26 pm

Can you clarify what sort of deficit spending Keynesians advocate? My understanding is it consists of public infrastructure, healthcare, education, unemployment benefits and food stamps.

Martin Brock April 30, 2011 at 4:53 am

Martin – you might want to read on to my very next point.

I read it. It’s an incredibly vague assertion that a lot more deficit spending by statesmen would do someone other than the statesmen and their creditors any good.

Dan April 29, 2011 at 9:52 pm

Obamacare……… I took the bait…… And aside from the rationing panel, it will create long term deficits.

hayseed April 29, 2011 at 9:58 pm

Hayek’s world is a world where the limits of human reason are properly understood. That is not the world we live in. Most government policies do not reflect this proper understanding. Those who fall for the “Fatal Conceit” of over estimating the limits of human reason are anti-hayekian.

muirgeo April 29, 2011 at 10:30 am

We’ve simply moved in a more free market direction. Taxes are lower since Reagan, Wall Street is deregulated, many other industries have been deregulated, Trade is more free, the party libertarians tend to support (republicans) has held decisively more power in policy and judicial decision. And the results are not good.

If the claim is you need to have a fully “Hayekian Milieu ” to see its full fruition then one must admit that your position is pure speculation because no such milieu has ever existed.

But the bigger question is to ask how likely any modern country would ever adopt all the principles of Hayek. It’s so remote and that is my concern. The libertarian position becomes irrelevant in the real world except as a tool for the wealthy and well connected over the rest of society and even over people lead democracy. It becomes the talk of global corporate world simply as a tool to garner more support and more control and more power.

It would be nice if libertarians would make suggestions that might actually be positive and possible within the real world of policy and economics.

ej April 29, 2011 at 10:35 am

“Wall Street is deregulated”

I love how this statement is alwasy thrown around like its fact. Please tell me what was degregulated in finance over the past 30 years, and why said degregulation is relevant to our current condition?

P.S. “de”regulation means the removal of regulation – not the absence of it.

Mesa Econoguy April 29, 2011 at 12:29 pm

Don’t bother – I’ve tried umpteen times to tell him, and he doesn’t get it, or is too stupid to get it, or has a reflexive response to ignore reality.

Sam Grove April 29, 2011 at 1:34 pm

He suffers from doctrinal dishonesty.

Methinks1776 April 29, 2011 at 9:32 pm

He suffers from extreme stupidity. Let’s not beat around the bush.

muirgeo April 29, 2011 at 1:59 pm

Deregulated versus poorly regulated.
Our economy has been totally financialized with the sector going from 15% of all corporate profits to 40% of all profits. (Ever since Reagan). They add nothing of value compared to what they extract.

Bottom line is regulation has been molded to their needs. That will ALWAYS be the case when you try to deregulate the industry.

There are so many smply regulations that would solve so many of the problems but they will never happen as long as they have the might of lobbyist and money to do their talking.

And note most libertarians I see send the message that they support unlimited lobbying, they support corporate personhood and they support the ridiculous claim that money is the same as free speech. A libertarian based society will ALWAYS result in a Kleptocracy with massive amounts of power and welath and control and priveledge going to the few over the many and ultimately is far lesss economically effecient. I’ve never had some one explain a logical scenario of how it would not always devolve into some for of Kleptocracy.

ej April 29, 2011 at 2:49 pm

“A libertarian based society will ALWAYS result in a Kleptocracy with massive amounts of power and welath and control and priveledge going to the few over the many ”

Once again.. this is stated as if its fact. What is the mechanism in which occurs? What power does a corporation have that is not given to it by government’s hand? And why are you worried about kleptcracy? You explicity advocate that. Its more like you only want certain groups to take, not others.

Answer this for me. Currently which industries are the most consolidated, have the most lobbying power, and have the highest amount of super high earners? — ones that are heavily regulated (banks, pharma, healthcare, etc) or ones that are not (retail, clothing, consumer goods, etc)?

muirgeo April 29, 2011 at 4:27 pm

“Once again.. this is stated as if its fact. What is the mechanism in which occurs? What power does a corporation have that is not given to it by government’s hand?”

How does it not happen? Wealth is accumulated in a libertarian free market system.. how does the system prevent that wealth from rent seeking and taking over the government?

There are just too many complexities that a libertarian society can not address. Who gets first crack at resources… I bet it’s the guys that already have money. Heck how do we set up the money system

See from my perspective things already work pretty well.. sure there’s buracracy and waste but that is inevitable. A few very basic simple rules could make things run much smoother. The problem is those rules need to be consistent across states and countries. It’s never easy to desing society in our mind as well as in reality but libertarianism makes dsuch an oversimplification of the task that it really is almost immature to consider it as a serious proposition for anything but theoretical thinking. On a smaller scale the idea of adrssing issues like waste, liberty and unintended consequences can be greatly contributed to by the libertarian philosophers among us…. but alas all they offer is ALL or NONE advice.

Sam Grove April 29, 2011 at 4:41 pm

There are just too many complexities that a libertarian society can not address. Who gets first crack at resources… I bet it’s the guys that already have money. Heck how do we set up the money system

Evidence of cluelessness.

Ken April 29, 2011 at 7:31 pm

muirgeo,

“Wealth is accumulated in a libertarian free market system”

So a libertarian system allows for accumulated wealth, like roads, hospitals, enough knowledge to manufacture transistors to make computers… Why is this bad?

“how does the system prevent that wealth from rent seeking and taking over the government?”

Do you understand what rent seeking is? It is manipulating the political environment to capture privileges and money from others, i.e., using political institutions to take from others and give to themselves, like what GM did. In a libertarian government, the government only has the power to do certain functions, one of which is not to redistribute wealth or enforce laws unevenly due to political consideration. In other words, your statement makes no sense.

“There are just too many complexities that a libertarian society can not address.”

There are too many complexities for ALL governments to deal with in any society. This is the point. Government provides some functions, such as instituting property rights and providing neutral arbitration in the form of courts. However, governments don’t do these modest tasks very well. The rest should be left to the individual. The complexities of my life are not the governments business: what doctor I go to, what company to work for, which type of work to do, what insurance to buy, where to live, and on and on. I, as all other individuals, do a better job of working out those complexities for myself rather than let some bureaucrat who isn’t affected on way or another by the decisions he would like to make for my life.

“Who gets first crack at resources… ”

Is this a trick question? In my mind I have enormous resources to build machines and networks and design programs to run on them. Who do you think gets first crack at using them? I do, dickhead. As to natural resources, who ever owns the property currently determines who can use what on that property. For example, if I found a huge gold deposit in my backyard, it is mine. This isn’t really rocket science!

“A few very basic simple rules could make things run much smoother.”

What do you think a libertarian society is, but a set of basic rules that people know and can follow. Instead we have a byzantine 76000 page tax code. Questions about the tax code do not have uniform answers from even the experts at the IRS!

“It’s never easy to desing society”

This is your problem, dumbass, you want to design society. That’s like saying you want to herd cats. How would you have a government bureaucrat, who most assuredly would have commissioned a steering committee designed what is now called the 9th Symphony that was created by an INDIVIDUAL (I know that’s a scary word for you) named Beethoven.

Is it really so hard to understand that complexity arises spontaneously WITHOUT central planning? Stop trying to make decisions for MY life. I don’t want to “design” society. I want to make government simpler to maximize liberty and let the billions of human interactions that occur daily shape society around me.

On a smaller scale the idea of addressing issues like waste, liberty and unintended consequences can be greatly contributed to by the libertarian philosophers among us”

This is absurdly false.

Regards,
Ken

brotio May 1, 2011 at 12:42 pm

ej,

Note that the Muirtard did not answer your direct question – again.

Rugby1 April 29, 2011 at 2:50 pm

How do you not see the obvious flaw in your argument.

You said;

“Bottom line is regulation has been molded to their needs. That will ALWAYS be the case when you try to deregulate the industry.”

Followed by:

“There are so many smply regulations that would solve so many of the problems but they will never happen as long as they have the might of lobbyist and money to do their talking.”

How is it even possible that you reach your conclusion? How can you say regulations would solve problems when you admit that the making of regulations are often left to lobbyists. You lack the basic ability to create argument predicated on evidence.

I am actually stunned.

Look I agree that most regulation is gamed by K street lobbyists who are paid by corporations. So how could you possibly ask for more of it? In one sentence you accurately state one of the main fallacies of government regulation and then you draw the exact opposite conclusion.

By utilizing your own argument could you not see that since regulation often fails, regulators are often captured, and smaller businesses struggle due to the expertise required to navigate the morass of said regulation….. Maybe less is better? Maybe a free market where losses are not socialized would provide the best protection to the consumer? How do you not see that?

Sam Grove April 29, 2011 at 3:11 pm

How do you not see that?

He refuses to see that.

PrometheeFeu April 29, 2011 at 4:17 pm

The issue he seems to have is very similar to that which many liberals have. Both liberals and libertarians see regulatory capture as a bad thing. The difference is what we think should be held constant:

Liberal see regulators being corrupt and they say: “We should have regulators that are not corrupt.”

Libertarians see regulators being corrupt and they say: “Given the resources of those they regulate it is obvious that regulators will always be corrupt. The only way ti get rid of the corruption is to get rid of the regulators.”

That is IMHO the primary difference between liberal and libertarian attitudes towards regulation. As far as I am concerned, the liberal attitude is nothing more than unwarranted optimism.

muirgeo April 29, 2011 at 4:33 pm

“How is it even possible that you reach your conclusion? How can you say regulations would solve problems when you admit that the making of regulations are often left to lobbyists.”

Its very simple . You admit tht corporations are not people, you admit that money is not free speech, you admit that lobbying as we do it is legalized bribery of public officials.

You make the rules to serve peoples needs and not the needs of corporations. That’s NOT an anti-business stance… that’s a pro small business stance.

Glass Steagal was a great exaple of somethiong that worked. A small tax on financal transactions would solve tons of problems and raise revenue for better enforcement.

We need sepration of state and money just like seperation of church and money. It’s very doabe but will never hapen because extreme wealth has captured the regulatory infrastructure as well as our democracy and policy makers.

Sam Grove April 29, 2011 at 4:44 pm

We need sepration of state and money

Unless you advocate the abolotion of the FED or any form of central bank, you are not credible.

The state is all about control of resource allocation through manipulation of money.

When will you ever be able to include incentives in your calculations?

muirgeo April 30, 2011 at 10:56 am

I advocate making the Fed a government agency and not one filled with Wall Street representatives and lobbyist.

vikingvista April 30, 2011 at 1:56 pm

A government agency not filled with lobbyists?

brotio May 1, 2011 at 12:48 pm

We need sepration of state and money

LMAO! In the same sub-thread, our Dear Ducktor wrote that bit of inanity, and followed it with:

I advocate making the Fed a government agency…

The muirzophrenia is getting worse.

Rugby1 April 29, 2011 at 5:33 pm

This in response to your comment below.

“You make the rules to serve peoples needs and not the needs of corporations. That’s NOT an anti-business stance… that’s a pro small business stance.”

Followed by

“extreme wealth has captured the regulatory infrastructure.”

EXACTLY. So reducing the power of the regulatory infrastructure would reduce the power of wealth. Wealth is great but I can name hundreds (literally) of companies that were once dominant in the American landscape and have now been destroyed, and their capital, labor and ideas allocated to somewhere else. This happened due to the market!!! Regulators were not needed. In fact these “pro-small business rules” you speak of, would be created by the very people you are lambasting.

As the famous quote goes “The only difference between a rut and a grave is their dimensions.”

To think that all of the sudden the next raft of legislation would be made by towering intellectuals who would be able to beat back the lobbyists and some how develop a regulatory structure that serves the common man, is nothing short of fantasy! Do you believe in unicorns, Dr?

We live in the real world, with real politicians, real lobbyists and real corporate influence. Since government is at the nexus, reducing the power of government (noticed I did not say getting rid of) and letting the markets work is the only thing that can maximize freedom, increase wealth for all, and reduce the income disparity you worry so much about.

kyle8 April 29, 2011 at 5:46 pm

No, dumbass, regulation is molded to the needs of the industry ALL of the time, and the more regulation, the worse it becomes.

That is the very nature of the critique of overly regulated industry.

That is why we believe that regulations should be those which are minimally sufficient to ensure that no one steals, defrauds, or destroys the ecology, and not much more.

You beleive that if only wise lefties were in control of everything, then they could enact wise regulations and “stick it to the man”. However, that is not the case with the present administration, it has never been the case, and it never will be the case.

That is because the wealthy men who run big corporations are a lot smarter than you, Paul Krugman, Barack Obama, or any left wing idiot, and further, most left wingers are very selfish and greedy and easily bought off.

muirgeo April 29, 2011 at 9:59 pm

Separation of investment banks and lending banks
Leverage requirements
Fraud enforcement
Derivatives/ commodities
Lending standards

Regulation Q that allowed the Federal Reserve to regulate interest rates in savings accounts were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980.

Gramm–Leach–Bliley Act
Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999

Financial Services Modernization Act of 1999

Alternative Mortgage Transactions Parity Act of 1982

Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994

The Commodity Futures Modernization Act of 2000

Read more: The History of Bank Deregulation | eHow.com http://www.ehow.com/about_5413083_history-bank-deregulation.html#ixzz1Ky2xYUsx

And simply poor enforcement of existing regulations because Greennspan didn’t like regulations

Now you tell me wich increased regulations you were talking about.

wesley mouch April 29, 2011 at 11:08 am

We are not free market at all. The US has become a plutocracy where the plutocrats direct governmnet largesse to their benefit. Given that all major governmnet programs have been a huge failure (FannieMae, Social security, Medicare) it is time to cut back the government dramatically (abolish 80% of it) and reclaim our lost liberties.

Cthorm April 29, 2011 at 3:38 pm

You do not sound anything like your namesake.

tkwelge April 29, 2011 at 12:34 pm

Taxes are down?

Well this graph certainly shows a decline in taxation… OH WAIT, IT DOESN’T!

http://www.usgovernmentrevenue.com/downchart_gr.php?chart=F0-total&year=1902_2015&units=p

I don’t think that trade is necessarily dramatically freer than it was. We just happen to live in a more globalized world now, but that has more to do with an increase in trade than a breaking down of barriers. Most free trade agreements are a sham. Why would free trade require multi page agreements? If it were free trade, it would just be allowed to be.

“The libertarian position becomes irrelevant in the real world except as a tool for the wealthy and well connected over the rest of society and even over people lead democracy.”

If all that you’re going to do is blatantly state nonsense, you need to stop posting.

crossofcrimson April 29, 2011 at 12:53 pm

To be fair, tax “rates” ARE down. Revenue has increased (despite the disparate warnings).

In any case, it doesn’t follow that lower rates of taxation = free market.

crossofcrimson April 29, 2011 at 12:50 pm

“Wall Street is deregulated”

That’s pretty funny.

Cthorm April 29, 2011 at 3:48 pm

Yeah, I wonder where Sarbanes-Oxley and Dodd-Frank fit into that narrative. There is an enormous difference between “deregulation” and “regulatory capture.”

vikingvista April 30, 2011 at 2:00 pm

No kidding. Wall Streeters have worked hard to get those massive tangled regulations in place. It is disrespectful of all their efforts to ignore their accomplishments.

Sam Grove April 29, 2011 at 1:33 pm

We’ve simply moved in a more free market direction>

Pure fabrication by the left which would not know a free market if it bit them in the ass.

muirgeo April 30, 2011 at 8:21 am

We sure haven’t moved in to a progressive era… since Reagan.

From a practical stand point there are two parties to choose from. Libertarians tend to vote for Republicans and policy since Reagan has decidedly been more in the republican direction… it’s certainly not been more in a progressive direction. The US population given what they wanted would move us in a more progressive direction but the peoples desires are being neglected in favor of what corporations want.

You guys consistently defend the ill gotten wealth of these corporations so the current shit hole economy has more blame going to the neoliberal side than to the progressive side.

Sam Grove April 30, 2011 at 2:29 pm

Government never becomes what people intend, however, even you have pointed out that government spending grew under Reagan. the Federal government has become ever more entangle with education, various bureaucracies have grown and increased their multitude of regulations. The tax code has grown more complex. U.S. interventions in the world have increased.
None of the ag subsidies spawned by FDR’s regime have disappeared.

Government entanglement in virtually all aspects of society have increased as a result of the path set for government by the progressive movement. This is evident in any sector of the economy and society.

The current foreign policy regime began under Wilson, a noted progressive.

Sam Grove April 30, 2011 at 2:34 pm

You guys consistently defend the ill gotten wealth of these corporations so the current shit hole economy has more blame going to the neoliberal side than to the progressive side.

You are lying. Libertarians oppose all corporate subsidies, protections, marketing orders, etc, any activity that can be fairly described as producing “ill-gotten” gains.

It is the governments management of the financial sector that has justified the bailouts and transfer of billions of dollars to firms that libertarians believe should have been allowed to fail, and My. Faith & Hope supported that transfer, from the Senate to the White House.

It was the merging of the left and progressive memes that built this shit hole political society.

brotio April 30, 2011 at 6:43 pm

You guys consistently defend the ill gotten wealth of these corporations so the current shit hole economy has more blame going to the neoliberal side than to the progressive side.

There is only one person who regularly frequents this Cafe who supports corporate welfare. That person is the author of the italicized sentence above.

That would be you, Yasafi. I just realized that you probably don’t know what italicized means.

brotio May 1, 2011 at 12:49 pm

The joke kind of fizzles when the HTML code isn’t properly executed :)

Dan April 29, 2011 at 9:44 pm

Any ‘ deregulation’ in financials came with strings attached to behave according to congressional will. Clinton in the nineties made sure that any financial institutions who wanted to be allowed to diversify must have been in good standings with the CRA. Congress perverts the market with their regulatory abilities.

muirgeo April 29, 2011 at 10:35 am

To put my thoughts another way… judge all those wealthy corporations and their leaders not by their claims to support free markets. Sure they all make such claims. But look at their actions and you will see at every turn they have no second thoughts of circumventing free markets or dropping their free market principles as well as too seek rent from the government just to get ahead.

John V April 29, 2011 at 10:42 am

How is that putting your thoughts another way? Sounds more you put them the OPPOSITE way.

Your filters make it so that you only notice a few “more free market” ideas in practice. What your filters block out is all the increase in size and scope of government.

ej April 29, 2011 at 10:42 am

See you are almost getting there… almost. You just have to drop this notion that the problem with the world is that some people are just more or less moral than others rather than looking at the design of the systems.

You have accepted the straw man argument that free marketeers think businessmen are more holy and thats why they shouldnt be regulated. Quite the opposite. In a free market, businesses are subject to the punishment of market forces. In contrast it is in indutries with large and complex regulatory regimes that cause executives to make enormous unjustified profits.

Did you ever take time to notice that all the industries where you have a lot of rich people or ones that have a lot of problems with them (energy, finance, education, law, etc) are all the ones with complex and arbitrary reglatory regimes? Do you ever hear of a lot of rent seeking going on in freer markets like textiles or consumer electronics?

John V April 29, 2011 at 10:45 am

muirgeo has this all explained to him thousands of times. The fact that he can’t even accurately recite is an indictment against his ability to learn or his integrity or both.

Sandre April 29, 2011 at 10:49 am

He is a douchebag. He has been trolling this blog for 6-7 years. He has heard it all. He is incapable of learning anything new.

MWG April 29, 2011 at 4:50 pm

“He has been trolling this blog for 6-7 years.”

It’s pretty crazy when you stop and think about it. 6-7 YEARS!

kyle8 April 29, 2011 at 5:49 pm

well it’s not like he has anything better to do.

muirgeo April 29, 2011 at 10:05 pm

Except I think it’s closer to like 4 or 5 years. Hey I have established lots of long term relationships and I have lots of friends here… I’m not gonna walk away from them now. So when are we going to finally get together for a beer?

vikingvista April 30, 2011 at 2:02 pm

That means he must be pushing 20 years old by now. I guess high school wasn’t much use to him.

Sandre April 29, 2011 at 10:48 am

“To put my thoughts another way… judge all those wealthy corporations and their leaders not by their claims to support free markets. Sure they all make such claims. ”

No douchebag, they ALL don’t make any such claims. Wealthy corporations overwhelmingly support the Demoncrats and non-free markets. I know you don’t have enough inside your skull to understand this, but temptation to repond is too much.

http://www.opensecrets.org/orgs/list.php

Martin Brock April 29, 2011 at 11:32 am

Wealthy corporations support demoblicans or republicrats depending on how the political wind is blowing, and most organs of the corporative state support both at the same time. Our “two party system” has been an Orwellian pretense for my entire life.

Sandre April 29, 2011 at 1:00 pm

I know. Muirgeo perpetrates this myth that Democrats are for the poor and Republicans are all for the rich and wealthy corporations. I was just pointing out that if anything, truth tilted, ever so slightly in the other direction.

muirgeo April 29, 2011 at 2:00 pm

BS…. look at where the corporate money is now going since the supreme court loosened the campaign finance rules. As Karl Rove says on his web site, ” They brought a hammer and we have grenades.”

You are so wrong on that claim maritn.

kyle8 April 29, 2011 at 5:50 pm

your ideology has blinded you to the truth.

Martin Brock April 30, 2011 at 4:59 am

Corporate money buys influence within the state regardless of any campaign finance rules. An opportunity to engineer these rules is precisely what the corporations are buying, and they can buy the opportunity from a Supreme Court Justice or a President appointing a Supreme Court Justice or a Senator confirming a Presidential appointment of a Supreme Court Justice. The market for influence peddling is very deep. The larger and more complex the state becomes, the deeper this market becomes.

crossofcrimson April 29, 2011 at 12:54 pm

“Sure they all make such claims”

No, they really don’t.

crossofcrimson April 29, 2011 at 12:55 pm

“But look at their actions and you will see at every turn they have no second thoughts of circumventing free markets or dropping their free market principles as well as too seek rent from the government just to get ahead.”

Now, if we could only get you and other liberals to realize that we’d all be on the same page….

Rugby1 April 29, 2011 at 2:53 pm

“judge all those wealthy corporations and their leaders not by their claims to support free markets.”

And how do they “circumvent free markets……” That’s right with government help which you want to institutionalize. Good job exposing your massive hypocrisy. Do you see if the government refused to get involved and possibly restricted the reach of their greedy little hands maybe businesses would not be able to “circumvent free markets.”

I have read enough of your posts and you are always claiming to care about the poor or the downtrodden, but I actually think you just say that to cloak your fascist tendencies.

muirgeo April 29, 2011 at 10:19 pm

There is no hypocrisy here. Government has always catered to the wealthy. All of history has been a struggle of the masses against a ruling elite minority. What the social democracies have and what we were working toward is a more egalitarian society that allows MORE people to succeed and is far more efficient for the overall economy.

http://www.frbatlanta.org/econ_rd/macroblog/082108a_lg.jpg

We had greater growth when prosperity was shared than when it was mostly going to the wealthy.

I’m just looking at the data and arguing for efficiency which happens to coincide with shared prosperity.

Everything I’ve read on the classic markets from Henry George , to Veblen, to Marx to Dickens suggest they create some horrific condition for the poverty ridden as well as boom and bust cycles of economic inefficiency and huge externalities.

brotio May 1, 2011 at 12:50 pm

Yasafi said, “my thoughts”.

Martin Brock April 29, 2011 at 11:01 am

Don’t worry, Chris. The good guys are in charge now.

wesley mouch April 29, 2011 at 11:05 am

Your website is a delight and always insightful. Someone has to defend liberty. Keep up the good work.

Speedmaster April 29, 2011 at 11:20 am

>> “Some commenter on my rap video with John Papola claims that policy has “followed Hayek since Reagan” meaning that since the 1980s, we’ve been living in Hayekian paradise.”

Wow, talk about cognitive dissonance! I am at a loss to understand how someone could believe this. On topic, I also often hear that our current economic woes have been caused by decades of deregulation. Amazing.

Bill April 29, 2011 at 11:43 am

Actually, dchris1990 is the “some commenter.”

rios9000 is the person who wrote the reply you are quoting.

Mao_Dung April 29, 2011 at 11:48 am

Speaking of taxpayer subsidized farming, I have come up with a solution to the chronic unemployment problem. Where is my Nobel prize?
In the meantime, send some stimulus funds to my email address. I’ll buy some seed and fertilizer with the money. Your stimulus funds won’t be misspent. I’ll grow some fruit trees. I love Fuji (not radioactive Fukushima disaster) apples:

It’s time to break up the big corporate farms that are subsidized by Uncle Sam. Each unemployed person will be given enough land to become a self-employed farmer. At the very least, they will be able to feed themselves and their family. In the past, people left the farm in search of a better life in the city. Factory jobs have become scarce due to outsourcing to China, Mexico, etc. It is now time to reverse the migration process with a little agrarian reform. An Idyllic, bucolic, pastoral farm is a good place to raise kids, too, rather than in a crime-ridden, gang-infested, drug-peddling slum. How useful and practical to learn to milk a cow or a goat!

Ken April 29, 2011 at 12:48 pm

Dung,

“I have come up with a solution to the chronic unemployment problem.”

Well what is that solution? You don’t say anything in your comment that will “solve” this problem.

“It’s time to break up the big corporate farms that are subsidized by Uncle Sam.”

After all, people should pay way more for their food than they pay now. All those gains due to the economy of scale, directly reducing the price of food, can’t be good can it, Dung?

“At the very least, they will be able to feed themselves and their family.”

Who are these people that can’t feed themselves now?

“It is now time to reverse the migration process with a little agrarian reform.”

And there it is. The migration to the city was due to people’s choices. People don’t want to move to farms as is evident by the lack of this reverse migration. I know that this is no problem for a wannabe cowardly tyrant such as yourself who has no problem forcing people to do what you want and killing them if they don’t.

The fact that people aren’t migrating out of the city to an “Idyllic, bucolic, pastoral farm” should tell you something about how “Idyllic, bucolic, pastoral” farms really are. I’ve lived and worked on a farm for about a year when I was a kid. It sucks. Work from sun up to sun down with no leisure time and you are physically at the end of the day that the only thing you can do is shower and go to bed. On top of that the nearest neighbor is quite a hike. I had to drive an hour to go to the nearest mall and movie theater; since I was only 11, I had to wait for my parents to make that drive. No resturants, either, so my mother and grandmother HAD to work in the kitchen all day, while the men worked the farm.

“How useful and practical to learn to milk a cow or a goat!”

Not that practical when it takes less than 10 minutes to drive to Wal-Mart and buy a gallon of pasturized milk for less than $5. Do you have any idea how long it takes to milk a gallon of milk from a cow, then separate much of the fat out of it by hand? It’s not practical to learn things that have no practical use.

Regards,
Ken

Mao_Dung April 29, 2011 at 12:56 pm

I guess you won’t be emailing me any stimulus funds, then. You have no trouble buying bullets for your guns to kill little animals in your backyard, though. You are the murderous one, along with all your other faults.

crossofcrimson April 29, 2011 at 12:59 pm

I’d send you some cash to float your newfound venture but I wouldn’t want you to think I’m a dirty capitalist.

Ken April 29, 2011 at 1:13 pm

Dung,

“You have no trouble buying bullets for your guns to kill little animals in your backyard, though.”

That’s what you do on those “Idyllic, bucolic, pastoral farm[s]“. Hunting and fishing are two of the main distractions to drudging monotony of farming. You’re encouraging hunting and fishing by encouraging people to live on farms. Herding cattle is far more barbaric than hunting. Have you ever seen a bull turned into steer? Have you ever been to a slaughter house? It’s far more barbaric that putting a bullet through the heart of a deer.

Have you ever done anything remotely related to working on a farm? Since you think it’s an idyllic life, I know the answer is an emphatic no.

Regards,
Ken

Mao_Dung April 29, 2011 at 1:58 pm

I would be happy if a big stag would kick you in your privates. You deserve nothing less.

Ken April 29, 2011 at 2:08 pm

Dung,

And yet you still fail to address the reality that farming sucks and people don’t want to do it. It is far more productive for people to keep working the jobs they have and going to the grocery store.

Thank you again, for demonstrating what a violent little creep you are. I would be completely surprised if you ever directly responded to anyone of my questions or comments instead of directing your impotent rage towards me.

Regards,
Ken

crossofcrimson April 29, 2011 at 12:58 pm

“Each unemployed person will be given enough land to become a self-employed farmer.”

Before you know it we’ll be making our own clothes, tools, and candles; and we’ll be tote around by horse-drawn wagons and carriages. It’s almost like the future…..of a more distant past.

Mao_Dung April 29, 2011 at 1:18 pm

Growing fruits and vegetables can be accomplished in your own backyard, or even front yard if you are lucky to have the available land. People can even grow things in cramped quarters if they learn how make use of any available, unused space. This need not be only a hobby, but a healthy, productive way of life. I think it is forward looking, not backward looking.

http://en.wikipedia.org/wiki/Urban_farm

crossofcrimson April 29, 2011 at 1:33 pm

“This need not be only a hobby, but a healthy, productive way of life.”

I have no problem with people growing their own food (or making their own clothes, etc.). I wouldn’t dream of forcing people to do something they didn’t want to (unlike so many people, unfortunately). But let’s not pretend most people would find growing their own food comparatively productive. If it takes me an hour doing task-1 to produce enough output to offset ten hours doing task-2, there’s nothing wrong with me engaging in task-2. It’s still less productive.

Mao_Dung April 29, 2011 at 2:04 pm

Maybe it’s not the thing for you. You’d rather watch Monday football. For someone who is unemployed, it might be a healthy and productive thing to do.

crossofcrimson April 29, 2011 at 2:12 pm

“Maybe it’s not the thing for you. You’d rather watch Monday football.”

I don’t watch football. Thanks though.

“For someone who is unemployed, it might be a healthy and productive thing to do.”

Yes, when demand slows for more productive activities (for whatever reason) it’s often good to do less productive activities in lieu of that. I assume you’ll support us repealing minimum wage laws in light of that.

Ken April 29, 2011 at 2:16 pm

Dung,

“For someone who is unemployed, it might be a healthy and productive thing to do.”

The most productive thing an unemployed person can do is look for another job or start a business. Growing their own food would be one of the least productive things they could do, since cheap food is plentiful in the US.

Regards,
Ken

Ken April 29, 2011 at 1:49 pm

Dung,

“This need not be only a hobby, but a healthy, productive way of life.”

If it’s more productive to grow your own food, why has productivity sky rocketed as fewer and fewer people grow their own food? You have no understanding of opportunity costs. Every minute spent maintaining a garden, which is typically a lot of work, is a minute NOT spent improving your skills for work, reading for pleasure, or hanging out with your friends.

Grow a garden and maintain it till harvest, then please try to explain to me how it’s better to spend a year full time on that rather than spend a couple of hours at a grocery store every two weeks is more productive.

It’s like you don’t understand basic english.

“I think it is forward looking, not backward looking.”

You made me laugh using the word “think”. Ha! As if what you do could possibly be regarded as that.

And to address your statement directly, this is the very definition of looking backwards. You look back at the early American agricultural economy and stupidly think “Idyllic, bucolic, pastoral”, when in fact it was back breaking work that people stopped doing as soon as they could. How do you imagine working in a factory in the 1800′s was like? It sucked, yet millions poured in from the country side to do that work rather than stay on a farm. Ever wonder why? Maybe you could try some of that thinking you claim you do.

You look backwards and idealize something about which you know nothing. You want people to take a step back in time and return to this way of life. Basically you’re an idiot.

Regards,
Ken

Mao_Dung April 29, 2011 at 2:00 pm

You meant, “Basically, I’m an idiot.”

Ken April 29, 2011 at 2:11 pm

Dung,

No, I got it right when I wrote “Basically you’re an idiot.”

Do you dispute any of my claims? Can you build a logical argument as to why you think you might be right? Or can all you do is spit vitriol in my direction?

Since you’ve only demonstrated that you can spit vitriol after I point out the obvious failings of your “thinking” I think everyone on this site can only conclude that you are an idiot.

Regards,
Ken

Ian April 29, 2011 at 12:07 pm

Can someone point me to the best book to read of Hayek’s where he espouses the views in this post?

I’m specifically interested in where he discusses the Federal Reserve and other system he proposes (Private currencies?).

Mao_Dung April 29, 2011 at 12:30 pm

Keynes died in 1946, and Hayek died in 1992. Hayek had an extra 46 years to make his point(s). Can anyone really say that he succeeded except with a fringe element of the population? If you can’t throw a knockout punch in 46 years, something is likely wrong with your boxing technique. Listening to Hayek on Youtube, I found him to be quite a drab, lifeless speaker with obvious false teeth and an unsoothing Germanic accent. Round-headed Milton Friedman was at least “stimulating” to listen to, but he still wasn’t credible to me.

crossofcrimson April 29, 2011 at 1:01 pm

“Can anyone really say that he succeeded except with a fringe element of the population?”

Well, if we know one thing it’s that popularity makes right. How many albums has Britney Spears sold again?

Daniel Kuehn April 29, 2011 at 1:03 pm

Nothing makes me reject the argument of another economist faster than the presence of false teeth.

And obvious false teeth?!?!?! Forget about it. That’s a deal breaker.

Mao_Dung April 29, 2011 at 1:06 pm

Yes, dental implants are the way to go if you can afford it. Be sure you get the best dentist to do them, not the cheapest.

Methinks1776 April 29, 2011 at 1:36 pm

For me it’s hair plugs.

Ken April 29, 2011 at 2:13 pm

DK,

The funny think is that Dung thinks that’s a valid reason to reject an argument. He’s a superficial, violent, creepy douche.

Regards,
Ken

Brad Hutchings April 29, 2011 at 1:35 pm

The Internet is Hayek’s knockout punch. Imagine if the rest of the economy worked mostly like highly disorganized but self-organizing Internet. Hayekian Gangster Paradise!

kyle8 April 29, 2011 at 5:55 pm

I would doubt if anything that made sense would be credible to you since you are an imbecile.

Previous post:

Next post: