Business-school Argot is No Substitute for Critical Thinking

by Don Boudreaux on December 11, 2011

in Competition, Complexity & Emergence, Country Problems, Creative destruction, Growth, Innovation, Myths and Fallacies, Seen and Unseen, The Economy, The Future, The Profit Motive

Here’s a letter to the New York Times:

In paragraph five of his column today, Thomas Friedman approvingly quotes Pres. Obama’s complaint that “Steel mills that needed 1,000 employees are now able to do the same work with 100 employees, so layoffs too often became permanent, not just a temporary part of the business cycle….” (“The Next First (and Only) 100 Days,” Dec. 11).

Ignore the fact that this Luddite lament – while in tune with the sympathies of Lord Keynes – is supported by zero historical evidence.  Focus instead on Mr. Friedman’s call, in paragraph eight of his column, for a “future … where people learn, imagine and create value rapidly by combining universities, high-tech manufacturers, software/service providers and highly nimble start-ups that collaborate and compete to invent things that make people’s lives more entertained, productive, healthy, educated and comfortable.”

If, in paragraph five, innovation that makes people more productive is a regrettable source of permanent job losses, how in paragraph eight does innovation that “makes people’s lives … more productive” – and, hence, destroys some jobs – become a desirable policy goal?

Sincerely,
Donald J. Boudreaux

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{ 224 comments }

Daniel Kuehn December 11, 2011 at 9:58 am

OK I’ll bite – what in the world does the “Luddite lament” have to do with Keynes?

Next I imagine we’ll be informed Keynes was on the grassy knoll.

Invisible Backhand December 11, 2011 at 10:54 am

what in the world does the “Luddite lament” have to do with Keynes?

Nothing, its just part of Boudreaux’s transparent propaganda. I hear Keynes caused dutch elm disease too.

While y’all’re here, I’ve a question about neoliberalism. Here’s a quote from wikipedia:

A common term in much of the world for what Hayek espoused is “neoliberalism”. British scholar Samuel Brittan concluded in 2010 that, “Hayek’s book [The Constitution of Liberty] is still probably the most comprehensive statement of the underlying ideas of the moderate free market philosophy espoused by neoliberals.”

http://en.wikipedia.org/wiki/Friedrich_Hayek#Hayek_and_conservatism

My question is, why do the denizens of CafeHayek never ever link themselves with neoliberalism? I won’t accept that there’s some subtle, nuanced doctrinal difference–the rest of the world calls you neoliberals, why don’t you own up to it?

Ten bonus points if you can use the word ‘praxeology’ in your answer.

Emil December 11, 2011 at 11:44 am

is there something wrong with neoliberalism? I mean, it’s not really like “comunism” or “fascism” even if you leftists are trying hard to attach a bad ring to it

Sam Grove December 11, 2011 at 1:49 pm

What is a “moderate” free market philosophy?

Personally, I espouse a radical free market philosophy.

See a difference?

Invisible Backhand December 11, 2011 at 1:58 pm

So, what are you doing hanging out at CafeHayek?

Invisible Backhand December 11, 2011 at 11:27 pm

So, what are you doing hanging out at CafeHayek?

I’ll tell you what I’m doing on Cafe Hayek:

With the help of my political correctness officers and propaganda indoctrinators, I hope to identify and (with any luck) remove various undesirables from this site and others. Undesirables include (but are not limited to) blacks, hispanics, Jews, Mormons, Christians, Freemasons, Republicans, and Libertarians.

Jawohl Mein Fuhrer!

nativist December 11, 2011 at 2:29 pm

von Mises is credited with coining “praxeology”. Hayek, his most famous student, may have used it, but I don’t remember coming across it. In any case, Hayek came to be more closely aligned in his thought with Friederich von Wieser.

Invisible Backhand December 11, 2011 at 3:55 pm

Not exactly, but close enough. 10 points to Gryffindor.

Darren December 11, 2011 at 2:41 pm

I hear Keynes caused dutch elm disease too.

I’m confused. I thought that was Bush.

Ubiquitous December 11, 2011 at 11:07 pm

the rest of the world calls you neoliberals, why don’t you own up to it?

For that matter, dipshultz, the rest of the world calls you an ignorant troll, why don’t you own up to it?

Invisible Backhand December 11, 2011 at 11:16 pm

I hear Keynes caused dutch elm disease too.

Actually, ladies and gentlemen of Cafe Hayek, I personally caused dutch elm disease when I pleasured myself in the knot-hole of a nearby tree.

But don’t tell anyone, OK?

JoshINHB December 11, 2011 at 11:12 am

The idea that overinvestment leads to depression has been a major part of the leftist belief system from the time of Marx to the present day.

Dan J December 11, 2011 at 11:52 am

Was it Marx who complained of automation and technologies bringing about change for the worse by men being replaced by mechanization?
Oh, no….. That means men will be jobless and without meaning in life.

GiT December 11, 2011 at 3:53 pm

No, it wasn’t.

Cute misreading of Marx, though.

Daniel Kuehn December 11, 2011 at 3:59 pm

What’s the misread exactly?

GiT December 11, 2011 at 4:23 pm

To put it simply in Marxist terms, the problem was not in the least advances in the forces of production; the problem was in the relations of production.

Technological progress was great, and the elimination of the need to work was in fact the precondition for communism.

The problem was not increasing efficiency, but concentrating ownership rights. From here one would have to get into an argument about what makes being a wage laborer necessarily oppressive and whether that particular relationship will be made more or less prevalent with the passage of time.

(as an analog, slavery is arguably oppressive regardless of how well you treat your slave and how much your efficient use of slave labor allows you to improve the lifestyle of your slaves).

Daniel Kuehn December 11, 2011 at 4:32 pm

OK yes – I would agree with that. But it is right to say that Marx though under the capitalist mode of production labor-saving technology was bad for workers. I would say – unless we’re just talking about case-specific dislocation a la Arnold Kling – Marx was quite wrong.

GiT December 11, 2011 at 4:53 pm

He thought labor saving technology was bad for the proletariat, not necessarily bad for workers.

In fact, it was perfectly consistent with being good for workers (in terms of their material possessions and their income).

Workers are not the same as those who need work to survive.

The question remains though, whether or not more people continue to need work to survive, and whether or not needing work to survive is a bad thing.

I’m not sure there are clear answers to either of those.

Josh S December 12, 2011 at 1:20 pm

If you distill anything intelligible out of Marx, you have misread him.

JoshINHB December 11, 2011 at 12:23 pm

Was it Marx who complained of automation and technologies bringing about change for the worse by men being replaced by mechanization?

Beyond that, he believed that the profits derived from increasingly efficient production represented consumption that was stolen from laborers and that this would continue until near universal poverty incited revolution.

Leftists believe this narrative and think that the “solution” to preventing destitution and revolution is increasing consumption of the lower classes through progressive taxation, which in their paradigm is moral because it is return the stolen consumption of profits to the rightful laborer owners.

That belief is expressed today by democrats in multiple ways. Among those, claims that higher taxes on millionaires and billionaires will lead to greater economic activity; that government transfer payments create more jobs than private investment; that the greatest threat to economic growth is inequality; etc.

The left is oblivious to the fact that the Marxist premise requires a labor theory of value, a zero sum economy and ignores effects of increased supply on prices and living standards.

GiT December 11, 2011 at 4:06 pm

And another cute, incorrect version of Marx.

For Marx, an increasing standard of living and consumption for wage workers was consistent with increasing exploitation of ‘the proletariat.’

JoshINHB December 11, 2011 at 6:25 pm

Then what leads inexorably to revolution?

GiT December 11, 2011 at 6:40 pm

1. The increase in the relative inequality of condition between workers and capitalists.
2. The increase in the number of those who cannot find (regular) work to meet their needs (the reserve army of labor).

JoshINHB December 11, 2011 at 9:42 pm

Right,

Which is exactly how I described Marxist theory.

I get that you are embarrassed by it’s underlying fallacies.
I don’t get your defense of the theory despite those fallacies.

GiT December 11, 2011 at 10:44 pm

I suppose it’s no surprise that you’re functionally illiterate. That is not ‘exactly how you described Marx’s theory.’

I’ll keep it short and simple.

Relative inequality can increase while absolute poverty decreases.

Similarly, competition over and insecurity/irregularity of work can increase while absolute poverty levels decrease.

Hence conditions leading to revolution need not correspond to a state of near universal poverty.

kyle8 December 12, 2011 at 4:07 am

That is like arguing the difference between a Pixie and an imp.

It is all silly hogwash that has no relationship to the real world.

GiT December 12, 2011 at 12:30 pm

Relative inequality has increased markedly.

Whether it matters is a very different question from whether or not it’s happening.

As to whether or not job security or stability is decreasing, that I don’t have data on. At the least I’ve heard reports that people hold more jobs and change careers and lines of work more frequently in the present than previously.

Again, whether that’s ‘good’ or ‘bad’ or ‘irrelevant’ is a separate question from whether or not it’s happening.

If both those things are actually happening in the world, then there is quite obviously a relationship with the real world.

Josh S December 12, 2011 at 1:23 pm

Has it really increased that much? I play the exact same Playstation 3 my retardedly wealthy cousin plays for entertainment. We even play the same Call of Duty game. We like the same superhero movies.

Now compare the entertainments of rich and poor in the 18th century.

GiT December 12, 2011 at 1:42 pm

Speculating on the ‘relative inequality’ of subjective enjoyment is not really to the point. Wealth inequality has increased markedly. That means some people use a lot more energy and matter than others. Does using thousands of times more energy and matter than others make them thousands of times happier? Of course not. In fact we can hardly say whether people now are any happier than they were a thousand years ago.

That doesn’t change the fact that the relative inequality of wealth, and of consumption, has increased.

SmoledMan December 11, 2011 at 1:56 pm

Lately you’ve been trolling disingenuous Kuehn.

Daniel Kuehn December 11, 2011 at 3:48 pm

Asking for clarification on a very strange claim isn’t trolling.

I Miss Nixon December 11, 2011 at 4:49 pm

Kuehn

Read your blog. You are spot on that Hayek didn’t remotely understand either the zero bound or deflation.

No good deed goes unpunished.

Invisible Backhand December 11, 2011 at 4:02 pm

Kuehn has a great blog:

http://factsandotherstubbornthings.blogspot.com/

That should calm your concern that he’s a troll.

Sam Grove December 11, 2011 at 7:30 pm

Daniel is no troll. He knows what he knows very well.

Sam Grove December 11, 2011 at 7:29 pm

Luddites were afraid that technology would deprive them of their income.
They were right, of course, but they did not consider the greater productivity to be achieved by embracing technology.

Ubiquitous December 11, 2011 at 11:35 pm

OK I’ll bite – what in the world does the “Luddite lament” have to do with Keynes?

Keynes had a fetish about “full employment”;
Luddites had a fetish about “full employment”.

Neither could approve of labor-saving technology because in the short-run, it can remove an economy from a state of “full employment” (at least, in the industry that has introduced such new labor-saving technology).

The long-run?

In the long-run, we are all dead. Haven’t you heard?

GiT December 12, 2011 at 2:49 am

Wow, you just know when a post starts off with a fallacy it’s going to be good.

Apples are red.
Strawberries are red.

Therefore apples are a berry.

Yes, clearly.

Ubiquitous December 12, 2011 at 6:09 pm

Apples have a red color.
Strawberries have a red color.
Ergo, strawberries have an apple-like color (and apples have a strawberry-like color).

No logical problem there, because no identity between apples and strawberries was asserted.

Keynes had a full-employment fetish.
Luddites had a full-employment fetish.
Ergo, Luddites have a Keynesian-like fetish, and Keynesians have a Luddite-like fetish.

No problem there because no identity between Luddites and Keynesians was asserted.

Don never said “Luddites ARE Keynesians” or “Keynesians ARE Luddites,” moron. He said that Keynesian Thomas Friedman made a “Luddite lament”, as in “a lament that was Luddite-like.”

You’re a stupid git*, GiT.

*http://en.wikipedia.org/wiki/Git_(British_slang):

Git is mild profanity with origins in British English for a silly, incompetent, stupid, annoying, senile elderly or childish person. It is usually an insult, more severe than twit or idiot but less severe than wanker, arsehole or twat.

anthonyl December 12, 2011 at 2:45 am

So Ludites are these people that are fearful of technology. Because they just don like it.
Keynes was this guy that thought that the only thing that mattered was demand and they way to get this demand was to have everyone employed. Even if the purpose of their employment was unproductive or valuable at all.
So Ludites are like Keynes in that they are both excuses for keeping people employed in endeavors that are not or no longer valuable.
Jeez, you are dense.
But I love it.

Chucklehead December 12, 2011 at 5:07 pm
Daniel Kuehn December 11, 2011 at 10:05 am

Also – I’d still be interested in what you think Arnold Kling’s thoughts on technological unemployment and PSST. He seems to think the sorts of things Friedman is referencing are central to PSST. You always reference PSST favorably but denigrate references to technological unemployment from others. How do you square that?

Brad Hutchings December 11, 2011 at 6:51 pm

I think I would start with basic reading comprehension here. Professor Boudreaux is not denigrating a reference to technological unemployment, nor do I think he ever would. It is progress that a process that used to take 100 people to achieve some level of output now requires just 10 people. That frees up 90 people to do other things and frees up capital for those things to be done.

What is being denigrated is how such an important thinker like Friedman can, in one paragraph, lament such “losses”, and a few paragraphs later, call for the kind of dynamism that requires them.

Ubiquitous December 11, 2011 at 11:47 pm

how such an important thinker like Friedman…

(Ahem) Friedman might be a well known pundit, but he’s scarcely an important thinker.

Except, perhaps, in his own mind, and to the lefty, libtard, demRats who religiously read the New York Times.

mdb December 11, 2011 at 10:12 am

Nevermind the inherent risks starting these innovative companies that will accomplish these policy goals. That is if the new omniscient government regulatory goons will allow the risk to be taken. Of course we all know the goons will only stop “bad” risks.

kyle8 December 12, 2011 at 4:09 am

and subsidize the others.

Methinks1776 December 11, 2011 at 10:21 am

This is the same guy who looks at China and laments “this used to be us”. Um…no…..

Jon Murphy December 11, 2011 at 10:44 am

One thing I am finding more and more removed from the economic dialogue (oh boy, I am about to open a can of worms with this one) is that some unemployment is desirable. Of course, 9.0% unemployment is not, but unemployment does have some benefits associated with it. For example, let’s take the assumption that everyone has a job. 0% unemployment. What happens if someone wants to come and open a jet-pack factory in America? He’d be unable to find any workers. His factory would be unable to open and we’d not get any jet-packs (or teleportation devices, or whatever else fantasy invention you want). Let’s go even further back. Again, assuming 0% unemployment, would we get the level of innovation we have? One of the silver linings of unemployment is people have time on their hands. Some of them invent (since money is tight, you gotta find a cheap way of doing things). If we have 0% unemployment, then that avenue of innovation is shut down.

These are just 2 of the silver linings of unemployment. I’d post more, but I am on my way out the door.

If you are a troll and/or wish to insult me, you may do so in person. My “Whiner Line” is 1-900-642-0986. Each call will cost you $2.

Methinks1776 December 11, 2011 at 10:53 am

What happens if someone wants to come and open a jet-pack factory in America?….He’d be unable to find any workers.

Of course he will. He must lure away labour from another company or he has to figure out how to automate his production. If he can’t then it’s because his jet-packs are uncompetitive.

I do agree with you on the value of unemployment – the inability to consume. We need to eat and necessity, as they say, is the mother of invention. By deadening that instinct through all kinds of welfare programs that make remaining unproductive comfortable, the instinct to survive is deadened and innovation is depressed. An entire class of leeches arises, the need for increased redistribution rises and the incentive to be productive declines.

nailheadtom December 11, 2011 at 11:32 am

Work
“…the Occident’s attitude toward work, so far from being natural and normal, is strange and unprecedented. It was the relatively recent emergence of this attitude which, as much as anything else, gave modern Western civilization its unique character and marked it off from all its predecessors.
In practically all civilizations we know of, and in the Occident too for many centuries, work was viewed as a curse, a mark of bondage, or, at best, a necessary evil. That free men should be willing to work day after day, even after their vital needs are satisfied, and that work should be seen as a mark of uprightness and manly worth, is not only unparalleled in history but remains more or less incomprehensible to many people outside the Occident.”

This passage is from Eric Hoffer’s tour de force, “The Ordeal of Change”. Although the work is filled with nuggets of insight, this particular observation is important because it applies so directly to the aims of the welfare state. The concept of “working” and having a “job” is not a universal one, even in the Occident. There are many westerners that are quite satisfied to live at lower level of consumption if they can do so with a minimum of effort. Who is to say that they are wrong? And, at the same time, who is to say that the rest of society should subsidize their values? “Progressives” maintain that the “poor”, whoever they might be, are victims in some Darwinian contest for economic supremacy, losers, through no fault of their own, in the game of life. The reality is that they’re not playing the game and that the game’s rules shouldn’t apply to them.

vidyohs December 11, 2011 at 1:00 pm

Jon is not seeing what most people do not see either.

Birthrates produce a pool of people that in about 18-25 years will be eligible to enter the workforce.

In other words, even if every available worker was employed today, upon graduation day in late spring 2012, because of that graduation from schooling, the USA would have an enormous cadre of available workers to march into whatever employment can be found. Enough new workers to fill up any slots that open due to retirements, or start-up innovation businesses.
- – - – - – -

Addressing the post above, It should long ago have become obvious that people like Obama and Freidman (loonies) do not understand nor anticipate change, and they operate with an underpinning of belief that everything must remain static in order to be fair or equal. Once a man gets a job, he should have that job for life and nothing, not even the lack of need for what he produces, should ever cause him to lose that job……unless of course he chooses to quit…..and that is okay because he is the “little guy”.

Then, as Don points out, Freidman goes on to envision a future of the business world that will produce the socialist worst nightmare, change, change, and more change. One big reason the loonies fear change so much is that we are all different, individuals, whose response to change produces more inequality and unfairness.

But, we beat the dead horse some more.

Jon Murphy December 11, 2011 at 1:30 pm

“Jon is not seeing what most people do not see either.

Birthrates produce a pool of people that in about 18-25 years will be eligible to enter the workforce….”

I must apologize for I was unclear with my assumption. I was assuming 0% at any given point that that the labor force was not growing at that particular point. Of course, over time, the labor force grows (or shrinks in the case of Japan and Europe) and unemployment is naturally created. You are absolutely correct in that. I was merely posing an extreme, hypothetical, short term situation.

vidyohs December 11, 2011 at 4:36 pm

I am glad to see you do grasp the implications in population growth, some people do not until it is explained to them.

I sold cultured marble for a year (1997) for a guy here in Houston. He marveled one day at the sheer number of new housing being built in metro-Houston year after year.

Using just reasonable speculation I was able to point out to him that a city with a metro area that held over 4 million people would likely produce the need for housing units on the order of a small city (Bryan, Texas pop 76,201) each and every year, with a majority of that being demand for new housing.

Greg G December 11, 2011 at 10:56 am

Jon

I think you may be over estimating your boldness here. I’ve never found anyone who thinks we should be trying for 0% unemployment and I’ll bet you won’t either.

Jon Murphy December 11, 2011 at 12:13 pm

I agree, Greg. I was just using 0% as a, arbitrary, extreme case, number to prove my point. You never want 0% unemployment.

Jon Murphy December 11, 2011 at 12:16 pm

By the way, in case you (or any one else here) is wondering, I think the ideal amount of unemployment for our economy is about 4-5%.

Greg G December 11, 2011 at 12:25 pm

I agree Jon. I used to hire people at times of 4 or 5% unemployment. Most of the people who applied then I wouldn’t have let near my customers if they had been willing to work for free. But I was able to find good people if I made the effort. Today my very best former employees are unemployed or underemployed.

Methinks1776 December 11, 2011 at 12:33 pm

What business were you in, Greg g?

Methinks1776 December 11, 2011 at 12:40 pm

I wasn’t wondering. However, as long as you’ve voiced your opinion on the matter, why 4-5% and what are you willing to do about it?

Jon Murphy December 11, 2011 at 12:43 pm

My research has found that the economy tends to grow at it’s fastest year-over-year rates when the unemployment is around that level.

As to your question “What are you going to do about it,” I’m afraid I do not understand what you mean. Do you mean what would I do to get/keep unemployment at that level?

Methinks1776 December 11, 2011 at 12:45 pm

yes, that’s what I meant.

Greg Webb December 11, 2011 at 12:49 pm

Jon, I thought that a 5% unemployment rate was consistent with the people changing jobs, re-training, etc. that is normal for an economy at any given period of time. I never thought that there was a correlation between unemployment and GDP growth.

Jon Murphy December 11, 2011 at 1:20 pm

Greg Webb,

That is correct. I just discovered the correlation a few months ago. I’m not sure there is a causation, however. I think the reason you cited is the causation and the unemployment rate is the effect of that.

Methinks,

If the research on this matter is correct, then this would mean the natural rate of unemployment is between 4-5%. In that case, the best thing one can do is allow people to interact freely. Of course, the rate will fluxuate above and below the rage, but any interventions (unemployment insurance, hiring incentives) will skew the natural rate of unemployment and people who would not be out of work naturally are now out of work.

Jon Murphy December 11, 2011 at 1:21 pm

Oh, Greg, I should also mention I am not counting GDP growth. I am using Industrial Production. The two move coincidentally through ups and downs and Industrial Production comes out monthly (as opposed to quarterly for GDP) and isn’t revised nearly as often.

Methinks1776 December 11, 2011 at 1:32 pm

In that case, the best thing one can do is allow people to interact freely.

I like that answer. To observe that something may be appear to be consistent with certain desired outcomes is not the same as believing that actively intervening to artificially achieve those ends is desirable.

Jon Murphy December 11, 2011 at 1:36 pm

” To observe that something may be appear to be consistent with certain desired outcomes is not the same as believing that actively intervening to artificially achieve those ends is desirable.”

I agree. It is important to note that these desirable results occur in these given conditions (eg, naturally). The moment you begin to manipulate the conditions, you change the environment and the desired outcome may no longer be optimal.

Stone Glasgow December 11, 2011 at 2:09 pm

Where are you getting your industrial production numbers?

Jon Murphy December 11, 2011 at 2:19 pm

Stone, I am using the numbers from the FRB. I use 12 Month Moving Averages (eliminates seasonality)

Greg Webb December 11, 2011 at 2:44 pm

Jon, you said, “In that case, the best thing one can do is allow people to interact freely.”

I agree wholeheartedly!

Methinks1776, you said, “To observe that something may be appear to be consistent with certain desired outcomes is not the same as believing that actively intervening to artificially achieve those ends is desirable.”

Exactly! And, intervening always has unintended and unforeseen consequences. It also has intended and foreseen consequences of helping the political cronies of corrupt politicians.

Sam Grove December 11, 2011 at 1:54 pm

Unemployment is only a problem if there are no savings.

Invisible Backhand December 11, 2011 at 10:57 am

You sure that’s the correct number?

Dan J December 11, 2011 at 11:57 am

As if the GOVT stat of 9% or 8.6% correctly states the real amount of unemployed.
Let’s raise the amount of weeks that someone can stay at home watching tv on backs of productive people and watch the unemployment numbers rise.

Jon Murphy December 11, 2011 at 12:40 pm

If you want to look at the REAL unemployment rate, that is the rate that includes people who are underemployed, stopped looking due to frustration, or in other ways are marginally attached to the workforce, it is 15.6%

nailheadtom December 11, 2011 at 10:46 am

Friedman has taken the place of the deceased Prof. Erwin Corey as a spokesman for the confused.
“The knowledge workers in these hubs will be the big profit generators. Their profits can and will support lots of other middle-class jobs, but those, too, will require more skills. They will require workers to bring something extra, something creative — “like the artisan” of old — to whatever job they do, says Katz, and through this extra command more pay. That’s the carpenter who learns some design skills, the nursing home employee who can put a smile on the faces of the elderly, the auto mechanic who learns customization. Our wealth as a country, says Katz, will be driven by the goods and services these hubs sell into the global market. But whether that wealth remains confined to an elite group or spreads, he adds, “will depend to a large degree on the skills our work force develops and the creativity of individual workers.”

What’s he talking about? There’s nothing profound or even informative about this. It’s just babbling.

SheetWise December 11, 2011 at 5:41 pm

“Friedman has taken the place of the deceased Prof. Erwin Corey as a spokesman for the confused.”

Yes. And if you actually try to deconstruct his writing there will always be many pieces left that don’t appear to have any use — so don’t try it, you’ll never get it back together. Here’s a link to one of my favorite reviews of Friedman.

Greg G December 11, 2011 at 5:56 pm

Thanks for the link to that Matt Taibbi review of Friedman. It was first rate. You should check out some of Taibbi’s reviews of the Tea Party and OWS.

SheetWise December 11, 2011 at 10:57 pm

Thank’s for the tip. I just read it. He’s very interesting to read — I’ve never read Rolling Stone, so I don’t see his work unless I’m linked to it.

Moggio December 11, 2011 at 10:48 am

“while in tune with the sympathies of Lord Keynes”… ???

Don Boudreaux December 11, 2011 at 10:54 am

Keynes was a stagnationist. In his view, opportunities for profitable private investment were (again, as Schumpeter said) “vanishing.” In a “mature” economy, increasing worker productivity releases workers but without any offsetting productive investments to employ those workers in other industries.

Invisible Backhand December 11, 2011 at 11:02 am

Going from investment stagnating below full employment to smashing the machines is a big leap.

morganovich December 11, 2011 at 12:07 pm

and one keynes and his disciple made. they loved WW2 because ti boosted GDP. it did this by, yup, smashing machines.

they then predicted massive unemployment and dire depression when the war ended and the smashing stopped.

instead, we got a massive decades long boom.

keynes literally believed that you could stimulate an economy by paying people to dig holes and fill them back in.

i think you need to actually acquaint yourself with his views IB.

you seem to be unaware of the core of his doctrine.

Invisible Backhand December 11, 2011 at 12:32 pm

I would take you more seriously if you learned capitalization, punctuation and proofreading.

and one keynes and his disciple made. they loved WW2 because ti boosted GDP. it did this by, yup, smashing machines.

Luddism and WWII are not the same thing.

keynes literally believed that you could stimulate an economy by paying people to dig holes and fill them back in.

That’s because you can, in certain conditions, for a while.

“To dig holes in the ground, paid for out of savings, will increase, not only employment, but the real national dividend of useful goods and services. It is not reasonable, however, that a sensible community should be content to remain dependent on such fortuitous and often wasteful mitigations when once we understand the influences upon which effective demand depends.”

Dances with Wolves December 11, 2011 at 12:33 pm

More on the prison-industrial complex here:

http://en.wikipedia.org/wiki/Prison-industrial_complex

Invisible Backhand December 12, 2011 at 2:11 am

Luddism and WWII are not the same thing.

But on considering this more carefully, I now see that they nevertheless had the same effect on machines: they smashed them. Their rationales may have been different for doing so, but why would GDP take into account the ex ante personal rationales for smashing machinery when the important thing from the standpoint of both WWII and Luddism was the ex post economic effect on GDP measurement?

I admit I’m a fat-headed bigoted troll, but I actually understand your point now.

Ubiquitous December 12, 2011 at 2:23 am

keynes literally believed that you could stimulate an economy by paying people to dig holes and fill them back in.

That’s because you can, in certain conditions, for a while.

“To dig holes in the ground, paid for out of savings, will increase, not only employment, but the real national dividend of useful goods and services. It is not reasonable, however, that a sensible community should be content to remain dependent on such fortuitous and often wasteful mitigations when once we understand the influences upon which effective demand depends.”

Ummm, but the same savings would have gone to support employment that would have been productive, useful, and desired by the community, at some later time. All you’ve done is pre-empt future productive employment for present unproductive employment. That’s good for politicians who need to be seen as “doing something”; bad for the economy as a whole, including those trying to save, and who make future productive employment possible.

Nice work, dipschultz. Try reading Bastiat’s “What Is Seen and What Is Not Seen.”

http://www.econlib.org/library/Bastiat/basEss1.html

GiT December 12, 2011 at 2:43 am

Argument is easy when you assume the consequent, isn’t it Ubiquitous?

That those savings ‘would have gone’ to support productive, useful &etc. activity is an assumption, an assumption with which Keynes disagrees.

Refuting it relies (for you) upon the epistemological argument that one can better know how to use someone else’s resources.

Paternalism may be distasteful as a principle of government, but it is not never appropriate. If it is not never appropriate, then it is trivially true that if certain conditions obtain (like systematic irrationality), acting as a custodian for another is perfectly appropriate.

Keynes thinks the government can be more rational than the market. You don’t. That’s the disagreement. The disagreement has nothing to do with this tired seen/unseen line. Keynes knew his policies prevented people from spending their money on things they think are useful. He just thinks people can be stupid and wrong about what’s useful.

He may be completely wrong about that, but if he isn’t, then his prescription holds, and the argument about seen/unseen simply does not apply.

Methinks1776 December 12, 2011 at 6:14 am

Keynes thinks the government can be more rational than the market. You don’t. That’s the disagreement.

It is not merely a disagreement. People have a right to liberty. To deny them liberty, you must, at minimum first provide a convincing argument for why a small group of self-interested politicians spending other people’s money will spend it more rationally than the people will spend it themselves. And if government is so much more rational, why restrict central planning only to depressions?

Stone Glasgow December 12, 2011 at 7:36 am

Methinks, you make two assumptions here:

“It is not merely a disagreement. People have a right to liberty. To deny them liberty, you must, at minimum first provide a convincing argument for why a small group of self-interested politicians spending other people’s money will spend it more rationally than the people will spend it themselves. And if government is so much more rational, why restrict central planning only to depressions?”

You assume that all men are self-interested and incapable of helping others achieve their goals. You assume they cannot make themselves happy by helping dumb people.

You also assume that men have a natural right to freedom. Why do you think that men are born with a right to liberty? In my opinion, freedoms and rights are not self evident. They are arranged when humans live in groups and make agreements with each other.

Stone Glasgow December 12, 2011 at 7:42 am

“To deny them liberty, you must, at minimum first provide a convincing argument for why a small group of self-interested…”

To deny a child liberty you must do the same. Are parents not self interested?

To deny a mentally disabled adult his freedom you must provide the same evidence. Are his caretakers not self interested?

If a genius sees a semi-blind man about to walk off an unseen cliff, is it moral for him to avoid forcing him to stop? It seems irrational to assume that no men find pleasure in saving the naive from their own hand.

Methinks1776 December 12, 2011 at 11:13 am

You assume that all men are self-interested and incapable of helping others achieve their goals.You assume they cannot make themselves happy by helping dumb people.

I assume no such thing and I wonder how many hallucinogens you must have ingested this morning to be able to read such idiocy into what I wrote.

And it’s odd that you don’t believe that men are not born with a natural right to liberty since liberty is a precondition for what you say you believe.

You’re not usually so sloppy. What’s wrong with you this morning?

Methinks1776 December 12, 2011 at 11:32 am

should read: “And it’s odd that you believe that men are not born…”

Ubiquitous December 12, 2011 at 6:23 pm

That those savings ‘would have gone’ to support productive, useful &etc. activity is an assumption, an assumption with which Keynes disagrees.

Wrong. “Saving” = “deferred consumption”. We’ve been through this before but you were sleeping. Saving does not mean hoarding.

You’re an ignorant git, GiT.

You’re trying desperately hard to brag to everyone how savvy you are with formal logic — “fallacy of the undistributed middle term” (which you misapplied in another post); “fallacy of affirming the consequent” (which you misapply here) — but these only apply if you haven’t previously committed the more fundamental fallacy of equivocation: using terms in way that is different from that in a particular discourse. If you wish, I can recommend some primers on the subject that your nurse can read to you.

GiT December 12, 2011 at 6:48 pm

Saving and hoarding are distinguishable only on the basis of a qualitative evaluation of the reasons for which people engage in their behavior. Without a distinction between the reasons for which people do not spend their money, saving and hoarding are completely indistinguishable.

If you define all saving as rational, then by definition saving cannot be hoarding, because hoarding is nothing other than irrational saving.

By defining any act of savings as necessarily rational, you assume that every act of saving is rational, when Keynes’s entire argument is that sometimes decisions to save are irrational. In essence you define hoarding out of existence, arbitrarily

You are right though, it was late and I used the wrong term. I was thinking of affirming the antecedent (not a fallacy) as something which is similar to begging the question (a fallacy, which you have committed.)

Your inane attempt to distinguish hoarding from saving is the only example of equivocation here, and it’s an equivocation you engage in so that you can smuggle in a premise without arguing for it – the premise that every time someone doesn’t spend money it is for a good reason, and that hoarding as such does not itself exist.

Sorry, I’m not interested in taking lessons in logic from someone incapable of making an honest argument. Sometimes I mess up the names of fallacies, but at least I can recognize them when they are being committed, unlike you.

Stone Glasgow December 12, 2011 at 6:55 pm

Methinks, you’re right. I was sloppy and I apologize for that. You do assume, however, that men are born with the natural right to freedom. Why? Are all men born with this right, including the mentally handicapped?

Serious question.

Ubiquitous December 12, 2011 at 8:56 pm

Saving and hoarding are distinguishable only on the basis of a qualitative evaluation of the reasons for which people engage in their behavior.

Which amounts to a re-statement of the basic, subjectivist position of Austrian economics, which is used to distinguish any sort of behavior from any other sort: i.e., why do people do X? Intentionality. And who better to make that distinction, dipschultz, than the person actually engaged in such behavior, as opposed to your paternalist overlord who, at best, is simply observing the behavior, and either second-guessing the other person’s intention, or — more likely — pre-empting the other person’s intention for his own “higher”, “nobler” one?

GiT December 12, 2011 at 9:47 pm

Yes, Ubiquitous, I know the basic Austrian argument about subjective preferences and the limits of knowledge.

So try paying attention to my point.

When people deploy the Broken windows fallacy, they accuse Keynes of not realizing that government spending requires taking money from one set of intended uses and spending them on another.

But Keynes doesn’t commit that error. He knows that the policies he recommends repurpose the intended use of resources

If he commits an error, it is the error of assuming that the government can identify inferior uses of resources, and/or be empowered to correct them in a way that is not pernicious.

But the parable of the broken windows does not establish that as true. It establishes that, given the efficient allocation of resources by individuals in a market, any forceful repurposing of that allocation is pernicious.

As for the completely ridiculous position that it is /never/ the case that paternalism or stewardship can ever be justified, I’m not going to get into it other than to say that parenting exists, and it is not bad that it does. That doesn’t justify government paternalism; it does establish the existence of situations in which paternalism is justified.

My point, after all, was not to debate about whether or not the Austrian theory of value is true, but rather only to establish that disagreement about the Austrian theory of value, and not some trivial accounting error, is what separates the Keynesian position from the Austrian position.

Ubiquitous December 12, 2011 at 11:58 pm

So try paying attention to my point.

That’s a challenge because you never get around to making a point.

When people deploy the Broken windows fallacy, they accuse Keynes of not realizing that government spending requires taking money from one set of intended uses and spending them on another.

Not exactly. Austrians would claim that they must constantly remind Keynesians that government spending requires redistributing money from the left pocket to the right pocket. Keynesians and others might not be unaware of that fact — they might simply approve of it, claiming, e.g., that the money magically multiplies while in transit from the left pocket to the right.

But Keynes doesn’t commit that error. He knows that the policies he recommends repurpose the intended use of resources

In other words, acolytes of Keynes are unaware they commit a fallacy, while Keynes himself was aware of it.

If he commits an error, it is the error of assuming that the government can identify inferior uses of resources, and/or be empowered to correct them in a way that is not pernicious.

It’s the error of assuming that a qualitative assessment like “inferior” is knowable by a third-party observer, not involved in a particular exchange.

But the parable of the broken windows does not establish that as true.

As told by Bastiat in “What is seen and what is not seen”, the parable of the broken window is neutral regarding any particular theory of value. Bastiat was working from an objective-value premise because that’s what he knew. The parable doesn’t become less true under subjective-value assumptions.

It establishes that, given the efficient allocation of resources by individuals in a market, any forceful repurposing of that allocation is pernicious.

Given freedom, voluntary exchanges on the market — by the fact of voluntarism alone — are efficient exchanges; meaning, only when freely exchanged by private buyers and sellers are resources allocated to where they are most desired/wanted/needed. So there’s a link between “voluntarism” and “efficiency” that you are evading.

My point, after all, was not to debate about whether or not the Austrian theory of value is true, but rather only to establish that disagreement about the Austrian theory of value, and not some trivial accounting error, is what separates the Keynesian position from the Austrian position.

Well, Hallelujah! You finally made a point.

Superficially, it’s an accounting error — in which one accounts for the seen but not for the unseen — which may, at times (perhaps often) be rooted in assumptions about an objective value to economic goods. But one can adhere to a subjectivist position regarding value and still, at times, make the same error. At any rate, while often connected in fact, the seen/unseen accounting error and the objective/subjective value schism are separate issues in theory and should be dealt with separately.

GiT December 13, 2011 at 12:57 am

The point I ‘finally’ made was the point with which I started off this particular conversation, remember:

“That those savings ‘would have gone’ to support productive, useful &etc. activity is an assumption, an assumption with which Keynes disagrees.

Refuting it relies (for you) upon the epistemological argument that one can better know how to use someone else’s resources.”

In any case, assuming one is able to evaluate other’s intentions as sub-optimal from a third party position is not an error.

Voluntary actions are not necessarily efficient or utility maximizing, for the individual who chooses them or for society in general. Sometimes that fact easily apparent to others.

Thinking it impossible to identify a heroin addict’s decision to buy heroin or a two year old’s decision to run into the street as ‘inferior’ is just stupid.

As to what acolytes of Keynes are aware of, they are perfectly aware of what they disagree about. That’s why their response to the BWF is that there is a liquidity trap, and they can identify it – i.e. that they, as a third party, are capable of identifying inferior uses of resources.

As to Bastiat’s parable, it is not necessarily true under any theory of value. It is only ever necessarily true if it is actually the case that resources are never misallocated, wasteful, or used for destructive purposes. If misallocation or waste occurs, then it is always possible (if not probable or likely) for an involuntary redistribution of resources to bring about economic improvement.

Methinks1776 December 13, 2011 at 1:13 am

Voluntary actions are not necessarily efficient or utility maximizing, for the individual who chooses them or for society in general. Sometimes that fact easily apparent to others.

You’re right, git.

It has become abundantly clear to me (the third party) that your voluntary actions are not good for you (who in their right mind names himself “git”? surely a sign of heroin addiction) or society.

To protect you from yourself and to correct your dumb actions, you will be handcuffed and dragged to my bootcamp at 0 six hundred hours tomorrow where you will submit to whatever corrective action I decide to subject you to for as long as I see fit. We’ll call it an optimizing redistribution of resources. Whatever you’re doing, in my superior judgment, it’s suboptimal. Even crazy.

We’ll see if you’re still a git when my jackboot is through with you. And I’m through when I say I’m through.

Welcome to my resource optimizing Gulag. Enjoy your stay.

GiT December 13, 2011 at 1:32 am

Methinks

Hilarious. Please, look up the following

1. Appeal to the consequences of a belief.
The fact that I believe some forms of coercive authority are legitimate, ajd that legitimating coercion has ill effects, does not mean that it is untrue that some forms of coercion are legitimate. Is all parenting unjust? No? Then coercion can be legitimate. Period.

2. Slippery slope
Accepting paternalistic relations or coercive relations in some situations does not imply accepting them in all situations.

Cut it with your infantile histrionics.

Stone Glasgow December 13, 2011 at 7:47 am

Methinks,

I ask why the world is flat, and you ignore the question. I ask again; why do you think all men are born with the “natural right” to freedom?

What is a natural right? If a bunch of babies are dropped on an island, would they too have natural rights to freedom if you were already there?

If not, how would it be decided when a baby becomes an adult?

Ubiquitous December 13, 2011 at 7:13 pm

@ GiT:
As to Bastiat’s parable, it is not necessarily true under any theory of value. It is only ever necessarily true if it is actually the case that resources are never misallocated, wasteful, or used for destructive purposes.

This is why you’re an ignorant git, GiT (I’ll try to explain it to you, OK?):

Irrespective of any theory of value — objective, subjective, or some as-yet-unstated third alternative — it is LOGICALLY, UNARGUABLY TRUE, that when you take ten dollars from the left pocket and put it into the right pocket, your, ah, “pants-as-a-whole” still only have ten dollars in them. One’s assumptions regarding value can then assess whether or not the ten dollars are better off in one pocket or the other, but the point is to admit that the ten in one pocket came from the other. That’s all the Broken Window Parable says.

Is there something you still don’t understand about this?

Dances with Wolves December 11, 2011 at 12:28 pm

http://en.wikipedia.org/wiki/File:US_incarceration_timeline-clean.svg

There is an effort underway to employ the captive prison population. This has become known as the prison-industrial complex. When you can pay the prisoners very little then it becomes cost effective to use them. There has been exponential growth in prison attendance since the 1980′s when get-tough-on-crime Reagan was elected to office.

There are roughly 2,500,000 potential and active laborers held in U.S. prisons.

Ubiquitous December 12, 2011 at 12:15 am

Going from investment stagnating below full employment to smashing the machines is a big leap.

Unless, of course, one agreed with the Luddites that smashing machines was a good way to achieve and maintain full employment.

GiT December 12, 2011 at 11:44 am

Sure, it isn’t merely a disagreement, but it is still a disagreement, unlike the tired use of the parable of the broken windows, which claims logical fallacy when what is in fact at stake is the truth or falsity of the premises assumed. If Keynes assumed the same premises, he’d admit the point.

As to people’s ‘right’ to liberty, Stone is correct. The only natural right that exists is the right to do whatever it is in your power to do. Any limit upon that is conventional, not natural.

muirge0 December 11, 2011 at 12:13 pm

” In a “mature” economy, increasing worker productivity releases workers but without any offsetting productive investments to employ those workers in other industries.”

Yeah and that seems to fit with reality and his long run arguments. Free markets are winner take all markets and there is no sane reason the majority of people should submit to them just because some libertarian thinks feel they are more free when unemployment rates are high.

If you philosophy was so damn good for everyone they’d support it. But they know better and you’d rather look down on them and assume they are children who don’t know better and deserve the lot they get.

WRONG… you are no purveyor of liberty much as you think you are. You have an opinion… it might be right but it also might be dreadfully dreadfully wrong dooming many to unneeded suffering and causing a major drag on the advancement of human civilization.

GiT December 11, 2011 at 4:31 pm

‘Without any offsetting productive investments’ for a time, not for all time. In what way does Keynes suggest that underinvestment is a permanent, and not just a cyclical, problem?

Andy December 11, 2011 at 10:53 am

Don Boudreaux — reading NYT op-eds so we don’t have to. Thanks Don!

W.E. Heasley December 11, 2011 at 11:00 am

“If, in paragraph five, innovation that makes people more productive is a regrettable source of permanent job losses, how in paragraph eight does innovation that “makes people’s lives … more productive” – and, hence, destroys some jobs – become a desirable policy goal“? – Donald J. Boudreaux

We can defer to Thomas Sowell for the answer to paragraph five [paraphrasing]: Paragraph five fits the vision of the anointed and hence arguments without arguments is employed.

Paragraph eight is the author mistakenly forgetting he employed a notional argument without a spec of evidence in paragraph five, then refutes his own claim. Journalism at its very zenith! Very nice!

“The New York Times Company Corporate Governance Principles
Revised as of February 18, 2010

Principles

The New York Times Company’s Board of Directors, acting on the recommendation of the Nominating & Governance Committee, has adopted the following Corporate Governance Principles:

1. The Core Purpose and Core Values of the Company
The Company’s core purpose is to enhance society by creating, collecting and distributing high-quality news, information and entertainment.

The core values that enable the Company to achieve its core purpose are:

Content of the highest quality and integrity. This is the basis for the Company’s reputation and the means by which it fulfills the public trust and its customers’ expectations”.

http://www.nytco.com/corporate_governance/principles.html

WhiskeyJim December 11, 2011 at 11:51 am

I marvel at how The New York Times so consistently finds the Thomas Friedmans of the world.

The guy need instruction, and has needed it for decades now.

Read one of his books. I dare you.

Dan J December 11, 2011 at 12:01 pm

Marveling at the Chinese authoritarians and declaring how great it would be to have a dictator for a day, as all of the things needed to be done would be accomplished (with the right person, of course), as Thomas Friedman once exclaimed is enough to cast his opinions into the trash heap.

WhiskeyJim December 11, 2011 at 11:28 pm

The World is Flat is arguably the biggest piece of wrong headed gobbledygook by a supposed thinker I have ever read.

Some of Gladwell is not far behind.

Jeremy December 11, 2011 at 11:52 am

I don’t know why anyone would even bother to read anything by that Friedman. He has absolutely nothing of value to give and nothing he writes make sense. He’s just confused the NYT into thinking “verbose” equals “intelligent” and ran with it.

Darren December 11, 2011 at 2:56 pm

“verbose” equals “intelligent”

It seems to me that verbosity has generally been a convenient stand-in for intelligent writing for quite a while.

Dances with Wolves December 11, 2011 at 11:59 am

“Ignore the fact that this Luddite lament – while in tune with the sympathies of Lord Keynes – is supported by zero historical evidence.”

Zero is a pretty extreme reading of the historical evidence. Spain has had something like 20% unemployment since Franco died in the 70′s. The current economic crisis in Spain has been pushing unemployment to over 40 percent among workers ages 15 to 24.

How do you know that zero percent of the chronic, persistent unemployment is do to technological advances. The truth is that you seem to not care about the unemployed. Is it their own fault and tough luck? You appear to have zero percent compassion for the unemployed is my take.

http://www.washingtonpost.com/world/europe/spains-conservative-declare-victory-in-election/2011/11/20/gIQADBpZfN_story.html

Dances with Wolves December 11, 2011 at 12:00 pm

isn’t due to technological advances…

Sam Grove December 11, 2011 at 2:01 pm

How do you know that zero percent of the chronic, persistent unemployment is do to technological advances.

Persistent unemployment has zero to do with increasing productivity.

Why does that have to be explained to you?

Dances with Wolves December 11, 2011 at 2:58 pm

“Persistent unemployment has zero to do with increasing productivity.”

You know everything, except what you don’t know.

“Much technological unemployment, e.g., due to the replacement of workers by machines, might be counted as structural unemployment. Alternatively, technological unemployment might refer to the way in which steady increases in labour productivity mean that fewer workers are needed to produce the same level of output every year. The fact that aggregate demand can be raised to deal with this problem suggests that this problem is instead one of cyclical unemployment. As indicated by Okun’s Law, the demand side must grow sufficiently quickly to absorb not only the growing labour force but also the workers made redundant by increased labour productivity. Otherwise, we see a jobless recovery such as those seen in the United States in both the early 1990s and the early 21st century.

Technological unemployment has historically been temporary and the economy has adapted and created jobs in other sectors; however, some analysts, such as Martin Ford, in The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future[57] argue that many jobs in the economy will ultimately be automated via advancing technologies such as robotics and artificial intelligence, resulting in substantial, permanent structural unemployment.” -Wikipedia (unemployment)

You need to brush up on your Martin Ford.

http://www.amazon.com/Lights-Tunnel-Automation-Accelerating-Technology/dp/1448659817/ref=sr_1_1?ie=UTF8&qid=1323633456&sr=8-1

Maybe you can get a used copy.

Dances with Wolves December 11, 2011 at 3:02 pm

Sam,

Funny, you are probably one of those who lost her job permanently to technology. Explain why you are unemployed and what you were doing before you lost your job. Inquiring minds want to know why you are out of the job market. Who’s paying your bills for you? An old aunt?

Sam Grove December 11, 2011 at 3:25 pm

I disagree with him.

Has he proven his case, or does he merely aver it?

Sam Grove December 11, 2011 at 3:28 pm

I work IN technology.

Sam Grove December 11, 2011 at 3:30 pm

And I bet I am a better dancer than you.

El Diablo December 11, 2011 at 3:39 pm

LOL, Sam! Don’t let Marxist with Fake Indian Name for Fictitious White Man bother you. She hasn’t eaten any red meat yet so she is in a particularly bitchy mood. It helps her deal with her emotional and biological pain to make stuff up about people who are much smarter than her.

kyle8 December 12, 2011 at 4:39 am

You have answered your own question. Since Spain has high unemployment and Germany does not, yet they are both part of the same economic community, then obviously there is something Spain is doing that Germany is not, or vice-versa.

I think it highly unlikely that the distinguishing factor is that Spain uses more automation than Germany.

A more likely candidate would be high taxes and regulations that are unfriendly to business.

muirge0 December 11, 2011 at 12:07 pm

Critical thinking might involve NOT believing the market gods always proportions rewards justly…. I think that is Friedman’s point.

If you are an ideological purist who believes markets always are superior to policy you have no wiggle room for nuance. Putting aside for now the very fact that such a belief is itself illogically inconsistent and can only make you truly an anarchist via a simple reductio ad absurdum argument, it is clear that for these people critical thinking is also of little value…. as it is in an religion. In fact it is even counterproductive. But it has little to do with reality. FDR’s economy should have been worse not better than Cooldige’s or Reagan’s. But this fact cane avoided if one avoids critical thinking.

The debate here is nothing about the economy. For the big picture we have a pretty good idea of how to set up our economy to be most successful. What is far harder is indeed how to get politics and government set up to make the best decisions that indeed maximize market efficiency. Politics is the problem not the economy but that doesn’t mean government is of no use. So far the best government has been well correlated with the best economy but indeed there is plenty of room to improve on government and the one solution that is clearly not the right way forward is to blindly deregulate the economy… the toxic assets let loose by unregulated markets are clearly the reason for our poor economic situation.

Greg Webb December 11, 2011 at 12:29 pm

George, the current economic situation has been explained to you many times, yet you insist in repeating the same old nonsense. The federal government, through low interest rate monetary policies and subsidies to the real estate industry through fiscal and tax policies, created the incentives that created the most recent boom and bust. The problem is government, not to people that comprise the markets.

I Miss Nixon December 11, 2011 at 6:38 pm

the same old nonsense. . . here it is:

The federal government, through low interest rate monetary policies and subsidies to the real estate industry through fiscal and tax policies, created the incentives that created the most recent boom and bust

Silly me. I thought the millions who lied on their loan applications and the tens of thousands who packaged and resold the loans, knowing their were fraudulent had something to do with it all

And, further silly me. Since all those low interest rates (and tax incentives) were equally available for any other investment, how did the bubble become concentrated in real estate?

Why has everyone with a discerning eye said that the Economy was sick from 2001 on? Why do all the charts showing decreasing capital investment, as soon as the Bush tax cuts and wars started?

In sum, being honest about the position in which we find ourselves has no connection with what solutions we ought to attempt, so why do we have spin of the causes?

Greg Webb December 12, 2011 at 1:24 am

Hey Luzha! Why did you change your name again?

Sigmund Fraud December 12, 2011 at 9:28 am

Hey Luzha! Why did you change your name again?

Yah, vhat vee see heaah is..DPD (Dissociative Personality Disorder) is present in all zee stahtists und leftists. You zee leftist political eempulses are just vun part of a multi-faceted metal disorder.

kyle8 December 12, 2011 at 4:42 am

“”Since all those low interest rates (and tax incentives) were equally available for any other investment, how did the bubble become concentrated in real estate?”"

Factually incorrect. Real estate enjoys a variety of specific tax and interest rate reductions that other borrowing does not.

muirge0 December 11, 2011 at 11:29 pm

Greg,

It’s been explained to you a hundred times the FED did EXACTLY what Wall Street wanted. The Fed was run by a self proclaimed libertarian. Wall Street ran the Fed. Wall street had their man in the treasury as well and Wall Street got the SEC to decrease capital requirements. It wasn’t us liberals screaming for those policies. Again 1 trillion dollars of bad loans could only get leveraged to $100 trillion dollars by rule changes requested and granted to the big banks and by creations not of government but of the big banks themselves.

Greg… why are the banks no longer making bad loans? Can you answer that honestly without having to deceive yourself. Why did the banks NOT used to make bad loans in 1999 and before. You can not answer these questions honestly. It will require you to lie to yourself. I find that sad.

Greg Webb December 12, 2011 at 1:28 am

George, you are pretending at knowledge again. The Fed maintained economic growth during the Greenspan period through low interest rate monetary policies, which facilitated malinvestment in the real estate industry in according with the federal government’s fiscal and tax policies.

muirgeo December 12, 2011 at 7:48 am

No real answer huh Greg? Just denying reality. How does a low interest rate allow you to leverage bad loans 100 times with opaque financial products if leverage ratios weren’t increase and if those financial products never existed before?

Again you can’t answer that so I will witness you lying tomyourself…. AGAIN. Sad.

Greg, you clearly can’t deal with reality. The fact is if Greenspan hadn’t keep interest rates low the economy would have never recovered from the 2001 recession because it was already seriously broke from our trade policies and the stagnant wages Bush created. It’s also the reason our current economy is not recovering.

You are a basically a dead man walking in this debate because there is no more wiggle room. The economy will only improve significantly if some drastic measures and changes are made in the direction of improving middle class wages. Doing nothing as the republicans are now forcing us to do or passing any of their agenda if the public is stupid enough to give them the power to do so will clearly make things worse.

Sam Grove December 11, 2011 at 2:02 pm

George learned a phrase from his encounters with libertarians; “critical thinking”.

Methinks1776 December 11, 2011 at 4:42 pm

Now if he would only learn what it means.

Greg Webb December 11, 2011 at 4:58 pm

And, once he learns what “critical thinking” means, it would be nice if he tried to apply it before regurgitating idiotic leftist propaganda.

Methinks1776 December 11, 2011 at 5:41 pm

I’m afraid we’re asking too much.

Greg Webb December 12, 2011 at 1:28 am

I think you are right. Poor old Georgie was just born stupid.

muirge0 December 11, 2011 at 11:37 pm

I AM the critical thinker here. Tying the facts with the theory. You guys are the creative thinkers twisting anti-correlation to conform with what it is you believe. Post Coolidge we did horrible, post FDR we did great post Reagan here we are again. It’s that simple Sam. Your silly philosophy is opposed by historical reality and the facts. There is consistent anti-correlation with what you believe. Your philosophy is so awful it is unable to exist anywhere in a stable state in nature and when policy leans a little too much in its direction the course of civilization is thwarted. Its the 2 steps forward and the 1 step backward… you guys are the step backward. Things will only improve with massive changes in the progressive direction. If we live long enough to see the policy changes we will have a forth economic experiment confirming my positions and pushing yours into the dustbin of history with things like lamarkism and spontaneous generation and creationism.

Greg Webb December 12, 2011 at 1:29 am

Georgie, that’s not history. That’s libtard propaganda.

brotio December 12, 2011 at 2:22 am

I AM the critical thinker here

If you’re using the word, “critical” in medical terminology; as in, “He had a heart attack, and is in critical condition”, then you are correct. There is a critical shortage of thinking emanating from your pea-brain.

Methinks1776 December 12, 2011 at 6:15 am

:)

muirgeo December 12, 2011 at 7:54 am

“Georgie, that’s not history. That’s libtard propaganda.”

LOL…Right there was no Great depression after Coolidge and FDR didn’t get elected 4 times and creationism is real and climate change is fake and I am the one who’s not too bright. Yeah you all are too smart for me. The only way for me too compete with your brilliance is for me to buy some of those reality blinders you have… those are what make you soooo smart huh?

I Miss Nixon December 12, 2011 at 9:17 am

I Miss FDR

Methinks1776 December 12, 2011 at 9:20 am

Well, at least we know that Miss Nixon is not Japanese.

muirge0 December 12, 2011 at 11:12 am

I miss reasonable rational people. I hate living in this Invasion of the Brain Snatchers world.

brotio December 12, 2011 at 10:01 pm

I hate living in this Invasion of the Brain Snatchers world.

Why are you worried about brain snatchers? They aren’t going to bother with you.

Jon Murphy December 12, 2011 at 9:21 am

I’m a little confused to your point. Your definition of “post-” changes with each president.

“Post-Coolidge” you seem to refer to the year immediately after him
“Post-FDR” you seem to refer to the decade after him (I’m assuming you are not referring to the 30′s and 40′s, as those would not be post-FDR).
“Post-Reagan” you seem to refer to two decades after him

Which do you mean?

muirge0 December 12, 2011 at 11:09 am

Jon,

Cooldige represented an era of policy as did FDR and so too with Reagan. I think it’s no mere coincidence that the two era’s of relative laissez faire economics resulted in concentrations of wealth, economic collapse and overall less economic prosperity than the era represented by FDR when good policy was better established and predominated over laissez faire policy.

Does that really seem unreasonable on my part?

Seriously if the situation was the other way around I’d be on your side. I simply care about what seems to work best pragmatically in the real world. The evidence points to good regulation and a more equitable policy regime then the simple minded less rules is better idea. We did that twice and it resulted in major crashes two times now.

When I see defenders of market fundamentalism trying to blame the Great Depression on FDR, or telling me Hoover was a Keynesian and trying to blame the Thatcher/Reagan economy on Obama it’s quite clear to me that they have given up their objectivity, they have jumped the shark to defend a preconceived position. My position changes with the evidence.

Jon Murphy December 12, 2011 at 11:23 am

Well, if you are talking about policy eras, then you’d have to include modern times under FDR as well. So many of the government programs we have today were established by the New Deal.

The only issue I have with your statements is that they are kind of vague. They don’t really mean anything. You’d have to show that the policies of Coolidge, FDR, Reagan, etc caused the problems (or solutions) and not that they merely existed during. Remember that correlation does not imply causation. It gets especially vague when you talk about Reagan; the majority of the causes of our current crisis occurred well after he left office and cannot be attributed to him.

That’s my issue with what you’re saying here. It’s extremely vague.

muirge0 December 12, 2011 at 11:26 am

“You’d have to show that the policies of Coolidge, FDR, Reagan, …”

No,no,no Jon… enough of that. You guys are making the claims YOU show that laizzes faire leads to improved prosperity…YOU provide the proof. You made the claims and it appears more to lead to depressions. Take some responsibility for the claims you make so surely and so boldly.

muirge0 December 12, 2011 at 11:30 am

Again Jon look to policy.

The FDR era had high marginal and corporate tax rates, strong unions and Glass Steagal ( and other banking rules).

The Cooldige and Thatcher eras specifically did not have those and the results were concentrated wealth and middle class stagnation and economic collapse.

muirge0 December 12, 2011 at 11:31 am

And stop telling me correlation doesn’t mean causation. Correlation is a hell of a lot better to have on your side than anti-correlation.

Jon Murphy December 12, 2011 at 11:40 am

I can do that. Allow me to provide you with a list of countries who, as the government became less involved, their economies thrived and grew faster:

Post-Soviet Poland
West Germany (compared to East Germany)
China since the 1970′s
The US after WWII (The relative lessing of government control of the economy)
Post-Soviet Georgia
Post-Soviet Ukraine
Post-Soviet Russia
South Korea
Post-WWII Japan
Post-mercantile Britain

We can even do case-studies within the United States as each state has different levels of regulations.

New Hampshire (state with very little regulations) almost completely unaffected by the recession

New York and California (very restrictive states): got f-ed in the a.

If you’d like more evidence, I suggest you read some of the following books:

The Rational Optimist by Matt Ridley.
Capitalism and Freedom by Milton Friedman
The Wealth of Nations by Adam Smith (Chapters 1-3 of Book 1 would suffice. No need to read the entire thing).
The Worldly Philosophers by Heilbroner (1st name escapes me)
The General Theory by J.M. Keynes.
Any of Russ’ books

This list is far from comprehensive. There are tons and tons of academic papers out there. Krugman has a wonderful piece about the liberalization of trade and the benefits of no government interference in the trading world (I forget it’s name).

So, there goes your strawman. Have you anything to say about my other point? How vague your statements are? I asked a legitimate question and, if you are confident in your evidence, you should have no issue giving me an answer.

Jon Murphy December 12, 2011 at 11:53 am

“The FDR era had high marginal and corporate tax rates, strong unions and Glass Steagal ( and other banking rules).

The Cooldige and Thatcher eras specifically did not have those and the results were concentrated wealth and middle class stagnation and economic collapse.”

Again, you’re confusing me. FDR was president during the longest depression this country has ever seen, and yet you say his policies grew the US economy. I mean, US GDP barely made it back to pre-recession levels prior to the War (I am discounting WWII, unless you are also saying war was a FDR policy?). Conversely, The Reagan-Thatcher decade (I’m assuming you’re using the two interchangeably) the US GDP grew at bullshit levels.

Where is this “anti-correlation” of which you speak?

You are being much to vague. Give me precise time frames not this wishy-washy stuff.

Michael E. Marotta December 11, 2011 at 12:13 pm

On our street, there was another Sicilian family, the Incandellas. Apparently, sometime back, their family had a craft. Carpenter, Prentice, Brewer, Baker, Smith, Miller … Growing up, I saw television actors Marjorie Lord and Jack Lord, and of course editor Bennett Serf. Jobs change, and thank goodness for that, or we might all be named Serf…

Long ago, I read a science fiction story about a generation ship where one of the women had the family name “Astrophysicist.” Bill Programmer, Steve Interfacedesigner, Esther Technicalwriter, … But, yes, Bernie Madoff with the money…

Ubiquitous December 12, 2011 at 11:09 pm

or we might all be named Serf

Bennett Cerf, not Serf.

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

Katherine Gordy Levine December 11, 2011 at 12:22 pm

One problem driving all the drivel is the denigration of any work. Isn’t there something wrong when most of our youth want to be rock stars and have a job they love.

I love my garbage men, they do more to maintain health than most academics even most medical researchers. And yes I love what innovation has done for medicine and how it has prolonged my life. Just wish most could enjoy its benefits.

I am a bleeding heart liberal and a Cranky Old Lady. Stay strong.

Stone Glasgow December 11, 2011 at 1:59 pm

I agree. Even worse is thinking that it is wrong to replace garbage man with machines.

Eventually no human will need to take a job they don’t enjoy; machines will do everything boring and dangerous and unpleasant.

JoshINHB December 11, 2011 at 6:32 pm

Nah,

Boring and unpleasant are ever shifting pseudo conditions.

Ever hear Dilbert?

Stone Glasgow December 13, 2011 at 4:49 pm

I don’t agree. Eventually machines will support us and our every desire without necessary human effort. Perhaps in the future it will be unpleasant to be idle and unemployed and listless. Perhaps in the future people will demand that their freedoms be taken from them, as they do today.

Greg Webb December 11, 2011 at 12:23 pm

“If you are an ideological purist who believes markets always are superior to policy you have no wiggle room for nuance.”

LOL! George, you argue that a few in government should decide instead of the many who make those decisions in free markets everyday. Now that is ideological purity — stupid Marxist ideological purity to be more exact. Let people alone to make their own decisions. By arguing otherwise, you reveal your insecurities and need to control others.

Stone Glasgow December 11, 2011 at 1:54 pm

Market participants cannot make morally acceptable decisions unless individuals act altruistically. Government aims to prevent immoral actions by traders by preventing “fraud.” Definitions of fraud vary widely.

It isn’t so strange that many trust the Big Men in government to do this job honestly, but It is strange that we’re not completely enslaved already; anything but local small governance seems impossibly large.

Greg Webb December 11, 2011 at 4:10 pm

It is very strange that those who are most concerned about individuals acting in their own self interest advocate giving power to certain individuals hoping for a different result just because they were given that power.

g-dub December 12, 2011 at 12:32 am

Market participants cannot make morally acceptable decisions unless individuals act altruistically.

hmmm…. I don’t know about that. Reputation counts if you want to do successful trading in the future. I’d guess self-interest ironically produces more “moral” appearing action than altruism.

Stone Glasgow December 13, 2011 at 4:52 pm

Often, reputation cannot be determined by customers based on the quality of the work. For example, a doctor can prescribe a more profitable drug even if he knows a cheaper one will work. His patients are too ignorant of medicine to know if they received the best drug, and will recommend him based not on his choices, but perhaps on his building and bedside manner.

Stone Glasgow December 11, 2011 at 1:46 pm

This man is a child; it was difficult to finish the article. I’m surprised you found it worth your time to quote him. He seems not to have enjoyed a rational thought in his lifetime and may as well be mumbling incoherently to himself.

Jon Murphy December 11, 2011 at 3:45 pm

I’ve a question for all those who cry foul when technology “creates unemployment” and “destroys jobs.”

Many jobs in our military are being done more and more by robots: bomb disposal, recon, minesweeping, bombing, etc. This technology is taking away good, well paying jobs from Americans. Is this bad?

Greg G December 11, 2011 at 3:54 pm

“Is this bad?”

We’ll see. We may come to regret the precedent we are setting with the use of drone technology. Making it easier to kill is probably only good when it’s right to kill. Of course even if it is bad, it may be inevitable.

JoshINHB December 11, 2011 at 6:36 pm

Yes.

It’s important to remember that less than lethal force for police departments was developed for liberal reasons and has resulted in more acceptance for less than lethal uses of force, with bad consequences and even worse future implications for civil liberties.

Greg Webb December 11, 2011 at 4:06 pm

“Many jobs in our military are being done more and more by robots: bomb disposal, recon, minesweeping, bombing, etc. This technology is taking away good, well paying jobs from Americans. Is this bad?”

No. Technology, in and of itself, is never bad. The fact that technology makes people more productive, and hence, produces greater wealth is good. The fact that people will sometimes use technology for bad does not make the technology bad because those people were going to do bad with or without the technology.

GiT December 11, 2011 at 4:42 pm

If jobs are the only way people have to earn a living, and the number of jobs available decreases while the number of people who need jobs to make a living stays constant, then the destruction of jobs is in some sense bad, even if those jobs are generally wasteful, undesirable, and dangerous. (presumably not being able to afford to provide for oneself is more undesirable and more dangerous than taking shitty jobs).

The problem, then, is not increasing efficiency, but the failure to distribute money to those who need it through the labor market.

Note that I framed my statement as a conditional. I’m not saying that the first part is true, I’m saying that if it is true, then it has bad consequences.

Sam Grove December 11, 2011 at 6:27 pm

How many jobs are available relative to population?

What happened to all the agricultural jobs?

GiT December 11, 2011 at 6:32 pm

1. Yes, that’s the question.

2. They were destroyed. Do you have a point?

Jon Murphy December 11, 2011 at 6:36 pm

I’m wondering, GiT, if the question shouldn’t be the number of useful jobs available relative to the labor force. After all, we don’t want armies of people just digging ditches. That’s just a waste.

GiT December 11, 2011 at 7:00 pm

You’re eliding the conditions I’m setting up to frame the problem.

Assume the only way to make a living is to get a job.
Assume there are fewer useful jobs than there are people who need to make a living.

If the goal is to make sure everyone can make a living, you need to add useless jobs to the useful jobs until there are enough (useful or useless) jobs for everyone.

Unless, of course, you can come up with either A. more useful jobs or B. other ways of making a living than working a job.

Obviously there are accounts of why both A and B are true. But here are some basic reasons to be suspect of the necessity of their truth

For A, the fact that someone needs a job is not sufficient reason for someone to give them a job, and the desire to get a job to survive is not a sufficient condition for someone being able to take action so as to get a job.

For B, not everyone has access to ‘other ways of making a living,’

Whether

1. entrepreneurs/capitalists find ways of making people useful as workers
2. workers can find ways of improving their usefulness and
3. individuals have access to other modes of (useful) support than the labor market

are all contingent questions that need to be empirically verified. As it stands, in particular instances, for particular individuals, all 3 of these are clearly not always true. The question is whether those particular instances ever add up to a general tendency.

GiT December 11, 2011 at 7:05 pm

Sorry, that should read ‘obviously there are accounts of why both A and B are NOT true.’

Sam Grove December 11, 2011 at 7:32 pm

What became of all those unemployed thereby?

Sam Grove December 11, 2011 at 7:33 pm

How many possible “good” jobs are there?

Methinks1776 December 11, 2011 at 8:49 pm

I think we have plenty of empirical evidence that somehow humans muddle through and find ways to satisfy their wants and needs (which is the only reason they care about producing – or as you put it, having a job).

This hysteria over persistent insufficient employment is hilarious at this point in human history.

GiT December 11, 2011 at 8:56 pm

That’s a stupid question.

I framed my argument as a conditional to demonstrate how if you assume that job creation does not necessarily equal/exceed the rate of job destruction, and if you assume that not everyone has access to non-wage forms of subsistence, then job destruction can be a bad thing.

This was in order to shift the field of debate. The salient disagreement is about whether or not people are always able to successfully cope with unemployment in attempting to meet their basic needs.

The level of debate is not about whether technological progress is good – everyone except anti-Modernist pastoral romantics agree with that.

Some assume people can’t always cope, if not in general at the very least in particular instances, and as such see technological change leading to job loss as creating socially relevant problems

Others assume that the unemployed can always cope, and as such can’t imagine why losing a particular job would create any problems at all, since it is supposedly not at all difficult to find some other way of supporting oneself.

See how that sort of disagreement is very different from disagreement over whether or not modernization is good?

Methinks1776 December 11, 2011 at 9:04 pm

Git, if the number of people unable to cope with the loss of a particular job were such a giant problem, humanity would not have survived and prospered this long.

You’re just spouting nonsense.

GiT December 11, 2011 at 9:12 pm

Previous post was directed to Sam Grove.

Methinks -

Yes, you think there is evidence that that is the case in both history and the present. Others think history looks different and that even if it looks as you say it does, we cannot rely upon the future being like the past.

My point is that this is what the argument is about, not about whether or not technological efficiencies are good or bad.

As to the ‘hilarity’ of persistent insufficient employment, I’m sure those who spend their lives living in slums (1 billion, latest count), unable to secure regular waged labor in the formal economy, appreciate your laughter and assurance that any difficulty they have in providing for themselves is a hilarious fiction.

GiT December 11, 2011 at 9:18 pm

You’re the one speaking nonsense, Methinks.

Humanity’s survival has to do with whether most people can survive after losing their means of subsistence, not with whether every individual can survive after losing their means of subsistence.

Humanity has, without a doubt, been doing just fine.

Individual humans, often times, have not, despite the vast amounts of wealth humanity now produces. (over a dozen countries still have infant mortality rates over 100/1000 and life expectancy rates under 50. Clearly, not every human has an easy time providing for themselves).

Methinks1776 December 11, 2011 at 9:22 pm

As to the ‘hilarity’ of persistent insufficient employment, I’m sure those who spend their lives living in slums (1 billion, latest count), unable to secure regular waged labor in the formal economy, appreciate your laughter and assurance that any difficulty they have in providing for themselves is a hilarious fiction.

Even the people in the slums to which you refer are able to feed themselves. But, of course, you’re talking about people who are in one way or another prevented by man-made events – government intervention. Yes, I agree that minimum wage laws, union monopolies and any law that raises the cost of entrepreneurship should be scraped from the books. But, to chalk these people’s plight up to technological developments or to a some natural state is to engage in absurdity.

Methinks1776 December 11, 2011 at 9:24 pm

Git, you’re getting more pointless with every post. At least you’ve named yourself appropriately.

Sam Grove December 11, 2011 at 9:33 pm

That’s a stupid question.

I was trying the Socratic method with you, but it seems we won’t be able to get to the point if you take that attitude.

GiT December 11, 2011 at 11:01 pm

Sam -Grove

I know precisely what your method was, and it was predicated on completely missing the point. I’m not interested in your use of the Socratic method (which assumes what it seeks to conclude and asks questions so as to construct the answer it seeks.)

Demonstrating that agricultural workers found new lines of work historically does not demonstrate that all workers who lose their jobs will find new lines of work and it does not demonstrate that people losing their jobs is not a problem for that person, even if it is a problem people are usually able to solve. The simple point is that if they don’t solve it (through another tiny contribution to technology), they are in a bind.

So if it becomes more and more difficult for individuals to solve those problems in general, then there is a problem.

GiT December 11, 2011 at 11:14 pm

Methinks-

I’d care more about you calling my comments pointless if you were capable of following a point.

But seeing as how you feel the need to attribute positions to me I don’t hold and argue about issues I’m not talking about, and use incoherent logic in a fallacious, strawman argument, I’m not sure why I should bother.

muirge0 December 11, 2011 at 11:41 pm

“Many jobs in our military are being done more and more by robots…”

Wait… you mean the government is improving our military efficiency. I thought the government was incapable of making anything, incapable of making jobs and incapable of doing things better than the private sector…. I think you just blasphemed yourself…. the Invisible Hand God is going to be very very upset with you.

sh December 12, 2011 at 11:12 am

It isn’t the government improving technology, it’s defense contractors. They’re private.

I Miss Nixon December 11, 2011 at 4:36 pm

Thomas Friedman is an object lesson for all who bloviate–you may have one or possiblty two ideas in a life time, but they will soon be overtaken by events.

Don and Russ ought to learn, but they won’t.

Today, reading Friedman is useful only because he makes it clear that no mental models exist for making sense out of the Mid-East. Events have moved so quickly, driven by people whom we do not know (and with whom we cannot communicate) (thanks to Bush/Bolton), that any observer with altitutude or perspective can readilty tell that his observations of even two years ago are of no moment.

Similarly, his current venture into domestic policy is equally illumative only because he marks how uncharted the waters have become.

What is really funny is that Friedman is ripped for saying, in different words, what Tyler C has been saying. The low hanging fruit (investment opportunity) is gone.

But then Tyler is one of the gang.

What is appalling is that when articles of faith are offered as economics.

The honest fact is that no rule of economics means that techonology will in the future produce better jobs and opportunities for the vast multitude or even a significant part of the populace.

We have had a steady rise in technology for the last 30 years, will a steady decline in the quality of most jobs and the lives of most workers.

In fact, on Tuesday we are supposed to learn that techonology has “discovered,” God, i.e., the Higgs boson.

Methinks1776 December 11, 2011 at 4:42 pm

Luzha is back.

Greg Webb December 11, 2011 at 4:56 pm

Damn! I thought that we were finally rid of one of these stupid trolls. I like debate and discussion. Isn’t there anyone on the statist side that is intelligent and can make a persuasive, logical argument supported by objective, verifiable evidence?

Mesa Econoguy December 11, 2011 at 5:12 pm

These people are so hopelessly confused and deluded that they are forced to re-interpret past misinterpretations of their own failed economic beliefs in order to divert attention from the 9% unemployment caused by their current failed policy.

Majuscule December 11, 2011 at 7:15 pm

The troll has morphed from Eastern Promises to Salt Water Economist to I Miss Nixon. The guy is obviously an unapologetic statist, but he’s unable to competently defend his position. Instead of intelligent debate, we’re subjected to posts that are incoherent, snarky, and beyond ridiculous.

It is entertaining to read, though. He’s oblivious to the fact that we’re all laughing at him.

Sam Grove December 11, 2011 at 6:28 pm

So today’s jobs are worse than when people had to pull sticks through the dirt to plant seed?

kyle8 December 12, 2011 at 4:54 am

“” We have had a steady rise in technology for the last 30 years, will a steady decline in the quality of most jobs and the lives of most workers.”"

I assume you meant with.

Again, factually incorrect.

Bill Stepp December 11, 2011 at 5:07 pm

Daniel Kuehn and “Invisible Backhand”:

The rapper Maynard K informed a dinner guest at a Washington restaurant in 1935 that he could cure unemployment by sweeping a pile of towels on to the floor, which he proceeded to do. It makes Mr. Ludd seem like a well-mannered economist by comparison, or at least well-mannered. As an economist, Maynard K was a pretty fair moralizer.

JoshINHB December 11, 2011 at 6:39 pm

His parable of the buried wine bottles is auto-parody.

EG December 11, 2011 at 5:57 pm

What do “business schools” have to do with this?

Furthermore, is arguing with Thomas Friedman worth it?

kyle8 December 12, 2011 at 4:55 am

It’s like arguing with your Mother in Law, It feels good for a while, but there is no profit in it.

Sam Grove December 11, 2011 at 7:56 pm

The world is poorer for the arbitrary division of people into employers and employees. That was the price people paid for job security.
They do not think of themselves as self employed traders.

Methinks1776 December 11, 2011 at 9:00 pm

You make a good point, Sam. However, there is no job security. Unlike in France, at this point in the United States, if a company shuts down a plant, the government will not force it to rehire the workers fired in the closing of the plant.

GiT December 11, 2011 at 9:25 pm

Thinking of yourself as a self-employed trader does not make you one. Being a self-employed trader, even of your own labor, requires access to physical, financial, and/or human capital. Some people, clearly, don’t get access to much of any of those, and thus are going to have quite a bit of difficulty employing themselves, no matter how hard they think of themselves as self-employed.

Methinks1776 December 11, 2011 at 9:28 pm

Not even in the third world is what you’re saying true. Not even in the most remote parts of Bangladesh. You are completely and totally clueless.

GiT December 12, 2011 at 2:24 am

Funny, the person implying that no where in the world is it true that anyone has ever seriously suffered or died because of their inability to find access to a sustainable source of personal income is calling me clueless.

Yes, it is trivially true that in the entire world no person who is alive has failed to find a way to stay alive.

Of course, that’s because any person who fails to find a way to stay alive… dies.

A tautology is not an argument, Methinks.

Every time someone dies because of a lack of economic resources it is not necessarily the case that it is either A. their fault or B. the government’s fault or C. nature’s fault.

Sometime’s it’s the fault of the ‘emergent order’ into which they were born.

Saying that it is impossible to willfully arrange the world in such a way so as to improve upon the life outcomes people face relative to the emergent order of a free market (1) is a different argument from saying that the emergent order of a free market leaves no individual without a safe, stable means of providing for themselves and their dependents (2).

The first, I might actually believe. The second is patently absurd.

kyle8 December 12, 2011 at 5:04 am

A free market provides the method that a person may use.

Methinks is correct and you are not. Even in the most poverty stricken places there exists the means to prosper.

This can be temporarily effected by drought, famine, war, or the negative effects of bad government. But human drive and ingenuity are powerful forces.

You constantly lament on the plight of those who you believe lack sufficient “human capital”. And you wish to “improve” on the way the benefits of a free market are distributed.

However, this is just your own way of feeling superior to others. In your case narcissism took the form of paternalism.

GiT December 12, 2011 at 5:42 am

I don’t see what ‘may’ has to do with anything. The free market may provide the methods which you deem it ok for a person to use, but a person provides their own methods.

The ‘free market,’ among quite a few other things, provides conditions under which people choose their methods.

The conditions under which people choose the methods they use have a rather large effect on what their quality of life is.

Means to prosperity existing does not mean that means to prosperity will be found, no matter how driven and ingenious humans are. (And presumably if someone’s drive and ingenuity is not strong enough, well, sucks to them. Your Social Darwinism is showing.)

As to your armchair psychology, this isn’t even coherent.

People lacking human capital has nothing to do with what I believe. How much human capital someone has is nothing other than how much they can command on the market for their skills and capacities. The less their skills and capacities garner, the less human capital they have. If one has a skill that is no longer economically valuable, then that skill is no longer part of your human capital This has nothing to do with whether or not they are skilled or capable, or superior or inferior, it has to do with how they are judged by the market, not with how I judge them.

Sam Grove December 11, 2011 at 9:36 pm

But if you don’t think of yourself as one, you will never be one.

It’s annoying to have to belabor every point with you. Becoming a self employed trader, in a world of employers and employees, starts with changing the way you view yourself.

vikingvista December 11, 2011 at 10:41 pm

Or put another way, they are self-employed traders whether they like it or nor not. Not realizing that they are tends to make them pretty unsuccessful at it, and easier prey for those who profit from their willful dependence.

But it is true, that governments place many obstacles in the way of their independence and mobility in the marketplace. And the government does it at the request of many the victims of those policies.

Josh S December 12, 2011 at 2:36 pm

You can’t make any manufactured good on an economy of scale with “self-employed traders.” Good luck enjoying prosperity without cars, airplanes, computers, or textiles. Just to name a few. The belief that the key to prosperity is self-employment is as incorrect as the belief that the key is a large manufacturing sector.

jorod December 11, 2011 at 8:53 pm

Penicillin put all those undertakers out of business. Maybe Obamacare will bring them back.

Methinks1776 December 11, 2011 at 9:01 pm

I see where you’re going with this, but even with penicillin (to which I am deathly allergic, as it happens), we all eventually die. Undertakers will never go out of business :)

kyle8 December 12, 2011 at 5:05 am

As my funeral director friend reminds me constantly.

Nick December 11, 2011 at 10:04 pm

Why is invisible backhand posting pictures of hitler now? At some point, someone needs to just say enough is enough. The guy is a complete sociopath- just trolls cafehayek and keeps an obsessive-compulsive diary on his own sub-reddit 24/7. I can’t imagine what else he does with his time.

Gil December 12, 2011 at 7:43 am

Why? Muirgeo’s has posted with a picture of F.D.R. and he’s way worse according to Libertarians.

Josh S December 12, 2011 at 2:32 pm

Hey, at least neither of them are using a picture of Abraham Lincoln.

Jeff Neal December 12, 2011 at 9:52 am

I find it noteworthy that the posts of Prof B, like this one, which merely point out an inconsistency and pose the obvious are the ones that cause the most debate. His detractors seem to be threatened by questions about their opinions. They resort to insults, detours, head fakes and other distractions. . . Could the cause be that they have no logical answer?

Jon Murphy December 12, 2011 at 10:10 am

Of course it threatens them. When you eliminate a scapegoat, especially one what cannot defend itself like technology, then their entire argument goes out the window. Everything they have built up, everything they have believed in, gone in a blinding flash of light.

It’s a lot like the Allegory of the Cave. They have spent their whole lives (or, at least, their intellectual careers) looking at these shadows on the wall. Finally, they are pulled out of the Cave. They look out into the light and see the animals that made the shadows. They are no longer black, but multi-colored. Surely, this must be some kind of witchcraft! Some will willingly go back into the Cave to be shackled against the wall once again. That’s what they knew.

I am not suggesting that those of us who believe in free markets (what ever label you wish to use on us) are enlightened more-so than Keynesians. I am merely suggesting that when an inconvienant fact comes into conflict with one’s bias, we naturally fear it. We all do that; our brains are wired that way. What separates us from the reptile is our ability to overcome that fear, consider that fact, and accept (or reject) it based upon its merits. Resorting to personal attacks demonstrates ones lack of humanity, regardless of the issue being discussed.

Jon Murphy December 12, 2011 at 10:53 am

Let’s say, for example, that a study comes out that shows a direct, positive relationship between the amount of government interference in the market and market growth (in other words, the more the government tinkers in the market, the faster it grows). The immediate, knee-jerk reaction to this would be denial: “This is wrong! You’re just a statist! All this is just political cover for the government to keep oppressing the masses!” However, the rational thinker would look at the study (or the evidence provided) and refute (or confirm) the data: “Well, this assumption is unrealistic.” Or “The over all economy grows by 10% per year, but they are only select, government companies. These entities grow by 25% per year but the private, non governmental companies shrink by 15% per year.”

Some fall into the first category: they fall pray to the reptilian brain and make knee-jerk decisions based upon it (The Earth is getting warmer! We must all stop using carbon!). Others think about the data and make a rational decision based upon all the information available and our own experiences (The Earth is getting warmer, but many of the observatories in the colder parts of the world have gone offline. Plus, the last few seasons have been about average, temp-wise. I’ll need to see more data before I am convinced as this report seems to be lacking).

We all like to believe we are the second category of thinkers, but we all have a tendency to fall into the first category. What is hard is recognizing when one is in the first category or the second. Hint: if you arrived at your conclusion in less then 5 minutes, you’re probably in the first category.

Jeff Neal December 12, 2011 at 3:49 pm

yes, Cave Men.

Jeff Neal December 12, 2011 at 9:53 am

^
“. . . post the obvious question . . .”

Brian December 12, 2011 at 12:00 pm

Why does the government feel so strongly about people getting an education if innovation is just going to push them out of their job, they might as well save the tuition and start their McDonalds career now.

jorod December 12, 2011 at 2:40 pm

SEC doesn’t regulate banks’ capital.

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