Quotation of the Day…

by Don Boudreaux on December 15, 2011

in Scientism, State of Macro

… is from page 11 of – first page of the Prologue to – W.H. Hutt’s unfortunately neglected 1979 book The Keynesian Episode: A Reassessment (original emphasis):

Already in 1936, although I had been bewildered by it, I had seen clearly and predicted that [Keynes's] The General Theory would have a quite unparalleled influence by reason of what I judged to be its demerits as a contribution to thought.  Its policy implications appeared to have been chosen for their political attractiveness.  Its misrepresentations of the “classical” economists seemed certain to have a powerful appeal (because the teachings of the “dismal science” had at all times been accepted with reluctance by many who were unable to refute them).  Moreover, the obscurities of the General Theory (which I have since come to recognize as due, in every case, to defective thinking), expressed as they were in the language of science, appeared likely to enhance its reputation (for all too many people in all spheres – the academic sphere not excluded – are apt to accept obscurity for profundity).

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{ 212 comments }

Peter December 15, 2011 at 8:33 am

I’ve said it before; I’ll say it again. I don’t think people actually believe Keynesianism is true / legitimate. I like to think that Krugman, Samuelson, Obama, and the host of others really are smarter than that. I think they (1) wish Keynesianism was true (and wish it with other people’s money) and (2) are thankful that Keynesianism has sufficient jargon and neat enough words to give them the intellectual cover to continue wishing it was true without feeling dumb.

Stone Glasgow December 15, 2011 at 9:06 am

The irony is that Keynes provided what the “market” in economic theory demanded — a plausible reason to steal and spend.

muirge0 December 15, 2011 at 9:19 am

Yeah, because classical theory doesn’t do that for the rich, powerful and privileged. Yeah… some one is using propaganda to advance their cause. The Great Depression it’s recover and this second Great Depression let us know decisively just which side that is. It’s really that simple.

Back up evidence like their need to deny science on things like lead poisoning to global warming confirms who’s pushing dogma and who cares about reality.

Rich Berger December 15, 2011 at 9:35 am

Is this a muirgeo parodist? If so, my hat is off to you – this is great stuff!

lwaaks December 15, 2011 at 10:39 pm

I guess if global warming is true, Keynesianism must be true. After all, they are all of a piece, ideologically speaking. Oops!

brotio December 15, 2011 at 11:03 pm

Nobody here has ever denied lead poisoning. It’s actually a plausible diagnosis as to how you’re so stupid, yet still breathing.

South Street December 15, 2011 at 10:02 am

I completely agree with muirge. The quote is great, but it could easily be expanded to any other schools of thought: Marxism was very popular because it served interests of the working class, neoclassical theory became popular because it served the purposes of the rich and powerful,…

Josh S December 15, 2011 at 10:40 am

Marxism is a theory of the wealthy, intellectual elite seeking to consolidate their privilege according to Marxist class-consciousness theory, because what class do you think Marx and Engels belonged to?

South Street December 15, 2011 at 11:25 am

Josh, just like your reasoning, the core foundation of neoclassical economics (maximizing agents, with no room for altruism) is flawed. You argue that it can’t possibly be that someone is not only trying to consolidate his own power (You argue that just because Marx and Engels did not belong to the working class, it must be that their theory has been directed only to consolidate their own privilege, hence against the workers). Taking into account only a very limited part of human behaviour makes neoclassical economics so simple, beautiful and useless.

Methinks1776 December 15, 2011 at 11:50 am

Why is there no room for altruism in neoclassical economics?

South Street December 15, 2011 at 12:16 pm

Methinks, i was sloppy, of course you can just include another variable and parameter in your utility function and call it altruism. The key point is that virtually all neoclassical models are simplistic in order to ensure mathematical tractability. In virtually all of the micro and macro models I have come across only the possesion and/or consumption (maybe also prospects) of goods and leisure enter the utility function. Often, simplistic models are not a good description of human behaviour. The reasoning
Marx was not a worker + Marx developed a theory = Marx theory was directed against the working class
is based on the assumption that Marx was only driven by self-interest in his own power. This is a simplictic/incorrect describtion of human behaviour.

Methinks1776 December 15, 2011 at 1:35 pm

South Street, Josh said nothing about Marx’s personal power. He was talking about consolidating power in the hands of Marx’s privileged class.

Speaking of which, this is not at all dissimilar to what Keynes preferred.

kyle8 December 15, 2011 at 2:48 pm

well not as simplistic as your thinking. I describe Marxism in all of it’s forms exactly the way Josh S does, but not because Marx was an elite. Rather because all of my life I have observed socialism as a conspiracy by elites and wannabes in academia on one side and the poor on the other side. A conspiracy aimed not at the rich, but at the bourgeoisie.

Josh S December 15, 2011 at 3:18 pm

That’s not my reasoning; that’s Marxian reasoning. I happen to think Marxism is idiotic.

See, Marx taught that there is no “objective” logic, reason, science, or knowledge, and that all claims of knowledge were actually tools of the class struggle. One’s ideology, particularly in the sphere of economics, is formed entirely by one’s class background, i.e., a particular theory or system of thought is merely an expression of class-consciousness. Thus the economics of Smith and Ricardo, Marx argued, were merely the economics of bourgeois class interests over and against those of the proletariat. According to Marx, you don’t logically refute someone who disagrees with Marxism; you expose his class background and prove that he is no true proletarian. In the unfortunate event that your challenger does in fact have a proletarian background, you prove that your opponent is a traitor to his class.

The problem with Marx’s theory that ideology is an expression of class-consciousness is that it’s self-refuting. Marx and Engels were no proletarians; they were both about as bourgeois as a pair of Germans could get. Hence, according to Marxian logic, it is impossible that Marxism is in fact the true proletarian ideology. Marxism itself must be a mask, not of proletarian interests, but of bourgeois interests. According to Marx’s logical presuppositions, we can only conclude that the purpose of Marxism is actually to subvert the proletariat and reify bourgeois power. The fact that Marx claimed his ideology was that of the working class is irrelevant; his class background by his own logic proves him a liar.

And of course, you rarely find Marxists working at a Ford factory. You find them getting graduate degrees in liberal arts. The most devout Marxists aren’t workers; they’re those who think they are fit to rule the workers.

Fred December 15, 2011 at 3:34 pm

According to Marx, you don’t logically refute someone who disagrees with Marxism; you expose his class background and prove that he is no true proletarian. In the unfortunate event that your challenger does in fact have a proletarian background, you prove that your opponent is a traitor to his class.

The old ad-hominem fallacy employed by the left and the media that works so well on the weak minded.

sdfsdf December 15, 2011 at 5:25 pm

South street: “the core foundation of neoclassical economics (maximizing agents, with no room for altruism)”

Good god you are confused.

JS December 15, 2011 at 8:48 pm

South Street,

Have you read Human Action? You should. It doesn’t fall into the category you criticize.

and for others… altruism is a form of selfishness

All behavior has economic consequences. Keynesianism and Marxism were examples of flawed logic and false human nature, but were useful for ambitious politicians. Only Austrian economics was based on a correct understanding of human nature.

lwaaks December 15, 2011 at 10:47 pm

Capitalism primarily serves the interests of the vaunted “99%”. Captain Crunch is not a luxury item. Well, actually it would have been only a few decades ago, but now is available in mass quantities for a pittance. Classical economics explains why this is possible. So much for benefitting the rich. And so it goes for countless other goods. Why should I begrudge the rich their yachts in light of this? With exploitation like this, who needs friends?

Gil December 15, 2011 at 10:19 am

Most people wouldn’t give a rat’s arse about a Hayek vs Keynes debate any more than hearing how some getting caught up in a Street Fighter 2 vs Mortal Kombat debate.

Troll Watch December 15, 2011 at 12:46 pm

You shouldn’t have said it even once. You are accusing highly credentialed people of dishonesty, ulterior motives, etc.
That is snarky, snarly, and contemptible on your part. You lack the necessary understanding of the economic issue to slam people smarter and more educated than you are. You are a troll and nothing more. Go away.

Truffy the Troll Slayer December 15, 2011 at 1:34 pm

Right on Brother.

kyle8 December 15, 2011 at 2:52 pm

Krugman is more educated than I, maybe even smarter, but that does not mean he is right. I easily trump your appeal to authority by using one of my on. I Hereby proclaim everything that Krugman has written in the last ten years as utter hogwash, based upon the work of a Nobel prize winning economist.

That economist is non other than Paul Krugman, The Krugman of the 1990′s who was not an unhinged, neo-keynesian, partisan leftist.

Josh S December 15, 2011 at 3:20 pm

Krugman’s always been a Keynesian. He just didn’t get his Nobel for making any contributions to Keynesian macro theory; he got it for his work on trade.

kyle8 December 15, 2011 at 4:57 pm

but at least he was sane at one time

lwaaks December 15, 2011 at 10:49 pm

Maybe even smarter? What do you think his I.Q. is? Damn high, I’ll bet. But you’re correct, that doesn’t prove he’s right.

Greg G December 15, 2011 at 8:34 am

This is yet another complaint about the common man’s incompetence to understand these things and select his own leaders democratically. Whether or not that is true, it is a form of elitism.

And yet I predict we will soon see another post on the evils of elitism.

Josh S December 15, 2011 at 8:52 am

I didn’t know Keynes was elected by the common man, or that the common man read the General Theory. I learn all kinds of neat things in these comment threads.

Greg G December 15, 2011 at 9:33 am

Josh S

You make a good point. I think the influence of Keynes on current voters and politicians is vastly overstated.

Milton Friedman is the economist most responsible for the current popularity of macro theory and deficits that don’t matter (as long as they come from tax cuts).

Josh S December 15, 2011 at 10:40 am

I wasn’t aware that the common man read Milton Friedman or understood his monetary theory. I learn something new every day in these comment threads.

Greg G December 15, 2011 at 10:43 am

Friedman had a column in Newsweek for years.

Watch and learn.

Jon Murphy December 15, 2011 at 10:45 am

He also had a very popular series on PBS: Freedom to Choose, back in the late 80′s/early 90′s.

Greg Webb December 15, 2011 at 10:47 am

Oh, that’s right, Josh S. And, as you know, everyone read Newsweek, especially “the common man.”

GG, haven’t you worn out that trite term already! I mean, give it a rest!

Greg G December 15, 2011 at 10:52 am

Jon

I thought you were on the home team. This gives me hope. Come to the dark side.

Jon Murphy December 15, 2011 at 10:54 am

I’m on Team Jon. I was just pointing out a fact, that’s all. Can’t have a discussion with anecdotes, insults, and half-truths, can we?

Methinks1776 December 15, 2011 at 11:25 am

Well, speaking of half-truths….

The “Free to Choose” series aired on PBS in 1980. It didn’t air continually through the 1980′s or early 90′s. In 1994, the Friedmans did a follow-up which aired at something like 3 am on CNN, I think.

Greg Webb December 15, 2011 at 11:30 am

Jon, half truths are standard operating procedure for our leftist trolls. If you take that away from them, they won’t be able to participate in the discussion.

Jon Murphy December 15, 2011 at 11:32 am

My mistake! Thanks, Methinks!

Josh S December 15, 2011 at 3:24 pm

George Will has had a column in the Washington Post for decades. Therefore, George Will is responsible for the failed stimulus bill.

Greg Webb December 15, 2011 at 3:33 pm

Excellent point, Josh S! It’s George Will’s fault. It’s remarkable what conclusions you can come with once you start to think like a big-government advocate.

kyle8 December 15, 2011 at 3:04 pm

Friedman never said deficits didn’t matter he said that the empirical evidence for harm from low levels of deficit spending simply was not there. High levels, however, alarmed him. His advice to policy makers usually included cutting government spending.

He advocated that as the best way to cut a deficit rather than through tax increases as that would have less of a negative effect on the economy and of course he was right.

In fact both Keynes and Friedman suffer somewhat from people giving a parody of their views rather than what they actually wrote.

muirge0 December 15, 2011 at 9:21 am

The common man elected FDR 4 times and the nation wept when he died….then went on to prosper as no nation every did before. I think the common man does know best.

Fred December 15, 2011 at 9:27 am

then went on to prosper as no nation every did before.

So for FDR’s four terms we were stuck in an economic funk as Keynesian policies were implemented, and once he was no longer around to enforce that policy the nation prospered?

Sounds to me more like an indictment of FDR and Keynes than a reason to give praise.

muirgeo December 15, 2011 at 10:04 am

Yeah if you consider 9% average increases in GDP and getting re-elected 4 times stuck in a funk. But here again 70 years later you are telling the people from that time how childish and poorly informed they were. No condescesion here… I think the people back then knew way better then you…. sadly even WITH your advantage of hindsight.

Greg Webb December 15, 2011 at 10:11 am

George, your facts are wrong again. FDR, with his political rhetoric and silly economic policies, caused the country to suffer from what became called the Great Depression for 9 long years.

muirge0 December 15, 2011 at 10:26 am

Greg;

FACT: officially the Depression ended the month FDR came into office.

An average increase of 9% GDP is not a depression or a recession. You are both mis-informed and intellectually dishonest. How fast do you think the recovery should have been considering the GDP went down the 3 years before he came into office.

http://static.seekingalpha.com/uploads/2009/10/30/336665-125687893092903-Howard-Richman_origin.png

Why does this graph look like it does if his policies should have been making things worse. YOU DON’T have an answer for that. All you can do is lie to yourself and hope nobody notices. Your friends here are OK with you lying to them… in fact they NEED to here your lies repeated over and over. I am different. I do NOT like your lies. I like reality. You have to self deceive … sooooo sad Greg. You poor pitiful man incapable of addressing reality…. very sad.

Fred December 15, 2011 at 10:32 am

Way to move the goalposts, doc.

Don’t you have some indigents paying with Methink’s tax dollars to treat?

Jon Murphy December 15, 2011 at 10:36 am

So, if the recession ended the month he cam into office, then that just proves his policies did not fix the recession. Nothing can be implemented in one month in office.

Greg Webb December 15, 2011 at 10:45 am

See, George, as Jon logically demonstrates, you are wrong about FDR and what a glorious economic time that FDR’s administration was. Any of you other leftist trolls want to defend George’s ridiculous statements? How about you Greg G?

muirge0 December 15, 2011 at 10:48 am

Jon, all the Keynesianism you guys try to claim Hoover did started in 1932 when he realized he’d said prosperity is just around the corner one too many times. So indeed when Hoover did finally start acting like a Keynesian things did start to improve.
Them’s the facts Bro…deal with it. Reality is a bitch for you neoclassical dogmatist.

Jon Murphy December 15, 2011 at 10:49 am

If anything, wouldn’t that suggest the policies adopted by Herbert Hoover ended the recession (I say no, as the influence the government has over economics is limited, but I am using his idea)?

Jon Murphy December 15, 2011 at 10:50 am

So you are renouncing your claim that FDR saved the economy?

muirge0 December 15, 2011 at 10:54 am

No Jon… are you claiming 9% increases in GDP are a bad thing?

Jon Murphy December 15, 2011 at 10:59 am

That depends. Since GDP is
C+I+G+(X-I), where C is consumption, G is government spending (not on transfer payments), I is investment, X are exports and I are imports.

If we have a 19% gain in G and a 10% drop in C (assuming all else held equal), leading to a net gain of 9%, then yes, I would say that’s a bad thing.

I also say any society that has to ration, regardless of GDP growth, is not having economic prosperity.

GDP is merely one measure of economic growth and rather flawed in my opinion. It doesn’t take into account happiness, health, quality of life (although it tries to estimate that).

Sam Grove December 15, 2011 at 11:22 am

As GDP of the price of economic activity, it does not provide a measure of wealth of value created. If the government hires all the unemployed to dig holes and fill them up, then GDP will obviously increase, but there will be no net wealth creation.

GDP measures nothing of value.

Sam Grove December 15, 2011 at 11:24 am

Most historical reports say the Great Depression ended with the beginning of WWII and more recent studies suggest it actually ended (from the point of view of consumers) after WWII ended.

muirge0 December 15, 2011 at 11:33 am
Fred December 15, 2011 at 12:09 pm

If the government hires all the unemployed to dig holes and fill them up, then GDP will obviously increase, but there will be no net wealth creation.

There could be wealth destruction, depending upon how the government obtains the funds that will be used to pay these people.
If anything there’s opportunity cost, as the money collected in taxes or the sale of bonds could have been used to pay people to create something of value.

Which is why I think the GDP equation should subtract G rather than add it.

Dan J December 15, 2011 at 12:24 pm

So without FDR, the recession had ended? And, when he came in, the terrible times of rationing, continued High unemployment, bread lines, etc,… Persisted until his policies were shown the door near and upon his departure. Too bad, he didn’t die within weeks of being sworn in like one of his predecessors. We all would have been better off with a dead FDR in early ’30s.

Jon Murphy December 15, 2011 at 12:30 pm

“Which is why I think the GDP equation should subtract G rather than add it.”

Right, but let’s remember that the government can add wealth, too: when the government buys a big ‘ole bomber from Boeing, it does add wealth (granted, to the military, but still).

The problem with GDP is that it doesn’t measure wealth, true wealth. We have no way of measuring one’s full benefits from any given action; the only mechanism we have is price. When you have artificial prices, it sends the wrong message.

For example, I get no greater pleasure than from hiking. How do we measure that in GDP? It generates no money.

Methinks1776 December 15, 2011 at 12:33 pm

Right, but let’s remember that the government can add wealth, too: when the government buys a big ‘ole bomber from Boeing, it does add wealth (granted, to the military, but still).

Is that added wealth or is that transferred wealth? Where does the government get the money to buy the bomber?

Dan J December 15, 2011 at 12:35 pm

9% jumps in GDP, yet most of America lived in horrible conditions with rationing and High unemployment. This is great to you? Sounds like Stalins Russia.
Fabricate some stats and never mind the suffering and misery present all around you.

Dan J December 15, 2011 at 12:39 pm

GOVT buying is transference of wealth. Forcibly taken from citizenry thru taxation and given to someone else.

Huh mm mm….. Sounds familiar….. Oh, yeah!!

SOLYNDRA!!!!!!!!!!!!! Tax dollars given to Obama buddies who ran a a bankrupt solar company. Tax payees lose and Obama buddies walk away richer.

Jon Murphy December 15, 2011 at 1:42 pm

When I was talking about government adding wealth, I merely meant in terms of GDP. I apologize, I should have been clearer in my talk.

Methinks1776 December 15, 2011 at 4:21 pm

Nah, Jon. GDP is just such a shitty measure.

Soviet GDP growth really impressed Sovietologists in the West. Too bad you couldn’t eat any of it.

Rugby1 December 15, 2011 at 4:24 pm

@ Muirego

Are you joking, GDP did not get back up to 1929 levels until 41 and unemployment was at or above 15% for an entire DECADE. This was a terrible time in American history and of course you lightly gloss over it as you want nothing to taint the image of your hero.

Truffy the Troll Slayer December 15, 2011 at 1:37 pm

then went on to prosper as no nation every did before.

Agreed, once he was dead, we could stop trying to figure out his next crackpot scheme.

brotio December 15, 2011 at 11:14 pm

Thanks, Truffy!

I’m shocked that our Dear, stupid Ducktor would admit that it took St Franklin’s death for the nation to finally prosper!

Greg Webb December 15, 2011 at 10:08 am

Swing and another miss byGreg G, everybody’s favorite busybody minding other people’s own business

Gil December 15, 2011 at 10:27 am

Nah, a hit and a score. It’s a case of the masses can’t run a successful business yet have voting power to use government hurt businesses, eh? If people want voting power then can work hard to become a company director instead, eh?

Greg Webb December 15, 2011 at 10:32 am

Nah, Gill. Government is not Robin Hood. They steal from the taxpayers and give to themselves and their cronies. Did you get any of the money from Solyndra? I did not.

muirge0 December 15, 2011 at 10:28 am

Swing and a miss…. Greg’s favorite rebuttal. Very deep Greg… very deep and well thought out. He didn’t even come up with it himself and baseball season is over.

Greg Webb December 15, 2011 at 10:35 am

George, how many times do I have to present the evidence that government created incentives caused the financial crisis and FDR’s actions made a recession The Great Depression before you quit posting your inanities on this blog. “Swing and a miss” describes your continues efforts to restate your previously refuted statist propaganda.

muirge0 December 15, 2011 at 10:52 am

You don’t have to that anymore Greg…I’ve gotcha your message load and clear. I know every one of your talking points and I’ve got reality here with me… you don’t need to do a thing. Let’s just consider this all settled between us. Me here in the real world and you there in your own little “real” world. We are both right in our own little worlds. Yeah that Barney frank sure was an ass in your world huh… good thing he’s retiring after all the damage he caused in your world. Do you believe in the parallel universes theory?

Greg Webb December 15, 2011 at 11:07 am

No, but I believe that you have eaten raw North American Elk. Your dementia is showing and has shown for years at the Cafe. Instead of repeating your nonsense, why don’t you stop since we have heard it many times, and properly proven you wrong a similar number of times.

muirge0 December 15, 2011 at 11:34 am

Me all demented Greg and I’m still schooling you…. what’s that say about you?

Greg Webb December 15, 2011 at 11:37 am

LOL, George! You are schooling us all in leftist propaganda!

Greg G December 15, 2011 at 11:38 am

Looks like a fair fight to me between you two.

Greg Webb December 15, 2011 at 11:42 am

Greg Government, of course, your own AIDS-induced dementia is coloring your view of that issue. Have you been able to persuade the government to enact a law making it illegal for someone to eat bushmeat?

Greg G December 15, 2011 at 11:48 am

Earth to GW. Seek help. You are loosing your shit.

Greg Webb December 15, 2011 at 12:13 pm

Greg Government, now you sound like muirgeo.

Greg G December 15, 2011 at 12:01 pm

losing

Oops. Over reliance on spell check. I guess my poor leftist work ethic is showing.

Jon Murphy December 15, 2011 at 12:09 pm

At the risk of pissing off Greg Webb (Sorry Greg), I thought “loosing” was really funny

Greg G December 15, 2011 at 12:11 pm

Yeah that works too come to think of it.

Greg G December 15, 2011 at 12:12 pm

I’m starting to not feel good about it though. We are crossing over the line into internet bullying.

Greg Webb December 15, 2011 at 12:14 pm

What do you mean “starting to”?

Jon Murphy December 15, 2011 at 12:16 pm

Dude, that line was crossed about 6 months ago. And trust me, you three (Greg Webb, Methinks, and you) are the least of the offenders.

Believe it or not, this board is pretty clean compared to some other forums out there. We really only have 2 really bad posters (Luzha and his various names and IB and his various names). Others, you get inundated with them. Read the WSJ comment section and you’ll see what I mean.

Jon Murphy December 15, 2011 at 12:17 pm

I should probably mention that I mentioned Greg G, Greg Webb and Methinks simply because you guys gang up on each other, but because I think you guys are major offenders or trolls.

Jon Murphy December 15, 2011 at 12:21 pm

Sorry, that should say “NOT because I think you guys are major offenders or trolls.”

Greg G December 15, 2011 at 12:23 pm

Yeah Jon. I have come to love the cafe. It reminds me of watching The Wire. One you really know the characters they all eventually do something wrong or something sympathetic. Who could fail to be moved by that question from GW: “What do you mean ‘starting to’?”

Greg Webb December 15, 2011 at 12:29 pm

Muirgeo has been doing this trolling for 4 years. So, starting to just seems wrong.

Greg G December 15, 2011 at 12:33 pm

Must. Not. Reply.

Jon Murphy December 15, 2011 at 1:29 pm

I wouldn’t classify Muirego as a troll. Douchebag, yes, but troll no. A troll’s purpose is to disrupt conversation, hurl insults, make ridiculous accusations, and usually involves one of the following elements in his comments: Nazis, slavery, corporatism (i.e., “you are nothing but a shill for XXXX) or moral righteousness (i.e., I am right because I am morally superior to you). You see these qualities in the schtizos, but not in Muirego. He may misinterpret stats, make leaps of logic so large Evel Knievel couldn’t make, refuse to consider the possibility he is wrong, and be over all argumentitve, but that doesn’t make him a troll, just a giant douche. He will, from time to time, exhibit trollish behavior (I mean, who doesn’t?) but it’s not a constant theme with him.

Greg Webb December 15, 2011 at 1:32 pm

Jon, okay, I agree that muirgeo is a douche bag. Though I must admit, I really liked your comments about him being famous at your office.

Jon Murphy December 15, 2011 at 1:43 pm

It is true!

Greg Webb December 15, 2011 at 1:45 pm

LOL! I believe you. I just talked to someone having a muirgeo kind of day.

Jon Murphy December 15, 2011 at 1:48 pm

Maybe he just needs a hot chocolate. I don’t know about you, but the weather here is really muirgeo. It’s like 40 degrees and raining a cold, steady rain (kind of what I imagine Hell is like). But nothing cheers me up like a nice cup of hot chocolate!

Greg Webb December 15, 2011 at 1:51 pm

LOL! I’ll suggest it. It’s cold and rainy here too. I hate it. I knew that I should have moved to Puerto Rico.

muirge0 December 15, 2011 at 3:15 pm

“I wouldn’t classify Muirego as a troll. Douchebag, yes,…”

Well I appreciate that… in the hierarchy of blog beings and being on an adversarial blog that’s quite a complement. Now if I can just work my way up to that of an Asshat I think mother would be proud.

Greg Webb December 15, 2011 at 3:24 pm

Damn, George. That’s funny!

Sam Grove December 15, 2011 at 11:14 am

Actually, it’s about the self selected elite’s incompetence to understand real economics.

Greg Webb December 15, 2011 at 12:17 pm

No, they don’t want to understand, Sam. That is why they come to a economics and simply make half-truth comments and call libertarians all sorts of hateful, silly names. If you or I went to Paul Krugman’s blog, I would hope that it would be to try to better understand what Krugman was advocating and why. Not insult him and make half-truth comments.

Greg G December 15, 2011 at 9:57 pm

GW

Congratulations for your imaginary politeness in your imaginary comments on Krugman’s blog.

Troll Watch December 15, 2011 at 12:48 pm

You win the prize for Troll for a Day.

Truffy the Troll Slayer December 15, 2011 at 3:07 pm

Applause!

Fred December 15, 2011 at 8:45 am

Its policy implications appeared to have been chosen for their political attractiveness.

Keynesian economics is little more than an academic excuse for politicians to spend, spend, spend, and then spend some more.

Randy December 15, 2011 at 9:48 am

I’d go with “nothing” more.

Troll Watch December 15, 2011 at 12:49 pm

You are runner-up for the prize of Troll for a Day.

JS December 15, 2011 at 8:58 pm

The spending buys votes and their monopoly of money allows for currency devaluation, since taxation is unpopular.

Keynesian economics is a political device, nothing more. It’s popular because of it’s stealth attributes. Politicans can pretend to reward you while their stealing from you.

nailheadtom December 15, 2011 at 8:55 am

“obscurity for profundity”

Hegel, Marx, Keynes, Freud, Joyce, Chomsky, Rawls . . . .

SaulOhio December 15, 2011 at 9:53 am

Kant

William Bruce December 15, 2011 at 2:55 pm

As a Kantian myself, I resemble that remark: “How many angels can dance on the transcendental deduction of the categories? After accounting for dialectical illusion, the world may never know.”

But in all seriousness, I have long believed the issue to be a Germanic thing. My one word proof would just be “Heidegger.” How Schopenhauer and Nietzsche ever managed to write clearly, well… the world may never know.

Randy December 15, 2011 at 3:53 pm

:)

South Street December 15, 2011 at 10:17 am

“obscure” is just a way for you to admit that you have not understood what they said, right?

Randy December 15, 2011 at 10:37 am

That’s an interesting point. I’ve read my way through much of the great books collection and have reached that point with many of the authors that I have had to decide whether what the auther is saying is beyond me or whether the author is being deliberately obscure. I have learned to read the first few chapters very carefully in order to discover the false premise that such authors wishes to bury. It is usually not difficult to find, and once found makes reading the rest of the chapters unneccesary. I like the english philosophers of the enlightenment best, precisely because they blew away so much of the obstructionist philosophy of the past.

SaulOhio December 15, 2011 at 10:58 am

I got through about 12 pages of Marx’s “Das Kapital”, and found dozens of such false premises.

Troll Watch December 15, 2011 at 12:52 pm

Hayek was infamously an obscurantist, and you are a troll.

William Bruce December 15, 2011 at 3:02 pm

Quis custodiet ispos Troll Watches?

Malcolm Kirkpatrick December 16, 2011 at 7:00 am

Hayek was pompous, not obscure. His AER article “The Use of Knowledge In Society” is clear and direct. However, he filled __The Road to Serfdom__ and __The Constitution of Liberty__ with annoying tropes like “It cannot be denied that __X__” and “No reasonable person will dispute that __Y__” . This is rhetorical extortion: “agree with me or admit that you’re stupid”. Why not just say “__X__ and __Y__”?

I agreed with him. Where he was hard to understand, he was usually making a subtle point.

You want obscure? Hutt was obscure. I have been picking up and putting down __The Keynesian Episode__ for more than five years. Where I can figure out what he’s saying, I agree, but every paragraph gives me the sensation I remember from college, studying on Sunday morning for a Monday exam, after too much alcohol and other chemicals I have to assert my Fifth Amendment rights not to name, where you finish a paragraph and realize that you have no recollection of what you just read, and you have to read iit three times to get anything. Like that. The whole book, like that.

Jon Murphy December 15, 2011 at 3:27 pm

” I’ve read my way through much of the great books collection and have reached that point with many of the authors that I have had to decide whether what the auther is saying is beyond me or whether the author is being deliberately obscure.”

I agree with you, Randy. I think we need to be cautious using the word “obscure”. Some people get confounded if the language is not plain-spoken (that may be the issue when it comes to Hayek. He used very flowery language that can be tough for some people to understand). Also, some people the topic may be outside their realm of expertise. I try to read my cousins biology journals and they go way over my head. Does that mean the author was trying to shove through bullshit?

Randy December 15, 2011 at 4:50 pm

Jon,

To clarify, I consider efforts to prove the existence of a diety, or to prove the value of a political organization, as being deliberately obscure by default. The scholastics used up innumerable pages to bury the simple fact that the unknowable is unknowable. The political apologists did the same in their assumptions that the preferred social order was the correct social order (actually, just another case of an unknowable). So, while I am perfectly willing to accept that I don’t know all the technical details of many technical fields, I have no patience at all for grand theories that “prove” that society must be arranged in some preferred manner.

Jon Murphy December 15, 2011 at 4:53 pm

Fair enough.

Josh S December 15, 2011 at 10:44 am

No, “obscure” is a way to say that they can’t state whatever it is they want to say in a coherent fashion.

I’ve read Keynes. There are passages that convince me that Keynes himself didn’t know exactly what it was he was trying to say, but had a sort of vague sense of where he’d like to end up, and believed that if he just muddled through with enough words and chased enough rabbit trails, he’d end up putting something together that all fit together in the end.

I think few writers are deliberately obscure. Obscure writers are simply those whose minds are not up to the task of writing about the subject they want to write about.

Josh S December 15, 2011 at 10:52 am

Marx has the same problem. He doesn’t really understand economics, his theories are ultimately self-contradictory, he can’t find a good definition of “class,” his math involves a lot of sleight-of-hand, and he ultimately can’t find a way to fill in step two of his process:

1) Have a workers’ revolution
2) ???
3) Communist paradise!

So he just tries to paper over the holes by being linguistically blurry. I don’t think he was doing that on purpose. I think his obscurantism came from trying to patch all the logical fallacies and rational holes with more and more words, not recognizing that they were indeed fallacies and holes.

nailheadtom December 15, 2011 at 11:09 am

Marx wasn’t “linguistically blurry”, he was blurry period, usually under the influence of copious amounts of ale. If contemporary Marxists had to live with Karl they might very well gravitate to a different way of looking at things.

Methinks1776 December 15, 2011 at 11:35 am

1) Have a workers’ revolution
2) ???
3) Communist paradise!

LOL! EXCELLENT!

Michael December 15, 2011 at 12:17 pm

I didn’t know Marx was an underpants gnome…

Randy December 15, 2011 at 10:57 am

I disagree that there were few writer who were deliberately obscure. Scholastics (Aquinas) and political apologists (Hegel) spring to mind. I place Keynes with the latter.

Jon Murphy December 15, 2011 at 11:02 am

Actually funny you should mention St. Thomas Aquinas: his Summa Theoligica was criticized for being too obscure or anyone but devoted biblical scholars, to he (and a monk friend) rewrote and released a version of it for the common man written in vernacular.

Josh S December 15, 2011 at 3:28 pm

I don’t think Summa Theologica is obscure at all. If you’re familiar with the sorts of terms it uses, it’s actually rather clear. It’s just very, very dense. And long. And dull. But it’s ultimately not that hard to figure out what he thought about things, or why he thought it.

By contrast, I have no clue what Keynes is trying to say in his passage on rendering capital nonscarce, and I don’t think he really had one, either.

Jon Murphy December 15, 2011 at 3:30 pm

I agree with you, Josh, but I am sure you have some kind of theological/philosophical background that helped you comprehend Aquinus (if I am wrong and you are a layman, then I am damn impressed)..

South Street December 15, 2011 at 11:03 am

It is true, the way Keynes, Marx, Hegel (not so much Freud, I guess) write is awefully complicated and often I gave up after a few pages. I believe some part of there writings seem “obscure” because (1) they were at the very edge of the research frontier, creating completely new theories and (2) economics, as psychology, are social sciences and human behaviour is utterly complex and often appears to be incoherent.

Methinks1776 December 15, 2011 at 9:12 pm

So, what you’re saying is that they didn’t know what they were trying to say either. You seem like a person who is fully capable of grasping even complicated theories. If you gave up after a few pages, it’s probably not you.

anthonyl December 16, 2011 at 10:14 am

Economics is not the study of human psychology. It is a subarea of the study of human action. Whose concern is not why people act but the consequences of the actions they engage it. You never need to question why people do what they do to study economics.

Darren December 15, 2011 at 12:47 pm

… if he just muddled through with enough words and chased enough rabbit trails, he’d end up putting something together that all fit together in the end.

Sounds like the typical college essay.

JS December 15, 2011 at 9:00 pm

Heiddeger was the worst

muirge0 December 15, 2011 at 9:15 am

Yeah, there were lots of quotes like that going around in 1936. As things got better and better they ( the Privileged Class) hated FDR and Keynesian theory more and more. Even conspired to assassinate him… as they often due. Then the markets took off and we saved the world in less than 4 years and the most powerful economy and the greatest middle class in ALL of history was born.

Still a lot of Keyes Envy going around to this day especially after this second major failure of classical economics…. the fury is great…some people writing hate letters everyday….dogma doesn’t die easily.

SaulOhio December 15, 2011 at 9:54 am

Funny how the economy took off AFTER FDR died, after the war spending ended, after we returned to a semblance of a gold standard with Brenton-Woods, after the government cut spending, AFTER the government stopped trying to regulate the economy out of the great Depresison.

muirgeo December 15, 2011 at 10:11 am

From what you guys claim it should have got worse and worse while he was alive pushing all those terrible policies but it didn’t. Let me remind you once again, Anti- correlation does NOT mean causation.

Jon Murphy December 15, 2011 at 10:33 am

It might be worth pointing out that, during the presidency of FDR, the US had 2 recessions, 1937-1938 (duration: 13 months), and February-October 1945 (duration: 8 months). You may be wondering why I am not including the 29-33 recession. The answer is simple: it was over before he got elected.

So, during your supposed golden age, the US had two recessions, totaling 21 months (nearly 2 years) of negative growth.

We can hardly give FDR credit for ending the major recession (’29-’33) as that was just about over when he took office and completely over before his new deal programs took effect.

Conversely, the Reagan era had one recession: July ’81- November ’82 (Duration: 16 months).

So, where’s the anti-correlation you speak of?

So, where’s the anti-correlation?

Jon Murphy December 15, 2011 at 10:33 am

I forgot to remove the sending ending sentence. My bad

Greg Webb December 15, 2011 at 10:37 am

George, you would learn economic reality of FDR’s administration if you read Jon’s post provided above.

BTW, well written, Jon!

muirge0 December 15, 2011 at 11:37 am

9% average GDP Jon. Unemployment went from 25% to 4%.

You keep jabbering all you want lil feller… I’m listening.

Jon Murphy December 15, 2011 at 12:07 pm

That’s not anti-correlation. Both periods saw GDP growth. Both periods saw falling unemployment. That’s not anti-correlation.

Anti-correlation would be if unemployment rose during the Reagan years and GDP fell. But that didn’t occur.

I think what you mean to say is that the GDP grew at a faster pace under FDR than Reagan. Which would be correct. However, it is important to remember that GDP also fell terribly, too. I mean, growth from 1 to 2 is a 100% growth, but in absolute terms, it’s not much.

Remember (and you’ll learn this in Stats, too), just because something has a stronger showing does not mean the other example has a less valid correlation.

Another thing that may be worth considering. Both during WWII and Reagan, US government spending on defense helped spur GDP growth. However, under FDR, it came at the expense of the consumer: everything was rationed (food, water, nylons, oil, metal, butter, everything!). Under Ronnie, consumption did not suffer; there was no rationing. Of course, there are many explanations for this, but rationing is never a sign of prosperity, regardless of what other statistics may say.

If you take nothing away from this conversation, remember these three things:

1) Anti-correlation (aka negative correlation), means that the two variables move in opposite directions, not that one has a less strong showing than the other.

2) Correlation does not mean causation. For example: I went to bed at 10 last night. It snowed last night. Does that mean every time I go to bed at 10, it will snow?

3) Economics is not about profit. Economics is about the allocation of scarce resources. While GDP may be growing, but everyone lives in poverty, it can hardly be called prosperity. If things are being rationed, then it is not prosperity. If every worker was thrown into the army and fleet, we’d have full employment and nothing to eat.

brotio December 15, 2011 at 11:24 pm

and you’ll learn this in Stats, to

You wrote that to Yasafi! LMAO!!!!!!!!!!!!!

Randy December 15, 2011 at 9:55 am

“we saved the world”

Ha :)

…and brings to mind my favorite line from the new AMC show “Hell on Wheels”. In response to the question,”What’s the world coming to?” from one of the workers, Bohannon replies, “World ain’t coming to nothing son, its the same as it ever was”.

muirge0 December 15, 2011 at 10:32 am
Randy December 15, 2011 at 10:38 am

Untrusted source. Just say what you have to say.

muirge0 December 15, 2011 at 10:44 am

Wow Randy…. a Holocaust denier???? Are you really? I love you buddy but you are a nut bag. That makes me sad.

Randy December 15, 2011 at 11:05 am

I mean I’m not following a link from an untrusted source – and being a troll makes you an untrusted source.

As for the holocaust, such things have happened many times in human history. This one was not relatively worse than many that have happened in the past. Just for example, the Romans and Mongols were known to have wiped out entire populations, and they were not unique. The Nazi holcaust was worse than these only in number, and it was not as bad in number as the purges of Mao and Stalin which have been largely swept under the rug by socialist apologists. And the purges to come will be worse, count on it. So yes, same as it ever was.

SaulOhio December 15, 2011 at 11:43 am

Also, what is this “second failure of classical economics”? Are you referring to the Great Recession, in which we had a central bank, government sponsored enterprises, huge government deficits, and massive regulation, all in contradiction to classical economics?

JS December 15, 2011 at 9:02 pm

The economies are the product of Keynesian thought. Cuba, Venezuela, etc., the product of Marxian thought–dictatorships.

Greg Webb December 15, 2011 at 9:47 am

Excellent quote, Don! Keynes’s General Theory was popular with politicians, not the common man, because it allowed a small group of politicians to disregard economic reality and the voters wishes in order to use taxpayer money to buy enough votes and reward enough political cronies to improve their chances for reelection. It is important to note that even FDR originally ran for office on free market principles that he changed once in office to expand Hoover’s big-government agenda. Now, that is elitism.

Greg Webb December 15, 2011 at 9:48 am

Or, perhaps, political cronyism is the more accurate term.

Greg G December 15, 2011 at 9:52 am

“Or, perhaps, political cronyism is the more accurate term.”

I think “disingenuousness” is the word you are searching for.

Jon Murphy December 15, 2011 at 9:55 am

No no, Greg, remember? We (I) replaced that word with “insidious” yesterday. That’s the new word we’re going to drive into the ground.

Greg Webb December 15, 2011 at 9:58 am

In this instance, Jon, I like deceitfulness. :)

Greg G December 15, 2011 at 9:59 am

Don’t make him take the training wheels off yet Jon. It’s too soon!

Greg Webb December 15, 2011 at 10:06 am

Yes, Jon. I need protection from myself by Greg G, a famous busybody minding other people’s business.

Greg G December 15, 2011 at 10:23 am

GW
It is Jon who wants you to stop using “disingenuous” in every post, not me.

Jon
How much longer you think before he wears out “Swing and a miss”?

Greg Webb December 15, 2011 at 10:30 am

My terms wear out quickly because you keep doing the same things over and over again. I suppose that we won’t see you using the term “the common man” anymore. LOL!

Josh S December 15, 2011 at 10:53 am

There are too many Gregs here. One of you has to change your name.

Greg Webb December 15, 2011 at 11:12 am

Josh S, let’s just call the other Greg Government.

Methinks1776 December 15, 2011 at 11:36 am

Accurate!

Greg G December 15, 2011 at 5:51 pm

I prefer “the artist formerly known as Disingenuous.”

Greg Webb December 15, 2011 at 9:16 pm

Greg Government, you do (occasionally) have a sense of humor.

Greg Webb December 15, 2011 at 10:05 am

GG, have you, as the self-appointed hall monitor, decided to ban the term “political cronyism” too? I’m sure that you will want to ban my favorite description of you next: “Greg G – a busybody minding everyone else’s own business.”

Greg G December 15, 2011 at 10:16 am

GW

I’m not banning anything. The truth is I will be disappointed if you find some new hobby horse words. I was starting to laugh out loud each time at the old ones. Please don’t stop using your favorite words on my account. Even I don’t want to steal that much of your liberty.

Jon Murphy December 15, 2011 at 10:19 am

I thought I was the self-appointed hall-monitor here?

Greg Webb December 15, 2011 at 10:22 am

You mean hobby horse terms like “the common man” don’t you, Greg G.

Greg Webb December 15, 2011 at 10:28 am

Jon, you have my vote to be hall monitor. I’m not sure that Greg G would like for you to be hall monitor with your libertarian philosophy and all. Why there just might be an outbreak of personal responsibility with you in charge? And, that would be tragic to a busybody who wants to mind other people’s business.

Randy December 15, 2011 at 10:11 am

Political cronyism works for me… though actually you could drop the first word as all cronyism is political behavior.

Greg Webb December 15, 2011 at 10:18 am

Careful using that term, Randy. It is under review by Greg G, the self-appointed hall monitor, for possible banning. For someone who constantly pretends to care about the common man, Greg G is quite the elitist busybody.

Greg Webb December 15, 2011 at 10:23 am

Good point, Randy. Cronyism describes political behavior well. Don’t worry about Greg G. He does not have any power. He is just a self loathing leftist troll.

South Street December 15, 2011 at 10:43 am

Wrong, Keynes’s theory is popular with the politicians because neoclassical theories are agnostic about crises. They do offer no or very limited advise about how to deal with a situation that does not occur in their models. Once we got into the mess, the only practical guide was Keynes.

And, please let me know which economic theory is actually very popular among the common man. Do you think he read Adam Smith?

Josh S December 15, 2011 at 10:56 am

Yes, they do offer lots of practical advice.

1) Identify the interventions that caused the mess and stop doing them.

2) Identify inefficiencies in the legal system that prevent the orderly liquidation of bad assets and smooth them out, or, if the necessary legal institutions don’t exist for such liquidations, create them.

3) Identify legal restrictions that prevent the rapid reallocation of capital and repeal them.

4) Identify the perverse incentives created by government subsidies and penalties, and repeal them.

There are actually lots and lots and lots of things neoclassical and Austrian models propose, but none of them create new opportunities for graft, which is why they are politically unpopular.

South Street December 15, 2011 at 11:13 am

Josh, all these points (I agree with most of them) are policies that prevent crises but do not give any advise of how to react when animal spirits drive the economy. It’s like a doctor giving a bleeding drink&drive patient the advice to stop drinking instead of healing his wounds.

Economiser December 15, 2011 at 11:20 am

>> “when animal spirits drive the economy.”

And when, pray tell, is this?

“Animal spirits” are the Keynesian equivalent of stone age gods that can be summoned to explain away whatever phenomena is currently proving troublesome.

South Street December 15, 2011 at 11:42 am

Yep, animal spirits was not a good choice of mine. Fundamental uncertainty would have fit better…

Neoclassical theory does not need the concept of “animal spirits” only for one reason: as a general result, any theory that has been empirically falsified can be rescued by saying it was not the theory, but the auxiliary assumptions that were wrong.

Darren December 15, 2011 at 1:08 pm

but do not give any advise of how to react when animal spirits drive the economy.

How about an exorcism?

Greg Webb December 15, 2011 at 1:37 pm

Exactly right, Eoncomizer!

Josh S December 15, 2011 at 3:30 pm

Accusing Hayek and Schumpeter of not having a good way to deal with animal spirits is like accusing Kepler and Galileo of not having a good way of counting epicycles.

Josh S December 15, 2011 at 3:32 pm

And BTW, that’s the advice Harding used to react to the depression of ’21…worked really well, too.

kyle8 December 16, 2011 at 12:05 am

Fundamental uncertainty? And what do you think causes that fundamental uncertainty if not the actions of a wayward government? The threat of higher taxes and inflation, the uncertainty caused by ever climbing deficits, and the threat of higher tariffs and more business killing regulation.

Greg Webb December 15, 2011 at 1:37 pm

Try again, South Street. Politicians love to spend other people’s money. Keynes wanted fame more than he wanted to be right so he gave the politicians exactly what they wanted: a way to legitimize their theft of other people’s money and spending to help cronies.

JS December 15, 2011 at 9:06 pm

Again, you’re completely ignorant of Austrian economics. By the way, idiot, there are no Austrian economic models, per se. It’s simply chain link reasoning based on a few axioms of human nature. It is the only complete theory of human nature applied to economics.

Craig S December 15, 2011 at 9:57 am

Muirge0,

Speaking off dogma, you claim the current economic downtownis a return to classical economics starting in he 80′s What was the prevailing economic theory in the 30 years prior to the 70′s? What cause that economic downturn? How did it end?

South Street December 15, 2011 at 10:29 am

Craig S: an important difference in the 30 years prior to the 70′s was the strong position of another superpower (ussr) that provided an ideological balance for the western countries (surely, you couldn’t let the masses impoverish because it would have given credit to marxist theorist). this was also one of the most prosperious periods, because we let market forces work and cared about redistribution at the same time.
once the cold war eased off, and it became clear that ussr was not working, neoclassical ideology took over, which guided us into the current crises and inequality.

muirge0 December 15, 2011 at 10:42 am

You think the 70′s was comparable to this?

http://economix.blogs.nytimes.com/2011/06/03/comparing-recessions-and-recoveries-job-changes/

We had post war debt, an oil embargo, a recent change from the gold standard and interest rates from the Fed as high as 18%. Which of those things would you have done different?

Craig S December 15, 2011 at 11:08 am

South Street, that’s not what I was asking. If the current mess was caused by a return to classical econmics (which BTW I disagree that we did return to that, but thats a different discussion) then what caused the mess in the 70′s if not the prevailing economic theory of the time?

Tor Munkov December 15, 2011 at 11:28 am

The Keynes-Hayek debate is in full flight, much like the dodo or passenger pigeon also are. Today the fault line between right and left can be defined as the difference between those, like Krugman and Obama, who believe that the broken economy can be fixed by an omnivorous government providing a giant fiscal stimulus, and those, like all the Republican presidential contenders, who claim to believe government in America is too big and should be dismantled to make way for the operation of the free market.
While Obama pushes his Jobs Bill, which would inject about half a trillion dollars into the economy, the GOP in the House is extracting politcal power by temporarily preventing any such manipulation of the economy from taking place until they are confident it is their cronies who will have first claim on all the spoils.

For a touchstone to America of 1936, watch the movie Reefer Madness. That is the type of learned debate one sees in American Media. The “freedom” of its characters is the type which the world hates so very much. What madness to believe the corrupt Arabs are going to cross 2000 miles of water and threaten your government in gold plated speedboats.
Nationalism * Socialism * Puritanism * Blind Ignorant Panic. That is the factorial equation reality you have constructed for yourselves.

Troll Watch December 15, 2011 at 1:07 pm
Darren December 15, 2011 at 1:32 pm

Yes. Thanks, Keynes!

SaulOhio December 15, 2011 at 2:56 pm

The result of eight years of deficit spending and stimulus under Bush, then three years of even more of the same under Obama is to be blamed on Reagan and Hayek?

Jon Murphy December 15, 2011 at 3:02 pm

Hayek gets the lip service, Keynes gets the influence.

Greg Webb December 15, 2011 at 3:03 pm

The FDR, LBJ, Nixon, Carter, and Obama disasters. Thanks, Keynes!

Josh S December 15, 2011 at 3:33 pm

Wait, I thought we were living in the era where Obama fixed everything. But you say Reagan is President?

Troll Watch December 15, 2011 at 1:09 pm
Economiser December 15, 2011 at 1:15 pm

And the Waltons have contributed more to the wealth of the bottom 30% than perhaps anyone else alive today.

The wealth you see in their hands is the tip of the iceberg. You don’t see the diffuse benefits they created by reducing the cost of material goods; benefits that are overwhelmingly enjoyed by the poor.

kyle8 December 15, 2011 at 3:09 pm

No, Troll watch would rather we had a world were everyone had to shop at little mom and pop general stores, boutiques and bodegas all selling domestically made union crap. That way we can all experience shitty service, stores that are never open when you need something, and sky high prices.

Then our society would really be prosperous!

Fred December 15, 2011 at 3:36 pm

Prosperity does not occur equally, therefor it is a bad thing.
It is better to be equally poor than to be unequally wealthy.

Emily Latella December 15, 2011 at 3:14 pm

What’s all this I hear about a struggling sawmill in 1930′s North Carolina having contributed more to the wealth of the bottom 30% than perhaps anyone else alive today.

Peter December 16, 2011 at 6:57 am

I really can’t tell if you’re serious or not. You are either the most ironically named person here or the most clever.

Invisible Backhand December 15, 2011 at 5:00 pm

Look, the Austrian/Ron Paul types made some very strong predictions about inflation — and rightly, given their model of how the world works. In their version of reality, it really isn’t possible to triple the monetary base without dire effects on the price level. In my version of reality, of course, that’s not only possible but what the model predicts in a liquidity trap.

http://krugman.blogs.nytimes.com/2011/12/15/inflation-predictions/

Mesa Econoguy December 15, 2011 at 5:51 pm

LMFAO, yeah, here’s Kruggy baby’s track record on inflation forecasts, dumbshit:

http://old.nationalreview.com/nrof_luskin/kts200406170833.asp

Invisible Backhand December 15, 2011 at 9:01 pm

Hey, child molester is back! Where teaching boys ‘hygiene’ in the shower with Sandusky?

Greg Webb December 15, 2011 at 9:23 pm

Irritable Bowel, you must need another dose of thorazine before you go back to your parent’s basement.

Mesa Econoguy December 15, 2011 at 10:15 pm

Hey, it’s Visible Asswipe!

No new material Visible Asswipe? Unsurprising.

Stop pissing off Johnny Cash, suckwad.

Mesa Econoguy December 15, 2011 at 10:17 pm

So you’re auditioning to be Krugman’s fluffer?

Sorry, Asswipe, that job’s taken:

http://gonzalolira.blogspot.com/2010/11/contradictions-in-life-of-fluffer.html

Keep trying, third stringer.

JS December 15, 2011 at 9:34 pm

The various economic crises, boom- bust cycles that every so often occur are not the result of a failure of free markets, or capitalism, but rather the logical result of various types of market interference. I can’t say as much for classical economics, since it was corrected by Austrian economics in many vital areas, but Austrian economic theory completely explains the causes of every economic crises that has happened, and it also offers the cures. There is no mystery for the boom-bust cycle other than what the governments do to the currencies in combination with their interference of risk and responsibility via intrusive regulations.

Western Governments did not turn to Keynes because his theories would cure the problems– because they knew that the true measures that would solve the problems would reduce their power over the economy, private property,their monopoly of money and the power to print it, their ability to spend money without having it, and to enrich their elite constituants who handsomely donate to their reelection campaigns, etc.

Instead, they turned to Keynes because he had ideas that might soften the hard landings that the boom-bust cycles resulted in without them having to suffer the restrictions of political power that would accompany the true reforms necessary to solve the problems.

It’s like the guy who’s had too many DUI’s. If he quits drinking, he won’t risk getting another, but he doesn’t want to do that. Instead, he researches the internet for a pill he can take that will block the alcohol from registering on the breathalizer test he takes when he’s pulled over.

That, in a nutshell, is the difference between the solutions offered by Keynesians and the Austrians.

Greg Webb December 15, 2011 at 9:38 pm

Hear, hear!

Randy December 16, 2011 at 2:34 am

Well said.

Ubiquitous December 16, 2011 at 3:28 am

http://www.humanevents.com/article.php?id=48177

International Study Confirms Government Spending Crushes the Economy
by John Hayward

The question of whether government spending, independent of high tax rates, injures the economy is of great concern, because Democrats always deflect the harmful effects of taxation by insisting that either faceless rich people can be taxed to provide the money, or that it’s worth borrowing mountains of money to pay for vital Big Government programs. Neither of these things are even remotely true, but the wonderful benefits of big spending, and the heartless misery inflicted by austerity, are loudly invoked to drown out concerns about how the Really Great Society will be funded.

Thus it was intriguing to see a new European Central Bank study (hat tip to Veronique de Rugy of National Review and Ace of Spades) that used data from 108 national economies to demonstrate that “government consumption is consistently detrimental to growth.” This is true “irrespective of the country sample considered.” De Rugy ties this to domestic studies that have found “federal spending in states caused local businesses to cut back rather than grow,” which flies in the face of the almost unquestioned conventional wisdom that such spending promotes business growth by creating opportunities and providing infrastructure.

The ECB study acknowledges that government spending can do some good, but in excess it reduces economic growth through “government inefficiencies, crowding-out effects, excess burden of taxation, distortion of the incentives systems, and interventions to free markets.”

[The ECB study is linked to the above article at HumanEvents.com and can be downloaded as a PDF.]

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