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Old 8th December 2012, 08:29 AM   #321
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Originally Posted by lupus_in_fabula View Post
And frankly, I’m at loss to understand why you would cross over to free trade policy in order to validate supply-side theory; you might as well take the arguments for free trade to validate most proper economic theorizing. It is not a sole domain for SSE, not even close. I also hope you’re not arguing for SSE to be the first school of thought to bring up the beneficial sides of free trade.
Because they were right that removing artificial barriers to market entry, both domestically and in terms of international trade, leads to more competitive markets and lower consumer prices.

We certainly did not need the supply side movement to explain that to economists, the neoclassical emergence on the 70's had it covered, but politically they got positive changes made in those areas.
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Old 8th December 2012, 08:50 AM   #322
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Originally Posted by WildCat View Post



As for the chart in the OP, I'm at a loss to explain what it has to do with supply side economics.
It does highlight that simply having money is not a compelling reason for suppliers to expand.
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Old 8th December 2012, 10:15 AM   #323
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Originally Posted by respect View Post
It does highlight that simply having money is not a compelling reason for suppliers to expand.
Apparently it's hard to believe.
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Old 8th December 2012, 10:20 AM   #324
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Originally Posted by Caper View Post
Why would you ever have Wildcat on ignore? Almost no one defends his position or brings more relevant points to a discussion.
Wildcat is a human being. He's not perfect. I'm not interested in justifying why I put him on ignore. Just understand it's something that I never do lightly.
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Old 8th December 2012, 10:25 AM   #325
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Originally Posted by respect View Post
The point was that some of the arguments advanced in supply side theory are supportable.
Yes, of course. But by and large, IMO, it's largely wishful thinking and confirmation bias.
  • Reducing taxes can stimulate the economy.
  • Reducing regulations (particularly bad regulations) can stimulate the economy.
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Old 8th December 2012, 10:34 AM   #326
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Originally Posted by WildCat View Post
I think if you want wages to rise at the lower end of the scale you can't continue to glut an already glutted market. And I think you should know by now that I think those who hire illegal workers should pay a heavy price for doing so. And I'm happy to allow those already here to stay in exchange for a rational immigration policy that imports workers only when truly needed and not just because they're willing to work for cheap. You want to fine companies $1,000 for every day theu employ an illegal worker? I'm fine with that. It's far easier to control illegal immigration by cracking down on employer rather than trying to seal a border.
All well and good but stop blaming liberals and start looking at lobbyists that are protecting employers and putting up roadblocks to anything that will give workers an advantage.

How does all the union busting help the economy when it is lack of wages at the root of the problem?

And why not increase government spending on infrastructure that would do us all good? That would create real jobs, not 'make work' jobs. We need the infrastructure.


Originally Posted by WildCat View Post
The cost of college was spiraling out of control (way more than the rate of inflation would dictate) long before there was a tea party, and the reasons for that are complex and well beyond the scope of this thread. But yes, it's not just low-skilled workers who are feeling the squeeze from foreigners willing to work for less. But in this case it's from legal workers who take advantage of a broken work visa program. Far too many employers are claiming they can't find domestic workers when in fact they just can't find cheap domestic workers. The work visa program needs to be reformed.
It's not the cost of college that is the issue. It's the universities getting less and less public funding and allowing the vultures to get in on the student loan business.

And some of the debt problem was letting all those unregulated for profit colleges to enter the market with false promises to students encouraging them to borrow. The colleges profited from lies and the students were stuck with the bills. This is not what happened to my son but it is irksome to watch while listening to all those Libertarian leaning ideologues go on and on about the market solutions being superior to our government's.



Originally Posted by WildCat View Post
I didn't dodge it, I agree with you. Income stagnation is a real problem, and I think much of it is related to skyrocketing health care costs. When a company pays more for health insurance there's less available for raises. And surely you know by now I'd like to break the link between employment and health insurance? If I had my way benefits would be taxed as income and government should be managing health care. IMHO only the government has the power to force health care providers (note I'm not talking about health insurance but hospitals and such) to rein in their costs. Insurance companies simply don't have the clout to do it themselves. But that's another thread...
Totally illogical conclusion in light of the fact the rich have never been richer. Or should I call it an illogical rationalization that allows you to maintain your ideology in the face of obviously contradictory evidence?

The owners are sitting on more cash than ever. How is greed then not the reason they've held wages down? They took greater profits, they didn't spend more on employee health care.

As for government control of health care costs, goodness are you for a NHS then?

But honestly, you lack a key piece of information in your explanation. One reason for health care costs going up is the body of medical knowledge and capability is expanding. There are more and more things doctors can do for you, it's not that they are necessarily charging more.

Yes, government could reign in some price gouging on new drugs. And what some are hoping is that reducing medical errors will save a lot of money. I happen to think getting people to stop spending billions on worthless cures would go a long way, perhaps using some public health educational campaigns.
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Old 8th December 2012, 10:39 AM   #327
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Originally Posted by RandFan View Post
Yes, of course. But by and large, IMO, it's largely wishful thinking and confirmation bias.
  • Reducing taxes can stimulate the economy.
  • Reducing regulations (particularly bad regulations) can stimulate the economy.
When those things correct a current problem, but right now it is lack of demand that is the problem.
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Old 8th December 2012, 10:44 AM   #328
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Originally Posted by respect View Post
There isn't a sign up sheet or anything like that, rather it can be seen in the discussions ongoing amongst economists. In a nutshell this issue is that monetary policy has to be restrained way below its potential for fiscal stimulus to work at all. The interest that rose a few years back in Keynesian fiscal stimulus policies has largely receded because the same old problems with it have cropped up again. Promises that it can pay for itself have not materialized which really shouldn't surprise anyone because they weren't true in the past, arguments advanced by Brad DeLong and Larry Summers along these grounds are the same kind of pie in the sky dreaming that supply siders and their promises of self-paying tax cuts engage in. Fiscal stimulus trades short term benefits for long term deficit problems and does not seem to be able to generate enough activity to offset them, even Krugman sort of inadvertently acknowledged this the other day, "Remember, the U.S. government can’t run out of cash (it prints the stuff)." Well okay then, that's the problem, well one of them anyway. This doesn't pay for itself, but does risk uncontrolled inflationary problems, one of the major failings in Keynesian positions.

The perhaps bigger, more pressing problem is that central banks have to restrain themselves for fiscal stimulus to work. It relies on a positive multiplier effect that approaches zero when interest rates are not zero bound. The argument Keynes himself advanced was that central banks run out of ammo when interest rates drop to zero, it is the situation he described as a liquidity trap, but we now know that central banks are never out of ammo, especially when they are not restrained by a gold standard (or some other similar restriction). The question is whether or not restraining them to protect fiscal stimulus goals is a good idea, the answer appears to be no, optimistic stimulus projections have not materialized, central banks can pursue expansionary policies that do not bring in long term debt problems, too much Keynesianism means stagflation in the long run, monetary policy does not share that problem.

It is too late now, in that because the government has enacted fiscal policies, the Fed does not appear to be willing to sabotage them. However, we can still learn for future situations and the Fed does appear to be listening to the market monetarist arguments to the degree it can without sabotaging Washington's goals.

As Sumner says here:

"It seems to me that there are two ways of thinking about how monetary policy would react to fiscal stimulus. One approach would be to ask: “What is the optimal Fed response to fiscal stimulus?” And the answer to that question is rather obvious; the Fed should act in such a way as to completely neutralize the impact of fiscal stimulus, i.e. make sure the multiplier is precisely zero. This is because the Fed has some optimal level of expected AD growth in mind, and that level should not change just because fiscal policy changed. So if the Fed is doing its job, which means if it is always targeting expected AD growth at what it sees as the optimal rate, then it will try to completely offset fiscal stimulus and the expected fiscal multiplier will be precisely zero. That’s why fiscal stimulus almost disappeared from graduate textbooks in recent years."

The Fed isn't doing its job anywhere to the level it can because of fiscal stimulus goals.

What makes this all incredibly stupid is that this shouldn't be surprising. The relative strengths of monetary policy were already well known, the Keynesians lost this debate 40 years ago for the same reasons they are now. Monetary policy that does not require all of the long term problems associated with fiscal policy is far more compelling.
Good post. Thanks. It's primarily just an explanation with a number of controversial points that are simply asserted (without supporting data our sources) but that's fine. I'm grateful for the tone of your post.

I don't accept the notions that stimulus has disappeared from textbooks. I kinda doubt you personally have done a study on textbooks. What is your basis for that and how are you controlling for confirmation bias? I don't at all accept the notion that Keynesians have "lost this debate".

2008–2009 Keynesian resurgence

Reagan Was a Keynesian
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Old 8th December 2012, 10:49 AM   #329
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Originally Posted by respect View Post
Stagflation is what killed off Keynesianism as a dominant school of thought. Which isn't to say they have nothing to offer, but mainstream economics these days is neoclassicalism with a side dishes of Keynesianism and monetarism.
See my previous post. Reagan's effective policy was Keynesian. Reagan significantly grew the deficit as he significantly spurred recovery. Those are two facts that are not easily dismissed. Now, that could be simply correlation and not causation but if you are going to go that route then you have a problem as all we have are correlations. We cannot rewind the tape and try again with any of your examples. We need to be consistent in our use of correlations here.
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Old 8th December 2012, 11:57 AM   #330
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Re dominant schools of economic thought, Friedman's Monetarism and Keynesianism, it's my understanding there are still two, represented by the University of Chicago and U C Berkley respectively.

Summary from Wiki:
Quote:
In the context of macroeconomics, it is connected to the freshwater school of macroeconomics, in contrast to the saltwater school based in coastal universities (notably Harvard, MIT, and Berkeley). Chicago macroeconomic theory rejected Keynesianism in favor of monetarism until the mid-1970s, when it turned to new classical macroeconomics heavily based on the concept of rational expectations. The freshwater-saltwater distinction is largely antiquated today, as the two traditions have heavily incorporated ideas from each other. Specifically, New Keynesian economics was developed as a response to new classical economics, electing to incorporate the insight of rational expectations without giving up the traditional Keynesian focus on imperfect competition and sticky wages.
(bolding mine)

It doesn't seem to me the two sides have merged all that tightly, though I'm sure I'm grossly oversimplifying the schools of thought and apparently there are more than two.

I think the evidence supports this reality:
Quote:
The Chicago school's methodology has historically produced conclusions that favor free market policies and little government intervention (albeit within a strict, government-defined monetary regime). These policies came under attack in the wake of the financial crisis of 2007–2010.[19] The school has been blamed for growing income inequality in the United States.[20] Economist Brad DeLong of the University of California, Berkeley says the Chicago School has experienced an "intellectual collapse", while Nobel laureate Paul Krugman of Princeton University, says that recent comments from Chicago school economists are "the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten." [21]
Alan Greenspan's apology for believing Ayn Rand economics, (my interpretation), was rather telling, IMO:
Quote:
In Congressional testimony on October 23, 2008, Greenspan acknowledged that he was "partially" wrong in opposing regulation and stated "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity – myself especially – are in a state of shocked disbelief."[56]
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Old 8th December 2012, 12:45 PM   #331
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Originally Posted by RandFan View Post
Wowzers. Thank you. I've bookmarked that. It's really amazing to look at.

Full disclosure on the graphic: It uses the data in the first file in the list of files on this Census Bureau page (Table F-1, Income Limits for Each Fifth and Top 5 Percent of Families, All Races). I then took the constant dollars values for each year in each category and divided them by the value of the starting year (1947), and then graphed it in Excel. The result shows the relative rate of income growth. So in 1979, for example, each income category had an income that was about twice what it had in 1947, in constant dollar terms.

Note that the current edition of the Census Bureau file has data spanning 1947-2011. Those so inclined can download the Bureau's Excel file and graph the data for themselves.
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Old 8th December 2012, 12:52 PM   #332
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Originally Posted by psionl0 View Post
It should be noted that your chart doesn't show that the 1970's were characterized by "stagflation". Evidently the boom conditions of the 1950's and 1960's could not be sustained by the economic policies of that era.

That doesn't matter insofar as to what the graph illustrates: relative income growth across the different income groupings. Even in the 1970s the relative growth was nearly identical regardless of the specific group. It's only going into the 1980s that the lines begin to diverge noticeably.
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Old 8th December 2012, 01:57 PM   #333
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Not so great news for austerity proponents. BTW: I find the title of the article spurious. It's not an empirical fact and making it "official" is just cheep rhetoric.

Quote:
It’s Official: Austerity Economics Doesn’t Work

In making his annual Autumn Statement to the House of Commons on Wednesday, George Osborne, the Chancellor of the Exchequer, was forced to admit that his government has failed to meet a series of targets it set for itself back in June of 2010, when it slashed the budgets of various government departments by up to thirty per cent. Back then, Osborne said that his austerity policies would cut his country’s budget deficit to zero within four years, enable Britain to begin relieving itself of its public debt, and generate healthy economic growth. None of these things have happened. Britain’s deficit remains stubbornly high, its people have been suffering through a double-dip recession, and many observers now expect the country to lose its “AAA” credit rating.
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Old 8th December 2012, 02:30 PM   #334
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Originally Posted by RandFan View Post
Good post. Thanks. It's primarily just an explanation with a number of controversial points that are simply asserted (without supporting data our sources) but that's fine. I'm grateful for the tone of your post.

I don't accept the notions that stimulus has disappeared from textbooks. I kinda doubt you personally have done a study on textbooks. What is your basis for that and how are you controlling for confirmation bias? I don't at all accept the notion that Keynesians have "lost this debate".

2008–2009 Keynesian resurgence

Reagan Was a Keynesian
First, it was not my assertion that fiscal stimulus was dropped from graduate work/text books, it was Sumner's. Although I would add that in my anecdotal experience that that is true.

Second, did you only read the first half of the Keynesian resurgence article you cited? This is telling, " by late 2009 the previous apparent consensus for Keynesian policy among prominent economists began to dissolve into "dissensus". There was no reversal to the previous free market consensus," but could be expanded on, if economists were moving away from fiscal stimulus, but not to letting the free market take care of things, that really only leaves one alternative, they were on to monetary stimulus. That the Sumner led movement has been persuasive enough to alter Fed policy speaks to how influential it has been becoming.

Here is Brad DeLong lamenting the loss, link. Albeit, he means with policy makers rather than economists, although it would be fair to say he has lost there as well. Pleasantly he does look to monetary stimulus even if it is not his preferred method. If you are interested in Keynesian economics, DeLong is the go to guy in economic circles. Krugman may be the most recognizable economist in the world today but seems to be more interested in political commentary these days, DeLong is the intellectual leader of Keynesianism right now.
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Old 8th December 2012, 02:35 PM   #335
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Originally Posted by RandFan View Post
See my previous post. Reagan's effective policy was Keynesian. Reagan significantly grew the deficit as he significantly spurred recovery. Those are two facts that are not easily dismissed. Now, that could be simply correlation and not causation but if you are going to go that route then you have a problem as all we have are correlations. We cannot rewind the tape and try again with any of your examples. We need to be consistent in our use of correlations here.
Cutting taxes is Keynesian policy as well as supply side policy. But it comes with the same deficit issues as spending, which Reagan also did plenty of as Krugman points out.

The use of the dollar as the world reserve currency has enabled America to get away with a lot more of it than any other country could, but that ability was an unclear shelf life. It is very unlikely that the Fed would bail Washington out if that is what it came to. And would not be good if they did.
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Old 8th December 2012, 02:37 PM   #336
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Originally Posted by RandFan View Post
Not so great news for austerity proponents. BTW: I find the title of the article spurious. It's not an empirical fact and making it "official" is just cheep rhetoric.
Arguing against austerity is generally a strawman in US at least, European countries have ceded monetary control but that isn't an issue here. It isn't fiscal spending or nothing like political arguments (and Krugman's favorite strawman) like to make it seem.
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Old 8th December 2012, 02:39 PM   #337
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Originally Posted by RandFan View Post
Yes, of course. But by and large, IMO, it's largely wishful thinking and confirmation bias.
  • Reducing taxes can stimulate the economy.
  • Reducing regulations (particularly bad regulations) can stimulate the economy.
Those aren't controversial points, although I think the Keynesian explanation for tax cuts spurring short term growth by adding consumption is more compelling that the supply side version of the argument.

And that supply side monetary policy is nonsense.
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Old 8th December 2012, 02:45 PM   #338
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Originally Posted by respect View Post
Second, did you only read the first half of the Keynesian resurgence article you cited? This is telling, " by late 2009 the previous apparent consensus for Keynesian policy among prominent economists began to dissolve into "dissensus". There was no reversal to the previous free market consensus," but could be expanded on, if economists were moving away from fiscal stimulus, but not to letting the free market take care of things, that really only leaves one alternative, they were on to monetary stimulus. That the Sumner led movement has been persuasive enough to alter Fed policy speaks to how influential it has been becoming.
I read the entire article and paid close attention to the criticisms. The article doesn't damn Keynesian Economics. It's a balanced analysis. You seem to veer from admission that economics is not empirical (not an exact science) to "there can only be one conclusion".

Quote:
Here is Brad DeLong lamenting the loss, link. Albeit, he means with policy makers rather than economists, although it would be fair to say he has lost there as well. Pleasantly he does look to monetary stimulus even if it is not his preferred method. If you are interested in Keynesian economics, DeLong is the go to guy in economic circles. Krugman may be the most recognizable economist in the world today but seems to be more interested in political commentary these days, DeLong is the intellectual leader of Keynesianism right now.
I think your ad hom against Krugman and suggetion of DeLong as a replacement for my Keynesian prophet is a transparent rhetorical device. First off, I'm not a Keynesian sycophant. I don't believe there is a single over-riding economic philosophy that will solve most or all of our problems. I believe that each economic hypothesis has trade offs and that the benefits and costs change depending on the status of a highly complex and chaotic dynamics. I suspect that we are evolving and hopefully with lots of trial and error we will pick the best aspects of various philosophies to craft better and better strategies.
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Old 8th December 2012, 02:48 PM   #339
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Originally Posted by RandFan View Post
I read the entire article and paid close attention to the criticisms. The article doesn't damn Keynesian Economics. It's a balanced analysis. You seem to veer from admission that economics is not empirical (not an exact science) to "there can only be one conclusion".

I think your ad hom against Krugman and suggetion of DeLong as a replacement for my Keynesian prophet is a transparent rhetorical device. First off, I'm not a Keynesian sycophant. I don't believe there is a single over-riding economic philosophy that will solve most or all of our problems. I believe that each economic hypothesis has trade offs and that the benefits and costs change depending on the status of a highly complex and chaotic dynamics. I suspect that we are evolving and hopefully with lots of trial and error we will pick the best aspects of various philosophies to craft better and better strategies.
Don't read him if you don't want to.
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Old 8th December 2012, 02:50 PM   #340
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Originally Posted by respect View Post
Arguing against austerity is generally a strawman in US at least, European countries have ceded monetary control but that isn't an issue here. It isn't fiscal spending or nothing like political arguments (and Krugman's favorite strawman) like to make it seem.
I don't at all think it is a straw man (two words btw and yes I live in a glass house ). If Krugman is engaging in a false dichotomy then what exactly does the GOP propose to do different than Europe. You might have me at a disadvantage here. I'll provisionally withhold judgment at the moment.
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Old 8th December 2012, 02:57 PM   #341
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Originally Posted by respect View Post
Don't read him if you don't want to.
Kudos for following up a criticism of a bad rhetorical device with another. And BTW: I'm not anti-rhetorical device. It's the hackneyed and/or intellectually insulting and/or passive aggressive ones that I have a pet peeve with.
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Old 8th December 2012, 03:00 PM   #342
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Originally Posted by RandFan View Post
I don't at all think it is a straw man (two words btw and yes I live in a glass house ). If Krugman is engaging in a false dichotomy then what exactly does the GOP propose to do different than Europe. You might have me at a disadvantage here. I'll provisionally withhold judgment at the moment.
The GOP is off in La La Land right now. Monetary stimulus is the third option. One of the arguments for it that is more political in nature, rather than technical, is that central banks are more coherent and likely to design good policies than legislatures.
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Old 8th December 2012, 03:03 PM   #343
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Originally Posted by RandFan View Post
Kudos for following up a criticism of a bad rhetorical device with another. And BTW: I'm not anti-rhetorical device. It's the hackneyed and/or intellectually insulting and/or passive aggressive ones that I have a pet peeve with.
It was a simple suggestion. Krugman is more interested in political commentary than economics these days, I believe DeLong is a better source of pro-Keynesian views.
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Old 8th December 2012, 03:05 PM   #344
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Originally Posted by respect View Post
The GOP is off in La La Land right now. Monetary stimulus is the third option. One of the arguments for it that is more political in nature, rather than technical, is that central banks are more coherent and likely to design good policies than legislatures.
Okay, but let's be fair here. Krugman advocates one thing and the GOP advocates another. There might be a third option but it isn't in play. Perhaps it should be but why should Krugman be a cheerleader for something he doesn't advocate. Don't get me wrong. I'll concede you are correct on point but given the dynamics I can't personally fault him but I do understand you.
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Old 8th December 2012, 03:06 PM   #345
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Originally Posted by respect View Post
It was a simple suggestion. Krugman is more interested in political commentary than economics these days, I believe DeLong is a better source of pro-Keynesian views.
I'm not going to belabor the point.
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Old 8th December 2012, 03:23 PM   #346
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Originally Posted by RandFan View Post
Okay, but let's be fair here. Krugman advocates one thing and the GOP advocates another. There might be a third option but it isn't in play. Perhaps it should be but why should Krugman be a cheerleader for something he doesn't advocate. Don't get me wrong. I'll concede you are correct on point but given the dynamics I can't personally fault him but I do understand you.
The GOP may be able to force fiscal austerity, but the Fed is non-political. Even if they could force Bernanke out he would be replaced by someone just like him. So such debates need to account for how the Fed would have responded had the legislature responded with austerity. It is an exercise in pointlessness if that is not accounted for.

The GOP deserves plenty of criticism but it is silly to pretend they can cause a full shut down of government action. I can understand the impulse to argue against such views as Krugman comes off looking smart, but it isn't particularly honest. And more disturbingly, he has a habit of lying to his readers about what other economists think, I doubt many of his liberal fans are aware of this, but it was big news in economists circles when John Cochrane took him down a notch for his constant intellectual dishonesty. That is another reason DeLong is now the de facto leader of their movement.
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Old 8th December 2012, 03:31 PM   #347
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Originally Posted by respect View Post
I doubt many of his liberal fans are aware of this, but it was big news in economists circles when John Cochrane took him down a notch for his constant intellectual dishonesty. That is another reason DeLong is now the de facto leader of their movement.
Thanks and all but you can seriously move on.
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Old 8th December 2012, 03:43 PM   #348
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Originally Posted by RandFan View Post
Thanks and all but you can seriously move on.
For someone who claims to like debate so much you sure don't seem to like seeing your prized economist challenged.
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Old 8th December 2012, 04:14 PM   #349
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Originally Posted by respect View Post
For someone who claims to like debate so much you sure don't seem to like seeing your prized economist challenged.
This thread is the result of a silly rhetorical device. You lost me at that point. Nothing good will come from offering up even more silly rhetoric. If you've got nothing else then thanks for playing.

ETA: I would be remiss if I didn't say that I very much appreciate your willingness to have a reasoned discussion. It was good while it lasted. Short but good. Thank you. Sincerely.
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Old 8th December 2012, 05:16 PM   #350
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Originally Posted by RandFan View Post
This thread is the result of a silly rhetorical device. You lost me at that point. Nothing good will come from offering up even more silly rhetoric. If you've got nothing else then thanks for playing.

ETA: I would be remiss if I didn't say that I very much appreciate your willingness to have a reasoned discussion. It was good while it lasted. Short but good. Thank you. Sincerely.
This may or may not be of interest to you, and even if it isn't, it may be to others, but there is a growing sense that Paul Krugman really does his readers a disservice. Most people do not know much about economics, although the rise of blogs has helped a little, it still isn't a subject very many people seek to learn much about. Krugman has an unusually high degree of celebrity, previously only trumped by Milton Friedman, I think we would all like it if he used his popularity more responsibly. Being a partisan liberal writing for The New York Times his loyal readers are naturally mostly liberals. It would be nice if he would present them with accurate opposing viewpoints. Sadly, he has previously suggested that people who don't agree with him are not worthy of his attention so maybe he isn't just employing logical fallacies but really doesn't know what his opposition is saying. It would be nice if he would stop calling people "mendacious idiots" and engage in civil discussions that accurately represent the opinions he seeks to criticize. You don't see Scott Sumner, Greg Mankiw, Robert Lucas, Robert Mudell, Tyler Cowen, John Talyor, Robert Barro etc, etc, etc acting like that. A lot of people are doing a lot of important research that his readers will never learn about from him. The closest Krugman is coming to debating with other economists these days is an ongoing discussion about if his behavior in recent years is just mostly unacceptable or extremely unacceptable.

Last edited by respect; 8th December 2012 at 05:25 PM.
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Old 8th December 2012, 07:50 PM   #351
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Krugman has evidence to back up his government stimulus recommendations. Countries that followed Friedman's free market solutions have a trail of dead citizens to show for it (Chile and Argentina come to mind).

I suggest, Respect, that your conservative mindset might be depriving you of objectivity about Krugman.
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Old 8th December 2012, 10:40 PM   #352
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I reckon Krugman realized there's a better living to be made in demagoging to the easily duped and manipulated left.
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Old 8th December 2012, 11:09 PM   #353
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Reading through this thread I had to look this up. Living wage.


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


In public policy, a living wage or subsistence wage is the minimum income necessary for a worker to meet basic needs (for an extended period of time or for a lifetime). These needs include shelter (housing) and other incidentals such as clothing and nutrition. In some nations such as the United Kingdom and Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation, although in many cases child care, education, saving for retirement, and less commonly legal fees and insurance may cost a family more than food, utilities, transport, or health care. In addition to this definition, living wage activists further define "living wage" as the wage equivalent to the poverty line for a family of four.

Why work just to go in debt? Why pay your workers so little they can't afford your product? Work more hours and multiple jobs for a negative income. What's the point? The corporations make more money than ever and the workers get less than ever.

Is that ultimate capitalism or just a big fail?
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Old 8th December 2012, 11:52 PM   #354
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Originally Posted by Virus View Post
I reckon Krugman realized there's a better living to be made in demagoging to the easily duped and manipulated left.
Please show evidence for this appalling accusation.

Note: Evidence means evidence, not imaginary accusations based on what the likes of Ann Coulter and Clint Eastwood dreamed up. You have played the game, now you have to pay up with the hard, testable, verifiable evidence. No empty chairs, please.

Deliver!
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Old 9th December 2012, 03:06 AM   #355
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Originally Posted by Profanz View Post
Reading through this thread I had to look this up. Living wage.

Is that ultimate capitalism or just a big fail?
There will always be poor people... Never been better to be poor.
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Old 9th December 2012, 03:41 AM   #356
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Originally Posted by Caper View Post
There will always be poor people... Never been better to be poor.
IIRC, you have posted this more than once. What's you point?

There's millions of people caught in slavery. The sex trade is found in nations rich and poor. Honor killings are all too common. Muslims are killing Muslims by the thousands. Modern weapons have expanded the ease of killing in wholesale numbers. You think the poor are shouting hosannas because all the have to do is think that they have it better than during the Bronze Age?

Or maybe you mean in first world countries like the USA, UK, Japan, etc. What's your point? You think the poor are shouting hosannas because all the have to do is think that they have it better than during the 16th century? Or maybe since there will always be the poor we should throw our hands up in the air and walk away. Let them eat cake, eh? Why bother trying to improve life. Hell, those slackers probably deserve to suffer a little.

What's your point?
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Old 9th December 2012, 04:30 AM   #357
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Originally Posted by Profanz View Post
Why work just to go in debt? Why pay your workers so little they can't afford your product? Work more hours and multiple jobs for a negative income. What's the point? The corporations make more money than ever and the workers get less than ever.

Is that ultimate capitalism or just a big fail?
Blaming capitalism in general seems somewhat fruitless. However, the current situation certainly looks like a political and economic fail. The debt-driven economic model seems rather broken.

Not only do high levels of private debt make the recovery from a recession painfully slow, it also makes the economic contraction more severe in the first place. (IMF survey regarding this here.) Public debt is a lesser evil but can certainly hinder recovery if much of it accumulated prior to a financial crisis (lesser ammunition to fight back).

There’s a nice paper out (by The National Bureau of Economic Research – Alan Taylor, here) showing that fiscal strains do not tend to result in financial crisis (Greece might be an exception to the rule here), whereas development of excess credit certainly does indicate a looming crisis ahead. It also validates Steve Keen’s assumptions on that point.

Here’s Keen’s illustrative chart:
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Old 9th December 2012, 05:27 AM   #358
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Originally Posted by Virus View Post
I reckon Krugman realized there's a better living to be made in demagoging to the easily duped and manipulated left.
You misspelled "human", there.
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Old 9th December 2012, 09:52 AM   #359
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Originally Posted by Caper View Post
... Never been better to be poor.


Talk about a Western ethnocentric tunnel vision view.
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Old 9th December 2012, 10:07 AM   #360
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Originally Posted by lupus_in_fabula View Post
Blaming capitalism in general seems somewhat fruitless. However, the current situation certainly looks like a political and economic fail. The debt-driven economic model seems rather broken.

Not only do high levels of private debt make the recovery from a recession painfully slow, it also makes the economic contraction more severe in the first place. (IMF survey regarding this here.) Public debt is a lesser evil but can certainly hinder recovery if much of it accumulated prior to a financial crisis (lesser ammunition to fight back).

There’s a nice paper out (by The National Bureau of Economic Research – Alan Taylor, here) showing that fiscal strains do not tend to result in financial crisis (Greece might be an exception to the rule here), whereas development of excess credit certainly does indicate a looming crisis ahead. It also validates Steve Keen’s assumptions on that point.

Here’s Keen’s illustrative chart:
http://cdn.debtdeflation.com/blogs/w...eDebtwatc1.png
Assuming the chart is accurate (because I haven't seen this issue discussed enough), it is very revealing. Thanks for posting it.

But I have a tiny nitpik with your straw man version of the complaint: "Blaming capitalism in general seems somewhat fruitless." I certainly don't blame capitalism and I'm confident saying RandFan doesn't either.

The blame goes to under-regulated capitalism and the deterioration of democracy due to increasing impact of the corporatocracy.

Capitalism is clearly the superior economic system, on the global scale anyway. But when it is under-regulated the result is just what you see, wealth concentrates at the top until the bottom becomes so intolerable the social system collapses. History suggests you eventually get revolutions and/or wars when the imbalance reaches too extreme a point. It's uncertain if the past reflects the future.

A lot of that private dept is the result of under-regulated mortgages and the under-regulated banking system. It's not the result of capitalism per se.
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