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Is Keynesian an Accepted Form of Economics?


By bgamall4   Follow   Fri, 1 Feb 2013, 4:44pm PST   1,299 views   32 comments   Watch (1)   Share   Quote   Permalink   Like   Dislike  

http://say-no-to-recourse-loans.blogspot.com/2013/02/is-keynesian-accepted-form-of-economics.html

There are only two solutions, Keynes stimulus and Mises austerity. Austerity does not work, period. Keynes would work if the money went into the real economy. However it doesn't. It goes into speculation. Speculation must be stopped.

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marcus   befriend   ignore   Fri, 1 Feb 2013, 11:04pm PST   Share   Quote   Like   Dislike     Comment 1

"form" of economics ?

THe wording of the question is a little weird.

But also, I still disagree with you about derivatives. You seem to generalize that all derivatives are bad. Including not only regulated exchange traded financial derivatives that have been big since the 70s, but I presume also commodity futures that have been traded for centuries.

These all have nothing to do with the shadow banking market derivatives that had such a big role in the crash in 2008, and the need for bailouts of the banks.

uomo_senza_nome   befriend   ignore   Fri, 1 Feb 2013, 11:57pm PST   Share   Quote   Like   Dislike     Comment 2

bgamall4 says

Keynes stimulus and Mises austerity

Both are equally absurd in their solutions, because they both ignore the problem of rent.

How about Hyman Minsky and Steve Keen, who has debunked neoclassical economics.

http://www.debtdeflation.com/blogs/manifesto/

bgamall4   befriend   ignore   Sat, 2 Feb 2013, 12:00am PST   Share   Quote   Like   Dislike     Comment 3

marcus says

But also, I still disagree with you about derivatives. You seem to generalize that all derivatives are bad. Including not only regulated exchange traded financial derivatives that have been big since the 70s, but I presume also commodity futures that have been traded for centuries.

These all have nothing to do with the shadow banking market derivatives that had such a big role in the crash in 2008, and the need for bailouts of the banks.

Those derivatives are likely ok, but there is not a regulated market and that could include more than shadow housing derivatives. It could include interest rate derivatives. If the city of Oakland walks away from an interest rate derivative could it expose a bank?

What if lots of cities did so!

And to say we are done with shadow bank derivatives may be too optimistic.

I just quoted the question as it was.

Finally, if the bankers weren't worried about derivatives why would you think they would care about cutting social security and medicare and the rest? They want those cut precisely because of the derivatives and the need for the Federal government to fill any black holes that they cause.

http://www.globalresearch.ca/the-wall-street-ponzi-scheme-called-fractional-reserve-banking/11600

bgamall4   befriend   ignore   Sat, 2 Feb 2013, 12:05am PST   Share   Quote   Like   Dislike     Comment 4

uomo_senza_nome says

How about Hyman Minsky and Steve Keen, who has debunked neoclassical economics.

I totally agree. Minsky was Keynesian but hated the bubbles and proved austerity was just for the bankers.

Bankers want three things:

1. austerity
2. supply side economics (called percolation by Andrew Mellon)
3. speculation in futures.

We have gasoline at the highest level ever for Feb 1. The oil market is cornered.

Entitlemented   befriend   ignore   Sat, 2 Feb 2013, 12:14am PST   Share   Quote   Like   Dislike     Comment 5

Germany in 2009 inacted moderate cuts in the government spending, focused on inefficiency. The EU decried this "Austerity", and all the experts said it was not going to work.

Now that Germany is in better shape with manufacturing and fiscally solvent, and has great social services as well.

Were are all the Keynesians in Deutchland?

bgamall4   befriend   ignore   Sat, 2 Feb 2013, 12:20am PST   Share   Quote   Like   Dislike     Comment 6

Entitlemented says

Germany in 2009 inacted moderate cuts in the government spending, focused on inefficiency. The EU decried this "Austerity", and all the experts said it was not going to work.

Now that Germany is in better shape with manufacturing and fiscally solvent, and has great social services as well.

Retail sales are down in Germany because austerity was exported to the PIIGS nations. German manufacturing is bumping along.

One thing that must be said is that neoclassical economics includes the Austrians, you know, Mises and the libertarians. The invisible hand of self interest, according to the neoclassical libertarians, a subset of neoclassical economics, always worked for the good of society. But it didn't work.

Alan Greenspan and the housing bubble proved that this invisible hand was a figment of the libertarian imagination. Mari Carrusa Cabrerra subscribes to this nonsense on CNBC. So do many others on CNBC

lostand confused   befriend   ignore   Sat, 2 Feb 2013, 12:20am PST   Share   Quote   Like (1)   Dislike     Comment 7

Entitlemented says

Germany in 2009 inacted moderate cuts in the government spending, focused on inefficiency. The EU decried this "Austerity", and all the experts said it was not going to work.


Now that Germany is in better shape with manufacturing and fiscally solvent, and has great social services as well.


Were are all the Keynesians in Deutchland?

Links please?? The EU is the one that has been pushing for austerity in many of their member countries-not the other way around.

bgamall4   befriend   ignore   Sat, 2 Feb 2013, 12:23am PST   Share   Quote   Like (1)   Dislike     Comment 8

I agree with you Lostland. I think Germany benefited from the Euro by exporting easy money and by wanting austerity so that it could be paid back. The Germans have really screwed the Eurozone. But they have also screwed themselves because the bankers want them to now bail everyone else out.

It is a bad deal all the way around.

errc   befriend   ignore   Sat, 2 Feb 2013, 12:41am PST   Share   Quote   Like (1)   Dislike     Comment 9

I don't think we have a system of economics problem. We have a system of currency problem. I'm still not convinced that we need to have such a malleable currency, where such select few control its valuation. Id prefer market based valuation of a currency

Otherwise, you always end up with what we have now. A government that will not allow trade or laboring to be commensed or compensated in anything but their currency. Then they can inflate its valuations (devalue) so that the working class folk are levered to the hilt and all their assets are dollar denominated. Then they can pull the rug out from under everyone, by deflating the currency supply, and asset strip the populace to death.

Economics occurs in the nature state. Its simply risk analysis, where participants trade one thing for another. I agree with uomo senza nome. Many on this board support the teachings of henry george. From learning about him, I've become a fan of the workss of Silvio Gesell (stamped money, free money, natural economic order etc.)

Reality   befriend   ignore   Sat, 2 Feb 2013, 12:47am PST   Share   Quote   Like   Dislike     Comment 10

Mises has nothing to do with "austerity" that entails raising taxes to pay the bankers. Mises proposal involve two parts:

1. Let the bad debts default, let the banks that made the loans eat the losses, going bankrupt if necessary. The result would be lower debt service burden on the rest of the society that did not make the mistaken loans.

2. Lower taxes, so more of the society's resources is left in the competitive private sector instead of being forcibly taken by the monopolistic government sector.

bob2356   befriend   ignore   Sat, 2 Feb 2013, 12:59am PST   Share   Quote   Like   Dislike     Comment 11

bgamall4 says

Keynes stimulus

Where is the other side of keynes theories? The part about paying back stimulus money and putting additional money away when the economy is good. That part has never been tried by "keynesians". Calling the policies of the last 40 years Keynesian is a joke.

finehoe   befriend   ignore   Sat, 2 Feb 2013, 1:05am PST   Share   Quote   Like   Dislike     Comment 12

bob2356 says

The part about paying back stimulus money and putting additional money away when the economy is good. That part has never been tried

That's not entirely true. We ran surpluses in the 90s, which was the Keynesian thing to do in that economy. But the Republican response was that it demonstrated the US was "overtaxed" and so enacted the Bush tax cuts.

bgamall4   befriend   ignore   Sat, 2 Feb 2013, 1:10am PST   Share   Quote   Like   Dislike     Comment 13

bob2356 says

Where is the other side of keynes theories? The part about paying back stimulus money and putting additional money away when the economy is good. That part has never been tried by "keynesians". Calling the policies of the last 40 years Keynesian is a joke.

Totally agree. Clinton did balance the budget some, though. He tried but the he ruined it all by allowing Phil Gramm to pass the repeal of Glass-Steagall.

Both those guys knew they would become rich by helping the banksters.

Reality   befriend   ignore   Sat, 2 Feb 2013, 1:41am PST   Share   Quote   Like   Dislike     Comment 14

bob2356 says

Where is the other side of keynes theories? The part about paying back stimulus money and putting additional money away when the economy is good. That part has never been tried by "keynesians". Calling the policies of the last 40 years Keynesian is a joke.

The joke is on Keynes. Since when did governments have sustained surplus in the long run under a fiat money system? The whole idea of fiat money system is for one generation of politicians to pass the debt to the next generation. Clinton's so-called "surplus" is an accounting trick: it was able to loot the social security surplus thanks to favorable demographics.

bgamall4   befriend   ignore   Sat, 2 Feb 2013, 1:47am PST   Share   Quote   Like   Dislike     Comment 15

Reality says

Clinton's so-called "surplus" is an accounting trick: it was able to loot the social security surplus thanks to favorable demographics.

The Bush tax cuts made Clinton look like an economic saint. Bush tax cuts are a huge drag on main street.

Reality   befriend   ignore   Sat, 2 Feb 2013, 3:41am PST   Share   Quote   Like   Dislike     Comment 16

bgamall4 says

The Bush tax cuts made Clinton look like an economic saint. Bush tax cuts are a huge drag on main street.

Bush's error was not in the tax cuts but the massive military spending to "jump-start" the economy in the classical Keynesian attempt. Ask yourself, would you prefer figuring out how to spend your income or would you prefer someone else spend it for you? Which way would end up buying more cost-effective goods and service for your personal taste?

mell   befriend   ignore   Sat, 2 Feb 2013, 7:39am PST   Share   Quote   Like   Dislike     Comment 17

Not accepted by me.

uomo_senza_nome   befriend   ignore   Sat, 2 Feb 2013, 8:36am PST   Share   Quote   Like (1)   Dislike     Comment 18

bgamall4 says

Keynes stimulus and Mises austerity

Both are equally absurd with their solutions. How about Hyman Minsky and Steve Keen, who have debunked neoclassical economics?

http://www.debtdeflation.com/blogs/manifesto/

bgamall4   befriend   ignore   Sat, 2 Feb 2013, 10:26am PST   Share   Quote   Like   Dislike     Comment 19

Reality says

Bush's error was not in the tax cuts but the massive military spending to "jump-start" the economy in the classical Keynesian attempt.

No, Bush was not Keynesian. He was a supply sider, like Andrew Mellon. He allowed massive speculation and leverage. He was a bankernesian.

bgamall4   befriend   ignore   Sat, 2 Feb 2013, 10:27am PST   Share   Quote   Like   Dislike     Comment 20

uomo_senza_nome says

Both are equally absurd with their solutions. How about Hyman Minsky and Steve Keen, who have debunked neoclassical economics?

http://www.debtdeflation.com/blogs/manifesto/

I totally agree. The acceleration of credit is what a bubble is all about. The acceleration of credit is what Mises and Krugman don't allow for.

lostand confused   befriend   ignore   Sat, 2 Feb 2013, 11:22am PST   Share   Quote   Like   Dislike     Comment 21

bgamall4 says

Reality says



Bush's error was not in the tax cuts but the massive military spending to "jump-start" the economy in the classical Keynesian attempt.


No, Bush was not Keynesian. He was a supply sider, like Andrew Mellon. He allowed massive speculation and leverage. He was a bankernesian.

I think Bush defies all logic. He is beyond human comprehension!!

Reality   befriend   ignore   Sat, 2 Feb 2013, 11:50am PST   Share   Quote   Like (1)   Dislike     Comment 22

bgamall4 says

No, Bush was not Keynesian. He was a supply sider, like Andrew Mellon. He allowed massive speculation and leverage. He was a bankernesian.

Bush himself was not exactly in charge of his administration. The neocons surrounding him and running his administration were plenty Keynesian in policy outlook. There were plenty talks around the 2000-2001 time frame after the tech bubble burst about the need for a war to stimulate the economy; e.g. how great Pearl Harbor was for the US economy, etc..

Reality   befriend   ignore   Sat, 2 Feb 2013, 11:53am PST   Share   Quote   Like   Dislike     Comment 23

lostand confused says

I think Bush defies all logic. He is beyond human comprehension!!

That's just an expression of intellectual laziness. or is that haziness?

lostand confused   befriend   ignore   Sat, 2 Feb 2013, 12:04pm PST   Share   Quote   Like   Dislike     Comment 24

Reality says

lostand confused says



I think Bush defies all logic. He is beyond human comprehension!!


That's just an expression of intellectual laziness. or is that haziness?

Bush and intellectual are like nails on a chalkboard.

bgamall4   befriend   ignore   Sat, 2 Feb 2013, 12:20pm PST   Share   Quote   Like (1)   Dislike     Comment 25

Reality says

Bush himself was not exactly in charge of his administration. The neocons surrounding him and running his administration were plenty Keynesian in policy outlook. There were plenty talks around the 2000-2001 time frame after the tech bubble burst about the need for a war to stimulate the economy; e.g. how great Pearl Harbor was for the US economy, etc..

Keynes believed that in times of prosperity you put stimulus away. Bush and his economic advisors were supply side economists who believed that you never put stimulus away. And the supply side hot money that came in came to the US from weatlhy financiers the world over, pushed up the price of housing and commodities, in order to fund the oil wars.

Reality   befriend   ignore   Sat, 2 Feb 2013, 12:31pm PST   Share   Quote   Like   Dislike     Comment 26

lostand confused says

Bush and intellectual are like nails on a chalkboard.

The same can be said of the pointless ad hominin attack. Clinton, Bush, and soon Obama all serve their function as a two-termer: to be the 2nd coming on the way in, and to be discredited on the way out. That's how American democracy gets renewed: hope renewed yet nobody's ego gets too big for the rest of the elite group to handle. All three, plus Bush Sr., are in reality life-long intelligence agents/assets.

lostand confused   befriend   ignore   Sat, 2 Feb 2013, 12:33pm PST   Share   Quote   Like   Dislike     Comment 27

Reality says

lostand confused says



Bush and intellectual are like nails on a chalkboard.


The same can be said of the pointless ad hominin attack. Clinton, Bush, and soon Obama all serve their function as a two-termer: to be the 2nd coming on the way in, and to be discredited on the way out. That's how American democracy gets renewed: hope renewed yet nobody's ego gets too big for the rest of the elite group to handle. All three, plus Bush Sr., are in reality life-long intelligence agents/assets.

Huh?

Reality   befriend   ignore   Sat, 2 Feb 2013, 12:37pm PST   Share   Quote   Like   Dislike     Comment 28

bgamall4 says

Keynes believed that in times of prosperity you put stimulus away. Bush and his economic advisors were supply side economists who believed that you never put stimulus away. And the supply side hot money that came in came to the US from weatlhy financiers the world over, pushed up the price of housing and commodities, in order to fund the oil wars.

How exactly would the pushing up of housing and commodity prices help fund a war? Doesn't war consume commodities? You have the cause and effect backwards. The Cheney team was primarily interested in driving oil price up. Starting a war that disrupts Iraqi oil production and export was the way to do it. They got plenty intellectual support from Keynesians who were looking around for a war to jump-start the economy.

gsr   befriend   ignore   Sun, 3 Feb 2013, 8:08am PST   Share   Quote   Like   Dislike     Comment 29

You mentioned austerity in Euro zone, but you failed to mention big tax increases coupled with highly regulated anti business environment. That's where you fail, along with Henry from BI. You only look at things that you want to look, and skip everything else.

Peter P   befriend   ignore   Sun, 3 Feb 2013, 8:16am PST   Share   Quote   Like   Dislike     Comment 30

What if "economics" is nothing but a frivolous exercise of noise-making?

bgamall4   befriend   ignore   Sun, 3 Feb 2013, 8:28am PST   Share   Quote   Like   Dislike     Comment 31

Reality says

bgamall4 says

Keynes believed that in times of prosperity you put stimulus away. Bush and his economic advisors were supply side economists who believed that you never put stimulus away. And the supply side hot money that came in came to the US from weatlhy financiers the world over, pushed up the price of housing and commodities, in order to fund the oil wars.

How exactly would the pushing up of housing and commodity prices help fund a war? Doesn't war consume commodities? You have the cause and effect backwards. The Cheney team was primarily interested in driving oil price up. Starting a war that disrupts Iraqi oil production and export was the way to do it. They got plenty intellectual support from Keynesians who were looking around for a war to jump-start the economy.

That's easy, it keeps people spending and increases government revenue. Securitization and ponzi bubbles are tools to increase government revenue.

Reality   befriend   ignore   Sun, 3 Feb 2013, 11:42am PST   Share   Quote   Like   Dislike     Comment 32

bgamall4 says

That's easy, it keeps people spending and increases government revenue. Securitization and ponzi bubbles are tools to increase government revenue.

Government can fund a war by printing. To the extent that asset prices and commodity prices go up, it actually gets in the way of funding the war. In fact, the wars are have been toned down due to threat of commodity prices going through the roof.

The invasion of Iraq was part and parcel of the effort to reflate the economy, especially raising oil prices from about $10/bbl to a then target of about $28/bbl as that would be most profitable price range for existing big oil companies without bringing too much new production online. A $60-100Billion war and interruption of Iraqi production/export was thought as the perfect formula. The war and occupation dragged on to cost over $1000 billion, and oil price went to $140/bbl! Now new production and new sources of oil was brought online.

Keep in mind, governments don't go to war because leaders want to fight, but because they want to profit from war-making.

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