Crony capitalism = both a corruption of capitalism and a corruption of morals
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2013 May 1, 2:04pm 64,596 views 206 comments
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You have got to be kdiding. The problem is that the guy making $7/hour at Walmart isn't saving enough??? Are you able to type this stuff without laughing?
Walmart pays more than minimum wage. In any case, the lack of savings among low to mid-income families make them much more vulnerable to what essentially is loan sharking by banksters. That condemns them to perpetual and generational poverty.
How can what he said and wrote in his magna opus ("The General Theory"), the
defining work of his economic theory not matter?
This is such a ridiculous use of the latin term and not correct...it would be magnum opus. Or perhaps you meant plural "great works" which would be Magna opera, if my grammar school latin holds.
Anyway, the problem you have here is I usually remember when I have read something before....and curiously, the wikipedia page on Keynes also refers to "General Theory" as his Magnum Opus.
http://en.wikipedia.org/wiki/John_Maynard_Keynes
Did you write the wikipedia page on Keynes? jk....
It was lifted from Martin Frost so maybe you are he...
Just use normal english and make your points. We already know you are pretty bright so speaking like this is unneccesary.
The idea that too much savings would leadto underemployment is preposterous.
So please explain this one. With math or examples, please.
That condemns them to perpetual and generational poverty.
Funny, I thought what condemned them to generational poverty had something to do with the amount of their productivity siphoned to the top...ie how low their wages were.
tatupu70
2013 May 6, 6:04am
What kind of market demand was there when iPod, iPhone and iPad were merely
figments of Steve Jobs' imagination?
Huge demand. That's why Jobs figured out a way to make them.
tatupu70
2013 May 6, 6:05am
The big breakthroughs in life are not result of endless replications, but
genuine entreprenuership.
Yep--how does that relate to the discussion at hand?
Really? What are short term treasuries paying now? Or bank savings accounts?
Not nearly high enough. The FED is robbing the retirees to pay the banksters.
Yep.
Did you write the wikipedia page on Keynes? jk....
It was lifted from Martin Frost so maybe you are he...
Just use normal english and make your points. We already know you are pretty bright so speaking like this is unneccesary.
Thanks, but no and no to the two bold guesses. Obviously, if I were Martin Frost or read Wikipedia, I wouldn't have made the rather rudimentary mistake in Latin. I used the expression for two reasons: 1. the significance of the book in the context of Keynes' theory; 2. the book was written in such a (unnecessarily) convoluted and dense way that a Latin phrase would be appropriate.
The idea that too much savings would leadto underemployment is preposterous.
So please explain this one. With math or examples, please.
1. Savings are invested.
2. Japan, Korea and China all had/have extremely high savings rate during their massive economic growth period. Comes to think of it, the US had very high savings rate in the 1950's. The problems began in the 70's, after the savings rate dropped starting in the late 60's.
Funny, I thought what condemned them to generational poverty had something to do with the amount of their productivity siphoned to the top...ie how low their wages were.
Considering how high the youth unemployment rate is both in this country and in Europe, largely due to minimum wage laws, it's questionable how much productivity those baseline retail jobs can have.
The lack of savings deprive the poor family of any opportunity to start their own businesses, which used to be what made Americans upward socially mobile. Read the biographies of Andrew Carnegie, Henry Ford and etc. I don't think many youths of America today are aware of iconic American figures from an earlier much more upward mobile era.
What kind of market demand was there when iPod, iPhone and iPad were merely
figments of Steve Jobs' imagination?Huge demand. That's why Jobs figured out a way to make them.
No, the market didn't exist. Jobs' supply created the demand. That's the market premium of Apple.
The problems began in the 70's, after the savings rate dropped starting in the
late 60's.
Hmm. Nice, but the problem is my data shows the savings rate rangebound by 5 and 8% in the 1950s, 7 and 10% in the 1960s, 8 and 13% in the 1970s, and hovering between 10 and 12% in the early 1980s until around 1985, where the savings rate gradually deteriorated to 2.5% today.
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tatupu70
2013 May 6, 8:04am
No, the market didn't exist. Jobs' supply created the demand. That's the
market premium of Apple.
The market existed. For an iphone--it was cell phones or smart phones.
But even the market didn't exist-there could still be demand. Before cell phones were manufactured, there was demand for a phone that could work anywhere. Just no product to satisfy that demand.
Hmm. Nice, but the problem is my data shows the savings rate rangebound by 5 and 8% in the 1950s, 7 and 10% in the 1960s, 8 and 13% in the 1970s, and hovering between 10 and 12% in the early 1980s until around 1985, where the savings rate gradually deteriorated to 2.5% today.
Are you talking about savings account interest rate or per centage of income put into bank savings account? The numbers don't look right for generalized savings that would include the entire difference between earning and consumption (i.e. not just bank savings accounts, but also financial investment of all kinds).
The market existed. For an iphone--it was cell phones or smart phones.
But even the market didn't exist-there could still be demand. Before cell phones were manufactured, there was demand for a phone that could work anywhere. Just no product to satisfy that demand.
The "Demand" in economic discussion is a very specific term, not just want, but a qualified demand meeting price points. There could not have been quantifiable qualified demand before the price point for iPhone was set.
Bellingham Bill
2013 May 6, 5:03pm
replacing old capital structure (which has run into a wall as proven by recession) with a New Capital Structure that liberate human labor and natural resources to more productive use.
sounds pretty Marxist to me! Sign me up!
Of course, the recession happened in the aftermath of the home ATM running out of cash, starting in 2006. I haunt DeLong's site regularly trying to make him understand that, LOL.
http://research.stlouisfed.org/fred2/graph/?g=i9G
is a graph I posted for him today -- blue is YOY job growth, red is YOY consumer debt take on . . . borrowing our way to prosperity!
We don't have a supply-side problem, we have the problem that J6P -- aka Mr & Mrs Consumer -- got tapped out 5+ years ago:
http://research.stlouisfed.org/fred2/series/CMDEBT
THAT'S who hit the fucking wall, not capitalism per se.
Push a trillion dollars into the middle class's hands again, like what the housing bubble was doing 2004-2005, and things would be great again.
tatupu70
2013 May 6, 8:38pm
The "Demand" in economic discussion is a very specific term, not just want,
but a qualified demand meeting price points. There could not have been
quantifiable qualified demand before the price point for iPhone was set.
Sure there can. Jobs goes out and asks people if they'd be willing to buy an iPhone like device at $100. Or $200. Or $300. etc.
The true demand at any price point is never known exactly. It depends on the price of substitute items as well as many, many other factors. I'm not sure what your point is--nobody invests capital without having an idea of the demand for what they are going to make.
replacing old capital structure (which has run into a wall as proven by recession) with a New Capital Structure that liberate human labor and natural resources to more productive use.
sounds pretty Marxist to me! Sign me up!
Not at all Marxist. Marxism advocates a centralized economic and social structure that would put an end to future on-going creative destruction for capital. That's why the soviet car factories were still building 1950's Lada's all the way to the 1980's. That's the very antithesis of what I'm advocating here. Keynesianism is essentially a mild version of Marxism that advocates government subsidy to keep the Lada factory in business after the consumers already expressed wishes for something new.
We don't have a supply-side problem, we have the problem that J6P -- aka Mr & Mrs Consumer -- got tapped out 5+ years ago:
That's just another way of saying the consumers are having a hang-over from past over-consumption and debt. The solution to that is not more alcohol and more debt, but more productive jobs to pay off the debt. That requires new capital formation displacing old jobs with new more productive jobs.
Push a trillion dollars into the middle class's hands again, like what the housing bubble was doing 2004-2005, and things would be great again.
hmm, this policy prescription sound awefully like telling the patient suffering from hang-over to just imbibe even more alcohol as a way of solving the morning-after headache. The consumer debt would have to be paid back, causing another debt service crunch down the road. That's what the 2004-05 housing bubble (to bail out the NASDAQ bubble crash debt service burden) proved in spades.
Corporations hording massive cash for many years is prima facie proof that there
is a lack of productive capital investment opportunity to buy into.
You suck at using latin terms. Prima facie is evidence, not proof. Using prima facie here only means the corporate cash hoards are evidence of lack of productive capital investment opportunity that are worth testing.
The way you used it here, you meant res ipsa loquitur, "it speaks for itself."
Sure there can. Jobs goes out and asks people if they'd be willing to buy an iPhone like device at $100. Or $200. Or $300. etc.
No, he did no such thing. The specs for iPhone and all other i products were shrouded in secrecy before release.
The true demand at any price point is never known exactly. It depends on the price of substitute items as well as many, many other factors. I'm not sure what your point is--nobody invests capital without having an idea of the demand for what they are going to make.
An educated guess regarding future demand is not the same as qualified demand in the market place right now.
tatupu70
2013 May 6, 11:32pm
An educated guess regarding future demand is not the same as qualified demand
in the market place right now.
So what? We're not talking about qualified demand in the market today. That can never be quantified so it's pretty much useless. We're talking about demand. Which can easily be estimated about potential future products.
tatupu70
2013 May 6, 11:36pm
No, he did no such thing. The specs for iPhone and all other i products were
shrouded in secrecy before release
lol. I guarantee you that Apple did market research and focus groups. Regardless, the concept that demand can be estimated before a product is released is the point. Companies spend a LOT of money doing just that.
So what? We're not talking about qualified demand in the market today. That can never be quantified so it's pretty much useless. We're talking about demand. Which can easily be estimated about potential future products.
Estimation of future existence is not the same as existing now. It can be safely estimated that your dead body will be in a coffin somewhere within the next 100 years; that does not mean it is there now.
The Keynesian way to create demand is to break windows to sell more windows,
destroy cars to sell more cars ( see cash for clunkers),
The Austrian way to create demand is to allow people to use their land, their
labor, their resources to produce things the they can trade for other things
Other than this critique of Keynesianism being untrue, please review the link I previously posted and tell me what the graph means.
http://research.stlouisfed.org/fred2/graph/?g=ibt
If what you say about Austrians are true, and this is the best method for economic growth, then why does the red line cross the green line? Why does the slope of the blue line and and slope of the green line appear to be correlated?
Personally I prefer the growth in blue over the growth in red. But what do I know?
PeopleUnited
2013 May 7, 12:28am
David1 said;" Personally I prefer the growth in blue over the growth in red. But what do I know?"
Your numbers are an illusion. You must subtract the growing national and household debt from these numbers to have any connection to reality. We are headed for a debt crisis both domestic and international.
Your numbers are an illusion. You must subtract the growing national and
household debt from these numbers to have any connection to reality. We are
headed for a debt crisis both domestic and international.
Ah. Here it is, good 'ole #1 in the Austrian playbook...
http://patrick.net/?p=1224393&c=959218#comment-959218
"The government numbers are lies"
by the way, I responded to a similar "added debt" argument from mell a few days ago, here -
http://patrick.net/?p=1224393&c=959295#comment-959295
Never got a response to that.
political/monetary fiat, thereby preventing new capital formation from emerging
and displacing the old capital structure
Crowding out, I believe they say.
PeopleUnited
2013 May 7, 1:01am
Your numbers are an illusion. You must subtract the growing national and
household debt from these numbers to have any connection to reality. We are
headed for a debt crisis both domestic and international.
Ah. Here it is, good 'ole #1 in the Austrian playbook...
http://patrick.net/?p=1224393&c=959218#comment-959218
"The government numbers are lies"
by the way, I responded to a similar "added debt" argument from mell a few days ago, here -
http://patrick.net/?p=1224393&c=959295#comment-959295
Never got a response to that.
Absent creation of money out of thin air, there is no way that borrowed money can be paid back without an increase in productivity.
Domestic productivity in USA is not increasing faster than borrowing.
Absent creation of money out of thin air
When did we lose the ability to do this? We are not Greece.
PeopleUnited
2013 May 7, 1:06am
Absent creation of money out of thin air
When did we lose the ability to do this? We are not Greece.
Not yet, but the party is almost over.
Domestic productivity in USA is not increasing faster than borrowing.
And oh by the way, this isn't true, if we define domestic productivity as GDP.
GDP is growing at 2.5%. Federal debt is projected by the CBO to grow at 2.2% for the next ten years.
Why would the volcano blow in the future if Debt/GDP remains the same or slightly lower than the current 77%?
Why wouldn't Japan, whose debt to GDP ratio is about 200%, have high borrowing costs? The 30 year JGB is 1.62%.
tatupu70
2013 May 7, 1:16am
Estimation of future existence is not the same as existing now. It can be
safely estimated that your dead body will be in a coffin somewhere within the
next 100 years; that does not mean it is there now.
Horrible analogy aside, the demand is there now--it is the product that doesn't exist yet.
The S & P is higher than it should be, is that your argument?
No that is evidence. The argument is the creation of debt is a positive feedback loop. Given that 1.) SP 500 P/E ratios are lower than historical norms, 2.) Corporate earnings are at record highs.
More debt = more demand for goods and services = more earnings.
The rich did not get rich due to cronyism - they are rich due to the market - and they remain rich (and get richer) due to tax policy. The tax policy is where the cronyism lies.
No that is evidence.
Of crony capitalism, you are mistaking corporate wealth for societal wealth. Plus, it's nonsense to measure wealth solely by the stock market.
More debt = more demand for goods and services = more earnings.
No. Not at the amount of debt injected.
The rich did not get rich due to cronyism - they are rich due to the market - and they remain rich (and get richer) due to tax policy.
No, they did get rich by being fist in line to receive the freshly printed money. What tax policy are you talking about. The one that is crushing the middle class? Obamacare?
Plus, it's nonsense to measure wealth solely by the stock market.
I am just using Denninger's example.
What tax policy are you talking about. The one that is crushing the middle
class? Obamacare?
LOL. The trend of towards greater income inequality began long before the Heritage Foundation had its first wet dream about obamacare.
PeopleUnited
2013 May 7, 1:45am
Domestic productivity in USA is not increasing faster than borrowing.
And oh by the way, this isn't true, if we define domestic productivity as GDP.
GDP is growing at 2.5%. Federal debt is projected by the CBO to grow at 2.2% for the next ten years.
Why would the volcano blow in the future if Debt/GDP remains the same or slightly lower than the current 77%?
Why wouldn't Japan, whose debt to GDP ratio is about 200%, have high borrowing costs? The 30 year JGB is 1.62%.
You may define productivity however you wish but "we" don't equate GDP to productivity.
No matter, that is semantics. What about inflation? What about domestic debt? Surely you must not forget those drains on productivity?
Creating money out of thin air will induce mistrust, and eventually collapse if it is abused. when you see the way the USA bullies, sets up puppet regimes, you can clearly see the abuse. those chickens are coming home to roost in the form of terrorism. Our competitors will acquire the resources such as oil supply and raw materials to destroy the petrodollar and replace it with an international currency (controlled by the banksters no doubt). Then USA = Greece. Lately we are starting to see those resources being acquired by our competitors internationally. Both militarily and economically we are in grave danger of being overthrown. The economic war between the US and her thinning list of allies and the East/BRIC nations will likely prove to be the end of Keynsian theory.
I am just using Denninger's example.
That's a fair point, though it was only a small part of his overall considerations.
LOL. The trend of towards greater income inequality began long before the Heritage Foundation had its first wet dream about obamacare.
Again, be my guest and fight to change the taxes as you would like to see them, I am not wildly opposed. What I think is ludicrous though is the fixation on taxes while billions have been put directly into the pockets of the ones who should be in jail and their wealth clawed-back by this corrupt administration (and the one before). Instead you punish everybody by raising taxes, even if it may be necessary. Just stop the looting and start the prosecuting first, then you'd have more credibility and support from society to raise the taxes. I just don't get why people complain about this and go to great lengths to blame every Republican from the past while they blow the clown in chief who has been one of the biggest crony capitalists in action since he took office. The time is here and now to act.
You may define productivity however you wish but "we" don't equate GDP to
productivity.
Domestic aggregate productivity is not GDP? What about: Vaticanus says
The Austrian way to create demand is to allow people to use their land, their
labor, their resources to produce things they can trade for other things like
potatoes, shoes, houses, shingles, clothes, etc....
when you see the way the USA bullies, sets up puppet regimes, you can clearly
see the abuse.
This is an interesting argument. So we bully the world so they will buy our debt?
PeopleUnited
2013 May 7, 2:53am
You may define productivity however you wish but "we" don't equate GDP to
productivity.
Domestic aggregate productivity is not GDP? What about: Vaticanus says
The Austrian way to create demand is to allow people to use their land, their
labor, their resources to produce things they can trade for other things like
potatoes, shoes, houses, shingles, clothes, etc....
when you see the way the USA bullies, sets up puppet regimes, you can clearly
see the abuse.
This is an interesting argument. So we bully the world so they will buy our debt?
Now you just being stupid. One more = ignore.
Now you just being stupid. One more = ignore.
Darn. And I really thought you were going to teach me something too.
I'm a real asshole for using your quotes to ask you to explain your contradictions.
tatupu70
2013 May 7, 5:17am
Also this remains to be proven
Not really. See 1940s and 1950s. Didn't seem to affect productivity then...
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