patrick.net

yodaking says

From my study of basic economics, protectionism is bad on the long term for consumers

You mean, like when they lose their job?

CaptainShuddup says

Just a little known fact, Libs deny.

Exactly what are you accusing liberals of this time?

“If you buy a T-shirt made in China for $4-5 cheaper than you can get here, you will eventually put the American T-shirt company out of business.”

We don't need Americans making t-shirts. We need Americans making
- software
- hardware
- biotech
- nanotech
- machinery

You know 21st century stuff. Exactly the kind of tech that gets outsourced to China and India.

But if you're going to blame someone for getting rid of low-tech good production like clothing, blame Walmart. They rose to power jacking off to the "Made in America" meme and then stocked only "Made in China" goods once they got power and money. Walmart is exactly what your beloved Fox is bitching and moaning about.

Dan8267 says

We don't need Americans making t-shirts. We need Americans making

- software

- hardware

- biotech

- nanotech

- machinery

Also, excellent furniture. Most of ours are made in USA or Canada. They are not much more expensive than particle-board crap.

We need to hire north korean hackers to take down the chinese t-shirt factories....bring back the cloth to the homeland.

Dan8267 says

We don't need Americans making t-shirts. We need Americans making

- software

- hardware

- biotech

- nanotech

- machinery

You know 21st century stuff. Exactly the kind of tech that gets outsourced to China and India.

We need to hire north korean hackers to take down the IKEA design centers in Sweden. Bring back sofa whittling to the states...

Peter P says

Also, excellent furniture. Most of ours are made in USA or Canada.

zzyzzx says

You mean, like when they lose their job?

Job loss is part of any capitalist society, the only instance this does not happen is in communism. This comment is a non-sequitur, every policy has positive as well as negative consequences - one cannot evaluate a policy as a net positive only when it yields a utopian outcome -

Our legal system can at times find an innocent guilty - does that mean the legal system is a net negative and should be scrapped in favor of anarchy and frontier justice?

yodaking says

however I believe it's pretty clear that Kenseysian capitalistic policies is what prevented the second Great Depression, and current capitalist policies what is slowly getting us out. Or do you infer that we should have abandoned capitalism to a different economic model?

The Keynesian policies and the associated leverage were the cause of the financial crisis, deregulation played a part as well, but it's negligible. Nothing regulates better than tail risk, but with the cheap money, low interest policy, the bailouts and the non-enforcement of existing fraud laws (= regulation) the tail risk has been and still is completely gone for the FIRE sector. You can paint over a great recession by printing money but in the long run you will make matters worse because math simply is and doesn't lie. You cannot print wealth. The standard of living for the middle class will keep declining as long as they print money. Without the reserve currency status, the petro-dollar and the helplessness of politicians worldwide joining in the global race of currency debasement this charade would have ended quite a while ago.

yodaking says

I believe it's pretty clear that Kenseysian capitalistic policies is what prevented the second Great Depression, and current capitalist policies what is slowly getting us out.

If Keynesian capitalistic policies are grabbing the nearest poorest middle class sap than you by the neck and shaking every last cent from their pocket and putting a dragnet on their finances that skimmed every last red penny from the dissapeard middle class. Then I suppose you're right. But that just means a Keynesian by another name is really just a strong arm heartless thug, and can give two fucks about who lives or dies.

Energy, Food and Healthcare bailed Wallstreet out, which is that stupid fucking thing you assholes like to do with your mouth when YOU call IT "adverting a Great Depression".

And F-Y-Fucking-I The Great Depression was Great because it made great people at the end. This last one would be the fucking "Moron Depression", because a)Morons like you called it a "depression", b)what ever it is, we never got out of it. We weren't "pulled out" of anything. We were "Thrown Under".

CaptainShuddup says

If Keynesian capitalistic policies are grabbing the nearest poorest middle class sap than you by the neck and shaking every last cent from their pocket and putting a dragnet on their finances that skimmed every last red penny from the dissapeard middle class. Then I suppose you're right. But that just means a Keynesian by another name is really just a strong arm heartless thug, and can give two fucks about who lives or dies.

So you would have favored the Government have done nothing? Would the economy be in worse shape or better shape of our markets seized and credit dried up?

***

While the actions did force us to fully surrender to "moral hazard" - the act was largely bi-partisan.

As long as we have Fiat Currency, everything is illusionary anyway - with the ultimate stop-gap as the "Full faith and credit of the United States"

Do I like that our debt has exploded? Hell no...

Do I like that the Fed has a crazy inflated Balance Sheet? Nope

But inflation is low and unemployment is going down - that's the Fed's Mandate no?

Would this have future repercussions? You Bet, I'm not naive to think the bill will come in (sooner rather than later)- but I do know having stabilized the economy puts us on much better footing to tackle our debt then one that would have no doubt been in a depression.

yodaking says

Job loss is part of any capitalist society, the only instance this does not happen is in communism. This comment is a non-sequitur, every policy has positive as well as negative consequences - one cannot evaluate a policy as a net positive only when it yields a utopian outcome -

Our legal system can at times find an innocent guilty - does that mean the legal system is a net negative and should be scrapped in favor of anarchy and frontier justice?

That's a good point. So, how do you think the positives of a free trade policy (lower prices) outweigh the negatives (unemployment and increased wealth disparity)?

News flash: loose monetary policy is not a tenet of Keynesian thought. Loose fiscal policy during GDP growth is also not a tenet of Keynesianism.

Thanks for you time!

sbh says

mell says

The Keynesian policies and the associated leverage were the cause of the financial crisis, deregulation played a part as well, but it's negligible.

Basically you think EVERYTHING BUT the free-market was to blame. Typical.

Actually in a mind-bending sort of "snake eating his tail" I agree partically with Mell - Many people (including myself) tried to understand the 'root' cause of the Great Depression. The consensus I've seen and agree with is it was not any ONE reason - like many great disasters it was the confluence of multiple factors that formed a "perfect storm"

Some Keynesian components that contributed were:

Greenspan keeping interest rates too long after 9/11
GSAs making good ol' uncle same the last guy holding the bag for companies such as Freddie Mae/Fannie Mac/etc
Government programs mandating banks lend to 'disadvantaged' groups
Tax Subsidies for Mortgages

I by no means am saying that these are the *only* reasons or even the *main* reasons - again it was the coming together of many factors - but mell is right that some Keynesian policies definitely contributed.

yodaking says

So you would have favored the Government have done nothing? Would the economy be in worse shape or better shape of our markets seized and credit dried up?

Objection you're leading the witness again. You led the witness the last time and this is what we got.

There's a million ways that could have played out and "Doing nothing" would have been the best option in retrospect for a myriad of reasons. For starters what was done was the best thing depending on how you look at it, and who you ask. For everyone that benefited marginally there are ten times that lost substantially. We have had not had middle class growth by any stretch of the imagination. And that has been the only barometer that America can be measured on.

Just one of the thousands of arguments I could make for "Doing nothing" or at least "Something else" is as the following.

If we didn't do anything and we allowed everyone to take their lumps like should have happened. The result would have been carnage and devastation. Like many had anyway. See I don't give a fuck about those companies who's lowest paid employees were making 150K a year.

The houses and assets didn't go away, neither did the business needs of all of those companies. The government if they were looking for any to benefactor, then small business or at least new players should have been created by chopping up the carcasses and distributing out the divisions and departments, and assets to the highest bidder backed by federal loans. Let a new batch take a turn. At least people would have been producing. The only creative way people have been producing in this government protected industry controlled environment has been to seek rent off of those that least afford it.

That's just one, I could think of a million ways that would have been better than watching what played out since 2007 to now that would have been better. I'm so happy OPEC is pulling the plug, you're about to see just how much Obama bailed anyone out, and just how much they benefited.
This time next year, your going to be hobnobbing with a lot of has beens that used to think they had the world by the balls, because gas was $4.00 a gallon.

tatupu70 says

yodaking says

Job loss is part of any capitalist society, the only instance this does not happen is in communism. This comment is a non-sequitur, every policy has positive as well as negative consequences - one cannot evaluate a policy as a net positive only when it yields a utopian outcome -

Our legal system can at times find an innocent guilty - does that mean the legal system is a net negative and should be scrapped in favor of anarchy and frontier justice?

That's a good point. So, how do you think the positives of a free trade policy (lower prices) outweigh the negatives (unemployment and increased wealth disparity)?

Great question, the only way to tackle unemployment is to support pro-business policies - that means reforming our tax code, lowering regulation, (yes, even environmental), and embrace not isolate oneself from the global economy.

Please refrain from ad-hominem attacks on how I hate the environment and hate workers etc.

As far as the wealth gap - only education can equalize that - our current school system is not properly equipping our population for the new economy....and I am no way insinuating that lack of money/funding is the *only* cause for this as is often repeated.

CaptainShuddup says

Objection you're leading the witness again. You led the witness the last time and this is what we got.

I have no love for what happened, but I see this as Monday morning quarterbacking. It sucks that we effectively socialized loss and privatized profit. I get it - but that frustration doesn't change the fact that many of the bailouts were for firms that serve as the 'grease' for our economy. Whether one likes it or not.

Yes, it's wrong that all these Wall Street guys got 'rewarded' for being stupid. It's the opposite of how things should work - I think everybody can agree with that. But I truly believe that if we didn't bail out Wall Street - main street would be in *much* more pain.

Can I prove my assertion? No. This is just my opinion. I don't have an alternate reality machine that can play my theory out. So while I hate what happened, I do by and large agree with the general bailouts instituted by not only Bush, but Obama.

yodaking says

but that frustration doesn't change the fact that many of the bailouts were for firms that serve as the 'grease' for our economy.

Example?

We hear that shit, but let's put it to the test.

HydroCabron says

News flash: loose monetary policy is not a tenet of Keynesian thought. Loose fiscal policy during GDP growth is also not a tenet of Keynesianism.

Thanks for you time!

I disagree,
Source:
https://en.wikipedia.org/wiki/Keynesian_economics

"Keynesian economists often argue that private sector decisions sometimes lead to inefficient macroeconomic outcomes which require active policy responses by the public sector"

Governmental interaction (public sector) and either (dovish or hawkish) as Keynesian

CaptainShuddup says

Example?

We hear that shit, but let's put it to the test.

Were you asleep all of 2008?

http://www.nytimes.com/2008/10/01/business/01auto.html?_r=0

yodaking says

Governmental interaction (public sector) and either (dovish or hawkish) as Keynesian

Keynes explicitly warned against stimulus during expansionary times - those periods of GDP growth which I referred to above.

Can you read?

yodaking says

Great question, the only way to tackle unemployment is to support pro-business policies

It doesn't have to mean Big business policies. Nor does it mean we should "Big Business" every aspect of life from the water you drink to the air you breathe.

I think we're saying the same thing. I'm just saying we need far more benefactors, for our economy to have rebounded as much you intend to give the false illusion that it did. What monopolies the current policy didn't create, they created new ways to necessitate new titles and roles with new appointed monopolies to service the voids, without actually creating jobs. The jobs as well as the people who didn't have one, just simply "Went away". Poof! vanished we don't even talk about them anymore. As their fresh baked self date expires our unemployment rate dropped. That's hardly anything to give any credit for as an achievement.

The government could have wrote Goldman Sachs a trillion dollar check or wrote out many million dollar checks to thousands of Goldman Sachs wanna bees, who have to restaff, retrain, reboom and reboot the economy.

If you give all the money to same evil bastards that caused this mess then they'll just take it and slither away to their cesspool and sit on it and let it rot. Or do something corner the Oil market and create undetectable inflation that the FED with all of their super powers will never notice.

HydroCabron says

yodaking says

Governmental interaction (public sector) and either (dovish or hawkish) as Keynesian

Keynes explicitly warned against stimulus during expansionary times - those periods of GDP growth which I referred to above.

Can you read?

The question is *can you* read?

Keynes advocated what has been called countercyclical fiscal policies, that is, policies that acted against the tide of the business cycle: *deficit spending* when a nation's economy suffers from recession or when *recovery is long-delayed and unemployment is persistently high*

Source: https://en.wikipedia.org/wiki/Keynesian_economics#Active_fiscal_policy

Your comment only makes sense if you are argueing that our unemployment is in good shape.

Your assertion that Keynes advocated spending to mirror GDP growth is largely simplistic.

yodaking says

Great question, the only way to tackle unemployment is to support pro-business policies - that means reforming our tax code, lowering regulation, (yes, even environmental), and embrace not isolate oneself from the global economy.

I disagree 100%. Lower taxes lead to higher profits, but not one job more. Companies don't hire because they make more money--they hire to meet demand. Lowering regulation is a race to the bottom--you have to agree that's not the correct policy decision. What does "embracing" the global economy mean exactly?

yodaking says

Please refrain from ad-hominem attacks on how I hate the environment and hate workers etc.

Of course. I don't know how you feel about the environment other than you seem to advocate policy decisions that would harm it.

yodaking says

As far as the wealth gap - only education can equalize that - our current school system is not properly equipping our population for the new economy....and I am no way insinuating that lack of money/funding is the *only* cause for this as is often repeated.

I believe more people are getting a college education than ever before. While the education gap (rich to poor) reflects the general wealth gap--it's a symptom not the root cause.

yodaking says

Your comment only makes sense if you are argueing that our unemployment is in good shape.

Here is what I said: " Loose fiscal policy during GDP growth is also not a tenet of Keynesianism."

I am not discussing our current economic situation, because it is not a period of job growth. I wasn't even thinking of the present.

I was only saying that fiscal stimulus during a time of GDP growth is not a Keynesian tenet.

The end.

yodaking says

Greenspan keeping interest rates too long after 9/11

GSAs making good ol' uncle same the last guy holding the bag for companies such as Freddie Mae/Fannie Mac/etc

Government programs mandating banks lend to 'disadvantaged' groups

Tax Subsidies for Mortgages

I don't think any of those are Keynesian. The early and mid 2000s were a good time economicially--Keynes would have advocated reduced spending, not increased.

Does Keynes say anything about advocating home ownership?

Regardless---if you truly think government programs mandating banks lend to disadvantaged areas had ANYTHING to do with the housing bubble then you are much less learned than I thought.

yodaking says

the only way to tackle unemployment is to support pro-business policies - that means reforming our tax code, lowering regulation, (yes, even environmental),

There have been periods of tremendous economic expansion in places with heavy environmental regulations. Job and wealth creation is never a reason to sacrifice public health.

tatupu70 says

Regardless---if you truly think government programs mandating banks lend to disadvantaged areas had ANYTHING to do with the housing bubble then you are much less learned than I thought.

This forum is admittedly tiring me out.

Source:
http://www.nber.org/digest/may13/w18609.html

Btw NBER is non-partisan and is used by both sides of the political aisle to determine when recessions start/end.

yodaking says

This forum is admittedly tiring me out.

You and me both. That link is weak at best--as it's a summary with no link to the actual paper. It uses a period from 1999 to 2009 and purports to show that loans in CRA areas are 15% more likely to default in 1 year. Even if that's true, which I don't believe to be the case, it has no bearing on the housing bubble. I would hope that you would agree that the housing bubble and bust were not primarily for houses in areas subject to the CRA. And I would hope that you would also agree that the biggest drivers of the mortgage fraud were S&Ls that are not even subject to CRA regulations.

tatupu70 says

You and me both. That link is weak at best--as it's a summary with no link to the actual paper. It uses a period from 1999 to 2009 and purports to show that loans in CRA areas are 15% more likely to default in 1 year. Even if that's true, which I don't believe to be the case, it has no bearing on the housing bubble. I would hope that you would agree that the housing bubble and bust were not primarily for houses in areas subject to the CRA. And I would hope that you would also agree that the biggest drivers of the mortgage fraud were S&Ls that are not even subject to CRA regulations.

I actually think the Great Recession was a combination of factors - that's what makes anybody claiming they "know" what caused it right and wrong at the same time.

1) Low Interest Rates
2) Greed by Wall Street
3) Lower requirements for getting a loan
4) Mortgage Fraud
5) Exotic Loans
6) CDS
7) MBS
8) GSE
9) Credit Rating Agencies
10) Repeal of Glass Stealgal
11) 2000 Omnibus Bill
12) CRA
13) Home Equity Loans
14) Bankruptcy of Lehman (no structured buyout like Bear Stearns)
15) Predatory Lending
16) Little to no down payments
17) Consumer borrowing - home equity loans/home equity extraction

I think it was truly a 'perfect' storm of events - with truly no 'one' or even 'main' reason - a real confluence of multiple factors. That's what made it so extraordinary. Wall Street has been doing shenanigans since the 1920's - and it will continue to do so...

HydroCabron says

There have been periods of tremendous economic expansion in places with heavy environmental regulations. Job and wealth creation is never a reason to sacrifice public health.

Agreed, take my comment with a heavy grain of salt - no need to sacrifice pubic health - but some regulations are very draconian and ultimately nonsensical.

yodaking says

think it was truly a 'perfect' storm of events - with truly no 'one' or even 'main' reason -

The recent recession was caused by 17) Consumer borrowing - home equity loans/home equity extraction

specifically, the failure of this credit expansion:

blue is monthly job gain, red is quarterly mortgage take-on

Now, this credit expansion was driven by:

1) Low Interest Rates
2) Greed by Wall Street
3) Lower requirements for getting a loan
4) Mortgage Fraud
5) Exotic Loans
6) CDS
7) MBS
9) Credit Rating Agencies
10) Repeal of Glass Steagal
13) Home Equity Loans
15) Predatory Lending
16) Little to no down payments

essentially, laissez-faire deregulation of our housing finance sector. The results were predictable, fraud as far as the eye could see.

8) GSE
12) CRA

had little to do with this fraud. Banks were making billions lending trillions to middle-class america, these two government programs are right-wing bugbears but blaming them is more an attempt at obfuscating who really screwed things up -- the conservatives who deregulated our financial system in the 1990s and then were in charge of its oversight 2001-2006.

The Dems in the minority 2001-2006 failed to do their constitutional duty to oppose these great crimes, granted.

Additionally, per the above graph it's important to understand this credit expansion did not just end up in higher home prices and granite countertops, these trillions ping-ponged through the entire economy as middle class America was able to tap on average $1000/mo of free money while the housing bubble party lasted (2004-2006).