Keynesians vs. Classical Economists - The Rap
inlet13
Posts: 1,979
Here's a new demo called "in the fire":
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
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http://www.youtube.com/watch?v=GTQnarzm ... ure=relmfu
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
and does a far more persuasive job of presenting the case for Hayek than it does for Keynes, although perhaps that is just my bent.
at 3:30, Hayek, refering to Keynes theory, saying that it "ignores human action, and motivation" is one of the key flaws of Keynes theory. People don't respond to imposed macroeconomic and fiscal policy changes like automatons, and assuming that they do\would\will has lead to a host of unforeseen horrors at the behest of Keynesian theory.
The more generalized problem with Keynesian economics is presented here rather well.
It's imagined defenses against the boom and bust cycle are just that -- imagined. You need look no further than the current would-be economic "recovery" to note just how failed the "inflate-your-way-out-of-trouble" theory is. While the inflationary "scam" does offer *some* limited protection to downside in markets in limited situations with limited results, the general trend is to trade long term health of the economy for some modicum of short term stability. In some cases (like the current one) , it hardly seems to even work at all, even in the short term.
In fact, though I don't advocate what he is selling (at ALL), i think Stansberry Research, and their video, The End of Amerika are right on the "money" (har har) with just about every point they make. And the sad truth is, it is ALL the result of failed Keynesian economic theory.
You don't have to watch the whole hour to get the jist of it, but (imho) one of the most disturbing things shown (literally) in the video, is the following (must be scaled) graph comparing the Great Depression to the Great Recession in DOW terms:
For anyone who has been wondering if were going for the double dip \ double leg down ... i would heed this graph, not because I believe history will "literally" repeat, but because it shows how we could just as easily now be living in a "fools recovery" as were those who believed all was over and in the clear in the 1930's.
Economic signposts & indicators are currently still largely negative, and though both the commodity and equity markets are bouncing all over the place with no clear direction, I would hasten to warn anyone who thinks things will soon get better than worse that the general "feel" of things right now is still extremely uneasy. Certain indicators taken out of context can look rosey, but understood against a more versed backdrop, they become confused at best, and disturbed at worst. For example, gold and silver plunged today, which you may think (especially if you read the news) means that the markets are reacting to lowered inflationary fears and a higher dollar. In fact, the dollar *is* up a good bit over its recent lows. However, if you scale out a bit, you begin to understand that the dollar is only "up" in relationship to a basked of foreign currencies which, themselves, are all fighting similar if not worse economic woes at home. In other words, the dollar is only up, because other countries are down even worse than the US right now. Is that really "good" news ??? Alternately, gold may be down sharply today because an even slower than expected economy (jobless claims, i believe) in theory indicate that inflation is slower than the market may have expected -- however, if one can break out of their "rising demand for goods equals inflation" hoax\scam mentality to understand that the real crux of inflation is in fact Keynesian inspired additions of "liquidity" to the market (ie. "printing" more money) ... AND you actually bother to take a look at prices of *real* goods in *real* terms on the street, anyone with half a brain can see that inflation is rampant and that prices both on the producer and consumer side (despite the fudged numbers in government reports) are IN REALITY rising dramatically.
To end this rant,
i would direct your attention to another guy I really like (at times) ... old Milton Friedman ...
i know a lot of people give him a bad wrap, but I think it is largely undeserved.
Check out his 1985 article, The Case For Overhauling The Fed in which he outright advocated the dismantling of the federal reserve and the stabilization of the economy through the total FREEZING of the currency.
ka-ching.
If I opened it now would you not understand?
Key Arena - Nov 05, 2000
Gorge Amphitheater - Sep 01, 2005, Jul 22,23, 2006
Key Arena - Sept 21,22, 2009
Alpine Valley - Sept 3, 4 2011
I was looking for good nuggets (since its been a while since i read it) and scrolled all the way down real quick, good thing too:
... clearly.
If I opened it now would you not understand?
I find it funny you haven't responded to this post.
Not that our current president has done much if anything to change that.
We're all still living at the mercy of a handful of billionaires who don't really give a shit about whether we starve homeless in the street or not.
I keep hearing about the free market that bush unleashed upon the world, why do democrats get no blame for what they did with blocking regulation of Fannie and Freddie and then receiving thousands from them and their employees in campaign contributions? probably because it is just easier to blame the evil rich republicans for everyone's problems...funny thing is that those republicans were keynesians too. No matter the side of the aisle Keynesian economics doesn't work to avoid booms and busts...
but this has nothing to do with the topic...Keynesian economics keeps markets a float that should hit bottom like the housing market...without a bailout and continued foreclosure avoidance manipulation for political gain, the housing market would have bottomed out and probably would be on the way to steady recovery with REAL home values that aren't inflated
but I guess it is easier to just not learn about economic theory(which I am very much a layman right now) and blame rich people for being racist and hating the poor
INLET, or anyone for that matte, rgot any good books to recommend? I would like to learn more about the two theories from as non-biased a source as I can get.
It is terrifying when you are too stupid to know who is dumb
- Joe Rogan
True.
Sorry if I sounded like I was laying the whole thing at Bush's feet.
The whole "Deregulation" circle jerk started in the Reagan years, Bush 1 pushed it along, Clinton made a bunch of changes that allowed Bush 2 to come in and pretty much nuke any accountability. And through much of that time, both parties shared a good deal of power. It just happened that Bush was president when the whole thing face-planted. But it was inevitable from the start.
Yep, they are all at fault. I am glad you and I could agree on that...
It is terrifying when you are too stupid to know who is dumb
- Joe Rogan
http://www.amazon.co.uk/General-Theory- ... 915&sr=8-1
http://www.amazon.co.uk/Capitalism-Free ... 969&sr=1-1
These are not biased but books written by Keynes and Friedman. You would be better off reading them first before looking into 'non biased' works. Get it straight from the horses mouth so to speak.
It is terrifying when you are too stupid to know who is dumb
- Joe Rogan
Excellent advice. I'd read up on Keynes vs. Hayek and Friedman. Just google for their books/thoughts. Once you have that down, you can start to get into some other stuff, like neo-Keynesianism and neo-classicals. There's a lot of branches out there. But, it really comes down to Keynes vs. Classicals, in one way or another.
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
Key Arena - Nov 05, 2000
Gorge Amphitheater - Sep 01, 2005, Jul 22,23, 2006
Key Arena - Sept 21,22, 2009
Alpine Valley - Sept 3, 4 2011
"Degregulation" was a gigantic misnomer in the context of "free markets" ... what you had was less restrictive codes and regulations against banks within the confines of a HIGHLY RESTRICTED MARKET (ie. extremely high barriers to entry, and a supporting infrastructure that tilts the entire economy in favor of one "class" at the expense of all others). Viewed in this fashion, "deregulation" was nothing more than Bush opening the door wider for his elite set of corporate buddies to fuck everyone in the ass a little harder and a little faster. And when i say "Bush" opened the door, I mean the broad set of politico-corporate interests behind the presidency that authored and pushed the policies through the administration. "Bush" didn't do shit. He was just a monkey in a chair that gave the passive thumbs up while it all went down.
There is not now (and has not been for over 100 years) a "FREE" market, and so to deride classical economics or free market theory on the basis of the Bush years is a farce on the face.
Just saying.
We can point blame at people, and at parties all we want,
but the real blame should be laid to bear on the system itself.
The system is "rigged" by design to benefit the corporate interests that FOUNDED the system (der dee der) and to "game" the people for a continuous in flow of new funds.
If I opened it now would you not understand?
Amen! All someone has to do is look up how fractional reserve banking works, and they will soon find out that any amount of "regulation" or "de-regulation" with respect to banks within the last half of a century is pretty much a moot point. It's like blaming a handful of termites for the collapse of a house that had undersized and over-spanned floor joists, no re-bar in the concrete, etc.. These guys LEGALLY counterfeit money and put everyone else on the hook for loans on money that the banks didn't have to begin with. All of this while allowing the taxpayer to afford them a lender of last resort, which has led to trillions of dollars in bailouts that the public actually knows about-- let alone millions of other completely shady transactions completely NOT transparent to the public. "Regulation" has made fraud legal for banks, and it was done a hundred years ago. Some people scream it's the banks' fault! Some people scream it's the government's fault!
The reality is, it's both of their faults. The banks are greedy and exploitative, but their actions are openly endorsed and made legal by the actions of government which legalized fractional reserve banking and made it policy.