NationStates Jolt Archive

This article argues that the Nobel prize winning Obama advisor Paul Krugman is widely viewed to be an assclown by his "respected economist" colleagues.

http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db2009038_985205.htm

CONTEMPT FOR PAUL KRUGMAN
But that view is hardly unanimous. In late January The New York Times (NYT) published a full-page ad signed by about 250 economists, including Nobel laureates and other luminaries, slamming the Obama plan and saying, "Notwithstanding reports that all economists are now Keynesians… we the undersigned do not believe that more government spending is a way to improve economic performance."

These days some of the anti-Keynesians barely recognize the Keynesians' existence. In an interview on Mar. 6, one of the signers of the New York Times' open letter, Nobel laureate Edward Prescott of Arizona State University's W.P. Carey School of Business, argued that "no respectable macroeconomist" believes stimulus works. Prescott said 2008 Nobelist Paul Krugman, the Princeton University professor and Times columnist who advocates stimulus, "doesn't command respect in the profession." Prescott argues that what the economy really needs is tax cuts and a commitment to increase productivity, in part by eliminating wasteful regulation. Of Obama, he says: "His policies are designed to depress the economy and are depressing the economy."

Right now I can't find the ad signed by 250 economists or the Mar 6 interview alluded to by this article. If I find them I'll post the links here...

Krugman did kind of go off the deep end during the Bush years, even if he has done some really good work in the past. Without Bush, he's also gone all in for wanton spending--including an op-ed piece complaining about governors who are acting within the budgetary bounds they must. It's quite unfortunate, because he could have spent his time so much more productively.

Anti-Keynesians don't believe in Keynesian remedies and vice versa. Is this news?

I'm sceptical of this article.

Oh well then, if these economists think that all we have to do is more of what got us into this mess then who are we to argue?

Just out of curiosity, how will digging downward get us out of this hole? Via China?

Oh well then, if these economists think that all we have to do is more of what got us into this mess then who are we to argue?


That's not really what they're saying at all.

edit: bare in mind that the main reason economists are critical of Krugman (ignoring Prescott for now), is because of things that what has gone on before and has according to some theories made things worse (fiscal stimulus by manipulating demand etc...).

I'm sceptical of this article.

Me too.

Is the link not working properly for anyone else?

250 of them? Cool, and how many economists are there anyway? How many agree with the stimulus?

I'd like to know those numbers because otherwise it sounds oh-so-much like the famous list of "People with PhDs who disagree with Darwin".

Oh well then, if these economists think that all we have to do is more of what got us into this mess then who are we to argue?

Just out of curiosity, how will digging downward get us out of this hole? Via China?

How are these advocating more of the same? Oh I get it, you're hung up over the advice of "deregulation."

We've had years of government intervention in the money supply and government price-fixing and regulation of interest rates, keeping interest rates artificially low and fueling cheap credit with the result of producing the vastest credit bubble in the history of mankind. Seeing the disastrous results, how can you call for more government regulation and not less?

Is the link not working properly for anyone else?
It pulled up for me. It also mentioned that the majority of economists agree with the stimulus. Or, at least, the Keynesian idea that the US is in a dangerous spiral.

How are these advocating more of the same? Oh I get it, you're hung up over the advice of "deregulation."

We've had years of government intervention in the money supply and government price-fixing and regulation of interest rates, keeping interest rates artificially low and fueling cheap credit with the result of producing the vastest credit bubble in the history of mankind. Seeing the disastrous results, how can you call for more government regulation and not less?

And we've had a lot of deregulation, tax cuts, ecc. and seeing the disasterous results how can you call for deregulation and tax cuts.

These economists should go and work in Detroit, live in fear of their jobs disappearing, their house disappearing, their entire community disappearing, their future disappearing.

It's easy to call for harsh measures when you're not truly affected by them.

How are these advocating more of the same? Oh I get it, you're hung up over the advice of "deregulation."

We've had years of government intervention in the money supply and government price-fixing and regulation of interest rates, keeping interest rates artificially low and fueling cheap credit with the result of producing the vastest credit bubble in the history of mankind. Seeing the disastrous results, how can you call for more government regulation and not less?

Don't worry all those tax cuts will save everything......oh wait......never mind.....

And we've had a lot of deregulation, tax cuts, ecc. and seeing the disasterous results how can you call for deregulation and tax cuts.

Damn, deregulation and tax cuts at least offset some of the ill effects of the regulations.

Apparently the funding for this survey came from the Cato institute, a libertarian society. I don't hate these people by any means, they're a respectable bunch, but they clearly have a political agenda attached to their research, and this is clearly not an unbiased sample.

Damn, deregulation and tax cuts at least offset some of the ill effects of the regulations.

Incorrect. Anti-usury laws forced banks to only loan out funds to credit worthy, the savings and loan deregulation caused the savings and loan disaster, and tax cuts increased the deficit with little if any increases in productivity.

How are these advocating more of the same? Oh I get it, you're hung up over the advice of "deregulation."

We've had years of government intervention in the money supply and government price-fixing and regulation of interest rates, keeping interest rates artificially low and fueling cheap credit with the result of producing the vastest credit bubble in the history of mankind. Seeing the disastrous results, how can you call for more government regulation and not less?

And we've had a lot of deregulation, tax cuts, ecc. and seeing the disasterous results how can you call for deregulation and tax cuts.

Maybe like so many things, the answer is a happy medium. Maybe there's no magic bullet and you need an evolving plan instead of a fixed ideology.

...or maybe I'm the wacko here. ;)

And we've had a lot of deregulation, tax cuts, ecc. and seeing the disasterous results how can you call for deregulation and tax cuts.

The problem is that deregulation and tax cuts do work, yet under certain circumstances, as in when the economy is reasonably valued.

The fact is that the economy was highly over-valued, not just mortgages, the entire economy, and it was over-valued because people were being given money to spend, money they didn't have but could afford to spend due to cheap credit and low taxes.

That's not to say high taxes and difficult credit are the best solution now, ironically, it may be the other way round, but underlying all this is the simple fact that the economy has been false since 2001, buoyed by a ridiculous housing market but still, essentially, false.

These economists should go and work in Detroit, live in fear of their jobs disappearing, their house disappearing, their entire community disappearing, their future disappearing.

It's easy to call for harsh measures when you're not truly affected by them.

Detroit's jobs and houses should disappear, for a little while. They'd come back with surprising rapidity. This talk about "future disappearing" makes no sense.

There's no reason why the American auto manufacturers should continue to exist in their current forms. There is simply no demand for any Ford, GM, Chrysler automobiles right now, and the big 3 are in mounds of debt. Bankruptcy is the only course of action that makes sense in this scenario.

Detroit's jobs and houses should disappear, for a little while. They'd come back with surprising rapidity. This talk about "future disappearing" makes no sense.

There's no reason why the American auto manufacturers should continue to exist in their current forms. There is simply no demand for any Ford, GM, Chrysler automobiles right now, and the big 3 are in mounds of debt. Bankruptcy is the only course of action that makes sense in this scenario.

Unless you're one of the hundreds of thousand employed by them or by the dozens of other companies that contract with them.

The problem is that deregulation and tax cuts do work, yet under certain circumstances, as in when the economy is reasonably valued.

The fact is that the economy was highly over-valued, not just mortgages, the entire economy, and it was over-valued because people were being given money to spend, money they didn't have but could afford to spend due to cheap credit and low taxes.

That's not to say high taxes and difficult credit are the best solution now, ironically, it may be the other way round, but underlying all this is the simple fact that the economy has been false since 2001, buoyed by a ridiculous housing market but still, essentially, false.

it should always be high interest rates low taxes, or low interest rates high taxes.

...or maybe I'm the wacko here. ;)
Aren't you always? ;)

Detroit's jobs and houses should disappear, for a little while. They'd come back with surprising rapidity. This talk about "future disappearing" makes no sense.

There's no reason why the American auto manufacturers should continue to exist in their current forms. There is simply no demand for any Ford, GM, Chrysler automobiles right now, and the big 3 are in mounds of debt. Bankruptcy is the only course of action that makes sense in this scenario.

I don't disagree in theory but in practice you're putting a lot of jobs out of the economy, it's not just the manufacturers, it's their suppliers and, more pertinently, all the families that rely on them.

To simply let them go bankrupt is, although probably the quickest solution, simply unacceptable.

Since when does the economy take precedence over the citizen, there has to be some medium between the human factor and the most efficient means of fixing the economy.

Incorrect. Anti-usury laws forced banks to only loan out funds to credit worthy, the savings and loan deregulation caused the savings and loan disaster, and tax cuts increased the deficit with little if any increases in productivity.

The rabbit hole goes a lot deeper than that. If the government didn't regulate and socialize risk with the Federal Reserve, FDIC, and other socialist interventions, banks would voluntarily refuse to loan out funds to the un-creditworthy, for fear of bank runs. All goverment-endorsed fractional reserve banking does is create chronically insolvent banks (not just in the US, but all over the world), leading to these staggering credit crises of epic proportions that we unfortunate inhabitants of the world have to endure.

http://thinkfree.freedomblogging.com/files/2009/01/cato_stimulusad.jpg

Here's the ad

I don't disagree in theory but in practice you're putting a lot of jobs out of the economy, it's not just the manufacturers, it's their suppliers and, more pertinently, all the families that rely on them.

To simply let them go bankrupt is, although probably the quickest solution, simply unacceptable.

Since when does the economy take precedence over the citizen, there has to be some medium between the human factor and the most efficient means of fixing the economy.

The government is choosing the path of maximal pain right now. By zombifying the economy and socializing industries, economic inefficiencies will accumulate and become terminal. Eventually we'll become a vast, inefficient USSR-type state with industrial gulags in the Great Lakes region producing Ford, Chrysler, and GM automobiles that nobody needs, just like the real Soviet Union produced so much pig iron and heavy industrial machinery that no Soviet citizen needed.

At that point, the economy will suffer so many defects and basic consumer material shortages that we'll have no choice but to endure a maximally painful Yeltsin-style "Shock Therapy" session to wash all the accumulated inefficiencies out of the capital structure. Then we will truly know the limit for pain the "human factor" is capable of tolerating.

The rabbit hole goes a lot deeper than that. If the government didn't regulate and socialize risk with the Federal Reserve, FDIC, and other socialist interventions, banks would voluntarily refuse to loan out funds to the un-creditworthy, for fear of bank runs. All goverment-endorsed fractional reserve banking does is create chronically insolvent banks (not just in the US, but all over the world), leading to these staggering credit crises of epic proportions that we unfortunate inhabitants of the world have to endure.

If the feds did that then whenever a bank run happened, and they would happen, many innocent savers would lose their life savings along with a deflationary spiral. The majority of Cato institute members, the vast majority of economists(including libertarians, and most of those who signed this petition believe in regulation of the financial sector and government control of the money supply.

The government is choosing the path of maximal pain right now. By zombifying the economy and socializing industries, economic inefficiencies will accumulate and become terminal. Eventually we'll become a vast, inefficient USSR-type state with industrial gulags in the Great Lakes region producing Ford, Chrysler, and GM automobiles that nobody needs, just like the real Soviet Union produced so much pig iron and heavy industrial machinery that no Soviet citizen needed.

At that point, the economy will suffer so many defects and basic consumer material shortages that we'll have no choice but to endure a maximally painful Yeltsin-style "Shock Therapy" session to wash all the accumulated inefficiencies out of the capital structure. Then we will truly know how much pain the "human factor" is capable of tolerating.

cool story bro

If the feds did that then whenever a bank run happened, and they would happen, many innocent savers would lose their life savings along with a deflationary spiral.
Actually innocent savers would lose less money in small bank runs, than the huge sums of money being lost by innocent savers and investors in these Friedmanite monetarist economic bubbles and collapses we're experiencing.
The majority of Cato institute members, the vast majority of economists(including libertarians, and most of those who signed this petition believe in regulation of the financial sector and government control of the money supply.

One can't accurately call oneself a libertarian if one believes in government regulation of money supply.

cool story bro

Thx

At that point, the economy will suffer so many defects and basic consumer material shortages that we'll have no choice but to endure a maximally painful Yeltsin-style "Shock Therapy" session to wash all the accumulated inefficiencies out of the capital structure.

That's actually where we are right now give or take, but for the opposite reason.

The economy is not screwed due to over-regulation, it's screwed because:

1. The market was vastly over-inflated across the board.
2. It was buoyed on property prices that were in no way real
3. It was anchored by insurance and bets on that insurance and more bets and more insurance until banks weren't even aware that they were securing the insurance on bets they had made.

No one, not even the banks, actually had any money, just pieces of paper saying they were worth so much given the continued rise of the markets, on which they could borrow more money, betting further on that rise and...

It was the very height of capitalism gone wrong, it was more profitable to invest in the market than it was to invest in actually producing anything of any value, that is the natural conclusion of an unregulated market.

Paul Krugman did invent Reaganomics

snip

Here's the ad

reminds me of the petition to stop Smoot Hawley

Actually innocent savers would lose less money in small bank runs, than the huge sums of money being lost by innocent savers and investors in these Friedmanite monetarist economic bubbles and collapses we're experiencing.

Proove it.

One can't accurately call oneself a libertarian if one believes in government regulation of money supply.

Nice "no true scotsman" ass pull.

reminds me of the petition to stop Smoot Hawley

Reminds me more of the petition sent to Magaret Thatcher for her to stop her policies.

Aren't you always? ;)

It's a dirty job, but someone's got to do it. :)

Reminds me more of the petition sent to Magaret Thatcher for her to stop her policies.

name of it ? text of it ? name of the policies ? year ??

That's actually where we are right now give or take, but for the opposite reason.

The economy is not screwed due to over-regulation, it's screwed because:

1. The market was vastly over-inflated across the board.
2. It was buoyed on property prices that were in no way real
3. It was anchored by insurance and bets on that insurance and more bets and more insurance until banks weren't even aware that they were securing the insurance on bets they had made.

No one, not even the banks, actually had any money, just pieces of paper saying they were worth so much given the continued rise of the markets, on which they could borrow more money, betting further on that rise and...

It was the very height of capitalism gone wrong, it was more profitable to invest in the market than it was to invest in actually producing anything of any value, that is the natural conclusion of an unregulated market.
The bubble could never have occurred in a free market (which is a self-regulated, not unregulated) market. What just happened was a regulated and horribly dysregulated market.

To begin with, there would not be so much money in a free market. In our current regulated market the central banks produce new money out of thin air, and banks are not afraid to use fractional reserve to create even more new money out of thin air since that's the only way they can make money if the government is the only allowable - enforced by military fiat - originator of legal tender. In a free market without fiat money, how can real estate prices go so sky-high if the money supply stays modest and there are no government policies causing the money supply to increase exponentially?

It's a dirty job, but someone's got to do it. :)
Well if it's a dirty job, it's got your name written all over it. :wink:

The bubble could never have occurred in a free market (which is a self-regulated, not unregulated) market. What just happened was a regulated and horribly dysregulated market.

To begin with, there would not be so much money in a free market. In our current regulated market the central banks produce new money out of thin air, and banks are not afraid to use fractional reserve to create even more new money out of thin air since that's the only way they can make money if the government is the only allowable - enforced by military fiat - originator of legal tender. In a free market without fiat money, how can real estate prices go so sky-high if the money supply stays modest and there are no government policies causing the money supply to increase exponentially?

This doesn't solve the root issue.

The problem is that in a free market the money goes to the best returns, not necessarily the best value.

When the best return is clearly the market itself, then investment goes round and round in ever-increasing circles until...

POP!

I wonder whether p/e ratios should be capped.

name of it ? text of it ? name of the policies ? year ??

I'm not quite sure when it was. I have a mention of it by Margaret Thatcher in an interview in Commanding Heights:

NARRATOR: Thatcher had no time for conventional, Keynesian economists who urged her to use government money to lessen the pain.

MARGARET THATCHER: Although 364 economists wrote to the Times and said, "This is outrageous; you'll put us into a deep depression from a recession," 364 were wrong, and the half dozen who supported us were right.

Here's the source. I'll look for the Times. (http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/tr_show01.html)

I tend to try and ignore Krugman's work in public as much as possible. It's just political hackery. The way he then makes it look to people as though their ideology is backed up by academia is no good for politics and it's certainly no good for economics as a discipline.

That doesn't detract from his academic work though, it's just that he doesn't do much of that anymore.

Here's a pdf of the letter (http://www.econjournalwatch.org/pdf/WoodCh...January2006.pdf).

No worky....

http://thinkfree.freedomblogging.com/files/2009/01/cato_stimulusad.jpg

Here's the ad


Oh lordy. The Cato institute? Oh yes there was a "fair" evaluation of the plan. :rolleyes:

This doesn't solve the root issue.

The problem is that in a free market the money goes to the best returns, not necessarily the best value.

When the best return is clearly the market itself, then investment goes round and round in ever-increasing circles until...

POP!

I wonder whether p/e ratios should be capped.

P/e ratios are naturally capped by free market mechanisms. The equities index (for example a mutual fund) does not outperform cash in a free market.

No worky....

Crap. Sorry. It was a letter in the London Times on the 23rd of March, 1981. It had 364 economists complain about Thatcher budget proposal for being overly tight.

I can't find any working links to the letter itself.

P/e ratios are naturally capped by free market mechanisms. The equities index (for example a mutual fund) does not outperform cash in a free market.

Sure, it's a fairly stupidly simple example to give, what I'd like is a mechanism to stop markets racing out of control, fueled by the inescapable fact that it's racing out of control.

It's the same for any system, runaway growth spells trouble, fine when it's due to a new 'eco-system' being found, a previously unseen niche, but not when it's due to short-sighted munching of resources.

The current issue is that the resource being eaten was credit, and we ran out.

Sure, it's a fairly stupidly simple example to give, what I'd like is a mechanism to stop markets racing out of control, fueled by the inescapable fact that it's racing out of control.

It's the same for any system, runaway growth spells trouble, fine when it's due to a new 'eco-system' being found, a previously unseen niche, but not when it's due to short-sighted munching of resources.

The current issue is that the resource being eaten was credit, and we ran out.

While I theoretically agree with you about the ecosystems example (though so far increases in technology have allowed us to avoid the "Malthusian resource trap"), the late credit bubble was a symptom of government regulation, it was not a symptom of capitalism. Free market processes suppress credit bubbles; and only government policies that force down interest rates and by a variety of other methods artificially induce lending and credit expansion create credit bubbles where none existed before.

Free market processes naturally and inevitably tend toward equilibrium, while government interventions use fiat policies to disturb equilibrium. The fractional reserve alchemy and 100x leveraging examples you mentioned earlier are only possible in our interventionist monetarist system. They would be inconceivable, and completely suppressed, if market processes like bank runs and voluntary currency selection were allowed to function normally and undisturbed by government intervention.

While I theoretically agree with you about the ecosystems example (though so far increases in technology have allowed us to avoid the "Malthusian resource trap"), the late credit bubble was a symptom of government regulation, it was not a symptom of capitalism. Free market processes suppress credit bubbles; and only government policies that force down interest rates and by a variety of other methods artificially induce lending and credit expansion create credit bubbles where none existed before.

Free market processes naturally and inevitably tend toward equilibrium, while government interventions use fiat policies to disturb equilibrium. The fractional reserve alchemy and 100x leveraging examples you mentioned earlier are only possible in our interventionist monetarist system. They would be inconceivable, and completely suppressed, if market processes like bank runs and voluntary currency selection were allowed to function normally and undisturbed by government intervention.

Please prove the above assertions. With empirical evidence, I might add, not theory.

Please prove the above assertions. With empirical evidence, I might add, not theory.

Unfortunately there is only indirect evidence, since monetarists like yourself have refused to ever ungrip government control on the market: every asset bubble event in the history of the world (with one notable exception) was caused by government-mandated currency inflation that fostered a credit expansionary monetary environment.

To test the theory that elimination of government-mandated currency inflation will result in stabilization of markets and elimination of asset bubbles (since macroeconomists are so keen on testing theories and gathering empirical evidence), we should abolish legal tender laws and abolish central banking, and observe the empirical results. This economic experiment will demonstrate once and for all that free market money and credit cannot result in a bubble. Unfortunately, the monetarists and Keynesians (like yourself Tech-Gnosis) refuse to ever implement this theory as policy, while disingenuously simultaneously accusing the theory of being "unproven".

Unfortunately there is only indirect evidence, since monetarists like yourself have refused to ever ungrip government control on the market: every asset bubble event in the history of the world (with one notable exception) was caused by government-mandated currency inflation that fostered a credit expansionary monetary environment.

Please post this evidence that every single financial crisis in history except one was caused by the government.

To test the theory that elimination of government-mandated currency inflation will result in stabilization of markets and elimination of asset bubbles (since macroeconomists are so keen on testing theories and gathering empirical evidence), we should abolish legal tender laws and abolish central banking, and observe the empirical results. This economic experiment will demonstrate once and for all that free market money and credit cannot result in a bubble. Unfortunately, the monetarists and Keynesians (like yourself Tech-Gnosis) refuse to ever implement this theory as policy, while disingenuously simultaneously accusing the theory of being "unproven".

So you're saying that not one country in the last couple hundred years has tried to do this and won't? If one country was willing to do this it would be interesting but don't expect anyone to do it in their own countries due to how risky this policy would be.

Please post this evidence that every single financial crisis in history except one was caused by the government.



Please post evidence that a single financial crisis in history did not have a root cause tied in with the government?

this is economics as far as evidence goes its going to be closer to philosophy.

Please post this evidence that every single financial crisis in history except one was caused by the government.

Name a financial crisis. (Now that I remember the one financial crisis that "wasn't" caused by government action was in fact caused by government action. So that means every single financial crisis in history was caused by government action.)


So you're saying that not one country in the last couple hundred years has tried to do this and won't? If one country was willing to do this it would be interesting but don't expect anyone to do it in their own countries due to how risky this policy would be.

Why would any government be willing to do this? Monetarism impoverishes ordinary people while enriches governments, central bankers, and people who have access to the monetarist policies. Do you think governments, bankers, and people in power would be willing to give up their source of stolen income, i.e. monetarist policies?

Please post evidence that a single financial crisis in history did not have a root cause tied in with the government?

No, its please demonstrate that the root cause of every financial crisis, with one exception, was the government. So name every single financial crisis and show how the government caused it while listing the exception. I'm not asking for any evidence on any unasserted claims.

this is economics as far as evidence goes its going to be closer to philosophy.

Clarify. Do you mean its very debatable what the root causes of financial crises are or what?

Name a financial crisis. (Now that I remember the one financial crisis that "wasn't" caused by government action was in fact caused by government action. So that means every single financial crisis in history was caused by government action.)

All of them.


Why would any government be willing to do this? Monetarism impoverishes ordinary people while enriches governments, central bankers, and people who have access to the monetarist policies. Do you think governments, bankers, and people in power would be willing to give up their source of stolen income, i.e. monetarist policies?

Proove it.

No, its please demonstrate that the root cause of every financial crisis, with one exception, was the government. So name every single financial crisis and show how the government caused it while listing the exception. I'm not asking for any evidence on any unasserted claims.



Clarify. Do you mean its very debatable what the root causes of financial crises are or what?

I am saying we can look at any financial crisis. and person A can find and argue that these government actions lead to and caused the problem. while person B can argue these market action lead to and caused the problems.

In fact we could completely hijack any thread in regards to economics on the matter with the debate going well over 40 page on just one crisis.

Amm, I'd like to put in the Tech Bubble as an example of where the government wasn't the major factor, care to show me where I'm wrong?

Is it not considered a financial crisis, I could somewhat accept that, but it was a bubble caused by people piling into something due to the market profits as opposed to actual profits.

In fact, the trend of the last 30 years has been exactly that, investment into market profits not actual, and the government's only role is to control the rate at which people can do that with credit and deregulation. I can accept government culpability in feeding a system that was clearly rising out of control.

This is simplified, where markets root out actual value, well there's little more efficient, but they don't when value becomes distorted to the point where the value itself is the value.

I might completely re-write this to make it clearer, I probably won't.

Proove it.

This is the best request in any of these economic prognosticating threads. It's all fucking chicken bones and tea leaves. I remain unconvinced that giving those with the most amount of money more money and letting them do whatever the hell they want will work. Every time that crashes around them they're all "It's a cycle, suck it up. Not us, you..." Fuck that. It's all fucking voodoo. Give the tax cuts to the lower 98%. If we're going to keep floating this bullshit, at least let someone else play for a round. Honestly, when it comes down to it, our bridges are literally falling down. It's not like we don't need to fix our infrastructure anyway.

I am saying we can look at any financial crisis. and person A can find and argue that these government actions lead to and caused the problem. while person B can argue these market action lead to and caused the problems.

In fact we could completely hijack any thread in regards to economics on the matter with the debate going well over 40 page on just one crisis.

This is what I thought you meant though I wasn't sure. Its a reasonable assertion.

This is what I thought you meant though I wasn't sure. Its a reasonable assertion.

sorry i am drunk so might take me a few question and repsonces to make sense.

All of them.

1600s Tulip Bubble- inflation caused by Spanish government's confiscation and transferal of gold to Europe
1700s John Law Bubble- inflation caused by government guaranteed speculation in Louisiana
1700s South Sea Bubble- inflation caused by government guaranteed speculation in overseas colonies
1819 - deleveraging inflation and malinvestments caused by war of 1812
1857- deleveragin inflation and malinvestments caused by mex-am war
1873- deleveraging inflation caused by civil war green backs and first railroad land grants
1893- deleveraging silver monetization and inflation, unwinding malinvestments from more railroad land grants
1921- deleveraging inflation and malinvestments caused by WWI spending
1929- deleveraging coordinated Fed/Bank of England inflation of the 20s

It's not controversial even among monetarists and Keynesians that inflation causes asset bubbles. At no time in history has the free market produced this inflation; only government-mandated inflation (e.g. greenbacks and silver monetization, etc), wars, and other government spending causes inflation. (Even free-market gold strikes do not contribute to asset bubbles)

Proove it.

Jesus Christ. It's self-evident, not even monetarists would dispute that. Do you think you benefit from inflation? No, the guy running the printing press benefits the inflation. He can print money and spend it on anything he likes, and also give it to his friends. Meanwhile you have to work for your money, and if you get caught printing money you get put in jail for counterfeiting. The fact that I have to explain these basic concepts to you makes me wonder whether you're actually for real or just pulling my leg.

The fact that I have to explain these basic concepts to you makes me wonder whether you're actually for real or just pulling my leg.
No, we're just noting that your past posting history on this subject has been filled with nothing but "I say so" arguments and little to nothing to back them up.

1600s Tulip Bubble- inflation caused by Spanish government's confiscation and transferal of gold to Europe
1700s John Law Bubble- inflation caused by government guaranteed speculation in Louisiana
1700s South Sea Bubble- inflation caused by government guaranteed speculation in overseas colonies
1819 - deleveraging inflation and malinvestments caused by war of 1812
1857- deleveragin inflation and malinvestments caused by mex-am war
1873- deleveraging inflation caused by civil war green backs and first railroad land grants
1893- deleveraging silver monetization and inflation, unwinding malinvestments from more railroad land grants
1921- deleveraging inflation and malinvestments caused by WWI spending
1929- deleveraging coordinated Fed/Bank of England inflation of the 20s

It's not controversial even among monetarists and Keynesians that inflation causes asset bubbles. At no time in history has the free market produced this inflation; only government-mandated inflation (e.g. greenbacks and silver monetization, etc), wars, and other government spending causes inflation. (Even free-market gold strikes do not contribute to asset bubbles)

How do wars count? If a free-market society is besieged by war from a state society do they instantly collapse or what because if they fought for any period of time there'd be a lot of investment that would turn useless once the war was over. Or silver monetization? Silver and gold are both precious metals. If it was simple clay or some cheap material you might have a case. Or Spain's gold, why didn't the market adjust without a bust? Why wouldn't discovering a large supply of gold cause any booms and busts in a free market?


Jesus Christ. It's self-evident, not even monetarists would dispute that. Do you think you benefit from inflation? No, the guy running the printing press benefits the inflation. He can print money and spend it on anything he likes, and also give it to his friends. Meanwhile you have to work for your money, and if you get caught printing money you get put in jail for counterfeiting. The fact that I have to explain these basic concepts to you makes me wonder whether you're actually for real or just pulling my leg.

So how do you explain central banks bringing down inflation, inflation targeting, independent central banks, ect? Please explain constitutions that limit the state's power written and passed by the state? The fact that the state limits its own power to print money, and limits other powers? Please, the whole concept of a monetarist central bank set up to insulate itself from the legislature refutes your sentiment. They obviously find it as very possible a thing to set up. Also, every single monetarist I know thinks that monetarism will enrich everyone, not impoverish. Please explain how they realize their policies will impoverish everyone. Are you ignorant or do you discount all evidence that doesn't fit with your ideology?

No, we're just noting that your past posting history on this subject has been filled with nothing but "I say so" arguments and little to nothing to back them up.

I've cited, I've explained, I've exhorted, I've expounded. Yet I get nowhere because you people are the ones using the "I say so" arguments.

I remember you Nervun. Just a little while ago we were debating Japan and I cited research papers, statistics, data, whatever you asked for I cited and disproved your point. I think you just said I was "wrong" and left it at that. Please go brush up on your knowledge of Japan before we get into another such discussion!

How do wars count? If a free-market society is besieged by war from a state society do they instantly collapse or what because if they fought for any period of time there'd be a lot of investment that would turn useless once the war was over.
Why don't wars count? With the exception of the revolutionary war every single one of the US' wars could have been avoided.


Or silver monetization? Silver and gold are both precious metals.
I guess I should've clarified earlier since it appears you aren't aware of these things. By "silver monetization" I mean dollarization of silver. Silver functioned perfectly as a non-dollarized , voluntary money out west. It was dollarization and establishment of silver legal tender in the 1890s that caused the credit crisis.

If it was simple clay or some cheap material you might have a case. Or Spain's gold, why didn't the market adjust without a bust?

Government interference. Spain's gold inspired the Spanish and Dutch governments to greedily guarantee banknotes and expand credit. This directly caused the Tulip bubble.

Why wouldn't discovering a large supply of gold cause any booms and busts in a free market?

They might cause some booms and busts in the initial mining towns but no one cries over spilled milk, not even the miners do. Free market gold is easily assimilated by the free market because it would immediately equilibrate with the value of other voluntary moneys (silver, etc); this represents a monetary outlet for the newfound inflation. Under central banking and monetarism, there are no monetary outlets because of legal tender laws all over the world, so all this monetary excess is shunted into assets like dotcom stocks and real estate.

So how do you explain central banks bringing down inflation,
Central banks bring down inflation by inflating less but they're still inflating. Do you even know how inflation works? Don't tell me you think inflation grows magically on trees and central banks has to "fight" this magical inflation. Protip: central banks create inflation.

Elimination of central banking and legal tender laws would immediately eliminate inflation.

inflation targeting
Do you even know what that term means? It just means the central bank decides to inflate at say 3% instead of 5%. That's still inflation, and ordinary peoples' purchasing power is still being eroded. 0% is the bulls eye on the inflation target, the point where the central bank is not counterfeiting money. Anything above 0% is evidence of the central bank confiscating your wealth through counterfeiting.

independent central banks, ect? Please explain constitutions that limit the state's power written and passed by the state? The fact that the state limits its own power to print money, and limits other powers?
You just contradicted yourself. Independent central banks (your own words) are not limited by any legislature when it comes to printing money. Do you even follow current events? You are aware the Federal Reserve has adopted quantitative easing policies right?

Please, the whole concept of a monetarist central bank set up to insulate itself from the legislature refutes your sentiment. They obviously find it as very possible a thing to set up. Also, every single monetarist I know thinks that monetarism will enrich everyone, not impoverish. Please explain how they realize their policies will impoverish everyone. Are you ignorant or do you discount all evidence that doesn't fit with your ideology?
I never said their policies will impoverish everyone. They enrich the elite few who have first access to the newly printed money. Those unlucky ordinary people are impoverished because the cash in their hands becomes less valuable as the total supply of cash expands. Without monetarism, this naked thievery can't occur.

I've cited, I've explained, I've exhorted, I've expounded. Yet I get nowhere because you people are the ones using the "I say so" arguments.
Really? Let's go through this thread then.

Claim one:
This article argues that the Nobel prize winning Obama advisor Paul Krugman is widely viewed to be an assclown by his "respected economist" colleagues.
The article argues no such thing, you have ONE economist stating something offhand with no backup from others in a throwaway line. So claim is unsupported.

Claim two:
We've had years of government intervention in the money supply and government price-fixing and regulation of interest rates, keeping interest rates artificially low and fueling cheap credit with the result of producing the vastest credit bubble in the history of mankind. Seeing the disastrous results, how can you call for more government regulation and not less?
Nothing to back up that it was government intervention that caused the credit bubble that caused the current problem. Also nothing to show regulations caused the same.

You got called on it by Tech-gnosis and your response?
Damn, deregulation and tax cuts at least offset some of the ill effects of the regulations.
Again, nothing to back that up.

And again:
The rabbit hole goes a lot deeper than that. If the government didn't regulate and socialize risk with the Federal Reserve, FDIC, and other socialist interventions, banks would voluntarily refuse to loan out funds to the un-creditworthy, for fear of bank runs. All goverment-endorsed fractional reserve banking does is create chronically insolvent banks (not just in the US, but all over the world), leading to these staggering credit crises of epic proportions that we unfortunate inhabitants of the world have to endure.

Oh, here's another claim:
The government is choosing the path of maximal pain right now. By zombifying the economy and socializing industries, economic inefficiencies will accumulate and become terminal. Eventually we'll become a vast, inefficient USSR-type state with industrial gulags in the Great Lakes region producing Ford, Chrysler, and GM automobiles that nobody needs, just like the real Soviet Union produced so much pig iron and heavy industrial machinery that no Soviet citizen needed.
Note there is nothing, again, backing up your ascertain that the government is choosing maximal pain. Nothing saying why the path the government is going will cause problems, just political BS of "OMFG! We're gonna be commies!"

Yet another claim here:
The bubble could never have occurred in a free market (which is a self-regulated, not unregulated) market. What just happened was a regulated and horribly dysregulated market.

To begin with, there would not be so much money in a free market. In our current regulated market the central banks produce new money out of thin air, and banks are not afraid to use fractional reserve to create even more new money out of thin air since that's the only way they can make money if the government is the only allowable - enforced by military fiat - originator of legal tender. In a free market without fiat money, how can real estate prices go so sky-high if the money supply stays modest and there are no government policies causing the money supply to increase exponentially?
We actually start getting an actual honest-to-goodness explanation out of you, nothing to back it up, but at least you start explaining.

And from there you are in your current argument which you STILL haven't actually shown evidence that your theory would work beyond we've never tried it! Oh, and the the government causes everything, except that you haven't bothered to show proof of it.

Oh yeah, you certainly cited, explained, exhorted, and expounded. /sarcasm

I remember you Nervun. Just a little while ago we were debating Japan and I cited research papers, statistics, data, whatever you asked for I cited and disproved your point. I think you just said I was "wrong" and left it at that. Please go brush up on your knowledge of Japan before we get into another such discussion!
Oh I left long before you actually cited anything. 5 pages of telling someone to prove it with nothing coming does that.

And here we have another 5 with nothing but hot air from you.

Oh I left long before you actually cited anything. 5 pages of telling someone to prove it with nothing coming does that.

And here we have another 5 with nothing but hot air from you.

Check your user profile; I actually posted a link in your profile to all the statistics, for your convenience. You never replied.
http://forums.jolt.co.uk/showpost.php?p=14540539&postcount=368

Hold that thought though, I'll go do some more data gathering.

Hold that thought though, I'll go do some more data gathering.
Speaking of ignoring things, how about actually backing up your ascertains here in THIS thread?

Speaking of ignoring things, how about actually backing up your ascertains here in THIS thread?

I'm in the process of. I'm currently trying to find if there are more than one Nobel laureate in that NY Times ad in question, as you mentioned in your previous post.

May seem like a pointless exercise but I'm enjoying it in the same queer way a trainspotter enjoys looking at trains. It's 4 AM in my location now so I might not finish with your post in this sitting before I go to bed. That's alright, I haven't heard your analysis of my data on Japan in a couple weeks now so I'm sure both of us are on good pace.

This article argues that the Nobel prize winning Obama advisor Paul Krugman is widely viewed to be an assclown by his "respected economist" colleagues.

http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db2009038_985205.htm



Right now I can't find the ad signed by 250 economists or the Mar 6 interview alluded to by this article. If I find them I'll post the links here...

It depends on who the Undersigned are, and who is paying them.

My brother told me that he doesn't believe in man made global warming and he sent me an email with attachments to all the global warming denihilist "evidence."

Every person in it was on the Exxon/Mobil payroll, which rendered the whole thing meaningless.

Economy is far more subjective than science and you'll get far more people taking any position with very flimsy evidence just because it's what they grew up, professionally, thinking. It gets to the point that their school of economy is practically a religion. Everything seems to support their world view and discredit the other guy's.

But we've tried things the de-regulators way, and it was a disaster. The biggest economic downturn since the Great Depression is not just part of the normal economic cycle. It's a huge fuck-up. And it's time to stop listening to those who think that more de-regulation is the answer. It was time to stop listening to them in 1991, but now is all we've got.

He's a quack whose grasp of economics is comparable to that of a squirrel.

He's a quack whose grasp of economics is comparable to that of a squirrel.
He's also a Nobel Prize winner (http://forums.jolt.co.uk/showthread.php?t=568981).

But we've tried things the de-regulators way, and it was a disaster. The biggest economic downturn since the Great Depression is not just part of the normal economic cycle. It's a huge fuck-up. And it's time to stop listening to those who think that more de-regulation is the answer. It was time to stop listening to them in 1991, but now is all we've got.
This.^^

Regardless of whatever one might think of this or that individual economist or policy maker or pundit, the fact remains that we did try a system based on deregulation and it very clearly did not work out. Yet, like the mad scientist who madly insists on running his experiment over and over, nevermind the monsters it spawns, some people just keep insisting that the only problem is that the corpses just aren't fresh enough. Get them really, really fresh corpses, and their magic elixir will work, and then those fools at the academy will see and recognize their genius.

Well, no. The problem is not stale corpses. The problem is the system has failed. It is time to change the system. Yes, these things are cyclical. As much as I never thought Reaganomics could ever end in any way but in the burning wreckage we see all around us now, it did have a good couple of decades of making a few people very rich. But it has run its course, and now it is time for a system that will clean up the free marketers mess that they shat all over the world's carpet. It won't be much fun for the free marketers, but they had their turn, and now they get to wait while others run the show for a while.

Regardless of whatever one might think of this or that individual economist or policy maker or pundit, the fact remains that we did try a system based on deregulation and it very clearly did not work out.

What deregulatory policies resulted in the current crisis?

Paul Krugman is one of the better pro-capitalist economists out there.

How are these advocating more of the same? Oh I get it, you're hung up over the advice of "deregulation."

We've had years of government intervention in the money supply and government price-fixing and regulation of interest rates, keeping interest rates artificially low and fueling cheap credit with the result of producing the vastest credit bubble in the history of mankind. Seeing the disastrous results, how can you call for more government regulation and not less?How about calling for different regulation?

To begin with, there would not be so much money in a free market. In our current regulated market the central banks produce new money out of thin air, and banks are not afraid to use fractional reserve to create even more new money out of thin air since that's the only way they can make money if the government is the only allowable - enforced by military fiat - originator of legal tender. In a free market without fiat money, how can real estate prices go so sky-high if the money supply stays modest and there are no government policies causing the money supply to increase exponentially?If the government is not the only legal producer of money, then anybody can produce it out of thin air.

Paul Krugman is one of the better pro-capitalist economists out there.

How about calling for different regulation?

Maybe in a couple centuries when an advanced supercomputer can design better regulations than the self-regulatory mechanism of market processes.

If the government is not the only legal producer of money, then anybody can produce it out of thin air.
That doesn't occur though. In that situation people aren't legally obliged to accept the unsound money that just anyone prints out of thin air, and only highly sound money (probably precious metals) would circulate as the commonly accepted media of exchange. Due to legal tender laws, not only does government create money out of thin air, government forces people to use this money to settle debts (pay taxes). This is a distortionary and artificial built-in demand for unsound money.

Maybe in a couple centuries when an advanced supercomputer can design better regulations than the self-regulatory mechanism of market processes.
So Hayek, not Mises then. :wink:

So Hayek, not Mises then. :wink:

Well Mises is morally consistent, unlike Hayek who was purely an empiricist, so Mises still wins out. In all seriousness though by the time such a regulatory supercomputer is invented, I would imagine humans can merge with computers in cybernetic organisms and everyone would be capable of enjoying literal immortality, thus rendering economics discussions irrelevant.

What deregulatory policies resulted in the current crisis?
I got treated like an idiot in another thread for saying this and I suppose I'll get treated like an idiot by you, too, but what the fuck, I know I'm right: I am referring to over 20 years of lobbying and political influence by the financial industry that resulted in a series of legislative actions that killed Glass-Steagall, cut the guts out of the SEC, exempted sectors of the financial industry from various regulations and/or lifted those regulations altogether (such as reversing the rule against mixing regulated banking with unregulated investment banking in one business and no longer requiring banks to maintain a certain reserve). It is not a "policy." It is a history of deregulation, piecemeal. I assert and I stand by my assertion that loss of regulation opened the doors to the corrupt and/or irresponsible actions that resulted in the current crisis.

I got treated like an idiot in another thread for saying this and I suppose I'll get treated like an idiot by you, too, but what the fuck, I know I'm right: I am referring to over 20 years of lobbying and political influence by the financial industry that resulted in a series of legislative actions that killed Glass-Steagall, cut the guts out of the SEC, exempted sectors of the financial industry from various regulations and/or lifted those regulations altogether (such as reversing the rule against mixing regulated banking with unregulated investment banking in one business and no longer requiring banks to maintain a certain reserve). It is not a "policy." It is a history of deregulation, piecemeal. I assert and I stand by my assertion that loss of regulation opened the doors to the corrupt and/or irresponsible actions that resulted in the current crisis.

The only problem was they did not deregulate enough. Had the government deregulated the money supply, "the current crisis" would not have occurred. But you are generally correct, lobbyists from the financial industry will make sure this regulation never gets repealed.

I got treated like an idiot in another thread for saying this and I suppose I'll get treated like an idiot by you, too, but what the fuck, I know I'm right: I am referring to over 20 years of lobbying and political influence by the financial industry that resulted in a series of legislative actions that killed Glass-Steagall, cut the guts out of the SEC, exempted sectors of the financial industry from various regulations and/or lifted those regulations altogether (such as reversing the rule against mixing regulated banking with unregulated investment banking in one business and no longer requiring banks to maintain a certain reserve). It is not a "policy." It is a history of deregulation, piecemeal. I assert and I stand by my assertion that loss of regulation opened the doors to the corrupt and/or irresponsible actions that resulted in the current crisis.
funny the Sarbanes-Oxley Act of 2002 seems to be a regulatory measure.
In fact it is the largest shift to regulation since the new deal. one of its major aspects was it only let businesses(this case banks) declare hard assets (in this case homes) at current market price. This has the affect of making banks sell homes immediately to have liquidity, which further lowered prices forcing banks to sell homes at a greater and greater loss.

The only problem was they did not deregulate enough. Had the government deregulated the money supply, "the current crisis" would not have occurred. But you are generally correct, lobbyists from the financial industry will make sure this regulation never gets repealed.

your forgetting post 2002. Despite media claims, post 2002 was a regulatory environment. Everyone was trying to look like a white knight that was after evil big business.

Maybe in a couple centuries when an advanced supercomputer can design better regulations than the self-regulatory mechanism of market processes.I find it interesting when libertarians argue for what is better when considerations of what is better almost never make it into the moral justifications for libertarianism.
And, of course, they almost never specify what "better" means, and when they do, it usually means "more efficient".

That doesn't occur though. In that situation people aren't legally obliged to accept the unsound money that just anyone prints out of thin air, and only highly sound money (probably precious metals) would circulate as the commonly accepted media of exchange. Due to legal tender laws, not only does government create money out of thin air, government forces people to use this money to settle debts (pay taxes). This is a distortionary and artificial built-in demand for unsound money.You are correct that there is a built-in demand for government money, but the rest of your argument doesn't hold. There is little reason to assume that there would be only one commonly accepted medium of exchange if anyone is capable of creating media of exchange.

...and no longer requiring banks to maintain a certain reserve...
I actually believe the Fed still does that, though they lowered it a lot. It was replaced with capital requirements, which with Basel II were "risk-adjusted", meaning reliant on risk modelling based on historical data. If a bank could show that its risk models were as sophisticated as those of the regulators, they were allowed to use their own models to do the risk-weightings.

It's stupid, but that's what they came up with. But that's not a political thing, no politician ever told anyone involved to do that. This was something the regulators themselves at the BIS dreamt up all by themselves.

I find it interesting when libertarians argue for what is better when considerations of what is better almost never make it into the moral justifications for libertarianism.
And, of course, they almost never specify what "better" means, and when they do, it usually means "more efficient".
I think it's implicit from our discussion of asset bubbles in this thread that "better" here means "free of asset bubbles and credit crises."

You are correct that there is a built-in demand for government money, but the rest of your argument doesn't hold. There is little reason to assume that there would be only one commonly accepted medium of exchange if anyone is capable of creating media of exchange.

You're displaying the typical shortsightedness of the central planner type who believes that the fiat of production will always prevail and should be the only factor considered. In reality both production (supply) and demand determine the value of the media of exchange, and just because someone is "capable of creating media of exchange" and in fact does create and supply a particular medium of exchange doesn't mean there is demand for this medium of exchange. As empirical evidence demonstrates, the processes of free market supply and demand is an "evolutionary" process that selects against and suppresses unsound inflationary currencies so that only sound, noninflationary currencies remain.

The only problem was they did not deregulate enough. Had the government deregulated the money supply, "the current crisis" would not have occurred. But you are generally correct, lobbyists from the financial industry will make sure this regulation never gets repealed.
You may have noticed that I have not made any comment on anything you have said in this thread. There's a reason for that. It's because I think your entire argument is bullshit -- and batshit crazy bullshit at that -- and I see no purpose in arguing with you about it. If you would make the statements you have made here, then you are not going to be open to what I have to say. I figure I'll just post my comments to others, and if any of it makes sense to you then that will be great. But I'm not going to fight with you because I feel as if we don't even speak the same language.

funny the Sarbanes-Oxley Act of 2002 seems to be a regulatory measure.
In fact it is the largest shift to regulation since the new deal. one of its major aspects was it only let businesses(this case banks) declare hard assets (in this case homes) at current market price. This has the affect of making banks sell homes immediately to have liquidity, which further lowered prices forcing banks to sell homes at a greater and greater loss.
And I suppose you also believe there is no such thing a climate change because it snowed in North America yesterday? You may as well, if you're going to claim that Sarbanes-Oxley counteracts all the rest of the deregulation that has happened since the 80s.

You may have noticed that I have not made any comment on anything you have said in this thread. There's a reason for that. It's because I think your entire argument is bullshit -- and batshit crazy bullshit at that -- and I see no purpose in arguing with you about it. If you would make the statements you have made here, then you are not going to be open to what I have to say. I figure I'll just post my comments to others, and if any of it makes sense to you then that will be great. But I'm not going to fight with you because I feel as if we don't even speak the same language.

I don't think anyone in this thread would disagree that the government forced interest rates too low for too long through the early 2000s. This isn't even controversial or out of the "mainstream".

I actually believe the Fed still does that, though they lowered it a lot. It was replaced with capital requirements, which with Basel II were "risk-adjusted", meaning reliant on risk modelling based on historical data. If a bank could show that its risk models were as sophisticated as those of the regulators, they were allowed to use their own models to do the risk-weightings.

It's stupid, but that's what they came up with. But that's not a political thing, no politician ever told anyone involved to do that. This was something the regulators themselves at the BIS dreamt up all by themselves.
No, they did not dream it up all by themselves. They had plenty of help from then current and former executives associated with Lehman Bros, Goldman Sachs, and other entities now caught up in their own shit. And don't even try to palm off any BS about those companies not being politically connected and involved.

Furthermore, did I or did I not say "a certain level"? As in, the current level is insufficient. Therefore, you bringing up that there is still a required level is...oh, what's the word...pointless? Irrelevant? Misleading? Obviously, I do not believe the current level is good enough. I said as much. Really, seriously, please ignore me. I beg of you.

I don't think anyone in this thread would disagree that the government forced interest rates too low for too long through the early 2000s. This isn't even controversial or out of the "mainstream".
It's also not what I was talking about.

It's also not what I was talking about.

Weren't you talking about government regulation? I'm giving you a widely accepted and uncontroversial example of the negative effect resulting from government regulation (of money supply- I'm guessing you think I'm batshit whenever I mention the words "money supply").

And I suppose you also believe there is no such thing a climate change because it snowed in North America yesterday? You may as well, if you're going to claim that Sarbanes-Oxley counteracts all the rest of the deregulation that has happened since the 80s.

1st relevance. 2nd there is evidence of global warming. 3rd please list by name bush's financial deregulatory measures.

My point is since about 2002 the economy has been shifted more to regulation, and not counting the 9/11 shock, thats about the point where the economy turned to crap.

Weren't you talking about government regulation? I'm giving you a widely accepted and uncontroversial example of the negative effect resulting from government regulation (of money supply- I'm guessing you think I'm batshit whenever I mention the words "money supply").
Yes, I know you were doing that. And no, I don't think those words make your arguments crazy. I think the WHOLE arguments, all put together, and based firmly on their foundation of zero regulation and zero government action, are crazy talk.

And I don't argue with crazy talk.

Buh-bye to you, too. (Gosh, I'm brushing off a lot of people lately.)

1st relevance. 2nd there is evidence of global warming. 3rd please list by name bush's financial deregulatory measures.

My point is since about 2002 the economy has been shifted more to regulation, and not counting the 9/11 shock, thats about the point where the economy turned to crap.
And another one down. Did I say it was something Bush did? No, I didn't. I said it was a series of legislative actions starting about 20 years ago. Was Bush president for 20 years? No? Well, then.

And yes, I get your point, and I reject it as irrelevant because it has not one fucking thing to do with the financial deregulation of the previous two decades.

Buh-bye to you, too.

1600s Tulip Bubble- inflation caused by Spanish government's confiscation and transferal of gold to Europe
1700s John Law Bubble- inflation caused by government guaranteed speculation in Louisiana
1700s South Sea Bubble- inflation caused by government guaranteed speculation in overseas colonies
1819 - deleveraging inflation and malinvestments caused by war of 1812
1857- deleveragin inflation and malinvestments caused by mex-am war
1873- deleveraging inflation caused by civil war green backs and first railroad land grants
1893- deleveraging silver monetization and inflation, unwinding malinvestments from more railroad land grants
1921- deleveraging inflation and malinvestments caused by WWI spending
1929- deleveraging coordinated Fed/Bank of England inflation of the 20s

You're missing quite a few, such as Egypt in 1324 CE, which is pretty remarkable because the spending habits of one man horribly devalued Egypt's currency.

Also your analysis of the Tulip Bubble is laughable and has nothing to do with reality.

And another one down. Did I say it was something Bush did? No, I didn't. I said it was a series of legislative actions starting about 20 years ago. Was Bush president for 20 years? No? Well, then.

And yes, I get your point, and I reject it as irrelevant because it has not one fucking thing to do with the financial deregulation of the previous two decades.

Buh-bye to you, too.

so your saying the last 20 years except for the last 8 ?

so the 12 years that were good prior to the 8 years things were bad ?
but the reason things are bad has nothing to do with the policies 8 years?
and all to do with the policies of the 12 years where things were good ?

Also your analysis of the Tulip Bubble is laughable and has nothing to do with reality.Why do you think the Tulip bubble occurred?

I'm looking forward to correcting ignorance.

so your saying the last 20 years except for the last 8 ?

so the 12 years that were good prior to the 8 years things were bad ?
but the reason things are bad has nothing to do with the policies 8 years?
and all to do with the policies of the 12 years where things were good ?
No, no, no, and no.

The last 20 years, including the last 8.

The last 12 years that were good were also market bubble years, so good in the short term, bad in the long term (meaning now).

No, the last 8 years are included in the overall pattern of bad decisions.

And the intervening 12 years are included too.

Up and down within the overall pattern does not change the overall pattern, just like yesterday's snow does not mean there's no such thing as a warming trend.

To illustrate Muravyets' post:

http://g.imagehost.org/0022/img0009_2097970562.gif

To illustrate Muravyets' post:


You seem not to disagree with me about the overall bad trend, but you also seem not to get or not to care that you and I have polar opposite ideas of what caused it and what we should do to remedy it. I am not out to change your mind. If I was, I would have attacked your posts. The extreme nature of your remarks indicates to me that you are unlikely to listen to, let alone be swayed by, opposing arguments. That is why I did not seek to engage you.

You seem not to disagree with me about the overall bad trend, but you also seem not to get or not to care that you and I have polar opposite ideas of what caused it and what we should do to remedy it. I am not out to change your mind. If I was, I would have attacked your posts. The extreme nature of your remarks indicates to me that you are unlikely to listen to, let alone be swayed by, opposing arguments. That is why I did not seek to engage you.

I know. You're intractable too.

The current overall bad trend began in the 50s, related to inflation from the Korean War, and also related to Eisenhower's big spending programs like the Interstate highway system.

No, no, no, and no.

The last 20 years, including the last 8.

The last 12 years that were good were also market bubble years, so good in the short term, bad in the long term (meaning now).

No, the last 8 years are included in the overall pattern of bad decisions.

And the intervening 12 years are included too.

Up and down within the overall pattern does not change the overall pattern, just like yesterday's snow does not mean there's no such thing as a warming trend.
If we are talking growth trends.
then the 12 years(and a few before) we grew at 3.2~3.4% peak to peak average. where as a regulated economy like western Europe grew at ~1.6% peak to peak. (hard to compare former communist countries)

And its not like bush got in office and OMG the bubble burst. he got in office began regulating the economy then 6 years later the economy had issues. an unregulated Economy would have likely produced far better results. A strong economy is not something that is free of its snags. Its just a strong economy deals with them well. Not counting recent history because i haven't looked at the numbers the worst stock market crash in history(bot % and raw numbers) occurred in 1987. the Dot com bubble occurred in the late 1990's In both cases unregulated economies were able to shrug these off.

Now we have a housing issue but a regulated economy and things go to crap.

...the Dot com bubble occurred in the late 1990's In both cases unregulated economies were able to shrug these off.

Now we have a housing issue but a regulated economy and things go to crap.

What??

The .com bubble was not 'shrugged off', it took longer than nearly any recession for jobs to return to their previous levels.

The regulation to ease it was lowering interest rates along with tax breaks aimed at the upper end earners, which led to the housing bubble.

I know. You're intractable too.

The current overall bad trend began in the 50s, related to inflation from the Korean War, and also related to Eisenhower's big spending programs like the Interstate highway system.
Is this anther seasonal NSG thing -- picking the one person whose argument you will never agree with, never crack, and most likely never understand and who states over and over that they don't want to pointlessly butt heads with you, and just keep poking and poking them? You're like the fourth person to pull this shit.

You are wrong. Period. Your statements are so divorced from reality that "wrong" hardly even applies, because there is no way anything like them could ever be right. You don't even try to explain how you think they are not wrong. You just blurt them out like some kind of debate-forum, long-winded Tourettes spasm. And you seem to think that is going to explain an argument or carry a point somehow. I feel like you're not challenging me to a debate so much as just a barking contest. Well, I'm sorry -- I don't buy your arguments, and I'm not interested in wading through the morass of your reasoning.

If we are talking growth trends.
then the 12 years(and a few before) we grew at 3.2~3.4% peak to peak average. where as a regulated economy like western Europe grew at ~1.6% peak to peak. (hard to compare former communist countries)

And its not like bush got in office and OMG the bubble burst. he got in office began regulating the economy then 6 years later the economy had issues. an unregulated Economy would have likely produced far better results. A strong economy is not something that is free of its snags. Its just a strong economy deals with them well. Not counting recent history because i haven't looked at the numbers the worst stock market crash in history(bot % and raw numbers) occurred in 1987. the Dot com bubble occurred in the late 1990's In both cases unregulated economies were able to shrug these off.

Now we have a housing issue but a regulated economy and things go to crap.
See above, apply to yourself as well.

As for growth trends, no "we" are not talking growth trends.

As for what Bush was responsible for, did I SAY Bush was responsible for it? No? Did I already point out that I wasn't blaming this on Bush? Yes? Guess what my next statement to you is going to be. Hint: It would be flamey, which is why I'm not going to say it.

As for what an unregulated economy could shrug off, do you call the current situation "shrugging off" setbacks?

I'm sorry, you and P are both full of shit, and I'm done arguing with people who can only be described by a term I won't use.

the Dot com bubble occurred in the late 1990's In both cases unregulated economies were able to shrug these off.

Dotcom bubble wasn't shrugged off. Bush and Greenspan intervened in the market by forcing down interest rates to unprecedented low rates in an effort to produce a new asset bubble to replace the deceased remains of the dotcom bubble. That new asset bubble was of course the recent famous real estate bubble.

But you're right, the free market should've been allowed to digest the dotcom bubble, instead of the government using hamfisted interventions to prevent liquidation at all costs, thus compounding and forestalling a relatively smaller bubble into a larger one for the hapless American people to deal with a couple years down the road.

Is this anther seasonal NSG thing -- picking the one person whose argument you will never agree with, never crack, and most likely never agree with and who states over and over that they don't want to pointlessly butt heads with you, and just keep poking and poking them?

You are wrong. Period. Your statements are so divorced from reality that "wrong" hardly even applies, because there is no way anything like them could ever be right. You don't even try to explain how you think they are not wrong. You just blurt them out like some kind of debate-forum, long-winded Tourettes spasm. And you seem to think that is going to explain an argument or carry a point somehow. I feel like you're not challenging me to a debate so much as just a barking contest. Well, I'm sorry -- I don't buy your arguments, and I'm not interested in wading through the morass of your reasoning.

Haha I'm sincerely not trying to "provoke" you. I'm wasn't attempting to provoke a response from you since we already know where we each stand. Rather my post fits in the context of my previous posts about origins of bubble economies in my discussion with someone else, not you.

Haha I'm sincerely not trying to "provoke" you. I'm wasn't attempting to provoke a response from you since we already know where we each stand. Rather my post fits in the context of my previous posts about origins of bubble economies in my discussion with someone else, not you.
Okay, cool then. I apologize for the snap. I'm on edge today because, as I hinted at in my earlier post, I've had people figuratively trying to hold me in place so they could talk at cross purposes to me for the past several days.

Why do you think the Tulip bubble occurred?

I'm looking forward to correcting ignorance.

It occurred because tulip bulbs became a fad among the wealthy. Then they stopped being a fad. That's why it's called the "Tulip Bubble".

It occurred because tulip bulbs became a fad among the wealthy. Then they stopped being a fad. That's why it's called the "Tulip Bubble".

Plenty of things become fads without becoming bubbles. Bubble requires inflationary speculative borrowing, which is predicated on specific conditions. In the Dutch tulip bubble's case these specific conditions were related to the overabundance of bills of credit from Spanish gold inflation.

Plenty of things become fads without becoming bubbles. Bubble requires inflationary speculative borrowing, which is predicated on specific conditions. In the Dutch tulip bubble's case these specific conditions were related to the overabundance of bills of credit from Spanish gold inflation.

That's what they get for not tiptoeing. *nod*

Plenty of things become fads without becoming bubbles. Bubble requires inflationary speculative borrowing, which is predicated on specific conditions. In the Dutch tulip bubble's case these specific conditions were related to the overabundance of bills of credit from Spanish gold inflation.

Well, the overabundance of gold full stop if we're really looking at the root cause.

The bubble occurred because there was plenty of money around because they had access to lots of gold.

What were they supposed to do with it, and it's not necessarily the case that the government controlled the gold anyway, private investors were involved as well, it was a gold rush.

And we've had a lot of deregulation, tax cuts, ecc. and seeing the disasterous results how can you call for deregulation and tax cuts.

Who's "we" pissant brat?

Who's "we" pissant brat?

Seriously, do you have problems, I mean honestly, if you do it's understandable but I can't imagine what you think your goal is,

You just find it amusing to insult people?
You think it's cool?
You've nothing to say so you just insult?


Just...just what is it?

I'm genuinely curious.

Plenty of things become fads without becoming bubbles. Bubble requires inflationary speculative borrowing, which is predicated on specific conditions. In the Dutch tulip bubble's case these specific conditions were related to the overabundance of bills of credit from Spanish gold inflation.

You're going to have to explain how this works. Where were the bills of credit coming from? They certainly weren't coming from a governmental entity, since bills of credit were issued by the banks at the time. Furthermore, why can't I find anything about the Dutch tulip mania involving bills of credit?

I think it's implicit from our discussion of asset bubbles in this thread that "better" here means "free of asset bubbles and credit crises."Perhaps so.

You're displaying the typical shortsightedness of the central planner type who believes that the fiat of production will always prevail and should be the only factor considered. In reality both production (supply) and demand determine the value of the media of exchange, and just because someone is "capable of creating media of exchange" and in fact does create and supply a particular medium of exchange doesn't mean there is demand for this medium of exchange. As empirical evidence demonstrates, the processes of free market supply and demand is an "evolutionary" process that selects against and suppresses unsound inflationary currencies so that only sound, noninflationary currencies remain.You are correct that producing a supply doesn't mean there will be a demand. However, demand can be produced just as supply can, so we can expect that demand would be created for these new currencies.