Why Does Keynesian Success Feel Like Failure?

The most terrible thing about the bailouts is that they worked.

With Hollywood hipster clothing boutiques declaring “Broke Is the New Black,” establishment media outlets circulating the tired phrase new normal to describe America’s four-year-old economic stagnation, and producers trying to capture the increasingly fragmented national mood with titles like Downsized and Two Broke Girls, it seems everybody has given up hope for an economic intervention that will bring about the long-promised American Recovery. 

In September a Bloomberg poll found that only 36 percent of Americans approve of President Barack Obama’s efforts to create jobs. Around the same time, New York Times reporter Jennifer Steinhauer lamented that some congressional Democrats oppose Obama’s $447 billion American Jobs Act “simply for its mental connection to” the 2009 American Recovery and Reinvestment Act. Also in America’s newspaper of record, Nobel Laureate Paul Krugman, a prominent voice in favor of Keynesian economic intervention, argued that the 2009 stimulus failed because it was not large enough to close a gap in aggregate demand. 

But the most important goal of the stimulus was achieved almost a year ago: Consumer spending returned to its pre-recession level in the last quarter of 2010. As Robert Higgs, the Independent Institute’s senior fellow in political economy and editor of The Independent Review, noted in a blog post this fall, Commerce Department statistics show that the rate of personal consumption expenditures was “continuing to grow” and as of the second quarter of 2011 was “even farther above its pre-recession peak.” Real government expenditure for consumption and investment had also snapped back to its pre-recession level and in the second quarter “was running more than 2 percent higher” in real terms, Higgs wrote.

So why aren’t Krugman and other Keynesian interventionists cheering? John Maynard Keynes’ general theory teaches us that now should be Miller Time. According to the standard macroeconomic model, you revive a stagnant economy by closing the gap in aggregate demand. Taking up the slack in demand is supposed to be the heavy lifting of an economic recovery, the part of the job so big only the government can do it. 

Boosting demand is considered crucial enough that it can justify drafting the young to fight in horrible wars, just to reduce the surplus labor supply. We know this from the standard schoolhouse wisdom that World War II ended the Great Depression (a notion that persists despite having been refuted by, among many others, Christina Romer, former chairwoman of Obama’s Council of Economic Advisers). During an amusing CNN exchange with economist Kenneth Rogoff in August, Krugman even argued that if the public could be hoodwinked into increasing inflation and deficit spending to prepare for a hoax invasion by space aliens, “this slump would be over in 18 months.” 

With or without E.T.’s help, the recession officially ended more than two years ago, in June 2009, according to the National Bureau of Economic Research. More important, Keynesian “equilibrium” was achieved last Christmas. Demand has been restored. The strengthening of the dollar and a threatened increase in the net saving rate have been, with vast and concerted public effort, averted. Interest rates are low or effectively negative. Deficit spending has more than doubled. 

And yet the economy stays narcotized. Month after month the Bureau of Labor Statistics reports unemployment above 9 percent, higher than it was when the 2009 stimulus became law. Even allowing for the usual lag in post-recession job growth, the employment recovery is by far the most anemic since the end of World War II. At the pace of hiring that has held for the last two years, the jobs lost in the current recession will not be replaced until at least 2018. 

“There’s really nothing in Keynesian theory that encompasses indebtedness—consumer indebtedness and corporate indebtedness,” Higgs said in a phone interview. “That’s why these guys are at sea. This boom was built on heavy leverage. People are looking back, and they’re saying, ‘We were crazy to go that deeply into debt. We have to change that.’ ” 

Higgs points out that while spending is back, investment remains low. The trillions of new dollars that have been created by the Federal Reserve Bank are being absorbed into critically ill balance sheets. “Firms, if they have cash flow, are repaying debt,” he says. “If they increase output they’re doing it with their existing work force, maybe augmented by new equipment or software.”

Higgs and others hold that money is staying in the vaults because of regime uncertainty. The Patient Protection and Affordable Care Act, passed in 2010, has created a new panoply of expenses for anybody looking to hire an employee, but the full range and nature of those expenses can’t be measured even by a team of lawyers. The Fed’s battery of fanciful tools—including paying banks interest on reserves and conducting rounds of quantitative easing by buying long-term debt while selling short-term debt—makes it even more difficult for nonpolitical figures to understand what the future holds. 

The seemingly simple solution to this problem—and my personal advice to anybody looking to sell a house or get a job—is to lower your asking price. But University of Georgia economist George Selgin, author of the deflation classic Less Than Zero, says letting wages and prices go where they want to go—namely, down—is not the solution. “I have defended deflation,” Selgin said in an interview, “but only if it’s driven by productivity gains.” He noted that the demand collapse occurred “in 2008 and 2009, when the Fed should have provided liquidity but was too busy bailing out its Wall Street buddies.”

“Demand-driven deflation is a very bumpy road,” Selgin continued. “Prices and wages are rigid downward. Today there are lots of rigidities in markets that aren’t going to come down easily. So that means any poor sucker who does his share and takes his cuts is going to be living less well and waiting for everybody else to take their cuts.” 

Still, a market-clearing deflation could be less painful than four years (and counting) of stagnation—less painful for everybody except Keynesians, who only know how to make prices go up, not down. On the evidence of the last few years, it’s not clear that they even know how to make prices go up anymore. But that may not matter, because the Keynesians are still in charge of everything. How do you like their new normal? 

Tim Cavanaugh is a senior editor at reason.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Officer, am I free to gambol?||

    Or are we going to keep big-government regulations on the Land that restrict free movement of people?

  • Libertarian Priestcraft||

    We've consecrated big-government enforced Land enTITLEment as a as human right.

    Other big government entitlements that we don't like are bad.

    It's government for me, but not for thee. Hey, selfishness is a virtue, right?

  • Officer||

    Move along or I'll arrest you for loitering trolling.

  • anon||

    Move along or I'll arrest you for loitering trolling gamboling.

  • Live Free or Diet||

    Yawn. We already established you prefer gamboling through your mother's basement and collecting your EBT.

  • Mom's Basement||

    There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.

  • Sam Grove||

    One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes.

    Although I read Rand's novels, I never got that part. Her villains are much more memorable, especially Ellsworth Toohey.

  • ||

    Why wasn't the part of Wesley Mouch played by Barney Frank?

  • chris||

    White Indian and Rectal sitting in a tree,

    M-A-S-T-U-R-B-A-T-I-N-G,

    First came the self love,
    Then came the Dennis Rodmanesque Marriage,
    Now comes Rectal with a baby carriage ( plastic doll sold separately)

  • White Useful Idiot/Rectal.....||

    .....are one and the same. One super-duper communist.

  • ||

    They could not tear "Barney" away from his favorite 3rd memeber.

  • Old Mexican||

    Re: White Imbecile,

    We've consecrated big-government enforced Land enTITLEment as a as human right.


    No need for government - try stepping inside my house. GO on, I dare you.

  • All have a right to shelter||

    Everybody has a right to shelter, OldMex, as it is necessary to survive in most climates. (I dare you to say the same thing.)

    [1] WHITE INDIAN EMBRACES LEGITIMATE, NON-STATIST ENFORCED PROPERTY

    White Indian embraces property, legitimate property, as human have for hundreds of thousands of years.

    What's the difference?

    • Legitimate property is the stuff one needs to survive or personally enjoy, honored for hundreds of thousands of years by humans living in Non-State sociopolitical typography.

    • Statist-enforced abstract ownership of Earth's resources well beyond what an "owner" can personally use or enjoy.

    [2] WHITE INDIAN EMBRACES CAPITALIST'S/LIBERTARIAN'S OSTENSIBLE JUSTIFICATION OF PROPERTY

    Libertarians justify property as the things and resources that are necessary to human *survival.* Examples are as follows:

    • ...if he must use and transform material natural objects in order to survive, then he has the right to own [property]... ~Murray Rothbard

    • [Property] Rights are conditions of existence required by man's nature for his proper survival. ~Ayn Rand

    [3] WHITE INDIAN REJECTS BAIT AND SWITCH

    The bait-and-switch chicanery that capitalists/libertarians engage in follows:

    • BAIT: I need to own some things on earth as property that I need to *survive* (or would enjoy personally.)

    • SWITCH: I need government to protect my "right" to own vast amounts of resources, *well beyond* what would ever be needed for a person to survive or enjoy.

    [4] WHITE INDIAN ASKS'um HEAP BIG QUESTIONS

    • How do the 1% need 40% of the wealth to survive (or personally enjoy?)

    • How do the 10% need 85% of the wealth to survive (or personally enjoy?)

  • ||

    "• Legitimate property is the stuff one needs to survive or personally enjoy, honored for hundreds of thousands of years by humans living in Non-State sociopolitical typography."
    This has never been true. Ever since the first man bumped into the second man, each has always claimed this is my path now get off of it.

  • Cite?||

    Something with empirical data would be nice. That excludes your libertarian canon.

  • Brother Grimm||

    No need to cite common knowlege.

  • The earth is flat||

    All kinds of bullshit beliefs were once "common knowledge."

    But thanks for acknowledging the paucity of your understanding of anthropology and archeology.

  • Brother Grimm||

    Hell of an accusation. Citation, please.

  • White Useful Idiot cannot.....||

    .....seem to find in The Constitution the right to shelter. COMMIE FAIL.

  • Mr. FIFY||

    There IS no "right to shelter".

    It made it up, like it makes up all its talking points.

  • There is no right to anything.||

  • fish||

    Rather for the love of god....the White Indian bit is so tired. How about a new personality....one with magical powers....maybe the ability to fly? He could go to a special school with others like him/her/....err you and ride a magical enchanted short school bus to get to this very special special place.

  • Libertopia! ||

    I could be Peter Pan, about the speed of most libertarians.

  • fish||

    Okay Rather this is a good start.

  • Brother Grimm||

    Now, now all of this well thought out and highly coherent argumentation is turning so many people away from libertarianism. After all, it's not like someone needs to be predisposed to believe this rhetoric. It totaly stands on its own merrits! Right?

  • fish||

    This one too!

  • White Useful Idiot fly away...||

    ...as soon as she get next yeast infection!

  • Gilbert Martin||

    "Legitimate property is the stuff one needs to survive or personally enjoy, honored for hundreds of thousands of years by humans living in Non-State sociopolitical typography."

    Nope.

    That notion is every bit as much an artificial construct as the one you keep screeching about.

    And you aren't the least bit capable of proving it is one iota more legitimate in any way than the other one.

  • Civilis||

    What's even funnier is that WI destroys his own argument and doesn't even realize it.
    "Legitimate property is the stuff one needs to survive or personally enjoy"
    A socialist government will immediately note that one don't need all that gamboling space to survive, and therefore they are justified kicking out the primitive 100 gambolers so they can replace them with the 1000000 serfs that can be fed and housed in the same space with modern agriculture.

    WI's just pissed that his primitivism lost the past 6000 years of history and he wants a do over.

  • That makes no sense.||

    But then it's from a city-Statist.

  • Civilis||

    If primitive agriculture requires 1 sq. mile to feed 1 person, and modern agriculture can feed 100 people per square mile, then the primitive doesn't need 99% of the land he has as he can survive like the others on .01 square mile, and the socialist who believes "legitimate property is what you need to survive" is justified in taking 99% of the primitive's land...

  • Mr. FIFY||

    It still has yet to explain how seven billion people could possibly live the Shackbrah Life.

  • ||

    It doesn't want that. It wants 99.9999% of them to die the fuck off.

  • Mr. FIFY||

    Good point.

  • Civilis||

    There's lots of places where he defeats his own arguments and this is a dead thread so I decided to shoot fish in a barrel and practice my atrophied rhetorical skills on a very deserving target.

    WI doesn't realize that libertarian philosophy is the only philosophy which will allow him to gambol across the plains, provided they are his plains. Of course he doesn't own any plains to gambol across, but that's a side effect of 40000 years of history, which conclusively demonstrates that agricultural civilization beats barbaric primitivism hands down; 7 billion people can't be wrong. Even if you magically redistribute the surface area of the world evenly, he still doesn't end up with the land he needs to live his primitive lifestyle.

  • ||

    White Indian, aka Jason Godesky, is a sociopath. Here at Reason, quoting Stanley Crouch in another context, he is a sort of John Wayne Gacy in his clown suit.

  • Mr. FIFY||

    Man, after looking up Jason Godesky, now I have even *less* respect for White Indian... and I had zero respect for him before that.

  • Coming from a buffoon...||

    ...I'll take that as a compliment.

  • Mr. FIFY||

    Whatever you say... Jason.

  • Really...||

    .....a fat computer programmer! Really? Shit I take it all back.... you are free to gambol.....and I suggest you gambol a lot you Twinkie snorting tub o guts!

    Shit! I might actually have to apologize to Rather.

  • Mr. FIFY||

    "Anthropik"

    Did he write that on a laptop in his Pontiac Aztek?

    How fucking laughable.

  • Did you drive public roads?||

    How fucking laughable.

  • ||

    Yea well commie-tard try saying that at my house. You will be digging your own grave at gun point.

    My is mine, no part of it will ever be yours unless we trade/sell for it.

    You think the collective is more important than the individual, think again.

  • Officer||

    No

  • ||

    Thanks for the gambol, Mickey!

    Thanks for the gambol, Popeye!

  • Your Guardian Ad Litem||

    "Officer, am I free to gambol?"

    Not until you take your meds, sorry.

  • Soviet Psychiatry||

    Thank you for your diagnosis of political dissent, comrade zampolit.

  • Off White Indian||

    Sometimes my brother the White Indian will do benefit gigs....you know...like Johnny Cash did at Folsom prison.

    Here's a snippet of his last gig.....

    Here we go. [plays a steady rhythmic riff] Hey, this guy's good. [sings] "Well, I'm gambolin', gambolin' 'round, I'm a gambolin' guy, I'm gambolin', oh, yes, oh, yes!" [whistles poorly, shrugs, speaks] Free to get in. [sings] "I'm a gambolin' guy - G-A-M-B-O-L-I-N apostrophe, oh yes, I'm gambolin' -- Ga day. Oh, yes." [speaks] Okay, everybody! "I'm a gam--" Come on! Sing with me! Come on, have some fun, come on! "Gambolin' ..." Are you people uptight or somethin'? You can't sing along--? Oh, I forgot... New York. [applause, keeps playing] Okay! All right, ladies only! "Oh, look! A gambolin' guy!" Come on! Okay, this half of the room! Beautiful! Now this half! Good, good! All right, two fifths! Now, three-fifths! Good. Seven-ninths! Two-ninths. All right, in Chinese now! [sings Chinese gibberish, then sings in English:] "Well, I'm gambolin', gambolin', gambolin', gambolin', gambolin', gambolin', gambolin', gambolin'! Gam! Boh! LINNNN!" [suddenly launches into a long, snappy, complex banjo instrumental, smiles and raises eyebrows at audience, stops, takes a fake arrow-through-the-head prop from the stool and puts it on] I like to keep the laughs rolling even while I'm playing. [finishes banjo tune triumphantly] Heyyyy....I'm Rather/Rectal/White Indian/The Derider/etc....and I'm we're here all the [TIME]! [applause]

    If you would like a copy so you can here this huge talent in the comfort of your home....or padded cell please feel free to purchase the album....The Voices in My Head via ITunes or pick it up in person at your local WalMart!

  • Scruffy Nerfherder||

    "It's just another manic Monday..."

  • My Myself and I||


    2011 Gambol for Visual Art

    2011 Gambol for Visual Art
    Curated exhibition of finalists for the Gambol and salon-style display of work by all entrants
    December 2, 2011 - December 30, 2011
    MAIN GALLERY AND PROJECT GALLERY
    Opening reception December 2, 2011 6:00 PM - 8:30 PM

    Art League Houston announces the selection 39 artworks by 30 artists for the 2nd annual Gambol, its juried exhibition of work by Texas artists. Mary McCleary, 2011 Texas Artist of the Year, curated the main gallery exhibition of paintings, sculptures, drawings and mixed media from the more than 400 submitted artworks. On Friday, December 2nd at 7 PM at the Art League, one artwork will be named by McCleary as the 2011 Gambol for Visual Art.
    In a change from 2010, the Art League will display one artwork by each of the 187 Art League members who submitted to the Gambol. The works will be presented in tightly packed, salon-style on the walls of the project gallery, hallways and studios. The curated exhibition of finalists and the salon-style display will be open, free to the public, between December 2 - 30, 2011.
    Presenting works by hundreds of artist members and curating a selective exhibition by renowned artist and educator Mary McCleary matches our goal of broad participation while identifying artistic excellence. Through the Gambol and all our programs, the Art League advocates for the expansion of the number of people who have decided to be visual artists as a profession or a passion. As the new Executive Director Glenn Weiss has said: "There is no such thing as too many artists.
    Artworks by the following artists are finalists for the 2011 Gambol for Visual Art with its $1,000 cash prize and are exhibited in the main Art League gallery.
    Kelly Alison, Darwin Arevalo, Trudy Askew, Daniel Brents, Vachu Chilakamarri, Ruben Coy, Karon Davis, Sue Donaldson, Fran Fondren, Raul Gonzalez, Caroline Graham, John Grisaffi, Claude Habayeb, Maria Hughes, Ken Mazzu, Nicola Mosley, Anita Nelson, Preetika Rajgariah, Fernando Ramirez, Carrie Reeder, John Robertson, Diana Rodriguez, Magid Salmi, Kay Sarver, Emily Sloan, Damon Thomas, Sherry Tseng Hill, Patrick Turk, Nina Wickman, Robertson Wiley

  • Slowburnaz||

    The new normal sucks ass

  • ||

    why does Keynesian success feel so much like failure?

    It certainly cannot have anything to do with the complete lack of long term sustainable wealth creation as embodied in our various "rescue"plans.

    It must be anti-intellectual Teabagsterdz holding us down.

  • o3||

    "Why Does Keynesian Success Feel Like Failure?"
    _

    In fact, in 2009, representatives of many of the nation’s most powerful corporations attended the “2009 Strategic Outsourcing Conference” to talk about how to send American jobs overseas. Conference organizers polled the more than 70 senior executives who attended the conference about the behavior of their companies in response to the recession. The majority said their companies increased outsourcing in response to the downturn, with only 9 percent saying they terminated some outsourcing agreements"
    Why Does Keynesian Success Feel Like Failure?

  • o3||

  • Sevo||

    Well, look over there!
    WIH does your comment have to do with the article? Jingoism wasn't mentioned.

  • o3||

    because US corporate keynesian successes are happening overseas. duh

  • Hassan Chop||

    And that means you're not a jingo how?

    They aren't "American" jobs asshole, they're just jobs, and you're a jingo.

  • shorter hassan||

    what sevo said

  • Sevo is my political officer.||

    Da, comrade.

  • Sevo||

    Yeah, all those Euros are just rioting since they've found jobs.
    Or are you not only a jingoist, but a racist?

  • Art Vandelay||

    Or are you not only a jingoist, but a racist?

    False binary, in this instance.

  • Hassan Chop||

    "to talk about how to send American jobs overseas. "

    So you're a Jingo?

    How sad for you.

  • o3||

    Jingoism is defined in the Oxford English Dictionary as extreme patriotism in the form of aggressive foreign policy.[1]

    http://en.wikipedia.org/wiki/Jingoism

    _

    my posted info, & link, was about CORPORATE conduct, not US foreign policy. duh

  • Sevo||

    OH! A Wiki-cite!
    Ad terminally stupid to jingoist and racist.

  • o3||

    explain how discussing CORPORATE keynesianism is any of those things ?

  • Shorter Sevo||

    luv me some kochs

  • Mr. FIFY||

    Between the Wiki-cite and the "thinkprogress.borg" reference... which one is more full of shit?

  • Art Vandelay||

    http://en.wikipedia.org/wiki/Jingoism

    Wikipedia: "The Oxford Concise of the Weekly Reader set."

    To coin a phrase: duh.

  • Almanian||

    *sigh*

    Timmeeeeeeeeh. Timmeh timmeh timmeh. Timmeh! Timmeh timmeh timmeh timmeeeeeh - timmeh timmeh.

    Timmeh timmeh timmeh.

    TIMMEH!

  • ||

    Keynesianism is the Scientology of economics.

  • Almanian Keynes Scientologist||

    BACK OFF OR WE'LL SUE!!

  • anon||

    +fucking 1

  • moop||

    back in college we thought about naming our band "xenu and the thetans" part of me still wishes we had.

  • Market Clearing Famine||

    "The free market means that those without money to buy what they need do not have the right to live." ~John McMurtry

  • The Ingenious Hidalgo||

    It also means that those with money to buy what they need do not have the right to live either - since nobody is obligated to sell to them.

  • Invisible Finger||

    Now apply that same principle to government.

  • johnl||

    JMK was against Versailles on the grounds that it would lead to a new war. It's a little unfair to peg WW2 as a Keynesian project.

  • ||

    And yet the economy stays narcotized.

    Or, perhaps, necrotic.

  • anon||

    If only it were erotic.

  • Almanian||

    Again, for the record - my company is positive cash flow and net surplus billions since 2009. Making money - solid profits for two years straight now.

    We're not hiring a soul until we see something besides the Bamster's "economic policy" in play. Too much uncertainty. And too much certainty that whatever the gummint does will probably not be helpful to our bottom line (see every recent NLRB decision, Obamacare, EPA carbon decision, automaker mileage requirements, OSHA, banking regs, failure to repeal/modify Sarbanes/Oxley, Dodd/Frank, etc. etc. etc. ad fucking nauseum)

    Fuck Obama and fuck Congress and fuck the US government in general. And fuck you if you want a job - sorry.

  • Sevo||

    It's sort of looking like capital is going Galt.

  • anon||

    You make the mistake of assuming it's not mostly being destroyed before it can flee.

  • #OccupyWallSt = #goingGalt||

    refusing to lend their productive genius to the regime any longer

  • Red Rocks Rockin||

    What productive genius have art history and poli-sci majors actually contributed to ANY regime?

  • anon||

    They produce a lot of bullshit, from what I can tell.

  • Wesley Mouch goes ape on #OWS||

  • Bobarian||

    Soylent Green?

  • ||

    Hey! I was a Poli-Sci major!

  • Sevo||

    "refusing to lend their productive genius to the regime any longer"

    Texting /= productive anything.

  • I feel productive here.||

  • Live Free or Diet||

    Atlas Vaults?

  • Robert||

    Could you please send me some money? The last job I thought was possible for me to got (at a ridiculously low price for the scientific service and having to pull strings to make even that possible) just fell thru today (meaning the project it would've been required for must've been abandoned -- or else someone's selling them a bill of goods for less than a legitimate job is possible for), and I don't know how I'm going to pay my $800 rent on Thurs. I was 45 days behind on my rent until I caught up with a loan 2 weeks ago.

  • Spoonman.||

    What do you do? My company wants lots of sciency types.

  • Robert||

    I'm a Ph.D. biochemist. I've worked in medical device R&D and radiology and cancer research, maintained an AIDS database, been a medical editor and computer programmer, taught plenty of science, and even coach football. I've also been a hemodialysis tech and got more than halfway thru med school. Now I'm supposed to be managing clinical trials, but we spend all our time in preparatory work for studies that never come off.

  • ||

    Same thing at my company. We've been making money hand over fist throughout the recession, but we ain't hiring. The bosses tell me reason number one is no one has any idea what an employee will actually cost.

  • Lord Humungus||

    My company (the one I work for, not my blackmarket operation) is also cash positive. We are hiring in drips and drabs... only the bare minimum we need to meet production goals.

  • ICP||

    And fuck Lyle Lovett, whoever that is!

  • ||

    The majority said their companies increased outsourcing in response to uncertainty regarding the marginal cost of labor.

  • Mike M.||

    Why Does Keynesian Success Feel Like Failure?

    It's mostly because the anti-American, lowlife piece of garbage in the White House adamantly refuses to let anyone create real, productive jobs. Keystone Pipeline? Sorry buster, we'd rather you just stay on unemployment.

    The only jobs this creep wants to be created are bullshit fantasy jobs, like building worthless cylindrical solar panels, or $40,000 battery-powered cars where the battery explodes on you.

  • anon||

    Come on now. First of all, nobody's buying the 40k go-kart, and second, they merely catch fire, not explode.

    /sic

  • Robert||

    I'll take the job.

  • sarcasmic||

    But government spending comes from the money tree!

    When government bonds are sold to investors, investment in private enterprise isn't crowded out .
    How could it? That is not its stated intention so it cannot be so.

    When the Fed prints money the currency is not devalued.
    How could it? That is not its stated intention so it cannot be so.

    When the government takes in money and then pays bureaucrats to produce nothing of value, then returns that reduced amount of money to politically favored causes, this has a net multiplier effect.
    That's right. $(x - y) < $x where x < y and both x and y are positive numbers.
    I know. I know. That breaks all the rules of standard mathematics, but Congress has amended those rules so now 2 + 2 = 5 if the government says so.

    Yes, government spending is the answer, and we need more of it.... stat!

  • anon||

    If only I could reconcile being a federal employee with my morals, I could be rich. Damnit...

  • sarcasmic||

    ******correction*****

    $(x - y) > $x where x > y and both x and y are positive numbers.

  • St. V||

    Thank you for the correction.

  • St. V||

    Wait a minute...

  • Major Johnson||

    Actually no one is trying Keynesian economics, at least as I understand it. Keynes did state that deficit government spending can be used to support the economy in times of severe hardship, but my understanding is that his model also states that spending must be reduced and debts paid off immediately after. What happens now is deficit spending before, during and after a downturn. It's like saying America is great because it's a democracy when it's actually a constitutional republic. Something is being touted or denigrated without the slightest understanding of what that thing even is.

    Possibly a better understanding of Keynes economic theories would be helpful, I certainly am no expert (or even novice) in the subject. How about an article on what exactly what Keynes postulated Reason, or have I missed that one?

  • anon||

    You have a pretty accurate summation of Keynesian economics.

    The problem is that Keynesian economics is that it generally prolongs the downturn which necessarily increases spending, exacerbating the problem, creating a death spiral.

    But what's being tried now is some kind of post-keynesian nightmare. It's still within the economic school of thought though.

  • veemee sashimi||

    Another problem is that Keynes was hopelessly naive if he thought that the orgy of spending was going to stop once things started going good. It goes against a couple thousand years of human observation to think it would.

  • Sevo||

    Exactly.
    Keynes works when the unicorns fly in.

  • Tony||

    And libertarianism never works, not even with unicorns.

    You can't blame Keynes for the phenomenon known as the Republican Party.

  • Sevo||

    "And libertarianism never works, not even with unicorns."

    Shithead, the closer we get, the better off we are.
    Ever hear of Hong Kong, shithead?
    -------
    "You can't blame Keynes for the phenomenon known as the Republican Party."

    Who do you blame for your abysmal stupidity, shithead? Were you born stupid, or did you have to work at it?

  • shithead shithead shithead||

    So Reasonable, you can't logically deny it.

  • ||

    Libertarianism works just fine, if you work.....kinda like Capitolism Tony if you do nothing you reap what you sow. So since you hate both Capitalism and Libertariansm feel free to move and practice your life long loin shivering goal of collective life in North Korea. You will fit right in....idiot.

  • Tony||

    And libertarianism never works, not even with unicorns.

    You can't blame Keynes for the phenomenon known as the Republican Party.

  • Old Mexican||

    Re: Stoopid In Amerika,

    You can't blame Keynes for the phenomenon known as the Republican Party.


    Because the Republicans are lousy Keynesians, or because they're good Keynesians? Which one is it, sockpuppet?

  • Tony||

    Lousy Keynesians about covers it. Most of the country's debt problems are their doing, false equivalence head-in-the-sand bullshit notwithstanding.

  • Mr. FIFY||

    Unicorns with wings couldn't make liberalism work.

  • ||

    Liberalism is its own worst enemy.

  • Rob||

    Funny as we watch as Tony's economic model implode once again in Western Europe as it did in The Soviet Union, South America, Cuba etc. etc., he claims that another ideology is the root cause of the world's ills. Dude, what your peddling has never, ever worked in the history of the world.

  • Mercurus||

    It's working perfectly. Keynesianism is in economics what poison is in a living being: the agent of its death. Death by Keynes is slow and painful.

    J.M. Keynes hated success, hated wealth and hated mankind. He wasn't naive, he was EVIL.

  • John Maynard Keynes||

    In the long run we're all dead.

  • Maxxx||

    Another problem is that Keynes was hopelessly naive...

    A bigger problem with Keynesianism is that it's an intellectual polish on Marxist turds.

    Marx - Depressions are caused by the inherent contradictions of capitalism wherein productive capacity always exceeds consumption because of hoarded profits.

    Keynes - Depressions are caused by a fall in aggregate demand(not enough consumption)when the animal spirits of investors turn from exuberance to fear.(leading to them hoarding profits)

  • John Maynard Keynes||

    He's right about the "animal spirits" part. I was FUCKED UP (friend got me some killer peyote) when I wrote that shit. I can't believe anyone actually believed me.

  • Major Johnson||

    I don't find what I do know of Keynesian economics to be attractive, at best it sounds like a bad idea to me. But many of the posts seem to bear out my feeling that there are some people out there with incredibly strong opinions on a subject they don't actually understand. Instead of arguing the merits of the economics it's generally an argument on the naivete of Keynes to trust politicians or it will never work or some such generalization that fails to address the shortfalls or benefits. Advocates do the same, I'm not even sure Nobel award winning ex-Enron adviser Paul Krugman actually understands it or just uses it as a pretense to spout non-sense.

    I do know one thing, if Krugman is for it I'm against it. That's how I managed to become one of the 1%, listening to Krugman and betting the opposite.

  • o3||

    "How about an article on what exactly what Keynes postulated..."
    _

    because libtoidz arent the slightest bit interested in ACTUAL keynes...only the RW memes

  • Old Mexican||

    Re: Moo,

    because libtoidz arent the slightest bit interested in ACTUAL keynes...only the RW memes


    I'm sorry, I wasn't paying attention O3: Did you moo something?

    By the way, what happened to writing actual English? Yoo gut tird of it 2 esly?

  • Lord Humungus||

    So Old Mexican writes (and understands) English better than an Ohio native. Of course Ohioans aren't noted for their intelligence and having some of the worst work ethics I've ever run across.

  • o3||

    i ll respond when im done loafing...or something ohioian. furp derp

  • Sevo||

    So, terminally stupid, jingois, racist and now liar.
    Keep it up; you're on a roll.

  • o3||

    moar RW memes

  • Sevo||

    "moar RW memes"
    Don't like being called on bullshit?
    Don't post it.

  • No post no post onthemargarita||

  • ||

    Keynesian economics is just a brand name for big government. Whatever economic points he made have long since been ignored or forgotten.

  • o3||

    except for those w real knowledge of keynes rather than radio entertainment

  • Reason and Rush||

    Same religion, different sects.

  • ||

    If you had any understanding of Keynes you would agree with me because nothing that has been done in the name of "Keynesian economics" in the last 20 years bear any resemblance to what Keynes actually said.

    And look you fucking half wit, the right wing line is that Keynes is evil. I don't think he was evil. I am saying his ideas have been grossly distorted and misused.

    So do us all a favor and shut the fuck up unless you have something interesting to say.

  • anon||

    I think we had this discussion before and arrived at the conclusion that Keynes wasn't evil, just not very bright.

  • Sevo||

    You're right about how Keynesian econ is only half-used, but that's sort of the inevitable result.
    Keynesian econ relies on an unrealistic condition much as communism relies on the New Soviet Man.
    A government which returns surpluses to the taxpayer is every bit as likely, and for that reason we will never have a true Keynesian effort no more than we'll have true communism.
    Both need unicorns.

  • Surly Chef||

    This.

    Whatever my disagreement with Keynes's ideas of economics might be this is the premise that destroys his entire argument. Requiring the pols to use their power in a measured and responsible way when given near absolute power for a theory of economics to work is as good as saying that it doesn't work to begin with.

  • Old Mexican||

    Re: Major Johnson,

    Keynes did state that deficit government spending can be used to support the economy in times of severe hardship,


    And he was wrong. The stupid twit really thought that economic activity was all about spending, as if money burned one's hands.

    [...]but my understanding is that his model also states that spending must be reduced and debts paid off immediately after.


    And the stupid twit [Keynes] really thought spendthrift politicians would play along with this.

  • o3||

    wrong since keynes also advocated debt & spending reductions PLUS monetary & fiscal stimulus.

  • Major Johnson||

    I didn't ask if Keynesian economics was good or bad, I asked if anyone actually knew what they were talking about when they discuss it.

    Your premise that he should have known politicians would misuse his system is no more valid than that John Madison should have known that people would eventually turn his constitutional republic into a democracy.

    Saying that doesn't mean you have the slightest idea what the constitution even says and is pretty much the argument I keep hearing that makes me think few people know enough about the subject to fill a gnats navel yet have incredibly strong feelings toward or against it.

  • Invisible Finger||

    but my understanding is that his model also states that spending must be reduced and debts paid off immediately after.

    That should give you an idea of how completely bereft of historical knowledge Keynes was.

    Therefore the man's economic philosophy should be ignored with extreme prejudice.

  • Tim Cavanaugh||

    Ah, my old friend True Keynesianism! We meet again!

    You are correctly stating Keynesian theory. However, the admonition to pay down debt in flush times has never been put into practice. I don't know whether that's because Keynes didn't understand the nature of politics or because politicians only took what they wanted from Keynesian theory. In any event, it's what history has shown to happen again and again. On this planet, Keynesians do not reduce spending during boom times.

    In fact, I'd be happy to be bound by Keynesian debt reduction theory if the Keynesians were bound by it too. But I have yet to hear anybody in the Krugman/DeLong school say that, well, we just can't keep on inflating deficits now because we didn't pay them down during the boom. And those guys are the intellectuals: If even they won't reckon with the debt, you can't very well expect politicians to do it.

  • fish||

    because politicians only took what they wanted from Keynesian theory.

    Capitalize the "b" and you could have been done.

  • Mercurus||

    Keynes did not make the mistake of trusting politicians to reduce spending during boom times. He counted on them to NOT reduce spending at all. Politicians have not changed since the Pharaohs, why would he count on them to be any different now?

    The only way to stop a politicians from wasting the public treasury is to bury them 6 feet deep.

  • anon||

    I'm pretty sure Krugnuts actually said that we can just inflate away the debt. I am too lazy to cite it though.

  • tim tim tim||

    version 1:
    why is tim's mom so fat?
    because he insists she stop eating fatty foods of any kind, without doing anything about the carbs. result: she can still eat a dozen bagels a day, as long as she refrains from the cream cheese.
    result: she's still obese
    conclusion: tim, don't give diet advice.
    version 2: why are we in so much shit?
    because we (tim) insists on stopping the "keynesian" stimulus (~$1.5 trillion) without doing anything about the monetary stimulus ($7.7 trillion - see this) or the non-recession defecit spending ($1+ trillion - see this)
    result: we're still in debt, perpetually
    conclusion: tim, don't be a "journalist"

    disclaimer: all "stimulus" is bullshit - the market works, i.e. our "free market" would work better without the state-sponsored banking cartel

  • ||

    The problem isn't a lack of understanding. Most people do understand and you are essentially correct.

    The problem is it doesn't work at all. You will never get to the break even point so long as you keep spending. So what the hypothetical Keynesian would do once their policies succeeded never eventuates.

    The multiplier is always below unity in any time frame in which you pay off the initial expenditure. This has been demonstrated. (See Moountford, Uhlig, Barro, etc)

    Even a deficit funded tax break loses money in the long run, despite what Reagonmics lovers think. (To be fair, a deficit funded tax stimulus does perform much better than a deficit funded spending stimulus, but it still is a net negative)

    The reason no one talks about what would happen when K policy succeeded is because it cannot succeed, and thus never has.

  • Libertarian Regulators||

    Why do Libertarians think they have a "right" to big-government Land EnTITLEments regulating the free movement of people?

    Aren't all entitlements a sort of welfare, a sort of privation of others enforced by the government?

  • anon||

    Being such an genius producer of bullshit, I'm going to assume you either have or are working on a history or poli sci degree, as referenced above.

  • Libertarian Regulators||

    1. Wrong assumption.

    2. You're still evading the question, and refuse to identify Land enTitlement for what it is: a big-government regulation of the surface of Mother Earth to restrict the free movement of her children.

  • Mercurus||

    Just say no next time...

  • Old Mexican||

    Re: White Imbecile,

    See if by asking loaded questions you're going to stop that grizzly bear from making you cry like a little girl while tearing you to shreds if in your "original affluent society."

    Like a little wussy girl.

  • Poodles vs Wolves||

    Oh dear, I've frightened the submissively domesticated poodle who trembles at the mere word wilderness. It's an agricultural city-Statist bootlicker, psychologically projecting it's fear of running with the big dogs.

    Hey, Old Mex, it's your dad, third picture down.

  • Old Mexican||

    Re: White Imbecile,

    Oh dear, I've frightened the submissively domesticated poodle who trembles at the mere word wilderness.


    Ha ha ha!! The little wussy girly man that would wet himself at the sight of a wolverine if having to be in his "original affluent society" comes up with such strong words!

  • Original Affluent Society||

    Awwww....you remembered! Good boy! Wanna poodle treat?

  • ||

    I can tell Pale Aborigine has never dealt with a real (standard) poodle. They are some of the meanest, most territorial dogs around.

  • Domesticates must compensate||

    ...somehow. And about as fearsomely as OldMex nipping at my heals.

  • fish||

    Hi Rectal.

  • Concerned Citizen||

    I think he goes by Jason Godesky, computer progammer. Not exactly Grisly Adams.

  • Brother Grimm||

    "Why do Libertarians think they have a "right" to big-government Land EnTITLEments regulating the free movement of people?"

    We don't. Simple, really. Despite even the most twisted, pseudo-intellectual, moronic bullshit anyone (meaning you) can throw at it.

  • Libertarian Regulators||

    Since when do big-government enforced property borders not regulate the free movement of people to gambol about plain and forest?

  • Brother Grimm||

    Case rested.

  • Major Johnson||

    Libertarians believe in property rights, with property rights comes the right to restrict access to that property. I happen to be a part owner of the U.S.A. and would like to have some say in who can come onto my damned property. I didn't say they can't come in, I just expect them to ask permission first. Out here in the wilds of South Carolina not doing so can get you turned into buzzard poop.

  • Libertarian Regulators||

    At least you're honest about the aggression necessary to protect big-government Land enTitlement borders.

  • And you, White Useful Idiot...||

    ....are completely dishonest about big-government. Stupid Marxist.

  • Libertarians = Marxist||

    Both are agricultural city-Statists. I'm not. That makes you dishonest. Stupid Libertard-Marxist.

  • ||

    I would engage you on the topic of real estate vs other capital, it's a valid topic, without the easy resolution that some, even someone I admire as much as Rothbard would suggest. Similarly IP right theory.

    But judging from the incoherence and confused in the posts you make I'm pretty sure I could argue your side better than you could, so it would be a bit pointless. Too bad.

  • Old Mexican||

    Consumer spending returned to its pre-recession level in the last quarter of 2010. So why does Keynesian success feel so much like failure?


    Because economic activity is not driven by spending, you silly-willy! Consumption is the end of the process, but the driver is production. Without production, there's nothing to consume.

    The net result of leveraging consumption is, of course, indebtness, as well as inflation.

  • The Net Result||

    The Net Result of leveraging the soil's fertility with the illusory benefits of agriculture is, of course, deforestation, desertification, "farmed-out" soil, and famine.

  • Old Mexican||

    Re: The Net Result,

    ... Of the Amerikan Pulbic Skool Seistem is White Imbecile.

  • White Indian...||

    ...didn't attend public school.

    Hence, White Indian is not encultured by compulsion to cravenly bootlick the agricultural city-State.

    But OldMex, a submissively domesticated poodle who trembles at the mere word wilderness, is an agricultural city-Statist bootlicker.

  • Old Mexican||

    Re: White Imbecile,

    ...didn't attend public school.


    I advisde that you try to get your money back then, White Imbecile.

  • "I advisde"||

    I advise that poodles can't gambol over plain and forest, OldMex.

    Step up big or stay home.

  • annonymous commenter some guy||

    I left the board for 2 whole weeks. I expected this nonsense to have burned itself out by now.

    Do you enjoy these antics? If not, why do you participate in them?

    Don't get me wrong, OM. I'm not mad. I'm just trying to understand whether you're sadistic or masochistic.

  • Neither. OldMex is in love.||

  • fish||

    Nahh Rectal is unemployed....and given the manic nature of her posts....unemployable! What else would she be doing?

  • annonymous commenter some guy||

    Get bored and go to another board.

  • sarcasmic||

    Consume more than you produce and you become poorer.
    Produce more than you consume and you become richer.

    The net result of using the government to suck money out of the productive sector and funnel it into consumption, consumption of anything in order to boost "aggregate demand", can only make us richer. Right?

    Wait a minute...

  • Dolpins consume more than they||

    ...produce.

    As did humans for for millions of years, up until the advent of "production."

    Capitalists and Communists alike have an agricultural city-Statist fetish for production.

  • sarcasmic||

    All dolphins "produce" is shit, piss, and babies.

  • How do they survive without...||

    ...our dearly beloved agricultural city-Statist fetish of production?

    "Production is the application of reason to the problem of survival." ~Ayn Rand, Capitalism: The Unknown Ideal, p.195

    Ayn should have checked her premises better.

    What do dolphins produce? Squirrels? Crows? Elephants? Bonobos? Survival, how do they do it?

  • Charles Darwin||

    They produce dolphins, squirrels, crows, elephants and bonobos

    What was your question again?

  • Afterbirth=capitalist product||

    Libertard told me so.

  • anon||

    Pretty sure they produce rape too.

  • City-Statist Production Fetish||

    Oh, rape is a product. That was so libertarian of you to mention it.

  • Capitalists and Communists....||

    WHite Useful prefer Communists. Yah!

  • Libertarian=KOCH useful idiots||

  • o3||

    no, produce more than consumed & tie-up $$$ in idle inventory.

    >gosh, lean manufacturing...how do it work?

  • ||

    Two weeks is up already? Aw, man.

  • Barney The Frank||

    I am retiring from Congress, but will continue to suck cock and take it in the ass.

  • o3||

    one can see that old congressional habits die hard. very hard...

  • Charles Darwin||

    I figure you just saw how much Gore was raking in and realized it pays better to be a global climate whore than a federal slut

  • Barney Frank ||

    They're ending the congressional page program...no real reason to stick around if the perks are going away and I hear Penn State is looking for an assistant football coach.

    Anyway you won't have Barney Frank to kick around anymore.

  • annonymous commenter some guy||

    Scary scenario:

    In the near future technological advances replace all forms of manual labor. (i.e. It is always cheaper to use a machine than to use a human for non-skilled positions.)

    Furthermore, it turns out that many/most people are simply incapable of effectively doing any form of labor other than manual labor.

    I know this is a bit outlandish, but in theory, how would this large portion of society survive? Life's necessities would be very, very cheap, but these people would have no income at all.

  • sarcasmic||

    There will always be new wants and desires that have not yet been automated.
    The act of automating itself requires human hands, as do the automated tasks themselves.

    The only barrier to the survival of "this large portion of society" is the government erecting barriers to bringing new yet-to-be-automated ideas to market.
    Minimum wage and licensing come to mind.

  • annonymous commenter some guy||

    I think you missed my point. In this hypothetical future, the only people with jobs will be the ones programming the machines that do the physical labor. If you can't learn to program or manage programmers, then you are out of work.

  • sarcasmic||

    But what about new ideas?

    People always want something new. The first ones to provide it do not do so with automation. That comes second, and only if the idea is popular (most aren't).
    Why do you think people start new businesses?

    There will never be a time when all ideas have been tried. Human imagination and ingenuity is too great.

    As long as new ideas that have not yet been automated are being tried, then there will be work for the unskilled. Since goods produced by automation will be dirt cheap, even unskilled labor will have sufficient earning potential for a decent standard of living.
    Heck, when you compare the basic standard of living today to a century ago, the poorest of a century from now will have it better than the wealthiest of today!

  • annonymous commenter some guy||

    I understand all that. But the act of creation is, itself, a skill. All new inventions come from a small subset of society.

    Let me rephrase myself: Right now there are people who cannot contribute to society. Those with severe mental or physical disabilities may be capable of producing a small amount, but it is not enough to ever make them worth hiring. What if technology is slowly raising the bar? Say 500 years ago you only needed an IQ of 40 to be able to produce something of value. Nowadays maybe you need an IQ of 50 to be useful. How high can this limit go?

  • sarcasmic||

    Right now there are people who cannot are not allowed to contribute to society.
    ftfy

    The limit is not a result of technology. It is a result of government interference in the market.

    Much automation is a direct consequence of prohibiting feebs and tards from selling their labor for what it is worth.
    When was the last time you saw an EOE recipient and McDonalds? Probably before minimum wage was raised to the point where it was cheaper to invest millions and millions of dollars to automate the pouring of drinks, than to do the politically correct thing and let a certified moron do it.

    How high can this limit go?

    As high as the imaginations of politicians can take it.

  • anon||

    I'd like to point out that the only people that are not people who are unable to contribute to society except for those who are in a coma. And even those contribute to adding jobs for their caretakers.

  • sarcasmic||

    And even those contribute to adding jobs for their caretakers./i>

    How does that contribute? Where does the money come from to pay the caretakers? Looks like a net loss to me.

  • anon||

    Well, the money to pay the caretakers comes from either productive family members or insurance companies.

    I know I know, it's still a loss, but it does create demand for a service. The point is everyone that's not effectively dead has the ability to contribute something to society.

  • sarcasmic||

    Well, the money to pay the caretakers comes from either productive family members or insurance companies.

    Or the government. More than likely the government.

  • annonymous commenter some guy||

    Well, the money to pay the caretakers comes from either productive family members or insurance companies.

    Or the government taxpayers. More than likely the government taxpayers.

    FIFY

  • annonymous commenter some guy||

    Even if there were no minimum wage there would still be people who would never get hired. The maximum wage anyone would pay them would be less than what they need to survive. In fact, some people are so disabled that hiring them would be a liability. They would have to pay their employer before anyone would take them on.

    Saying that only politicians price people out of the labor market is denying that technology decreases the cost of production.

    I agree that the scenario I've concocted feels like it could never happen. But I've yet to come up with logical reason as to why it could never happen. Another example: Horses used to be indespensible. Now they are a hobby. Some people are less useful than a horse.

  • sarcasmic||

    Even if there were no minimum wage there would still be people who would never get hired.

    One word: charity.

  • annonymous commenter some guy||

    That's what I thought it would come to.

    So, how long until more than half the species is living solely on charity?

  • Bobarian||

    48% pay less than zero income taxes... So, maybe if we pass another 'stimulus', then maybe next year?

  • Another Phil||

    Well, when you beg the question, your outcome equals your starting premise. I'm not buying your premise. There's your answer.

  • ||

    So, how long until more than half the species is living solely on charity?

    This will only occur by government action. This isn't a natural result of automation. Quite the contrary. The more automation the less skill in fact is required.

    This is the problem for labor unions. People are more interchangeable all the time. There is no justification for paying a union worker as if his marginal productivity is no better than some Joe off the street.

    Preventing the lowering of wages is what would cause the thing you are worried about. That would exclude workers, it would also mean the price of the product would be less affordable to everyone.

    This is the general case. The natural trend over time is for wealth and income to equalize.

    On of the primary functions of government is to protect embedded capital at the expense of everyone else.

    In other words government primarily acts to impede capital dispersion.

    In a free market your scenario never occurs.

    Why? Because the more automation the less productivity is different between two people.

    So what in fact would happen, without government intervention, is for employment to reach ever closer to zero involuntary unemployment.

    To think otherwise you would have to think an employer would willingly pay someone more than he needed to.

    More and more jobs should have lower and lower prerequisites. Variously challenged people become more and more competitive as the difference between their productivity and anyone else's decreases.

    It used to be that men commanded a premium over women because of strength. Now there is very little difference due to automation.

    Did standards of living decrease or increase when women entered the workforce?

    Of course it increased. General productivity increased, and prices went down, and people had to work less for staples and had more ability to save or have leisure or become entrepreneurial.

  • ||

    I think you missed his point.

    In your hypothetical world where say food can be produced on the cheap by robots then that will free people to do other stuff.

    When people didn't have to spend 18 hours a day just to produce food to survive they didn't just do nothing else.

    Most people in developed countries do nothing at all involved with physical labor. Do you want to reverse that?

    The fact that machine allowed productivity makes staples so cheap and available is a good thing.

    It's hardly the case that farmers or home builders became somehow slavemasters for the rest of us;)

  • anon||

    By the time we reach a technological singularity that will make it possible for humans to not perform any manual labor, the greater portion of mankind will already be well adapted to not performing manual labor.

  • annonymous commenter some guy||

    the greater portion of mankind will already be well adapted to not performing manual labor.

    That's one way to solve the problem. But what if it isn't true? What if our technology is advancing faster than our brains. If so, in each generation a smaller and smaller portion of society will be able to contribute anything useful.

    Do you believe that most people are born with the potential to understand advanced physics, but most of them simply never develop that potential? I think it is more likely that most people are born without this potential.

  • Charles Darwin||

    There's a reason for that. Nature abhors a bunch of useless people hanging around and tends to destroy them. The real problem is that these stinking do-gooders keep trying to save the useless ones, even allowing them to reproduce. Next thing you know we're neck deep in useless people sucking the life out of us good ones. Look how few people would be posting here if only we superior ones survived.

  • That makes no sense.||

    "Nature abhors a bunch of useless people hanging around and tends to destroy them."

    Pure bullshit. You're spouting Calvinism, not biological evolution.

  • fish||

    "Nature abhors a bunch of useless people hanging around and tends to destroy them."

    Pure bullshit. You're spouting Calvinism, not biological evolution.

    I agree....congress seems to be doing just fine!

  • Calvin||

    leave my isms out of this

  • ||

    Again. For that to be true, employers would have to want to pay people more than they have to which is preposterous

    or

    Government would have to protect the wages of existing employees from competition.

    In the latter situation, however, so long as there is a democracy, the workers are going to be shouldering the burden of supporting the non workers that they 'benefit' from having the government exclude from competing fairly with their labor.

    In the latter situation less is produced, for everyone, and prices for everything will be higher, for everyone. Less is produced, and the costs for what is produced are higher than they need be.

    And again, this wage 'protection' merely means that the people actually working have to carry the load for the people that aren't protected.

    The trend if we had a free market would not for people to be increasingly dis-employed, it is for employment to be maximized, prices to always trend down, thus costs always trend down, and real wealth to increase for everyone.

  • ||

    I know this is a bit outlandish, but in theory, how would this large portion of society survive?

    By entertaining their betters with gladiatoral combat.

  • annonymous commenter some guy||

    I guess entertainment doesn't count as manual labor so I'll let it slide.

  • Another Phil||

    By entertaining their betters with gladiatoral combat.

    Thank you. 20-odd posts based on completely buying the guy's "what if" premise. Finally, the dismissive answer the original question deserved.

  • anonymous commenter some guy||

    Why don't you buy my premise? Keep in mind. I'm playing devil's advocate here. I never even said that I buy my premise. I just said I was having trouble refuting it. Help me out.

    I return to my horse example. 100 years ago horses were indespensible. If horses and people were equals then a horse would have had no problem finding a job 100 years ago. Nowadays most of them would be completely unemployable. Why can't the same be true for certain types of humans?

  • Jeffery Dahmer||

    The same is true, when humans become as dumb as a horse we can eat the good ones and make glue out of the sickly ones. Sending them to congress sure isn't working out well.

  • ||

    Answered in several ways.

    Short answer. Profit motive.

    Employers want to pay as little as possible for wages, and undercut their competition to keep up total revenue.

    More automation means more labor markets can cross compete. This does not mean people won't have jobs. This means more opportunity for jobs.

    I had to pay Joe 15/hour because of his training/experience.

    Now with automation I can hire Bob off the street for 14/h and do the job about as well.

    This also opens the door for other business who could not be profitable with labor at 15 but can be profitable at 14.

    The price mechanism automatically maximizes resource usage.

    If prices are too low there are shortages and profits are not maximized.

    If prices are too high there are gluts and profits are not maximized.

    This applies to labor as it applies to everything else.

    It is the profit motive, employers paying as little as they can and employees getting as much as they can, that creates the optimal employment.

  • jtuf||

    I bought an electric razor on Friday for $30. It has more features than the $60 one I bought a few years ago. I think deflation has already begun. It just hasn't hit the skilled labor sector.

  • Major Johnson||

    I bet the $60 model was nicer than the $90 model I bout around 8 years ago, probably with more features too. Did you expect the price of electric razors to go up as they made more and learned better, cheaper more efficient ways to make them? Notice the price of televisions lately? I remember my family had to save for months for our first tv which was black and white, around 15 inch diagonal screen and bigger than most of the other furniture in the room. We could only get 3 stations and someone had to go outside and rotate the antennae. I can buy a huge color tv with remote for pocket change today.

  • ||

    Why does Keynesian success feel like failure?

    Because it is.

    Warren says it is the scientology of economic thought. ( Thats priceless Warren ) I say it is the chevy Volt of economic thought. It costs too much, it doesnt work, and its failure is entirely predictable. Those who designed the Volt and those who advocate Keynesism are engaging in the same thought process; I want it to work. It has to work because I want it to. People who think like that are blind to the failure of their plans. Instead of changing direction when things are clearly falling apart around them, they will follow the course to the bitter, disastrous end.

  • Captain Ahab||

    to the last I grapple with thee; from hell's heart I stab at thee; for hate's sake I spit my last breath at thee.

  • Tony||

    The field of economics hasn't yet become a true science. Keynesian thought (and its successor--modern economics) comes the closest, but still doesn't account for many of the complex realities of human behavior.

    That makes libertarian "economics" that much further away from real science.

  • AZ||

    Don't confuse the authority of science with the allure of scientism. Go read Mises' Nobel acceptance speech, go read Feynman on cargo cults, go read up on how you actually validate predictive mathematical models.

    Bad "science" is worse than "unscientific" philosophy.

  • nobelprize.org||

    Mises = 0 (zero) results.

  • fish||

    Rectal he probably meant Hayek. How are those other personalities....err characters coming along?

  • AZ||

    Durr I meant Hayek. Sorry, I was dumb, the speech is excellent.

  • Tony||

    Bad science is corrected. Unscientific philosophy makes excuses for itself.

  • Mr. FIFY||

    Yes... liberalism excuses itself on a regular basis.

    Glad you're starting to catch on.

  • Sevo||

    Shithead hasn't a clue that shithead just explained every one of shithead's posts.

  • Mises? Nobel Prize? LOLOLOLOL||

    Question: Which year?

    www.nobelprize.org

    Next Question: which universe?

    LOL

  • first||

    Caprice made a sensational start to her nude modelling career when she dived straight into the hard core scene. The movies she made were the talk of the adult entertainment industry. Insiders and customers raved over them.

    Now she sees her career taking a different direction. “Those were crazy times” she tells us. “A lot of those films I did then weren’t right for me. Now I have moved on”. She sees a new role for herself pushing the boundaries of erotic nude modelling. Her natural charm and her winning personality make her ideal for that.

    It was amazing looks and a luscious body that made her famous, even notorious. Now Hegre-Art are revealing that there’s even more. There is the hidden Caprice.

  • Mr. FIFY||

    "Why Does Keynesian Success Feel Like Failure?"

    Stupid question. Rewriting it will help:

    "Why is Keynesianism a Failure?"

    MUCH better.

  • Sevo||

    o3|11.28.11 @ 2:02PM|#
    "explain how discussing CORPORATE keynesianism is any of those things ?"

    This is GREAT! Please explain "CORPORATE keynesianism".
    A Monday evening is a good time for a laugh.

  • Sevo||

    o3|11.28.11 @ 2:26PM|#
    "wrong since keynes also advocated debt & spending reductions PLUS monetary & fiscal stimulus."

    Yep, Keynes just KNEW politicos would steal their own wallets to do good!

  • Sevo||

    Tony|11.28.11 @ 5:26PM|#
    "The field of economics hasn't yet become a true science."

    Shithead, define "true science", shithead.

  • Sevo||

    Libertarian Regulators|11.28.11 @ 1:31PM|#
    "...Mother Earth..."

    Ah, mud momma returns!
    God talkers are to be disdained and humiliated; the dregs of obsolete stupidity.

  • Mr. FIFY||

    The planet as a living being... how utterly laughable.

  • Gaia hypothesis||

    Why does "gaia hypothesis" get 16,800 hits at SCHOLAR.google.com?

    Libertard evasion is utterly laughable.

  • Mr. FIFY||

    Whatever... Jason.

  • Felix ||

    Have you actually read Keynes? A nice guy, but the whole stimulus idea is just that -- an idea. The multiplier? Just a theory. And, I have to think, not a lit of practical support for either. True, you don't want a credit crisis. Hence bailouts as needed. But stimulus us a whole other ball of wax.

  • anonymous commenter some guy||

    "Bailouts as needed"?

    If banks knew there was no possibility of a bailouts there would never be a credit crisis in the first place.

    You can't fix a broken leg with a series of adhesive bandages.

  • Major Johnson||

    ding ding ding ... give that man a cigar, and not one of those nickle cigars, get him a dime cigar.

  • ||

    Correct, but then "they" aka Tony's friends would not be able to control the Money.

    So the Government wispers in the bankers ear "we have your back" and the money flys like Tony headed for BO's man meat. Then once the "bubble" burst Barney Frank and Chrid Dodd write another time bomb called "Finacial Reform Act"
    See a patern yet?

  • Gemstone Jewelry||

    Now she sees her career taking a different direction. “Those were crazy times” she tells us. “A lot of those films I did then weren’t right for me. Now I have moved on”. She sees a new role for herself pushing the boundaries of erotic nude modelling. Her natural charm and her winning personality make her ideal for that.

  • Sevo||

    annonymous commenter some guy|11.28.11 @ 2:10PM|#
    "Scary scenario:
    In the near future technological advances replace all forms of manual labor. (i.e. It is always cheaper to use a machine than to use a human for non-skilled positions.)"

    Not-so-scary scenario:
    Who builds, programs, re-programs and maintains those machines?
    And the ones for new products?
    Is your name Ned by any chance?

  • ||

    Who builds, programs, re-programs and maintains those machines?

    Precisely.

    My paternal grandpa was a mechanic on a large farm; eventually became the village mechanic, someone who fixed all kinds of machinery from wash-machines to scooters.

    My father was a metalworker who became a watchmaker.

    I hammer bits.

    Ultimately it is the same work, requiring much the same skills... but adjusted to contemporary technology & societal circumstances.

  • Major Johnson||

    And don't forget those guys and gals who I'll pay to wash my sheets and clean my toilet...there's always room at the bottom, it's just up to you whether to stay there or not.

  • ||

    Shusshhhh You will make a Progressive Liberal cry......For the Children....That is....

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