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The Medium-Sized Book That Started This Big War (Against the New New Deal)
David Weigel at the Washington Independent profiles the book, The Forgotten Man: A New History of the Great Depression, and its author, Amity Shlaes, which he credits with energizing the intellectual and political opposition to the new age of bailout and stimulus.
Excerpt:
There are 200,000 copies of the The Forgotten Man in print, a dramatic success for a work of economic history. Shlaes has written a gripping revisionist history of the New Deal, told through the interweaving lives of New Dealers and prominent Americans of the era.....
According to Shlaes, who builds on decades of New Deal criticism and research into the lives and work of FDR’s brain trust, the programs actually lengthened and aggravated the Depression because of regulation that ate away at American entrepreneurship and profit motive, and because of haphazard implementation that drove businesses and banks to uncertainty and panic. The “forgotten man” of the title is the American whose income and effort were taken, against his will, to pay for the experiments and entitlement programs of the New Deal. The New Dealers, in this telling, were well-meaning and smart people who did a lot of damage and little good, and understanding that is key to understanding why government intervention in the economy and big-spending stimulus packages are doomed to fail.
Shlaes did not invent these arguments. She's more a journalist reporting on a decades-old controversy than a pathbreaking economist or historian. Still, as Hayek knew, such popularizers of big ideas do the most to directly influence public opinion and policy. Nor is she even the only recent author making such anti-New Deal arguments; but she has certainly been the most influential one. Weigel gives examples of her shaping the thoughts of politicians from Gingrich to Giuliani.
Shlaes is hard-edged about the political lessons she thinks should be gleaned from her work:
Shlaes wants to wave Republicans off from making the kind of rhetorical or ideological compromise with the New Deal that Republicans made, for example, during the 2005 Social Security fight. “This is a time for choosing,” she said on Monday, “and I’m not the first person to say that or to use that term in saying so. Reagan could afford to like FDR because, at the time, it seemed possible to keep our entitlements if we reformed them. It turns out that we can’t afford entitlements. We have to choose between Reagan and Roosevelt. You can’t just say you like both Reagan and Roosevelt.”
Reason magazine interviewed Shlaes about her influential book in its January 2008 issue.
Citizen Nothing|2.4.09 @ 9:35AM|#
God save us from well-meaning and smart politicians. At least when Bush was in the White House everyone knew an idiot was in charge.
|2.4.09 @ 9:37AM|#
...he credits with energizing the intellectual and political
opposition to the new age of bailout and stimulus.
What the fuck are you talking about? Where is all this
"opposition". All is see are a bunch of impotent Republicans crying
about Democrats doing exactly what they did when they were in
power.
Taktix®|2.4.09 @ 9:38AM|#
Weigel gives examples of her shaping the thoughts of
politicians from Gingrich to Giuliani.
What a wide scope of opinion!
Not that I disagree, but I can't remember the last time a
politician had actual small-government cred. The only reason
Republicans are whining about big government is because the other
team is in power.
|2.4.09 @ 9:42AM|#
All is see are a bunch of impotent Republicans crying about
Democrats doing exactly what they did when they were in
power.
All I see are a bunch of low foreheads who think they can change
the world with dreams and talk. It's too late for that! If you're
not ready to act, give me a break and shut up.
|2.4.09 @ 9:45AM|#
Nor is she even the only recent author making such anti-New
Deal arguments; but she has certainly been the most influential
one.
Again I ask, what influence are you talking about?
Weigel gives examples of her shaping the thoughts of
politicians from Gingrich to Giuliani.
Oh them, Republicans with withered testicles in addition to their
limp and shriveled dicks.
Citizen Nothing|2.4.09 @ 9:46AM|#
How can I change the world with dreams and talk if I have to shut up?
|2.4.09 @ 9:54AM|#
Paul Krugman says Amity Schlaes doesn't know what she's talking
about. And he should know.
He's got a Knobble Prize.
guy in the back row|2.4.09 @ 10:02AM|#
David Weigel at the Washington Independent
I wondered what happened to him.
|2.4.09 @ 10:04AM|#
How can I change the world with dreams and talk if I have to
shut up?
CN, try this. It's
audio, just to let you know in case you are at work. Totally work
safe.
classwarrior|2.4.09 @ 10:05AM|#
If "little good" meant reducing the unemployment rate from 25% in 1933 to 13% in 1937, I'm all for it. Please stop this mendacious bullshit!
|2.4.09 @ 10:08AM|#
What's sad is that there are a good number of Republican rank
and file who lean, by and large, more towards limited government
and free market principles than not. Unfortunately, they're willing
to ignore the fact that their leadership generally doesn't give a
crap about such ideals to (1) avoid the Democratic bogeyman, (2)
support whatever war we're in, (3) "protect", in some cases, their
religious cause du jour.
Dumbing down debate to one-liners about a few issues has had no
small effect on eliminating tougher issues--like why we should
limit government power--from public discourse. I mean, how many
Republicans and Democrats vote for president based solely on their
position on abortion? That's insane, since it's obvious that
nothing substantial will change, regardless of who is in power and
since the president should be elected on things he's supposed to be
involved with, like defense and foreign relations. And that's just
one such issue.
Typical Libertarian|2.4.09 @ 10:10AM|#
How dare Republicans learn anything from the last eight years and start thinking about limited government. How dare they. No one ever said that sad sack group of fundie losers could be for limited government. Only the vangaurd elite untainted by the stain of the last 8 years can be libertarian. The rest of them need to shut up and vote with the Democrats. We will take our 10,000 votes rage against the dying of the light in the new socialist Utopia.
|2.4.09 @ 10:15AM|#
Pro,
Most movement Libertarians are transnationalists. Most rank and
file Americans are nationalists. Most movement Libertarians are
athiests. Most Americans are religous in some form or another.
Until Libertarians figure out a way to to talk to people with
nationalist and religous leanings, they will always be on the
sidelines. Ultimately, I think many movement Libertarians become so
more to make a statement than to actually win elections, so I am
not holding my breath for that to happen. But unless and until it
does, there will not be a coalition for small government. The rank
and file small government types will be stuck with the choice of
business as usual beltway Republicans intent on looting the
treasury like everyone else and Libertarians intent on lecturing
them on how their patriotism and religion are for the ignorant.
Since most people vote based on culture and don't like to be
insulted, they will swallow their distain and vote R and leave the
country much worse off for doing so.
|2.4.09 @ 10:26AM|#
I don't think religion is really the issue, even with the
rhetoric. I've remained registered as a Republican to be able to
vote in the primaries (I tend to vote LP in national and statewide
elections) and have been a member of the Republican Liberty Caucus
for a while. The RLC is about as successful in the GOP as the LP is
in national politics, but a good number of the RLC folks seem to be
all over the place, religion-wise. Not as atheistic as the LP tends
to be, but not fruitcakes, either.
What tends to frustrate me about the RLC from a philosophical
position is all the in-fighting about whether they are libertarians
or Republicans first. In my mind, that's not debatable, though, of
course, most of the party loyalists want to be party guys first out
of utilitarian motives. I think you're stated goals and actions
need to agree, and the only way the GOP can really do any good as a
minority party is for elements like the RLC to strike during this
realignment phase and change the tenor of the party. Very unlikely
to happen, but perhaps less unlikely than the LP ever winning
anything.
All that said, I agree that the Republicans have earned libertarian
wrath. And now the Democrats will as well. Maybe that's all to the
good, though I think the slide towards less freedom and more
government is bad, whatever flavor it is.
Fidus Achates|2.4.09 @ 10:38AM|#
Amity Shlaes gets the biggest economic story of 2008 completely and utterly wrong and we are supposed to believe this tool? Shlaes in July of 2008: "Gramm was right about the recession and stood by his recession comments on Thursday. A recession is two consecutive quarters in which the economy shrinks, and last quarter it grew. But no matter. Voters feel they are in a recession, and so they are, at least according to Campaign Econ." She even got the definition of a recession wrong according to the NEBR. And this is whom Reason uses to inform us about economic matters? Find someone with a clue. You really have to stop just saying Krugman's wrong. That doesn't make Shlaes correct. She cherry picks data and focuses on one year of the depression (1937). That year's poor showing was the result of FDR reducing taxes and the flow of money. What she does is find evidence that Krugman is right, FDR was right, and the left is correct about how to solve our economic troubles and then trot it out as the opposite. It's pathetic. Please find people who actually have some knowledge of economics and economic history.
Citizen Nothing|2.4.09 @ 10:39AM|#
The linky failed, Epi. I'm very disappointed.
Guess I'll just have to keep dreamin' and talkin'.
|2.4.09 @ 10:40AM|#
Pro,
I think Libertarians need to prioritize. What is the biggest threat
to freedom today? The federal government. The states are limited in
their ability to take our freedom and money if for no other reason
that people can easily move away from states that don't respect
freedom. You can't as easily move out of the country. I think the
compromise between religious conservatives and libertarians lies in
Federalism. Religious conservatives are making a deal with the
devil if they think that expansive federal power is the way to
enlightenment. Government power is the most dangerous threat to
religious freedom. The more power the Federal government has, the
more in danger religious freedom, like all freedom is in.
Ultimately, Libertarians need to learn to live with the fact that
some states and some communities are not going to be Libertarian.
Issues like abortion, drugs, vice laws ought to be left to the
states. It may not be libertopia, but I would take a country where
the states determined their own policies on those kinds of things
and the Feds stayed out of it. If Utah wants to ban fire water and
abortion and all forms of fun, I just won't live there. It is not
perfect, but it better than what we have now and it is a compromise
I think a lot of people could live with.
|2.4.09 @ 10:46AM|#
If "little good" meant reducing the unemployment rate from
25% in 1933 to 13% in 1937, I'm all for it. Please stop this
mendacious bullshit!
And yet national unemployment remained under (and sometimes well
under) 7.5% for over 20 years starting in 1984, all this without
FDR in office, with a preponderance of women in the labor force,
and without stimulus spending. I'm all for that.
Reinmoose performing as Dan T.|2.4.09 @ 10:47AM|#
If you don't like it you should move to another country!
Social contract!!!!!!
|2.4.09 @ 10:49AM|#
The linky failed, Epi. I'm very disappointed.
Guess I'll just have to keep dreamin' and talkin'.
It was a quote from The Running Man, CN. Arnold talking to
Dweezil Zappa and Mick Fleetwood.
|2.4.09 @ 10:51AM|#
"So, John. You one a them Freestaters?"
A bit yes. There has to be some limits however. No state can go
back to slavery or Jim Crow. But I don't think any state would if
it could anyway. Real federalism would give us places like Alaska
and a few other places out west where you could do anything you
wanted and then a few places like Utah that were pretty driery and
a lot in between. That doesn't sound like a bad deal to me.
|2.4.09 @ 10:57AM|#
I'm not sure federalism alone is the answer. I like the idea of
a strong thread of federalism remaining in our system, but my
interest in that is more in providing an additional check on state
power than on allowing the states to wield too much power. Florida
could oppress me as much as the federal government could, in
theory.
On the other hand, the idea of letting the states control the gray
area between the lines makes a lot of sense. I'm also partial to
the 50- laboratories argument, which allows for variations among
the states in how they handle regulation and the like.
|2.4.09 @ 11:04AM|#
And this is whom Reason uses to inform us about economic
matters? Find someone with a clue.
No one with a clue will tell them what they want to hear.
Journalist? Laughable record of making economic predictions? Sign
her up!
Obviously, the 3/4 of economists who think stimulus spending is a
good idea right now are in the tank with the climate
scientists.
David Weigel|2.4.09 @ 11:21AM|#
I wondered what happened to him.
I write two stories a week there, plus blog posts, in addition to
writing at the Economist's Democracy in America in blog. All caught
up!
BDB|2.4.09 @ 11:22AM|#
So all those who were making fun of people saying there was a
recession in the summer of '08 are now predicting a years long
depression?
Color me shocked, SHOCKED I say!
In 2011 they'll be telling us how growth will last forever.
|2.4.09 @ 11:23AM|#
Obviously, the 3/4 of economists who think stimulus spending
is a good idea right now are in the tank with the climate
scientists.
What is your source for the 3/4 figure?
Regardless, there may be libertarians who exclusively go down the
rabbit trail of whether this is a good idea or not economically,
but that is only part of the argument against it. The libertarian
objection to the stimulus package can rest on the simple point that
these actions are grossly outside the powers given to the Federal
government in the Constitution.
figured pulled from ass|2.4.09 @ 11:24AM|#
Obviously, the 3/4 of economists who think stimulus spending
is a good idea right now are in the tank with the climate
scientists.
>cough< bullshit >cough
The Angry Optimist|2.4.09 @ 11:26AM|#
They can, of course, mistakenly think stimulus spending will
work in theory, but this current crop of bills are
anything but stimulus spending.
Stimulus spending would just be cash vouchers or checks that you
have to spend on something. Sounds pretty simple, but somehow all
of these politically-connected groups keep getting the money.
|2.4.09 @ 11:29AM|#
Anybody who might be willing to consider some theoretical
benefit of "economic stimulus" would be by definition in favor of
Obama's plan.
It's important to accept this.
adrian|2.4.09 @ 11:30AM|#
if AGW and keynesian economics go down together that would be fucking sweet!
|2.4.09 @ 11:31AM|#
So the repudiated Keynesian position on spending is
unrepudiated? I heard no fewer than four different economics
professors tell me that Keynes was mostly wrong. And only one of
those was a hardcore supply-side guy.
Nah, I doubt economists have changed their views that radically.
It's like asking whether kids should chew Dentyne or landmines.
Four out of five dentists agree!
Seward|2.4.09 @ 11:35AM|#
joe,
Fine. If 3/4 of economists do think that then they would be fine
cutting the current "stimulus package" by roughly 90%, since
roughly 90% of that package goes for spending which not take place
until four years from now. Even based on the Keynesian notion of a
so-called savings paradox the majority of the spending in this
package makes little sense.
|2.4.09 @ 11:37AM|#
John, have you been to Alaska?
Really, I wish that people who haven't lived there would quit
holding it up as some libertarian paradise.
30 years ago or so, you could pretty much do what you wanted..now,
not so much. I used to grow a pot plant in my living room front
window, legally. Not any more. Not to mention the subsistence
issues...
Not to mention that they are able to be so "free" because they
don't pay any state income tax and suck off the federal tit to an
enormous extent.
I did enjoy that when I lived there..that and the PDF check every
year, but I wasn't under any illusion that Alaska citizens were,
for the most part, the rugged individuals they like to think they
were. Especially as most of them lived in the Anchorage metro area
with all the amenities. Note: I lived, and still work off and on,
out west...
Sorry, this is a pet peeve of mine.
RedStater|2.4.09 @ 11:38AM|#
Come on capelza, you have libertarian hero Sarah Palin as your governor!
Seward|2.4.09 @ 11:39AM|#
Pro Libertate,
Survey research has shown though that economists by wide margins
generally favor free trade, that they think that price gouging laws
are counter-productive (which they are), and that they do not favor
things like a minimum wage or rent control.
tear in a beer|2.4.09 @ 11:40AM|#
Hello, I'm a little tear in a beer. Joe Boyle has no argument to justify his shaky position. Instead, he squirted me outta his eye.
BakedPenguin|2.4.09 @ 11:40AM|#
If "little good" meant reducing the unemployment rate from
25% in 1933 to 13% in 1937, I'm all for it. Please stop this
mendacious bullshit!
I got a cold, and demanded my doctor give me anti-biotics, even
though he said they wouldn't help. Wouldn't help! That cold was
gone in a little over a week! Don't tell me we don't need to do
somethin'!
robc|2.4.09 @ 11:43AM|#
Fidus Achates,
Fuck NEBR. They are wrong. See my long argument with joe
previously, Im not repeating it here.
Yes, we were in a recession in July of 2008, but we didnt know that
for sure until last week. :)
(Just as a quick thing - my problem with NEBR isnt that they define
a recession differently than the 2 quarters "standard", its that
they dont actually define it. They are very unscientific and dont
have a repeatable methodology that can be used by anyone else to
verify their results. They use a frickin committee.)
Seward|2.4.09 @ 11:46AM|#
BakedPenguin,
Throughout the 1960s and 1970s using government spending to "prime
the pump" was a common feature of economic development plans. None
of the dynamic economies of the last twenty or so years (e.g.,
China, etc.) used such an approach. Low taxes, funding for
education, etc. were what were important.
|2.4.09 @ 11:50AM|#
I heard two economists trashing the "stimulus" package on NPR
last night (or maybe the night before). The issue, of course, is
that the various programs being foisted upon us in the name of
stimulus don't do what a stimulus is supposed to do--put cash in
the economy right now.
I think some serious tax cuts would be a good idea, but the only
way that can happen responsibly is to cut spending. Like a
household or company would do, you know, in a recession. Naturally,
no such thing will happen.
Seward|2.4.09 @ 11:52AM|#
BakedPenguin,
More to the point, any claims made about FDR's policies reducing
unemployment would have to demonstrate that his policies enhanced
the natural recovery of the economy. And those claims cannot be
based on Keynesian principles, because as I mentioned yesterday,
"The General Theory..." was not published until 1936.
I think it is safe to say that at least some of FDR's policies
clearly hindered economic recovery; that's what wage and price
controls do. They thought rather stupidly that they could mimic the
practices the government undertook in WWI to guide war production
activities. They were wrong.
Seward|2.4.09 @ 11:54AM|#
Pro Libertate,
The prevailing idea amongst some folks seems to be (and this
crosses party lines) that government debt isn't important. I'm
rather skeptical of such a notion.
|2.4.09 @ 11:56AM|#
Funny, I didn't write a word about "Obama's plan," but about
"stimulus spending."
swillfredo's point about non-economic points, and TAO's about the
plan working it's way through Congress are logical, but really
irrelevant to the issue at hand, which is Shale's argument about
stimulus spending as a strategy.
Why are so many of you so uncomfortable with talking about ideas
that you need to drag political parties and individual
personalities into every discussion? It comes across as (probably
well-supported) insecurity about your ability to discuss economic
concepts.
|2.4.09 @ 12:00PM|#
Seward,
The CBO released a report last week which found that 3/4 of the
spending in the stimulus bill would be spent within 18
months.
Also, a poll of economists done in 2006, and widely reported on the
blogosphere, found that something like 70% supported keeping or
raising the minimum wage.
And finally, Keynes was promoting his ideas about counter-cyclical
spending as pump-priming in papers and speeches for years before
his "General Theory" was published.
robc|2.4.09 @ 12:00PM|#
joe,
What does it say about your insecurities that you notice this in
every thread while others dont notice it?
I seriously didnt notice it. I believe you, Im sure if I scrolled
up it would be there. I guess the fact I dont give a damn about
parties (even, usually, the one Im in) makes it easy to gloss
over.
But, when I do notice it, I dont bring it up.
|2.4.09 @ 12:04PM|#
robc,
What makes you think that the people who write comments about
Barack Obama and Democrats don't realize that they're writing
comments about Barack Obama and Democrats?
That doesn't even make sense. I know it's a lot of fun to try to
put a counterargument in the same terms as the original argument,
but if you write something that illogical, it loses all its
punch.
robc|2.4.09 @ 12:09PM|#
joe,
What makes you think that the people who write comments about
Barack Obama and Democrats don't realize that they're writing
comments about Barack Obama and Democrats?
Huh, WTF? I never said that. Try rereading my post.
I, in fact, made no comment about them at all. I only commented
about you.
|2.4.09 @ 12:11PM|#
I think some serious tax cuts would be a good idea, but the
only way that can happen responsibly is to cut spending.
But if you match the two in order to avoid deficits, you're just
giving with one hand and taking away with the other, in terms of
stimulating demand.
Your point about debt is a good one, but it's also a long-term
concern.
The prevailing idea amongst some folks seems to be (and this
crosses party lines) that government debt isn't important. I
don't think that's true; I think supporters of a stimulus package
are very concerned about debt, over the long term. We just have
more immediate concerns right now.
And keep in mind, a depression would be terrible for the national
debt, since tax receipts would plummet.
|2.4.09 @ 12:12PM|#
Just piss off, robc. Not interested in your cheap shots. There are actual ideas being discussed.
robc|2.4.09 @ 12:14PM|#
Your point about debt is a good one, but it's also a
long-term concern.
And as seems to be commonly pointed out in threads discussing
corporate decisions (on other forums with more liberals), they (or
governments) should be focusing on the long term, not next
quarter's numbers.
Which I agree with. Make the best decision for the long term. Fuck
the short term. We will survive.
anti-joe|2.4.09 @ 12:14PM|#
WTF...the whole reason why we are talking about stimulus spending is due to the new administration and congress trying to push stimulus legislation! Talking about an idea and the parties pushing that idea politically go hand-in-hand.
|2.4.09 @ 12:15PM|#
the issue at hand...is Shlae's argument about stimulus
spending as a strategy.
I have not RTFB but I know the basic arguments she aggregates,
which is why I would like to see a cite for the poll in which 3/4
of economists surveyed support the stimulus spending. My guess is
that after evaluating the way the question is framed and throwing
out the obviously politically motivated among them the remaining
economists are those who support the tax cut component of the
stimulus plans waaaaay more than they do the spending components. I
seriously doubt there are any credible economists who support the
entire stimulus plans as proposed.
robc|2.4.09 @ 12:16PM|#
And keep in mind, a depression would be terrible for the
national debt, since tax receipts would plummet.
But only in the short term. A depression might clean out enough
chafe to lead to more tax receipts in the long term. Which when
discussing debt, is what is important (we aint paying off the
national debt in the next 5 years).
robc|2.4.09 @ 12:18PM|#
And keep in mind, a depression would be terrible for the
national debt, since tax receipts would plummet.
Also, this isnt true if spending is cut MORE than tax receipts
plummet. The key to debt reduction is to ALWAYS spend less than you
bring in. Good times and bad.
|2.4.09 @ 12:18PM|#
According to Shlaes, who builds on decades of New Deal criticism and research into the lives and work of FDR's brain trust, the programs actually lengthened and aggravated the Depression because of regulation that ate away at American entrepreneurship and profit motive, and because of haphazard implementation that drove businesses and banks to uncertainty and panic. The "forgotten man" of the title is the American whose income and effort were taken, against his will, to pay for the experiments and entitlement programs of the New Deal.
A bad idea, wrapped in good intentions, is still a bad idea.
What makes you think your comments about "3/4 of economists"
supporting stimulus won't be interpreted as you claiming that they
support the Democratic stimulus plan currently wending its way
through the sausage-grinder?
|2.4.09 @ 12:19PM|#
And as seems to be commonly pointed out in threads
discussing corporate decisions (on other forums with more
liberals), they (or governments) should be focusing on the long
term, not next quarter's numbers.
They need to focus on both. Criticism of short-sighted corporate
decision-making is based on the idea that they're putting too much
emphasis on the short-term, not that it should be neglected
entirely.
Particularly in a crisis, the short-term needs to be a priority.
Worrying about water damage when your house is on fire is foolish -
you need to put out the fire ASAP!
BTW, wouldn't a long-term concern about the national debt advise
against tax cuts as a stimulatory measure? I don't see the
newly-minted deficit hawks suggesting we can't afford those. Quite
the opposite, I see them arguing they should be larger.
Get your own handle,
Talking about an idea and the parties pushing that idea
politically go hand-in-hand. How are you supposed to figure
out if the items in the bill are smart ideas or not if you don't
first understand what is, and what is not, smart? Pinning down
stimulus in theory needs to come first; otherwise, you have no
grounds to criticize or evaluate specific practices.
|2.4.09 @ 12:20PM|#
I think the government should, for the most part, ignore
short-term economic effects, including recessions. I'm not keen on
long-term manipulation of the economy, either, but I think it's a
safer process in general.
Leaving aside that view for the moment, a tax-cut/spending
reduction stimulus means that the government, realizing that the
tax burden is more keenly felt now, simply eases that burden by
providing temporary tax relief. With more money, we're more likely
to spend it in commerce (not in black hole programs) and to help
limit the contraction of the economy. Even putting money in savings
has an effect, because banks get more money to lend.
|2.4.09 @ 12:22PM|#
swillfredo,
Please note, I didn't claim that 3/4 of economists support THE
stimulus spending, but that 3/4 of economists support the idea of
counter-cyclical, pump-priming stimulus spending.
robc|2.4.09 @ 12:23PM|#
What we need is priority based budgeting (like some states and
cities use - and many households):
You can vote to spend as much as you want, but a priority is
attached to each spending item. As revenue comes in, the items are
funded from highest priority to lowest. When the money runs out,
the spending stops. At whatever point you are at.
Would be interesting to see what priorities congress set on
things.
|2.4.09 @ 12:25PM|#
robc,
But only in the short term. A depression might clean out enough
chafe to lead to more tax receipts in the long term.
I think this would be a fine point if we were talking about an
ordinary recession, but a deflationary depression is a different
beast altogether. Past a certain point, an economic slowdown ceases
to function as a culling-of-the-weak, and becomes more like a
plague, killing of the fit as well as the unfit.
If this was 1990 or 2001, I wouldn't be arguing for a big,
pump-priming stimulus package.
robc|2.4.09 @ 12:27PM|#
wouldn't a long-term concern about the national debt advise
against tax cuts as a stimulatory measure?
Yes and no. As a stimulatory measure, Yes. As a means of raising
tax revenue because we are on the wrong side of the Laffer Curve
peak, no.
I don't see the newly-minted deficit hawks suggesting we can't
afford those. Quite the opposite, I see them arguing they should be
larger.
Well, Im an old-minted deficit hawk, so I cant speak to what they
say, but I favor tax cuts as a means of increasing long term
revenue. But, it is well behind spending cuts on my priority
list.
They need to focus on both. Criticism of short-sighted
corporate decision-making is based on the idea that they're putting
too much emphasis on the short-term, not that it should be
neglected entirely.
Oh, I agree. But we arent in an emergency situation, just a
recession.
|2.4.09 @ 12:28PM|#
Also, this isnt true if spending is cut MORE than tax
receipts plummet. Layoffs on a large scale make recessions
worse.
The key to debt reduction is to ALWAYS spend less than you
bring in. Good times and bad. Roosevelt tried big spending
cuts in 1937. The economy fell off a cliff, and didn't come back
until he revved up the military buildup in 1940.
|2.4.09 @ 12:28PM|#
Please note, I didn't claim that 3/4 of economists support
THE stimulus spending, but that 3/4 of economists support the idea
of counter-cyclical, pump-priming stimulus spending.
I'm sure they do, but I challenge the idea that any government
spending will be counter-cyclical. "Counter-cyclical" means that,
when the business cycle turns up, the government spending goes
down. Never happens.
"Temporary"/"Emergency" increases in government spending have a way
of becoming the new permanent baseline.
adrian|2.4.09 @ 12:29PM|#
are there economists in libertopia? Does a completely free-market, sound money economy have any need for economists? i don't see how always repeating "let the market work" would be called a science.
President Obama|2.4.09 @ 12:29PM|#
"No plan is perfect, and we should work to make it stronger," he
said. "Let's not make the perfect the enemy of the essential. Let's
show people all over our country who are looking for leadership in
this difficult time that we are equal to the task."
* * *
"A failure to act, and act now, will turn crisis into a catastrophe
and guarantee a longer recession, a less robust recovery, and a
more uncertain future," he said in his prepared remarks. "That's
why I feel such a sense of urgency about the Economic Recovery and
Reinvestment Plan."
|2.4.09 @ 12:30PM|#
P Brooks,
What makes you think your comments about "3/4 of economists"
supporting stimulus won't be interpreted as you claiming that they
support the Democratic stimulus plan currently wending its way
through the sausage-grinder?
I don't think that. I've come to expect that mostof commenters -
and some in particular - are going to be incapable of responding to
anything I write except to argue about partisan bullshit, eschew
any discussion on the level of the level of ideas, and think only
in terms of contemporary political controversies.
robc|2.4.09 @ 12:30PM|#
I think this would be a fine point if we were talking about
an ordinary recession
ITS DIFFERENT THIS TIME!!!!!
As I said yesterday, bullshit. Its just another recession, maybe
even just another depression (worst case). Same old, same old. Time
will heal it. Ride it out.
BTW, if counter-cyclic spending is such a good thing, how come
there arent suggestions of $900B emergency anti-stimulus cutting
packages during high growth years?
If the goal is to kill the cycle, killing it on both ends would
seem to be optimal. Dont claim the goal is just to end the negative
part of the cycle. That is impossible.
|2.4.09 @ 12:31PM|#
What we need is priority based budgeting (like some states
and cities use - and many households):
What a preposterous notion.
Reinmoose|2.4.09 @ 12:34PM|#
In order for a stimulus to be successful it has to create a floor of economic activity that is higher than the natural floor. A stimulus package that doesn't stimulate economic activity enough to compensate for the pork, much of which has already been proven not to do much of anything for economic activity, in the bill will not create a higher floor than we would otherwise have, nor will it create enough economic activity to compensate.
|2.4.09 @ 12:35PM|#
This is ridiculous, robc:
Oh, I agree. But we arent in an emergency situation, just a
recession.
GDP declined 3.8% in the last quarter - not "declined at a 3.8%
annual rate for a quarter," actually declined 3.8% in a three
months. That's over a 14% annual rate of decline! The estimates are
for a 5% decline in Q1 08. We lost over 500,000 jobs in EACH of the
last two months. This is vastly worse than a recession.
Hell, you don't even think we went into a recession at all until
late in 2008. I think your definitions are a little off.
corrrectablelunchables|2.4.09 @ 12:35PM|#
I think some serious tax cuts would be a good idea, but the
only way that can happen responsibly is to cut spending.
But if you match the two in order to avoid deficits, you're just
giving with one hand and taking away with the other, in terms of
stimulating demand.
A cut in spending would put more money in the hands of the private
sector to do as needed as the money spent on day to day operations
crowds out the monies that would otherwise be used by the private
sector.
For it to be otherwise you would have to assume that the monies
being spent in the public sector are being done so more efficiently
than the private. Indeed, that is the heart of the current
argument, that the drop in bank lending practices during this
recession gives us a situation where that is the case.
However, this ignores that if the money was returned to the private
sector, the majority of that money would go into banks who would
then have more flexible choices to expand lending practices.
True, that most of the money would be returned to the private
sector through contracting for projects under a stimulus plan, but
this is at the cost of overhead of the government being an
instrument of this transferal at a time when market efficiency is
most needed (not unique to government, all tertiary forms of
payment have overhead costs).
Cut spending, cut taxes, deregulate the economy, that is a recipe
for growth that will get us out of the current logjam.
|2.4.09 @ 12:37PM|#
I've come to expect that mostof commenters - and some in
particular - are going to be incapable of responding to anything I
write except to argue about partisan bullshit, eschew any
discussion on the level of the level of ideas, and think only in
terms of contemporary political controversies.
How did this tragic state of affairs come to be, do you
suppose?
Don't bother to "explain" it to me. The sun is blazing; time to
ski.
So long, Commander Quibble. Have fun skoolin the libertoonianz
|2.4.09 @ 12:38PM|#
R C Dean,
It is not inevitable that temporary spending become permanent, you
know. Which brings me to another point: it sure would be nice if
the people who spent 1980-2008 declaring that "Reagan proved that
deficits don't matter," but who have suddenly seen the light on the
problems with a large national debt, could remember their recent
insight the next time the economy recovers and we're running a
surplus, and support a debt paydown instead of reverting back to
their old habits.
That's the kind of thing that could change the political calculus
in Congress. So, let's all keep this concern in mind past 2010.
OK?
|2.4.09 @ 12:40PM|#
Please note, I didn't claim that 3/4 of economists support
THE stimulus spending, but that 3/4 of economists support the idea
of counter-cyclical, pump-priming stimulus spending.
Okay...I still would like to see some more information on this. The
economic analyses I have read show broad support of
counter-cyclical tax cuts for pump priming; I would like to see
some contemporary polls of economists supporting significant
deficit spending during troughs in the business cycle. Preferably
75% of them.
|2.4.09 @ 12:41PM|#
ITS DIFFERENT THIS TIME!!!!!
Wow, between the ALL CAPS and the exclamation points, I almost
didn't notice that you've offered nothing but your feelings to back
up your assumption.
It can't be different this time, despite the hard numbers on jobs
and GDP, because it would be politically inconvenient if it
were.
That's about it, isn't it?
|2.4.09 @ 12:45PM|#
BTW, if counter-cyclic spending is such a good thing, how
come there arent suggestions of $900B emergency anti-stimulus
cutting packages during high growth years?
See my comments about what to do the next time we run a
surplus.
But as far as your question goes, surely you've noticed that we've
been using Fed monetary policy to slow growth during boom times for
the past several decades.
I'm all for doing away with that next time, and using
debt-paydowns, during the good times in the 2010s and 2020s. (BTW,
does anyone remember the Bush campaign arguing in 2000 that paying
down the nation debt instead of cutting income tax rates would be
"a giveaway to the bankers," and fretting that "we might pay down
the national debt too fast?" It's like gallows humor now.)
If the goal is to kill the cycle... It's not, at least,
that's not my goal. I think that during ordinary recessions, we
should run small deficits, just to maintain service levels and give
people a life preserver during hard times.
Seward|2.4.09 @ 12:49PM|#
joe,
On the CBO.
According to that article, CBO projects only 40% is to be spent
within the first 18 months. The entire article is worth
reading.
Also, a poll of economists done in 2006, and widely reported on
the blogosphere, found that something like 70% supported keeping or
raising the minimum wage.
Is this the poll?
A similar survey in 2006 by Robert Whaples polled PhD members of
the American Economic Association. Whaples found that 37.7% of
respondents supported an increase in the minimum wage, 14.3% wanted
it kept at the current level, 1.3% wanted it decreased, and 46.8%
wanted it completely eliminated.[60]
...Keynes was promoting his ideas about counter-cyclical
spending as pump-priming in papers and speeches for years before
his "General Theory" was published.
I'm sorry, but there is no evidence that FDR's policies in his
first administration were influenced by anything Keynes had
written, said, etc.
robc|2.4.09 @ 12:49PM|#
joe,
An emergency is Pearl Harbor being bombed or aliens invading.
Zimbabwe's economy is an emergency situation. A recession (even a
bad one) is just a recession. The best way for it not to become an
emergency is for people to not treat it as an emergency.
I think my definitions are fine.
Seward|2.4.09 @ 12:51PM|#
joe,
I have to ask a question: remember all that money that we poured
into Iraq? We are here faced with a similar situation domestically.
How exactly are government agencies domestically better prepared to
spend money than they were overseas?
|2.4.09 @ 12:53PM|#
A stimulus package that doesn't stimulate economic activity
enough to compensate for the pork, much of which has already been
proven not to do much of anything for economic
activity..
This is a ridiculous statement. Any government spending is going to
have a short-term stimulatory effect.
A better argument would be that some of the proposed spending would
be a net long-term loss, because we wouldn't gain as much long-term
benefit as the eventual cost of paying for it, but to claim that
putting money into the economy isn't stimulatory is flat-out
wrong.
This is also a ridiculous statement: A cut in spending would
put more money in the hands of the private sector to do as needed
as the money spent on day to day operations crowds out the monies
that would otherwise be used by the private sector. As if
there is no idled capacity during a recession or depression. As if
there isn't a skyrocketing unemployment rate. As if the people and
equipment who'd be put to work are currently bombarded with offers
for work.
For it to be otherwise you would have to assume that the monies
being spent in the public sector are being done so more efficiently
than the private. No, you'd just need to be aware that the
money isn't being spent by the private sector, that unemployment is
high, and that there is a great deal of idled economic
capacity.
Cut spending, cut taxes, deregulate the economy, that is a
recipe for growth that will get us out of the current logjam.
It's generally best to ignore people who think every question has
the same answer, whose policies don't change in response to vastly
different circumstances.
|2.4.09 @ 12:54PM|#
How did this tragic state of affairs come to be, do you
suppose?
Excessive time spent in a partisan bubble by the majority of
libertarians, leading them to consider any argument they don't
already agree with to be a bad-faith Trojan horse.
kthxbai. Don't hurry back on my account.
robc|2.4.09 @ 12:55PM|#
Wow, between the ALL CAPS and the exclamation points, I
almost didn't notice that you've offered nothing but your feelings
to back up your assumption.
It can't be different this time, despite the hard numbers on jobs
and GDP, because it would be politically inconvenient if it
were.
That's about it, isn't it?
You have any evidence that this time is exponentially worse than
any of the other recessions or depressions of the last 200+ years?
And I used exponentially for a reason, if its just marginally
worse, then think of it as a local minima, but still not an
emergency.
If we are heading for Wiemar or Zimbabwe, then I think we have an
emergency that we need to fix. Then again, I think huge
deficit-based spending packages are the first step towards Wiemar
or Zimbabwe.
|2.4.09 @ 12:56PM|#
I have to say, they always say it's different this time. It's a
valid criticism of our overlords. Didn't Bush say that about the
WoT? Ditto the S&L crisis, ditto the various booms (to throw in
a non-crisis moment), etc. I still don't see this as being as bad
as the late 70s/early 80s. That was a horrific time, with no end in
sight. Given that lending last year was still high, the credit
crunch, which is supposedly the biggest problem, is largely
mythological. It's more about people not wanting to take on more
debt than it is about banks sitting on their money.
Nah, we should just sit put. If the government wants to reform
itself in the meantime, that's okay with me, but trying to guess
which way to jump? Well, they'll fail like they usually do.
Here's a question: With so much of the economy intact up to the
Bush/Paulson panic attack, how much of the GDP shrinkage was due to
the government publicly freaking out (Obama threw out the word
catastrophe in relation to the non-passage of the stimulus
bill--great leadership, that) versus the actual economic downturn?
No rational person can say that the government panic didn't have
any effect on commercial and consumer confidence. Right at
the time most companies are doing their 2009 budgeting, too. How
smart that was!
robc|2.4.09 @ 12:59PM|#
joe,
to claim that putting money into the economy isn't stimulatory
is flat-out wrong.
Depends entirely on the multiplier. If government spending has a
multiplier
Seward|2.4.09 @ 1:00PM|#
joe,
The best argument would be that any short term stimulus is not
significant enough to justify the air drop of money by the
government.
As for unemployment, idle capacity, etc. the government cannot
solve that problem since it is but a poor substitute for private
investment in the areas of the economy where economic growth and
death occurs. Indeed, a capitalist economy requires economic death
to occur; without this it becomes the corporatist, carterlized mess
that Schumpeter predicted it would be.
robc|2.4.09 @ 1:01PM|#
anyone remember the Bush campaign arguing
At least joe wont bring partisanship into this. :)
Reinmoose|2.4.09 @ 1:03PM|#
to put it more simply
Outputs need to be greater than inputs. If many economists can
agree that we need a stimulatory effect in the down times and admit
to a net-positive gain from stimulatory spending - the positive
effect can be easily completely wiped out by wasteful spending on
pork projects that never actually recoup the amount of their cost
in economic benefit.
adrian|2.4.09 @ 1:03PM|#
Joe is using the D word fairly often now. i always thought depressions were impossible with the FED watching over. hopefully joe is just nervous and not correct.
|2.4.09 @ 1:03PM|#
Seward,
You are linking to an outdated CBO report that looked at only a
portion of an older version of the stimulus bill.
Here's a link to how they scored that actual bill submitted in the
House.
http://yglesias.thinkprogress.org/archives/2009/01/actual_cbo_report.php
2/3 within 18 months.
robc|2.4.09 @ 1:04PM|#
adrian,
joe did successfully call the recession about 12 months in advance.
Of course, he said we were already in it. :)
|2.4.09 @ 1:04PM|#
And you're right, I misremembered the results of the poll of economists - it was about 53-46 in favor of maintaining or raising the minimum wage.
robc|2.4.09 @ 1:05PM|#
18 months? I thought this was supposed to be a short term
fix?
18 days is the proper time frame. :)
|2.4.09 @ 1:07PM|#
I have to ask a question: remember all that money that we
poured into Iraq? We are here faced with a similar situation
domestically. How exactly are government agencies domestically
better prepared to spend money than they were overseas?
There is much greater oversight of domestic spending than spending
in a war zone, and the intended use of the money is much more
targeted.
When they flew palettes of currency into Iraq to hand out, that was
the plan - to hand out stacks of money to people whose support
would be useful to the military mission. Obviously, that's not how
most government spending works.
robc|2.4.09 @ 1:08PM|#
joe,
Obviously, that's not how most government spending
works.
Heh. I beg to differ. Handing out stacks of money to people whose
support would be useful seems SOP.
|2.4.09 @ 1:15PM|#
You have any evidence that this time is exponentially worse
than any of the other recessions or depressions of the last 200+
years?
Yes, and I just provided it. Over a million jobs lost in two
months.
If many economists can agree that we need a stimulatory effect
in the down times and admit to a net-positive gain from stimulatory
spending - the positive effect can be easily completely wiped out
by wasteful spending on pork projects that never actually recoup
the amount of their cost in economic benefit.
It's certainly possible that the short-term increase in economic
activity could be smaller than the long-term reduction (from paying
back the cost years later) from any one item, but consider a couple
of points:
First, we typically ramp up interest rates during economic booms.
If our fiscal policy - paying down debt - during the next boom does
this and we keep interest rates lower, we're not talking about any
real reduction in economic activity.
Second, there is a benefit just to time-shifting. If unemployment
during a downturn is lowered from 8% to 6%, and the cost is that
the boom times feature a job market is characterized as "strong"
rather than as "serious labor shortages," because the nominal
unemployment rate is 3% instead of 1%, we are clearly better off
overall.
Seward|2.4.09 @ 1:17PM|#
joe,
You are linking to an outdated CBO report that looked at only a
portion of an older version of the stimulus bill.
Actually, I'm linking to an article which discusses some of the
metrics of how the CBO does business.
There is much greater oversight of domestic spending than
spending in a war zone...
I'm sorry, but how much money does the government simply lose every
year domestically? Vast swaths of the federal government's spending
simply cannot be accounted for; something which is the subject of
an embarrassing expose from time to time. And that's just under
regular, normal circumstances. That is the reality of government
spending, whether it is done domestically or overseas.
52.2% to 48.8% actually. Far below 70%.
|2.4.09 @ 1:18PM|#
i always thought depressions were impossible with the FED
watching over.
A deregulated financial sector that allows 1800s (or 1929)-style
cascades of failures will put you in a depression no matter what
the Fed does with interest rates.
Anyway, I'm not much of a monetarist. I've made actual arguments,
you know, if you'd care to address those, as opposed to the ones
National Review told you the joe in your head just gotta be
making.
|2.4.09 @ 1:20PM|#
joe did successfully call the recession about 12 months in
advance. Of course, he said we were already in it. :)
Heh. I wish. I didn't "call it" until half a year into the
recession.
But your quip raises a good point; how many of the people running
around like Kevin Bacon at the end of Animal House ("All is well!
All is well!") and insisting that this is just an ordinary
recession were arguing that there was no recession during Q4 2007,
and Qs 1, 2, and 3 2008?
robc|2.4.09 @ 1:20PM|#
Yes, and I just provided it. Over a million jobs lost in two
months.
So is that the worse job loss rate in the last 200 years? Because
we are no where near 70s unemployment or 30s unemployment numbers
yet.
I dont see the emergency. 1M jobs is about .3% of the population
(larger chunk of the working population obviously). About 1% of the
number of households.
Huge, but not emergency huge.
robc|2.4.09 @ 1:21PM|#
Heh. I wish. I didn't "call it" until half a year into the
recession.
You called it at least 6 months early. Im ignoring NEBR bullshit
definition of course. Last January, I know for sure you had called
it but I dont think that was your first call.
robc|2.4.09 @ 1:22PM|#
arguing that there was no recession during Q4 2007, and Qs
1, 2, and 3 2008?
They would be right for 75% of those quarters. :)
Seward|2.4.09 @ 1:23PM|#
joe,
First, we typically ramp up interest rates during economic
booms.
Apparently you've never heard of inflation targeting. That's not
what we typically do any more, and for good reason.
As for time-shifting, can you provide us with some econometric
data, analysis, etc. which actually illustrates this? Because to
that sounds like the sort of "fine tuning" which the macroeconomic
consensus of the early 1970s was unable to accomplish.
|2.4.09 @ 1:24PM|#
Im ignoring NEBR bullshit definition of course.
Of course you are. We must accept the government's unemployment
numbers, despite knowing they've changed their methodology
dramatically since the 70s, but you, rob, get to decide when we're
in a recession. And in an astounding coincidence, each of those
methods happens to help make your point! Wow!
I don't think I stated definitively that we were in a recession
until the summer of 08, though I might be remembering wrong.
robc|2.4.09 @ 1:26PM|#
Seward,
Because to that sounds like the sort of "fine tuning" which the
macroeconomic consensus of the early 1970s was unable to
accomplish.
It also sounds like the cycle killing that joe denies. There are
some people that really think that we can "manage" our way to
consistent 2% growth now and forever, instead of boom-bust cycles.
They are wrong.
|2.4.09 @ 1:26PM|#
Seward,
That's not what we typically do any more, and for good
reason.
Really? The Fed didn't raise interest rates during the mid-to-late
1990s? You sure about that?
Cuz I'm going to go link to a chart of interest rates now and prove
you wrong.
As for time-shifting, can you provide us with some econometric
data, analysis, etc. which actually illustrates this?
Illustrates what? How can econometric data illustrate a conceptual
point?
Seward|2.4.09 @ 1:26PM|#
robc,
Well, more to the point, the argument over whether we or were not
in a recession (I never called it either way) illustrates why
fiscal policy is so useless, particularly as some sort of fine
tuning instrument.
|2.4.09 @ 1:27PM|#
Seward,
Fed rates since 2000:
http://www.moneycafe.com/library/fedfunds.htm
Note the correlation with the performance of the economy.
robc|2.4.09 @ 1:29PM|#
We must accept the government's unemployment
numbers
Ive never accepted the government's bullshit unemployment numbers
either. Or their debt numbers. I use both at times as best
available, but I dont trust them at all.
And in an astounding coincidence, each of those methods happens
to help make your point!
Wrong. See above.
Also, NBER isnt government, they are just some random-ass think
tank.
|2.4.09 @ 1:29PM|#
Longer term:
http://en.wikipedia.org/wiki/Federal_funds_rate
I think making arguments based on the assumption that I don't know
what I'm talking about is an awesome idea, and doesn't ever turn
out badly.
robc|2.4.09 @ 1:31PM|#
joe,
I don't think I stated definitively that we were in a recession
until the summer of 08, though I might be remembering
wrong.
You are. Early last year I offered you a bet about whether or not
we would actually be in a recession by end of 2008 (standard 2
negative quarters definition). Loser couldnt post in Venezuela
threads in 2009. You didnt take me up on it, but I offered it based
on your claim we were already there.
Seward|2.4.09 @ 1:31PM|#
joe,
Really? The Fed didn't raise interest rates during the
mid-to-late 1990s? You sure about that?
The Fed doesn't "ramp up" interest rates; no central bank does
business like that any more. Look up inflation targeting. You might
learn something.
How can econometric data illustrate a conceptual
point?
By putting some skin on the concept? Logically the concept doesn't
make much sense because it seems unlikely that the government can
really anything like except by mistake, but perhaps there is some
empirical data in favor of it.
Seward|2.4.09 @ 1:34PM|#
joe,
I never claimed that they didn't increase interest rates. Indeed,
by using the term inflation targeting I readily admit that they do
so. Have you never even heard this term before? Because the
argument you are making, well, makes it sound like that is the
case.
|2.4.09 @ 1:35PM|#
Well, more to the point, the argument over whether we or
were not in a recession (I never called it either way) illustrates
why fiscal policy is so useless
I don't think it does. I don't think there's a serious case to be
made.
All through 2008, we had the unemployment-filing numbers, we had
the housing starts, we had all sorts of economic measures that
pointed to a recession.
Seward|2.4.09 @ 1:37PM|#
robc,
There are some people that really think that we can "manage"
our way to consistent 2% growth now and forever, instead of
boom-bust cycles.
That's largely because they have a 19th century physics model of
the economy. They look at the economy as if it were made up of
relatively static billiards balls smacking into one another.
|2.4.09 @ 1:37PM|#
You are. Early last year I offered you a bet about whether
or not we would actually be in a recession by end of 2008 (standard
2 negative quarters definition). Loser couldnt post in Venezuela
threads in 2009. You didnt take me up on it, but I offered it based
on your claim we were already there.
I remember that now. You're right, I did call the recession just
about at the time it began.
There goes my excessive humility again, getting the better of me.
Seriously, my humility is, like, superhuman. I need to stop doing
that, and just acknowledge that I am, indeed, teh awesome.
corrrectablelunchables|2.4.09 @ 1:39PM|#
It's generally best to ignore people who think every
question has the same answer, whose policies don't change in
response to vastly different circumstances.
and you see what a polite response to joe gets you? I do that as an
experiment every now and then to test his sincerity when he
complains about how he is treated. Just another failure on his
part. So is his attempt at a counter argument that punched not a
single hole in the solid, logical foundation I laid out for all
those who are serious and non partisan in their desire to end the
current crises. You can safely ignore joe and not doubt you are
doing so at your intellectual peril.
|2.4.09 @ 1:43PM|#
I know what inflation targeting is, Seward. I just didn't get
that you were objecting to my use of "ramping up" to mean
"raise."
OK, "the Fed raises interest rates during economic booms."
Better?
There are some people that really think that we can "manage"
our way to consistent 2% growth now and forever, instead of
boom-bust cycles.
BTW, I'd just like to repeat that I am not one of these people, and
only support getting all Keynesian on the economy's ass because we
are facing a depression. As I said, I think that we should run
deficits during ordinary recessions (like 1991 and 2001) only large
enough to avoid service cuts, and to help people who are really
suffering - welfare state, not cycle-busting.
You people (YOU PEOPLE!!!) always accuse me of never changing my
mind, but I've actually come to see a lot of wisdom in the
anti-monetarist argument that the Fed should have less discretion
with interest rates, and keep them a lot steadier than they have
been.
Seward|2.4.09 @ 1:44PM|#
robc,
I'm sort of a melding of Hayekian and Schumpeterian thought myself;
I don't really take issue with true efforts of the government to
relieve poverty, but when it starts mucking around in the real
economy, trying to pick winners and losers, that can basically be a
killing stroke for a capitalist economy.
Then again, we can always take comfort from Macauley:
It has often been found that profuse expenditure, heavy
taxation, absurd commercial restriction, corrupt tribunals,
disastrous wars, seditions, persecutions, conflagrations,
inundations, have not been able to destroy capital so fast as the
exertions of private citizens have been able to create it.
robc|2.4.09 @ 1:45PM|#
You people (YOU PEOPLE!!!) always accuse me of never
changing my mind, but I've actually come to see a lot of wisdom in
the anti-monetarist argument that the Fed should have less
discretion with interest rates, and keep them a lot steadier than
they have been.
Now if we can get you to take the next step that the Fed shouldnt
even exist.
One of your party's heroes was absolutely right about national
banks. Lets go all Andy Jackson on the Feds again!
|2.4.09 @ 1:46PM|#
corrrectablelunchables,
Shall I call the Waaaaaaaaaaambulance now?
BTW, I guess you missed the two longest paragraphs in my response -
you know the substantive replies I made to your Austrian arguments?
Here, I'll post them again for you.
This is also a ridiculous statement: A cut in spending would
put more money in the hands of the private sector to do as needed
as the money spent on day to day operations crowds out the monies
that would otherwise be used by the private sector. As if
there is no idled capacity during a recession or depression. As if
there isn't a skyrocketing unemployment rate. As if the people and
equipment who'd be put to work are currently bombarded with offers
for work.
For it to be otherwise you would have to assume that the monies
being spent in the public sector are being done so more efficiently
than the private. No, you'd just need to be aware that the
money isn't being spent by the private sector, that unemployment is
high, and that there is a great deal of idled economic
capacity.
So, just to keep score, it is YOU, not I, who responded to
substantive points with a personal attack.
You should really knock that off. Plenty of other people have
managed to both acknowledge and respond to my substantive
arguments; why can't you?
adrian|2.4.09 @ 1:47PM|#
joe, if the FED's job as bank regulator is to avoid depressions (flatten cycle) and we enter a depression, is this not a failure of the FED? You say it was deregulation, but the FED is still there as the regulator. I don't remember the FED speaking up about deregulation under its watch while it was happening.
|2.4.09 @ 1:48PM|#
Now if we can get you to take the next step that the Fed
shouldnt even exist.
Perhaps the libertarian movement would be larger if you didn't
dispose of your offspring every time you emptied the tub.
;-)
Seward|2.4.09 @ 1:49PM|#
joe,
Because the Fed doesn't simply ramp up the interest rate to "cool
down" (my term) the economy. That's what it used to do, and it was
very problematic. When you use terms like "ramp up" it sounds like
ideas that died a good death thirty years ago.
robc|2.4.09 @ 1:51PM|#
No, you'd just need to be aware that the money isn't being
spent by the private sector
Not true. The money the government is borrowing to spend would be
spent anyway. Using a very loose term of spending here to include
investment. The Chinese and Saudis arent sticking in under their
mattress if we dont borrow it.
robc|2.4.09 @ 1:52PM|#
Perhaps the libertarian movement
As I pointed out, getting rid of the Fed is an old school
democratic party idea. If the Dems would become the Party of
Jefferson/Jackson again (getting rid of the worst of both
obviously) I would join.
robc|2.4.09 @ 1:53PM|#
Perhaps the libertarian movement would be larger if you
didn't dispose of your offspring every time you emptied the
tub.
Also, the Fed isnt my offspring.
|2.4.09 @ 1:53PM|#
joe, if the FED's job as bank regulator is to avoid
depressions (flatten cycle) and we enter a depression, is this not
a failure of the FED? No, because the Fed (not all caps. It's
not an acronym) is neither all-powerful nor in possession of a
monopoly on regulation.
I certainly blame the Federal Reserve for its overly-aggressive
monetarist policies after the stock market collapse in 2001, and
for its stubbornness in refusing to regulate, and for Greenspan
talking up tax cuts instead of debt repayment, and for Greenspan
talking up ARMs, and...hey, you know what, fuck the Fed.
Where was I? Oh, yeah, but the primary culprits for the
deregulation of the financial sector were the executive and
legislative branches, particularly the White House, the SEC, and
Congress. This was a purposeful policy decision they made, to
assume that the Market Will Regulate Itself, and the Fed was far
from the leading actor on that front.
corrrectablelunchables|2.4.09 @ 1:55PM|#
As if there is no idled capacity during a recession or
depression. As if there isn't a skyrocketing unemployment rate. As
if the people and equipment who'd be put to work are currently
bombarded with offers for work.
You argument rest on the proposition that the burden of government
doesn't way into the decision making processes of employers, that
is false.
So, just to keep score, it is YOU, not I, who responded to
substantive points with a personal attack.
Hardly. You could use a conscience if you are not able to see what
you did, and I quoted to point out to you.
|2.4.09 @ 1:56PM|#
robc,
The money the government is borrowing to spend would be spent
anyway. Using a very loose term of spending here to include
investment.
This "very loose term" includes "spending" that doesn't actually
put our idled capacity to work; that's the point.
PS - it was a baby/bathwater joke. But I'm not going to insult your
sense of humor, because that would be bitchy.
|2.4.09 @ 1:57PM|#
corrrectablelunchables,
If you wish to apologize for your misrepresentation of my response
to you, I'll consider responding.
(I'd really rather you didn't, though).
corrrectablelunchables|2.4.09 @ 2:03PM|#
If you wish to apologize for your misrepresentation of my
response to you, I'll consider responding.
(I'd really rather you didn't, though).
I really need to get back to work, but I have to say, the chutzpah
of your rhetorical bag of tricks, is to quote Joey Strummer,
'simply unbelievable.'
adrian|2.4.09 @ 2:07PM|#
joe, if the FED (i use caps so people know its The Fed) has
failed as you point out in so many ways, why would you think we
would be in the same position (or worse) without it? If you adjust
your position slightly and accept that the FED is actually very
powerful and possibly mostly responsible, would this not bring
other solutions to the table? I really don't see it as being that
far of a stretch from the position you currently hold.
Is maybe 5-10% of your brain is thinking that the FED fucked 10
things up, couldn't it be possible that it actually fucked 20
things up (and we won't know till the future) and that it really
isn't doing the job it was created to do and we should rethink
it?
corrrectablelunchables|2.4.09 @ 2:07PM|#
replies I made to your Austrian arguments?
BTW, the recipe I propose doesn't follow from an Austrian model.
They would have some objections to cutting taxes without getting
rid of the debt burden.
Arthur Schopenhauer|2.4.09 @ 2:10PM|#
Here are my rhetorical tricks. They're vicious but effective in crushing your opposition.
|2.4.09 @ 2:16PM|#
adrian,
joe, if the FED (i use caps so people know its The Fed) has
failed as you point out in so many ways, why would you think we
would be in the same position (or worse) without it? Because
it did a pretty good job for the fifty or so years before that. It
was the Volcker Fed that beat inflation, for instance.
Now, please everyone, let's all stop talking about economic policy.
Someone who won't post under a recognizable handle wishes to hold
forth on how terrible I am. I'm afraid that these back-and-forths
we've been having about different ideas will have to go on the back
burner, because it's ever so important for us to talk about how I
refuse to have honest back-and-forths about ideas.
robc|2.4.09 @ 2:18PM|#
it was a baby/bathwater joke
I got it. I was just pointing out that Im okay with throwing out
someone else's baby.
robc|2.4.09 @ 2:19PM|#
This "very loose term" includes "spending" that doesn't
actually put our idled capacity to work; that's the
point.
Sure it does. Now, the idle may have to move to Hong Kong or
Riyadh, but that spending will put it to work.
#29|2.4.09 @ 2:22PM|#
Now, please everyone, let's all stop talking about economic
policy. Someone who won't post under a recognizable handle wishes
to hold forth on how terrible I am. I'm afraid that these
back-and-forths we've been having about different ideas will have
to go on the back burner, because it's ever so important for us to
talk about how I refuse to have honest back-and-forths about
ideas.
If you find that you are being beaten, you can create a
diversion-that is, you can suddenly begin to talk of something
else, as though it had a bearing on the matter in dispute. This may
be done without presumption that the diversion has some general
bearing on the matter.
joe|2.4.09 @ 2:34PM|#
Because it did a pretty good job for the fifty or so years
before that. It was the Volcker Fed that beat inflation, for
instance.
So I think now our disagreement is just one of measurement. Its
perfectly logical to not want to change something that you think is
doing a pretty good job, as well as it is perfectly logical for me
to want to change something that i think is not doing a good
job.
now the question is, how can we set up measurements to determine
good vs bad. Is it inflation, buying power, # of recessions, # of
depressions? Is there a goal that the FED is actually shooting for
(besides price stability and unemployment)?
|2.4.09 @ 2:35PM|#
I like #28:
28. When the audience consists of individuals (or a person) who are not experts on a subject, you make an invalid objection to your opponent who seems to be defeated in the eyes of the audience. This strategy is particularly effective if your objection makes your opponent look ridiculous or if the audience laughs. If your opponent must make a long, winded and complicated explanation to correct you, the audience will not be disposed to listen to him.
We see this around here, but it's also very, very common in political debates.
|2.4.09 @ 2:41PM|#
Oh, look, now they guy who won't respond to what I wrote is
crowing about winning something. Yawn.
Anyway, it's pretty funny that he 1) changed the subject from
economic policy to me, then 2) posted something about people
changing the subject when they're losing.
What could that mean?
|2.4.09 @ 2:43PM|#
Now, the idle may have to move to Hong Kong or Riyadh, but
that spending will put it to work.
So in other words, robc, it doesn't put our idled
capacity to work. That is, it doesn't stimulate our economy.
And what does "the idle may have moved to Hong Kong" mean? We still
have the unemployed workers, the close factories, and all of the
other unused inputs, sitting around, not producing things of
value.
anti-joe|2.4.09 @ 2:44PM|#
I stopped posting after i was told to get my own handle. Isn't this my own handle?
MAX HATS|2.4.09 @ 2:55PM|#
As I pointed out, getting rid of the Fed is an old school democratic party idea. If the Dems would become the Party of Jefferson/Jackson again
???
What is it that's appealing about Jackson? Is it the genocide, or
the willful violation of the Constitution?
tee hee!|2.4.09 @ 2:57PM|#
joe @ 1:04
And you're right, I misremembered the results of the poll of
economists - it was about 53-46 in favor of maintaining or raising
the minimum wage.
joe @ 1:20
I remember that now. You're right, I did call the recession just
about at the time it began.
joe @ 1:29
I think making arguments based on the assumption that I don't know
what I'm talking about is an awesome idea, and doesn't ever turn
out badly.
|2.4.09 @ 3:12PM|#
Robc - have you ever taken anything beyond econ
101?
Oh, come on. He's making perfectly good, informed arguments. He
just has a certain point of view.
It's not like he's Gil Martin here.
|2.4.09 @ 3:17PM|#
I can't remember shit. I blame the Internet, because I used to have a great memory.
robc|2.4.09 @ 3:48PM|#
joe,
So in other words, robc, it doesn't put our idled capacity to
work. That is, it doesn't stimulate our economy.
Im not a xenophobe. Hong Kong and Riyadh are part of MY economy.
Mass isnt. But fuck those assholes. :)
I mean really, are you going to go all USA! USA! on me here? When
the jobs are here, Mexicans move here. When the jobs are in Hong
Kong, we move there.
And what does "the idle may have moved to Hong Kong" mean? We
still have the unemployed workers, the close factories, and all of
the other unused inputs, sitting around, not producing things of
value.
It means the idle people, materials, assets etc, get shipped to HK
if that is where the money is being spent. They will be producing
things of value, just there instead of, for example, Detroit.
robc|2.4.09 @ 3:51PM|#
have you ever taken anything beyond econ 101?
I went to a real school, we used 4 digit class numbers.
robc|2.4.09 @ 3:52PM|#
What is it that's appealing about Jackson?
Killing the Bank.
Paying off the debt.
and
Ummm....yeah, i guess that is about it.
|2.4.09 @ 4:12PM|#
Im not a xenophobe.
Me neither. I was responding to a specific point about idled
capacity in the United States. It's all well and good that the
Chinese and Saudis can find other places to invest their money than
US bonds, but it really has nothing to do with what we were talking
about.
It means the idle people, materials, assets etc, get shipped to
HK if that is where the money is being spent.
You don't actually believe this do you? That unemployed American
workers all move to Hong Kong?
Further, you don't actually believe it would be a GOOD thing for
every downturn to result in a massive exodus of labor and equipment
that will no longer be available when the economy turns around, do
you?
robc|2.4.09 @ 4:33PM|#
joe,
You don't actually believe this do you? That unemployed
American workers all move to Hong Kong?
I once worked in Switzerland. It was my best offer straight out of
college. All? no. If it makes sense financially and etc? Why not?
Mexicans cross borders for jobs all the time. Why shouldnt
Americans?
Further, you don't actually believe it would be a GOOD thing
for every downturn to result in a massive exodus of labor and
equipment that will no longer be available when the economy turns
around, do you?
Every? Massive? No. But if it drags on you gotta do what you gotta
do. I do think that people are far too unwilling to move for better
jobs. Im stunned when people in Michigan-type areas (Detroit,
eastern KY, etc) whine about lack of jobs in their area when other
areas are hurting for employees (that isnt the case right now, but
a few years ago).
For most recessions, I think you just ride it out. For deep ones
and/or depressions, moving seems like a pretty good option. How
many of our ancestors came to America because this is where the
jobs were?
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