Paul Samuelson, R.I.P.

The influential Keynesian, who wrote the seminal 1948 econ-textbook, Economics, and was the first American Nobel laureate in economics, has died at 94. From the NYT obit:

A historian could well tell the story of 20th-century public debate over economic policy in America through the jousting between Mr. Samuelson and Milton Friedman, who won the Nobel prize in 1976. Mr. Samuelson said the two had almost always disagreed with each other but had remained friends. They met in 1933 at the University of Chicago, when Mr. Samuelson was an undergraduate and Mr. Friedman a graduate student.

Unlike the liberal Mr. Samuelson, the conservative Mr. Friedman opposed active government participation in most areas of the economy except national defense and law enforcement. He thought private enterprise and competition could do better and that government controls posed risks to individual freedoms.

Both men were fluid speakers as well as writers, and they debated often in public forums, in testimony before congressional committees, in op-ed articles and in columns each of them wrote for Newsweek magazine. But Professor Samuelson said he always had fear in his heart when he prepared for combat with Professor Friedman, a formidably engaging debater.

...Mr. Samuelson said he had never regarded Keynesianism as a religion, and he criticized some of his liberal colleagues for seeming to do so, earning himself, late in life, the label l’enfant terrible, emeritus. The experience of nations in the second half of the century, he said, had diminished his optimism about the ability of government to perform miracles.

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  • ||

    the conservative Mr. Friedman

    It never ends. There are only two possible positions according to the NYT; if you're not "liberal", you're "conservative". Fuck you, you limited thinking assholes.

  • Ironic||

    And the NYT wonders why it keeps losing readers.

  • Suki||

    It must be because the government is still refusing to make prisoners subscribe.

  • ||

    That's because there's constitutional issues preventing that -- the prohibition of "cruel and unusual punishment", for starters.

  • Suki||

    Under the current administration? They keep accusing FNN of being cruel.

  • ed||

    There are no liberals. They're calling themselves "progressives" again.

  • Johnny Longtorso||

    They're the result of thousands of years of human moral and intellectual Progress, and you are still mentally in the stone age, so of course they're 'Progressives'.

  • qwerty||

    Great! Maybe libertarians can get the work "liberal" back.

  • ||

    Like the socks you donate to the homeless, I don't think we're going to want it back after they're done with it.

  • Waitress @Bob's Country Bunker||

    Music? We have both kinds: Country and Western!

  • qwerty||

    Mr. Samuelson said he had never regarded Keynesianism as a religion, and he criticized some of his liberal colleagues for seeming to do so

    Did he ever criticize Paul Krugman? I hope so.

  • Johnny Longtorso||

    Tonite, I drink a happy toast to the subhuman monster who thought and said
    this:

    World-class economist Paul Samuelson, a Nobel laureate, wrote in the tenth edition of his textbook Economics: “It is a vulgar mistake to think that most people in Eastern Europe are miserable.” This, mind you, in the aftermath of the 1953 East German uprising, the 1956 Hungarian uprising and the Poznan protests in Poland, the 1968 revolution in Czechoslovakia— all suppressed with bloodshed by Soviet tanks. In the eleventh edition, he took out the word “vulgar.” In the 1985 twelfth edition, that entire passage had disappeared. Instead, he and his coauthor, William Nordhaus, substituted a sentence asking whether Soviet political repression was “worth the economic gains.” This non-question was identified as “one of the most profound dilemmas of human society.” After 70 years of Leninism, Stalinism, and Maoism that took at least 100 million lives, this was still a dilemma?

    It seemed to me utterly incredible that an otherwise great economist could parrot idiotic Marxist propaganda. At a time when the magnitude of the Soviet economic disaster was apparent even to the most willfully blind Marxists in Central Europe and the USSR, the 1985 Samuelson text offered this paragraph about the Soviet economy:

    But it would be misleading to dwell on the shortcomings. Every economy has its contradictions and difficulties with incentives—witness the paradoxes raised by the separation of ownership and control in America. . . . What counts is results, and there can be no doubt that the Soviet planning system has been a powerful engine for economic growth....

  • Johnny Longtorso||

    That should read "a happy toast to the death of" above.

  • Johnny Longtorso||

    Damn, "a happy toast to the death of the".

  • Suki||

    He uses Soviet editing AND Soviet economics. Some call that diverse.

  • Warty||

    It's amazing how stupid smart people can be.

  • ||

    It really is. I've had two ongoing arguments this year with very successful guys (and they're not just kiss asses) and they are totally on board with Obamanomics. They don't even know it's Keynesianism, but they think we'd have al died a miserable death if the government hadn't "bailed us out" via the massive stimulus spending. I want to reach through my email, grab them each by their throats and squeeze just to get them to shut the fuck up.

  • tarran||

    What he said isn't inaccurate though. Centrally planned economies can show spectacular growth. The growth, however, has little relation with what the people want or need.

    Thus you get state of the art space-stations while people are dying from lack of antibiotics and soap.

  • Johnny Longtorso||

    Is that 'growth', or just the occasional achievement?

  • ||

    Actually, centrally planned economies can show spectacular growth, such as in Mainland China -- by loosening the reins on the central planning a bit.

    If you start at "obscene levels of poverty", quickly getting to "fucking poor" IS spectacular growth.

    You can have spectacular growth and still lag WAAAAY behind more free countries with stagnant or slowly growing economies.

  • monolith||

    I though that the growth in he soviet union was in the initial stages when they forced people off the land and into industry?

  • ||

    The move of people off the land and into industry in Russia started long before the Soviet Union.

    My father once talked to a Professor of Slavic Studies who said he had detemined that rates of ecomic growth in Russia had been much higher in the years 1967-1917 than in the years 1917 to 1967.

  • Colin||

    I remember that textbook from high school. If only we had one of Friedman's books instead.

  • Johnny Longtorso||

    As an aside, I personally welcome our new lesbian overlords:

    http://latimesblogs.latimes.co.....sbian.html

  • Suki||

    But it says she is a conservative. Is that real Conservative or LA Times "conservative?"

  • Johnny Longtorso||

    This demonstrates the difference between Houston and Dallas.

    Media: The candidate is a lesbian.

    Dallas Voter: Oh My God, This Is The Apocalypse!!! Jesus will smite us!!! EEEEEEKKKKKK!!!!!

    Houston Voter: OK, but where does she stand on keeping my taxes down?

  • The Libertarian Guy||

    I didn't pay attention to that race. Did the lesbian in question claim to be more qualified to hold public office because of her sexual preference, or in spite of it?

  • Johnny Longtorso||

    She didn't make an issue of it either way.

  • The Art-P.O.G.||

    She didn't make an issue of it either way.

    Progress!

  • ||

    The lesbian's opponent: "... because muff-divers have no place in politics!"

    * Wife arches eyebrows at him, implying 'you cut me off, buster, I'll cut YOU off' *

    followed by a hasty retraction ...

  • phenomenologist||

    She didn't make an issue

    Homosexuality nominally implies barrenness.

  • ||

    I didn't see the dedicated thread; stuck this below.

    P Brooks|12.13.09 @ 2:22PM|#

    “I don’t care who writes a nation’s laws — or crafts its advanced treatises — if I can write its economics textbooks,” Mr. Samuelson said.

    Histextbook taught college students how to think about economics. His technical work — especially his discipline-shattering Ph.D. thesis, immodestly titled “The Foundations of Economic Analysis” — taught professional economists how to ply their trade. Between the two books, Mr. Samuelson redefined modern economics.

    The textbook introduced generations of students to the revolutionary ideas of John Maynard Keynes, the British economist who in the 1930s developed the theory that modern market economies could become trapped in depression and would then need a strong boost from government spending or tax cuts, in addition to lenient monetary policy, to get back on track. No student would ever again rest comfortable with the 19th-century nostrum that private markets would cure unemployment without need of government intervention.

    -NYT

    If this is the case, good riddance, Paul Samuelson.

  • ||

    It has been a good year for liberals dying.

  • bmp1701||

    Don't forget, Irving Kristol also croaked this year.

  • Johnny Longtorso||

    What's the liberal vs neoconservative death count this year?

  • robc||

    How does that not count?

  • ||

    President Barack Obama and his economic team lashed out at Wall Street, with the president calling bankers "fat cats" who "don't get it," in a move that could escalate tensions with the nation's biggest bankers ahead of a meeting with industry representatives.

    Mr. Obama, speaking on the eve of Monday's meeting with the heads of top banks at the White House, said he would try to persuade bankers to free up more credit to businesses, with the aim of helping boost job growth. But the president also expressed frustration with banks that the government has assisted.

    "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street," Mr. Obama said in an interview to be broadcast on CBS's "60 Minutes" program Sunday evening, according to excerpts made available ahead of the program.

    WSJ

    What will BigMedia say when this sort of hate speech leads some poor overwrought bastard to walk into his local branch of Citibank and plug the First Assistant Vice President for Turning Down Small Business Loans?

  • Johnny Longtorso||

    Given that nothing bad has ever come about due to govt forcing banks to give the 'right' loans to the 'right' people, I see only an upside to this.

    To infinity and beyond!!!!!!

    PS. Bank of America said in their Oct 2008 analysts conference call that CRA loans were 7% of their residential book but 29% of their losses.

  • Apostate Jew||

    And you believe the employees of the Bank of Italy?

    Every analysis I've read - those that actually cite numbers and include calculations - concludes that CRA loans have lower default rates than non-CRA loans and that the loans made to the white folks (well the analyses don't say that it's mostly whites who wold be dumb enough to take interest only and other idiotic loans but it stands to reason) are the problem.

    John Carney, a CRA basher, admitted as much in a conversation with Felix Salmon.

    "So, ironically, the poor were paying off their loans so well that bankers made similar loans to the relatively wealthy. And that blew up the world."

    So, not ironically but typically, the relatively poor, having behaved in an old-fashioned responsible way by fulfilling their obligations, get blamed for the crisis anyway.

    (I'd like to see it all in a nice spreadsheet, but it looks like no one wants to show that. Too many oxen gored.)

  • Johnny Longtorso||

    And you believe the employees of the Bank of Italy?

    Given that there are legal penalties for lying to stock analysts, and that you gave no evidence whatsoever to back up your implication that they were actually lying, then yes, I believe them.

    Bad loans weren't always known to be bad during the boom. If you can sell the property for a good profit, you don't default. It takes a bust to see how bad the loans were.

    Here are some stats from another bust period:

    http://www.banking.senate.gov/.....rb-cra.htm

    * By every measure, CRA loans are not as profitable as non-CRA loans.

    * No institution reported that CRA lending was more profitable than non-CRA lending for home mortgage, refinance, home improvement, or small business loans.

    * For home purchase and refinance lending, three times as many institutions reported their CRA-related loans not profitable as compared to non-CRA-related loans.

    * One out of three large institutions report that CRA lending in the home mortgage and refinance markets is not profitable.

    * Three times the value of CRA home improvement loans are not profitable as compared to non-CRA loans.

    * Delinquency rates for CRA loans in the home purchase and refinance market are twice that for non-CRA loans.

    * Among all institutions, about 40 percent of CRA special lending programs are not profitable. For large institutions, 58 percent report that their CRA special lending programs are not profitable. This is inconsistent with the safety and soundness requirements of CRA.

  • Apostate Jew||

    From your data, published in 2000. Let's assume it's still accurate.

    "Delinquency rates for CRA loans are twice that for non-CRA loans in the market for home purchase and refinance (1.57 percent v. 0.79 percent)."

    Here is the realtors' data from 2009.

    "As of October 2008, the foreclosure rate on jumbo mortgages reached 2.5 percent versus 1.2 percent for conforming mortgages."

    How many CRA mortgages are non-conforming?

    How can mortgages that are only 10 percent of the market (your data, although it doesn't say whether by volume or by value) and whose default rate is lower than that of jumbo mortgages (in 2007, 10 percent by volume and 30 percent by value) nearly wreck the financial system?

    Can you find data less than 10 years old?

    Answer those questions and you might convince me. Otherwise, I'll stick to the theory that a lot of people thought that an asset bubble could grow ever bigger and are now casting around for a scapegoat for their stupidity and avarice. (Nothing wrong with a little avarice but when combined with stupidity, a lot of avarice is dangerous.)

    The NAR report is here http://www.realtor.org/wps/wcm.....ec21680fb0

  • Johnny Longtorso||

    We started this conversation w/ my Oct 2008 info from BofA, so I've already found data less than 10 years old. The only response you were capable of was "that doesn't fit left wing dogma and therefore they must be telling outright lies to stock analysts, despite the risks in doing so".

  • Johnny Longtorso||

    AJ, do you deny that the govt had programs in place and a major effort toward

    1. Artificially keeping home prices up
    and
    2. Getting people into those more and more expensive homes w/ less and less of their own money?

  • Johnny Longtorso||

    If you can question BofA's honesty, wouldn't this call the NAR's objectivity into question?

    http://www.realtor.org/infoind.....enDocument

    2000 Democratic Party Platform

    Provisions Included in 2000 Democratic Platform by the
    NATIONAL ASSOCIATION OF REALTORS®

  • Apostate Jew||

    The financial markets did not almost collapse in 2000.

    CRA lending is, by your admission, at most 10 percent of the market and CRA lending is, by definition, at the low end of the market.

    To the extent that government policy contributed to the crisis, such policy is to blame. To the extent that members of the financial sector ignored sound practices, they are to blame.

    I have not once mentioned any political party. If you want to be a Republican, that's fine, I don't particularly care. But it's fairly obvious to me, that small loans that comprised a small share of the market cannot have been the real problem.

    The people who should have known better and who are very well paid to know better, fucked up and now they're trying to blame a tiny sector of the market. If they don't like the opprobrium heaped upon them, perhaps they ought not to behave so stupidly. Alternatively, they can go to China and ruin their economy.

  • robc||

    The people who should have known better and who are very well paid to know better, fucked up and now they're trying to blame a tiny sector of the market.

    Ive never heard the FED blame CRA.

  • Johnny Longtorso||

    I'm not a Republican, and there were many other govt activities that contributed toward the government created bubble and government created crash.

    However, I do have a stat from a major bank saying CRA loans were less than 10% of their residential book, but almost a third of their losses. Your only response is to claim that is impossible and to imply BoA must be lying despite the sort of legal trouble they could get into if they lied in that conversation.

  • Johnny Longtorso||

    Are you afraid of behavior like this?

    Activist Financier 'Terrorizes' Bankers in Foreclosure Fight
    http://online.wsj.com/article_.....jU0Wj.html

  • ||

    "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street,"

    Just like he didn't run for office to escalate the war in AFG and keep troops in IRQ for the foreseeable future, continue DEA medical marijuana raids, continue to hold Gitmo detainees without trial indefinitely, refuse to release photos of Abu Ghraib prisoner abuse, deny FOIA requests left and right,....

  • ||

    Speaking of home-grown terrorists

    Governor Arnold Schwarzenegger described Friday's attack on the home of the University of California at Berkeley's chancellor as a "type of terrorism" that will not be tolerated.

    Protesters angry about budget cuts and fee hikes vandalized Chancellor Robert Birgeneau's home on campus at about 11 p.m. Friday night, according to the university.

    "California will not tolerate any type of terrorism against any leaders, including educators," Schwarzenegger said in a statement released Saturday.

    The University of California is a terrorist training facility; send in the Marines!

  • ||

    Funny that he said, "terrorism against any leaders". One wonders if he has the same response to terrorism against civilians.

  • The Libertarian Guy||

  • EscapedWestOfTheBigMuddy||

    I see the Berkeley geeks are still jealous that it was UC Santa Barbara hippies who burned down the Bank of America.

  • ||

    I'll stick to the theory that a lot of people thought that an asset bubble could grow ever bigger and are now casting around for a scapegoat for their stupidity and avarice.

    The National Association of Realtors is a trade organization of avaricious idiots; that much I agree with.

  • Johnny Longtorso||

    Avaricious idiots who stood to gain from anything that pushed people into buying homes. However, since they are politically useful to liberals, that financial interest is to be ignored.

  • ||

    There are always people who see a trend that has made money, so they get behind it and push more, usually to the tune of "there's no limit to how high this can go."

    Then the bubble bursts.

    The next bubble - the Chinese economy - is building. Your guess as to when it bursts is as good as mine.

    "I made a fortune by selling too soon." J. Pierpoint Morgan.

  • Morris||

    'The experience of nations in the second half of the century, he said, had diminished his optimism about the ability of government to perform miracles.'

    ABSOLUTELY NOTHING DIMINISHES A RIGHT-WING LIBERARIAN'S OPTIMISM ABOUT THE ABILITY OF THE MARKET TO PERFORM MIRACLES.

  • ||

    And the libertarians who AREN'T right-wingers?

  • ||

    no no, he clearly shouted RIGHT-WING LIBERARIAN'S

    so he was somewhere along the gold coast with that comment

  • ||

    Can I just say, all and sundry? The comments on here are half the reason I read, uh...Reason.

    Half of it's intelligent, highly-informed analyses of what's going on in the world, from the libertarian layman's vantage point (ie, youse guys).

    The other half is delightful trashing of cretins like Morris. MO-RRIS!

    And I apologize for gettin' maudlin. Let the shit fly.

  • ||

    I think we need to stop fighting the trend. I think we need to give the central planners free rein/enough rope to manage everything and let it lead inevitable to where it will lead. When it all falls apart we can pick up the pieces and start over.

  • mbt||

    hi,
    everybody, take your time and a little bit.kfykyhjdf

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