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Post by Marshall on Jul 12, 2018 12:22:26 GMT -5
I take that back. Our leadership is who we are. And we're not going to change any time soon.  |
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Post by Marshall on Jul 13, 2018 16:14:01 GMT -5
How about the Mueller guy? Indicting 12 Russians for hacking the DNC right before Trump meets with Putin. I'd say he IS trying to send a message. Maybe something will come out of that afterall.
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Post by Fingerplucked on Jul 13, 2018 18:33:50 GMT -5
I unearthed Nancy's Master's thesis. It's a pretty thoroughgoing critique of Keynsian economics...back before there were no dissenting voices being heard. Interesting. The Nancy I knew couldn't have cared less. Friedrich Hayek was critiquing Keynes from day one, back in the 30s. |
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Post by Village Idiot on Jul 13, 2018 18:46:44 GMT -5
I've tried, on several occasions, to read up on Keynsian economics to see what it was and I honestly can't make heads or tails of what anything I've come across is saying.
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Post by epaul on Jul 13, 2018 19:29:49 GMT -5
That's because you are an artist, a musical artist. You learn through song. And as it happens, I have been working on an opera about the life of John Keynes and it covers Keynesian economics thoroughly, in song. It begins when young John Keynes is packing his bags to go off to college and realizes he doesn't have enough socks and must borrow some from his brother.
I'll bring the score to IJ.
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Post by Fingerplucked on Jul 13, 2018 19:32:28 GMT -5
Todd, the overall idea is fairly simple. Our economy is made up of three basic sectors: Consumers (you and me), Investment (business spending), and Government.
Both consumers and businesses will always try to act in their own self interest, and short term interests tend to trump long term interests. Only the government is in a position to act on behalf of the entire economy.
With the 1929 stock market crash, both people and businesses started to panic. People pulled their money from banks, even though their collective actions only made things worse. Banks closed their doors to protect their assets, even though they were collectively making things worse. People lost jobs, consumer spending crashed, and businesses responded with further layoffs, again, collectively, making things worse.
You can’t blame any individual player. Everybody was merely trying to protect themselves. But the downward spiral and the worst depression we’ve seen was caused by people’s reactions to the stock market crash, not the crash itself.
At this point Keynes was doing whatever Keynes did before Keynesian theory became a thing. But he came to realize that the government was in a unique position. While everybody was cutting spending in every conceivable way, the government, and only the government, was in a position to start spending on a major scale. The government could pump money into the economy. The government could create jobs. As Keynes argued, the economy would benefit if the government hired teams of workers to dig ditches, and an equal number of teams to follow right behind them and fill in the ditches. In other words, the economy would benefit and be stimulated by government spending no matter how valid or necessary the created jobs were. Further, there would be a multiplier effect as the ditch diggers spent their money at local stores, and then the local stores spent their money and/or hired more workers, and the money got spent again. The size of the multiplier effect is widely contested, but there’s little doubt that it exists.
To look at it another way, the government’s role is to act contrary to the rest of the economy. When people get tight with money, the government can spend and ease the extent of any downturn. And when things are going well, the government is obliged, according to Keynes, to pay down a portion or all of the debt it incurred during previous spending periods. That will not only keep our federal debt manageable, but also help keep the economy from becoming over stimulated. The overall effect is to smooth the peaks. Recessions won’t be as deep, and booms won’t be as high.
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Post by epaul on Jul 13, 2018 19:37:31 GMT -5
That's all covered in Act II. Good stuff, and it really does lend itself to song.
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Post by theevan on Jul 13, 2018 20:41:33 GMT -5
I unearthed Nancy's Master's thesis. It's a pretty thoroughgoing critique of Keynsian economics...back before there were no dissenting voices being heard. Interesting. The Nancy I knew couldn't have cared less. Friedrich Hayek was critiquing Keynes from day one, back in the 30s. Correct. True genius, him. |
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Post by Village Idiot on Jul 13, 2018 20:57:52 GMT -5
Todd, the overall idea is fairly simple. Our economy is made up of three basic sectors: Consumers (you and me), Investment (business spending), and Government. Both consumers and businesses will always try to act in their own self interest, and short term interests tend to trump long term interests. Only the government is in a position to act on behalf of the entire economy. Thanks, Jim, that all makes sense now. A heck of a lot more sense than terms like "aggregate demand". |
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Post by Village Idiot on Jul 13, 2018 21:00:52 GMT -5
That's because you are an artist, a musical artist. You learn through song. And as it happens, I have been working on an opera about the life of John Keynes and it covers Keynesian economics thoroughly, in song. It begins when young John Keynes is packing his bags to go off to college and realizes he doesn't have enough socks and must borrow some from his brother. I'll bring the score to IJ. That sounds fantastic, Paul. Do you think the story about him not having enough socks would be worthy of a final sing-a-long Saturday night in Garrison? Could it replace Goodnight Irene? It'd have to have an easy-to-catch-onto refrain, you know. In an easily singable key, like G. |
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Post by Russell Letson on Jul 13, 2018 21:26:38 GMT -5
Epaul should meet my friend Eleanor who wrote an opera about the invention of double-entry bookkeeping.
Oh, and aggregate demand always goes up when the economy rebounds--all that new construction needs concrete, doncha know.
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Post by amanajoe on Jul 13, 2018 22:07:08 GMT -5
That's because you are an artist, a musical artist. You learn through song. And as it happens, I have been working on an opera about the life of John Keynes and it covers Keynesian economics thoroughly, in song. It begins when young John Keynes is packing his bags to go off to college and realizes he doesn't have enough socks and must borrow some from his brother. I'll bring the score to IJ. That sounds fantastic, Paul. Do you think the story about him not having enough socks would be worthy of a final sing-a-long Saturday night in Garrison? Could it replace Goodnight Irene? It'd have to have an easy-to-catch-onto refrain, you know. In an easily singable key, like G. This may have been done before: www.industrialmusicals.com/ |
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Post by timfarney on Jul 14, 2018 10:07:13 GMT -5
An even shorter generalization: Keynes supposed that the economy was driven by aggregate demand, the sum of all factors, including government spending, creating demand in the market. The classical economics that preceded him (and followed him) stated that the economy is driven by aggregate supply, the sum of all the factors creating supply in the market. There are good and bad ideas about stimulating/manipulating economies based on both, but that’s the heart of the thing.
I tend to think demand drives supply. That doesn’t mean I believe in everything every Keynsean ever came up with, but it does mean I think the other guys don’t even have a logical premise. We have a perfect example of supply-side economics currently in the works. We have stimulated the supply side directly, through a massive cut in corporate taxes, resulting, so far, in an $800 billion stock buy back. Stock buy backs don’t invent, design, build or expand anything but shareholder value (temporarily). Keynes would have put that money in the hands of consumers, believing they would spend it, creating greater consumer demand, which inevitably creates production, expansion, jobs, wage increases. Actually, in this case, Keynes wouldn’t have us stimulating the economy at all. He would have us paying down the debt right now. That would be very Keynesian.
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Post by millring on Jul 14, 2018 10:11:31 GMT -5
But, again, the tax cuts have not led to a reduction in revenue.
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Post by timfarney on Jul 14, 2018 10:20:04 GMT -5
But, again, the tax cuts have not led to a reduction in revenue. Yeah, I get that. But they are stimulating a very narrow, very healthy slice of the economy that is not in need of stimulus. It has mostly moved digits repreosenting dollars around in the system, making lots of money for digit movers. It won’t trickle down, because they obviously didn’t need it and won’t be spending it. I think Keynes may have had a point. |
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Post by millring on Jul 14, 2018 11:05:26 GMT -5
Except that job growth is at a record high too.
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Post by timfarney on Jul 14, 2018 11:07:44 GMT -5
Except that job growth is at a record high too. True. Continuing a trend. So why did we stimulate the supply side again? |
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Post by millring on Jul 14, 2018 11:24:17 GMT -5
We didn't stimulate it. We cut taxes. Didn't cost us a dime.
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Post by fauxmaha on Jul 14, 2018 11:38:29 GMT -5
Economics, as commonly understood and discussed anyway, is really, really dumb.
If I were to say "The temperature in America yesterday was 85 degrees" you'd immediately tell me "well, what about Alaska and Denver and Key West" or whatever. Obviously the idea of describing the entire country by a single measure is nonsensical.
And yet that is precisely what we do with economics. We talk about fictions like the "GDP" or the "unemployment rate" as if a single number is any more meaningful in those contexts than it is describing temperature.
We do that because we are only capable of understanding so much. When we hit our limit of comprehension and data collection, we resort to abstraction and aggregation, not because those abstractions reveal meaning, but because we are incapable of dealing with things at a greater level of detail.
So we build elaborate systems and feed data into those systems, and blithely ignore that all of this is built on the total fiction we started with.
If there is a difference between Keynes and the Austrians, that's it. Keynes believed in a single temperature. The Austrians tell us something different.
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Post by Fingerplucked on Jul 14, 2018 12:14:01 GMT -5
It’s a shame they didn’t have separate classes for micro and macro economics where you went to school.
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