Krugman rips von Mises up one side & down the other

[Bfgrn]

Dispatching rw economists in his spare time: like shootin' fish in a barrell

http://krugman.blogs.nytimes.com/20...Opinion&action=Click&pgtype=Blogs&region=Body

Ludwig von Mises - Wikipedia, the free encyclopedia


Whittaker Chambers also dispatched Ayn Rand's scrivenings as well

Libertarianism and Objectivism was so 1995 for me. I was a senior in high school, I got a copy of Atlas Shrugged and the Fountainhead from my school library. They were marginally decent works of fiction. As an econ and finance major, we did cover von Mises, Rothbard, von Hayek and other heterodox thinkers, which sort of helps econ undergraduates with formulating concepts. The problem with the Austrian Scool, besides the problems inherent with their ideas about the natural rate of interest and the business cycle, is that we're no longer on a gold standard. It's like giving someone an Atari manual to run a Playstation 4.

of course that's not really true. When Ron Paul asked Bernanke why we don't switch to a gold standard he said, " we run the Fed as if we on a gold standard." THe objective is to get out of the way so the free market can work. A recession is the time it takes the free market to recover from liberal interference. Bernanke knows this.

THIS Ben Bernanke???

According to Federal Reserve chairman Ben Bernanke, “Only with the New Deal’s rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression.” In fact, even famed conservative economist Milton Friedman admitted that the New Deal’s Federal Deposit Insurance Corp. was “the structural change most conducive to monetary stability since … the Civil War.”

 

[Shanty]

Face it you Austrian Poodles. Theres no science behind your cult.

Actually, Keynesianism is pure Voo Doo. None of it's claims have ever been demonstrated in any way. In fact, the empirical evidence shows them all to be false.

The empirical evidence shows Keynes was generally right. Then, New Keynesians worked out some shortcomings in the aftermath of the 1970s, and applied microeconomic principles to find out how it was the macroeconomics worked.

Since that sort of rethinking of the early 1980s, the Keynesians have been getting it right on policies and predictions.

Here's an example of Krugman predicting what would happen in the US as the interest rates went near zero, and no traction from the low rates to get the economy roaring.
http://krugman.blogs.nytimes.com/20...Opinion&action=Click&pgtype=Blogs&region=Body

http://www.voxeu.org/sites/default/files/Vox_secular_stagnation.pdf

 

[JWBooth]

Why Austrian economics, in this case- von Mises, isn't taken seriously:

Ludwig von Mises - RationalWiki

Mises' greatest work is generally considered (among his followers, at least) to be the gargantuan doorstopper called Human Action, which fully codifies the method of praxeology. Unfortunately for Mises, it was pseudoscientific upon arrival in 1949 and is even more pseudoscientific in light of current knowledge.

I have lots more where that came from & will periodically update this thread

Nothing times "lots more" is still nothing.

IOW...you have nothing asshole.

This little quote is nothing more than the opinion of a left wing moron.

Yep

 

[Toro]

Actually, FDR didn't spend enough when we look at the Depression in the aggregate.

What is your opinion of the UCLA economists' paper about how FDR's policies extended the Depression?

...

The latest salvo came Monday morning in a piece by two economists, Harold L. Cole and Lee. E. Ohanian: “How Government Prolonged the Depression.”

Defenders of the New Deal will find much to argue with in Cole and Ohanion’s account, but for simplicity’s sake, I am going to zero in on just one point — the impact of the New Deal on unemployment.

Cole and Ohanian:

The goal of the New Deal was to get Americans back to work. But the New Deal didn’t restore employment. In fact, there was even less work on average during the New Deal than before FDR took office.

How can one make this claim? Unemployment reached 25 percent in the Great Depression, and fell steadily until World War II (although there were some bumps up along the way). Ah, but the revisionist position is that unemployment did not fall as much as it should have. And this argument is based on an interesting interpretation of the available data. As Amity Shlaes, currently the premier anti-New Deal historical revisionist writing for a popular audience, explained proudly in her own Wall Street Journal opinion piece in November, “The Krugman Recipe for Depression,” a necessary step is to not count as employed those people in “temporary jobs in emergency programs.”

So it's a data thing, then?

I have no horse in this race, and have defended the New Deal here in the past, particularly from conservatives who claim that Hoover's policies were the reason for the Depression. I asked Kimura out of curiousity because he's a published economist, and the paper's conclusion is at odds with his Keynesian philosophy, though he may agree with the authors' conclusions about wage fixing aspects of the New Deal, which was the basis of the authors' conclusion, and which many economists on the left now agree was a horrendous mistake.

BTW, economic output bottomed before FDR was inaugurated according to Paul Kasriel.

Here's the argument. Notice that they mention total hours worked, not unemployment, and include government employees. Whether that includes those on public works, I don't know.

The goal of the New Deal was to get Americans back to work. But the New Deal didn't restore employment. In fact, there was even less work on average during the New Deal than before FDR took office. Total hours worked per adult, including government employees, were 18% below their 1929 level between 1930-32, but were 23% lower on average during the New Deal (1933-39). Private hours worked were even lower after FDR took office, averaging 27% below their 1929 level, compared to 18% lower between in 1930-32.

Even comparing hours worked at the end of 1930s to those at the beginning of FDR's presidency doesn't paint a picture of recovery. Total hours worked per adult in 1939 remained about 21% below their 1929 level, compared to a decline of 27% in 1933. And it wasn't just work that remained scarce during the New Deal. Per capita consumption did not recover at all, remaining 25% below its trend level throughout the New Deal, and per-capita nonresidential investment averaged about 60% below trend. The Great Depression clearly continued long after FDR took office.

Why wasn't the Depression followed by a vigorous recovery, like every other cycle? It should have been. The economic fundamentals that drive all expansions were very favorable during the New Deal. Productivity grew very rapidly after 1933, the price level was stable, real interest rates were low, and liquidity was plentiful. We have calculated on the basis of just productivity growth that employment and investment should have been back to normal levels by 1936. Similarly, Nobel Laureate Robert Lucas and Leonard Rapping calculated on the basis of just expansionary Federal Reserve policy that the economy should have been back to normal by 1935.

So what stopped a blockbuster recovery from ever starting? The New Deal. Some New Deal policies certainly benefited the economy by establishing a basic social safety net through Social Security and unemployment benefits, and by stabilizing the financial system through deposit insurance and the Securities Exchange Commission. But others violated the most basic economic principles by suppressing competition, and setting prices and wages in many sectors well above their normal levels. All told, these antimarket policies choked off powerful recovery forces that would have plausibly returned the economy back to trend by the mid-1930s.

The most damaging policies were those at the heart of the recovery plan, including The National Industrial Recovery Act (NIRA), which tossed aside the nation's antitrust acts and permitted industries to collusively raise prices provided that they shared their newfound monopoly rents with workers by substantially raising wages well above underlying productivity growth. The NIRA covered over 500 industries, ranging from autos and steel, to ladies hosiery and poultry production. Each industry created a code of "fair competition" which spelled out what producers could and could not do, and which were designed to eliminate "excessive competition" that FDR believed to be the source of the Depression.

These codes distorted the economy by artificially raising wages and prices, restricting output, and reducing productive capacity by placing quotas on industry investment in new plants and equipment. Following government approval of each industry code, industry prices and wages increased substantially, while prices and wages in sectors that weren't covered by the NIRA, such as agriculture, did not. We have calculated that manufacturing wages were as much as 25% above the level that would have prevailed without the New Deal. And while the artificially high wages created by the NIRA benefited the few that were fortunate to have a job in those industries, they significantly depressed production and employment, as the growth in wage costs far exceeded productivity growth.

http://online.wsj.com/news/articles/SB123353276749137485

 

[Dot Com]

splitting hairs to buttress an ideoligal POV it would appear.

Also looks like people earned a living wage due to those policies and the CEO's didn't "make off" w/ the loot. Good for FDR. What do people do w/ more wages? spend more thus plowing it back into the economy.

Can't have Americans, who want to enter the middle-class, earning decent wages nowadays. Thats unRandian for cryin' out loud!!! [MENTION=19448]CrusaderFrank[/MENTION] [MENTION=2926]Toro[/MENTION]

 

[saveliberty]

All it shows, is the more government tries to manipulate the economy, the more is reacts improperly.

 

[Dot Com]

Thats all you got? Please go back to the Coffee Shop. Thank you for your cooperation.

 

[dblack]

All it shows, is the more government tries to manipulate the economy, the more is reacts improperly.

Yup. And the more it reacts 'improperly' the more they clamor for more power to intervene. It's all about power. We're essentially in a similar place, historically, to when warlords figured how much power controlling religion could grant them. It took us centuries to cut that unholy connection (in many places we're still working on it). Getting their paws off our money will probably take even longer.

 

[CrusaderFrank]

More government = less freedom + less prosperity

 

[Listening]

More government = less freedom + less prosperity

Pretty basic.

Pretty simple.

Always true.

FDR's jobs program and all it's "great things" came at the cost of an extended depression.

I agree that if the government is going to give people money, they should work for it.

But the idea of using tax dollars to "stimulate" an economy on the backs of people who are already working....is stupid.

Additionally, my experience was that those stimulus dollars didn't make a difference. Where they were spent, they were spent poorly (people knew that in many cases they were helping to build roads to nowhere).

But moving on:

How FDR's New Deal Harmed Millions of Poor People | Cato Institute

The most important source of New Deal revenue were excise taxes levied on alcoholic beverages, cigarettes, matches, candy, chewing gum, margarine, fruit juice, soft drinks, cars, tires (including tires on wheelchairs), telephone calls, movie tickets, playing cards, electricity, radios — these and many other everyday things were subject to New Deal excise taxes, which meant that the New Deal was substantially financed by the middle class and poor people. Yes, to hear FDR’s “Fireside Chats,” one had to pay FDR excise taxes for a radio and electricity! A Treasury Department report acknowledged that excise taxes “often fell disproportionately on the less affluent.”

Until 1937, New Deal revenue from excise taxes exceeded the combined revenue from both personal income taxes and corporate income taxes. It wasn’t until 1942, in the midst of World War II, that income taxes exceeded excise taxes for the first time under FDR. Consumers had less money to spend, and employers had less money for growth and jobs.

Less political liberty

Less financial liberty

Less individual liberty

 

[EdwardBaiamonte]

Can't have Americans, who want to enter the middle-class,

very hard these days when liberal unions and liberal taxes drive our jobs off shore. Harder still when liberals attack and destroy the American family and schools thus rendering most Americans unfit for the middle class.

 

[Listening]

Can't have Americans, who want to enter the middle-class,

very hard these days when liberal unions and liberal taxes drive our jobs off shore. Harder still when liberals attack and destroy the American family and schools thus rendering most Americans unfit for the middle class.

I'd rep this, but I'm out.

 

[Shanty]

What is your opinion of the UCLA economists' paper about how FDR's policies extended the Depression?

...

The latest salvo came Monday morning in a piece by two economists, Harold L. Cole and Lee. E. Ohanian: “How Government Prolonged the Depression.”

Defenders of the New Deal will find much to argue with in Cole and Ohanion’s account, but for simplicity’s sake, I am going to zero in on just one point — the impact of the New Deal on unemployment.

Cole and Ohanian:

The goal of the New Deal was to get Americans back to work. But the New Deal didn’t restore employment. In fact, there was even less work on average during the New Deal than before FDR took office.

How can one make this claim? Unemployment reached 25 percent in the Great Depression, and fell steadily until World War II (although there were some bumps up along the way). Ah, but the revisionist position is that unemployment did not fall as much as it should have. And this argument is based on an interesting interpretation of the available data. As Amity Shlaes, currently the premier anti-New Deal historical revisionist writing for a popular audience, explained proudly in her own Wall Street Journal opinion piece in November, “The Krugman Recipe for Depression,” a necessary step is to not count as employed those people in “temporary jobs in emergency programs.”

So it's a data thing, then?

I have no horse in this race, and have defended the New Deal here in the past, particularly from conservatives who claim that Hoover's policies were the reason for the Depression. I asked Kimura out of curiousity because he's a published economist, and the paper's conclusion is at odds with his Keynesian philosophy, though he may agree with the authors' conclusions about wage fixing aspects of the New Deal, which was the basis of the authors' conclusion, and which many economists on the left now agree was a horrendous mistake.

BTW, economic output bottomed before FDR was inaugurated according to Paul Kasriel.

Here's the argument. Notice that they mention total hours worked, not unemployment, and include government employees. Whether that includes those on public works, I don't know.

The goal of the New Deal was to get Americans back to work. But the New Deal didn't restore employment. In fact, there was even less work on average during the New Deal than before FDR took office. Total hours worked per adult, including government employees, were 18% below their 1929 level between 1930-32, but were 23% lower on average during the New Deal (1933-39). Private hours worked were even lower after FDR took office, averaging 27% below their 1929 level, compared to 18% lower between in 1930-32.

Even comparing hours worked at the end of 1930s to those at the beginning of FDR's presidency doesn't paint a picture of recovery. Total hours worked per adult in 1939 remained about 21% below their 1929 level, compared to a decline of 27% in 1933. And it wasn't just work that remained scarce during the New Deal. Per capita consumption did not recover at all, remaining 25% below its trend level throughout the New Deal, and per-capita nonresidential investment averaged about 60% below trend. The Great Depression clearly continued long after FDR took office.

Why wasn't the Depression followed by a vigorous recovery, like every other cycle? It should have been. The economic fundamentals that drive all expansions were very favorable during the New Deal. Productivity grew very rapidly after 1933, the price level was stable, real interest rates were low, and liquidity was plentiful. We have calculated on the basis of just productivity growth that employment and investment should have been back to normal levels by 1936. Similarly, Nobel Laureate Robert Lucas and Leonard Rapping calculated on the basis of just expansionary Federal Reserve policy that the economy should have been back to normal by 1935.

So what stopped a blockbuster recovery from ever starting? The New Deal. Some New Deal policies certainly benefited the economy by establishing a basic social safety net through Social Security and unemployment benefits, and by stabilizing the financial system through deposit insurance and the Securities Exchange Commission. But others violated the most basic economic principles by suppressing competition, and setting prices and wages in many sectors well above their normal levels. All told, these antimarket policies choked off powerful recovery forces that would have plausibly returned the economy back to trend by the mid-1930s.

The most damaging policies were those at the heart of the recovery plan, including The National Industrial Recovery Act (NIRA), which tossed aside the nation's antitrust acts and permitted industries to collusively raise prices provided that they shared their newfound monopoly rents with workers by substantially raising wages well above underlying productivity growth. The NIRA covered over 500 industries, ranging from autos and steel, to ladies hosiery and poultry production. Each industry created a code of "fair competition" which spelled out what producers could and could not do, and which were designed to eliminate "excessive competition" that FDR believed to be the source of the Depression.

These codes distorted the economy by artificially raising wages and prices, restricting output, and reducing productive capacity by placing quotas on industry investment in new plants and equipment. Following government approval of each industry code, industry prices and wages increased substantially, while prices and wages in sectors that weren't covered by the NIRA, such as agriculture, did not. We have calculated that manufacturing wages were as much as 25% above the level that would have prevailed without the New Deal. And while the artificially high wages created by the NIRA benefited the few that were fortunate to have a job in those industries, they significantly depressed production and employment, as the growth in wage costs far exceeded productivity growth.

Harold L. Cole and Lee E. Ohanian: How Government Prolonged the Depression - WSJ

http://krugman.blogs.nytimes.com/2011/09/27/bad-faith-economic-history/?_php=true&_type=blogs&_r=0

Cole and Ohanian do what a lot of frauds do: limit their observations to the data that can tell a story because it's limited data. The larger story falls apart when you go beyond their limited data.

 

[gipper]

More government = less freedom + less prosperity

Pretty basic.

Pretty simple.

Always true.

FDR's jobs program and all it's "great things" came at the cost of an extended depression.

I agree that if the government is going to give people money, they should work for it.

But the idea of using tax dollars to "stimulate" an economy on the backs of people who are already working....is stupid.

Additionally, my experience was that those stimulus dollars didn't make a difference. Where they were spent, they were spent poorly (people knew that in many cases they were helping to build roads to nowhere).

But moving on:

How FDR's New Deal Harmed Millions of Poor People | Cato Institute

The most important source of New Deal revenue were excise taxes levied on alcoholic beverages, cigarettes, matches, candy, chewing gum, margarine, fruit juice, soft drinks, cars, tires (including tires on wheelchairs), telephone calls, movie tickets, playing cards, electricity, radios — these and many other everyday things were subject to New Deal excise taxes, which meant that the New Deal was substantially financed by the middle class and poor people. Yes, to hear FDR’s “Fireside Chats,” one had to pay FDR excise taxes for a radio and electricity! A Treasury Department report acknowledged that excise taxes “often fell disproportionately on the less affluent.”

Until 1937, New Deal revenue from excise taxes exceeded the combined revenue from both personal income taxes and corporate income taxes. It wasn’t until 1942, in the midst of World War II, that income taxes exceeded excise taxes for the first time under FDR. Consumers had less money to spend, and employers had less money for growth and jobs.

Less political liberty

Less financial liberty

Less individual liberty

Of course more and ever expanding government is detrimental to all, but the power elite and their friends.

How is it possible all Americans do not know this simple truth?

...in the Age of Ignorance (aka Age of Progressive BS), simple truths are easily disposed of.

 

[Bfgrn]

More government = less freedom + less prosperity

Pretty basic.

Pretty simple.

Always true.

FDR's jobs program and all it's "great things" came at the cost of an extended depression.

I agree that if the government is going to give people money, they should work for it.

But the idea of using tax dollars to "stimulate" an economy on the backs of people who are already working....is stupid.

Additionally, my experience was that those stimulus dollars didn't make a difference. Where they were spent, they were spent poorly (people knew that in many cases they were helping to build roads to nowhere).

But moving on:

How FDR's New Deal Harmed Millions of Poor People | Cato Institute

The most important source of New Deal revenue were excise taxes levied on alcoholic beverages, cigarettes, matches, candy, chewing gum, margarine, fruit juice, soft drinks, cars, tires (including tires on wheelchairs), telephone calls, movie tickets, playing cards, electricity, radios — these and many other everyday things were subject to New Deal excise taxes, which meant that the New Deal was substantially financed by the middle class and poor people. Yes, to hear FDR’s “Fireside Chats,” one had to pay FDR excise taxes for a radio and electricity! A Treasury Department report acknowledged that excise taxes “often fell disproportionately on the less affluent.”

Until 1937, New Deal revenue from excise taxes exceeded the combined revenue from both personal income taxes and corporate income taxes. It wasn’t until 1942, in the midst of World War II, that income taxes exceeded excise taxes for the first time under FDR. Consumers had less money to spend, and employers had less money for growth and jobs.

Less political liberty

Less financial liberty

Less individual liberty

Of course more and ever expanding government is detrimental to all, but the power elite and their friends.

How is it possible all Americans do not know this simple truth?

...in the Age of Ignorance (aka Age of Progressive BS), simple truths are easily disposed of.

During the Great Depression conservatives raised objections to F.D.R.’s programs. They said the economy must be left alone and it would correct itself in the long run. Commerce Secretary Harry Hopkins shot back: “People don’t eat in the long run. They eat every day.”



The true "ignorance" is to 'simplify', without any attempt to understand the situation FDR faced when he took office. Doing nothing was NOT an option, economically, politically or on ANY human scale.

A humane government is in the best interests of We, the People. A nation is measured by how the people are doing, not by doctrinaire.

I have been around since Truman was President, so I have witnessed the drastic changes in my country brought about by the conservative era that followed the liberal era that ran from the New Deal through the Great Society. The conservative era has been a disaster for all but the very wealthy. Conservatives have built nothing.

Honestly, I see today's conservatives being no different from communists in Russia...where strict doctrinaire trumps humane government, where ideology has reached the level of insanity. History has proven that a mixed economy outperforms those run on strict doctrinaire, be it communism or Laissez faire.

Here is what FDR faced when he was inaugurated March 4, 1933:

From 1929 to 1933, unemployment in the U.S. increased from 4% to 25%, and manufacturing output decreased by one third. Prices fell by 20%, causing a deflation which made the repayments of debts much harder. The mining, lumber, construction, and farming sectors were hit especially hard, along with railroads and heavy industries such as steel and automobiles.

The Great Depression had devastated the nation. As Roosevelt took the oath of office at noon on March 4, 1933, the state governors had closed every bank in the nation; no one could cash a check or get at their savings. The unemployment rate was 25% and higher in major industrial and mining centers. Farm income had fallen by over 50% since 1929. 844,000 nonfarm mortgages had been foreclosed, 1930–33, out of five million in all. Political and business leaders feared revolution and anarchy. Joseph P. Kennedy, Sr., who remained wealthy during the Depression, stated years later that "in those days I felt and said I would be willing to part with half of what I had if I could be sure of keeping, under law and order, the other half."

Roosevelt entered office without a specific set of plans for dealing with the Great Depression; so he improvised as Congress listened to a very wide variety of voices. The "First New Deal" (1933–34) encompassed the proposals offered by a wide spectrum of groups. (Not included was the Socialist Party, whose influence was all but destroyed.) This first phase of the New Deal was also characterized by fiscal conservatism (see Economy Act, below) and experimentation with several different, sometimes contradictory, cures for economic ills. The consequences were uneven. Some programs, especially the National Recovery Administration (NRA) and the silver program, have been widely seen as failures. Other programs lasted about a decade; some became permanent. The economy shot upward, with FDR's first term marking one of the fastest periods of GDP growth in history. However a downturn in 1937–38 raised questions about just how successful the policies were, with the great majority of economists and historians agreeing they were an overall benefit.

The New Deal policies drew from many different ideas proposed earlier in the 20th century. Assistant Attorney General Thurman Arnold led efforts that hearkened back to an anti-monopoly tradition rooted in American politics by figures such as Andrew Jackson and Thomas Jefferson. Supreme Court Justice Louis Brandeis, an influential adviser to many New Dealers, argued that "bigness" (referring, presumably, to corporations) was a negative economic force, producing waste and inefficiency. However, the anti-monopoly group never had a major impact on New Deal policy. Other leaders such as Hugh Johnson of the NRA took ideas from the Woodrow Wilson Administration, advocating techniques used to mobilize the economy for World War I. They brought ideas and experience from the government controls and spending of 1917–18. Other New Deal planners revived experiments suggested in the 1920s, such as the TVA.

Among Roosevelt's more famous advisers was an informal "Brain Trust": a group that tended to view pragmatic government intervention in the economy positively. Donald Richberg, the second head of the NRA, said "A nationally planned economy is the only salvation of our present situation and the only hope for the future."

The New Deal faced some vocal conservative opposition. The first organized opposition in 1934 came from the American Liberty League led by conservative Democrats such as 1924 and 1928 presidential candidates John W. Davis and Al Smith. There was also a large but loosely affiliated group of New Deal opponents, who are commonly called the Old Right. This group included politicians, intellectuals, writers, and newspaper editors of various philosophical persuasions including classical liberals and conservatives, both Democrats and Republicans.

Read more: New Deal - Knowledge Encyclopedia

 

[Wry Catcher]

Page one: A collection of ad hominems; is it any wonder the New Right is considered a collection of know-nothings?

 

[Wry Catcher]

Page 2: More ad hominems and still no rational response to the OP.

 

[The Rabbi]

Page 2: More ad hominems and still no rational response to the OP.

Page 10 Wrycumcatcher making ignorant blanket statements unsupported by facts.

 

[EdwardBaiamonte]

Honestly, I see today's conservatives being no different from communists in Russia.

actually they are exact opposites. Conservatives are for limited govt while lib commies are for huge govt. Did you even know that our lib commies spied for Stalin and gave him the bomb because he was a Russian llib commie? see why we have to be positive liberalism is based in pure ignorance? Is any other conclusion possible?

 

[Wry Catcher]

Page 2: More ad hominems and still no rational response to the OP.

Page 10 Wrycumcatcher making ignorant blanket statements unsupported by facts.

No one must wonder why I consider you, Rabbi, as one of the most vulgar, dumb and partisan hacks on this forum. The statements are not ignorant and are supported by facts. All one needs to do is read the first two pages of comments by members of the New Right.