Pro-Wrestler Smacks Down Keynesian

[Paulie]

Your minimalist attempt to reason your position is losing its luster pretty fast, Rav.

We're arguing the merits of the stimulus, and frankly, all the rest of the money that's been thrown at this mess that you've supported. TRILLIONS of dollars, that will be TAKEN from you, me, and the rest of the business world as well, to recoup.

Keep pretending like your little $1,000 example means more than a pile of horse shit. It makes you look worse and worse. When you account for the TRILLIONS being taken from us now already, we'll talk, ok?

 

[Ravi]

I was arguing that the government can and does create jobs. If you'd like to prove me wrong, be my guest and quit crying. Show me how you can turn $1,000 into a $50,000 dollar job.

 

[Paulie]

I didn't argue that the government can create jobs. What I'm arguing is that it is taking jobs away from others who already HAD them. Over the next 20 years, while we're paying back your Trillions of dollars of so-called economic stimulus, recovery, rescue, whatever neat little name you want to give it, we're going to be taxed, our money supply is going to be inflated, and people are going to still LOSE MORE JOBS. The money you're advocating spending now to "create" jobs, is going to kill a whole host of others. It's inevitable. That money has to come from somewhere Rav, and the only source is our pockets. Tax? Our pockets. Print it? Our pockets.

 

[Ravi]

I didn't argue that the government can create jobs. What I'm arguing is that it is taking jobs away from others who already HAD them. Over the next 20 years, while we're paying back your Trillions of dollars of so-called economic stimulus, recovery, rescue, whatever neat little name you want to give it, we're going to be taxed, our money supply is going to be inflated, and people are going to still LOSE MORE JOBS. The money you're advocating spending now to "create" jobs, is going to kill a whole host of others. It's inevitable. That money has to come from somewhere Rav, and the only source is our pockets. Tax? Our pockets. Print it? Our pockets.

I disagree with you but that wasn't what we were talking about. I think you should start another thread.

 

[Paulie]

How is it not what we were arguing? This thread is about keynesian policies, and how they won't work. You're advocating keynesian policies of spending trillions of dollars, including TARP which you supported, to "fix" the economy. We're approaching 2 trillion on just those two bills alone. Where does that money come from if not taxes or the printing press? Inquiring minds are fucking DYING to know, Rav.

 

[Ravi]

Read back up the thread and see my initial post.

It isn't possible to argue the merits of anything if you can't start with some basic agreements. The guy in the OP made a statement that government cannot create jobs. This is simply untrue and you can't really discuss the differing philosophies without settling this untruth.

 

[Paulie]

I settled it when I said government can create jobs. The argument is how beneficial, or not, it ultimately is.

So since that's settled, where is the 2 Trillion coming from? And where is the financial burden from the inflationary result of the Fed's interventions since the beginning of '08, where we have an unprecedented monetary base waiting to flow into the streets, going to come from?

 

[Kevin_Kennedy]

Read back up the thread and see my initial post.

It isn't possible to argue the merits of anything if you can't start with some basic agreements. The guy in the OP made a statement that government cannot create jobs. This is simply untrue and you can't really discuss the differing philosophies without settling this untruth.

The government cannot create jobs, more accurately, it cannot create wealth.

 

[Paulie]

Read back up the thread and see my initial post.

It isn't possible to argue the merits of anything if you can't start with some basic agreements. The guy in the OP made a statement that government cannot create jobs. This is simply untrue and you can't really discuss the differing philosophies without settling this untruth.

The government cannot create jobs, more accurately, it cannot create wealth.

The government can create a government job, that much is obvious. The debate is how beneficial it ultimately is, when considering the inevitable loss to the private sector.

 

[Kevin_Kennedy]

If the government creates a job, it destroys a job. So what has it created? Nothing. It's simply redistributed employment.

 

[Paulie]

Rav, here's a pretty good article that explains it succintly as far as I'm concerned:

Positive Liberty » Does the Government Create Jobs?

In one sense, government does create jobs, because (obviously) it employs people. I hope there is enough charity on the left to realize that this can’t possibly be what Steele was getting at. He’s not that stupid, or hypocritical, or forgetful of his own time as a government employee. Government does create jobs, at least in this very narrow sense — jobs like the one Michael Steele used to have.

But in another sense, government doesn’t create jobs. Taxpayers’ money creates jobs. But taxpayers’ money could also create jobs in the private sector, and it is far from a foregone conclusion that it will create more or better jobs in the public sector.

If it hadn’t gone to paying taxes, taxpayers’ money almost certainly would have gone toward creating at least some jobs elsewhere. If we use the money to consume, then the money creates jobs that produce things that we want. If we keep the money as savings, then it produces jobs by providing investment capital. Even hoarding money under the bed (probably the worst use of it, and a minuscule one as well) still satisfies an economic want for some people, and this means that they have more money to use on other economic wants, money being fungible and all.

Thus it is very, very far from clear that the addition of, say 100 extra government jobs can be done without the subtraction of 100 jobs, or more, in the private sector. We should never imagine that, when a government program creates 100 jobs, these jobs are cost-free and just materialize out of thin air. Yet that’s exactly what we are being asked to do — to disregard the job-creating power of the private sector entirely.

We should also resist the conclusion that government jobs represent an efficient use of economic inputs that the market just somehow failed to find.

Not only is finding new economic opportunities rather hard even in the private sector, but legislators’ incentives usually run in the opposite direction: They don’t want to turn a profit. Indeed, they take obvious delight at doing things that never could and never will. And they typically don’t want to work on something obscure or counterintuitive, something that perhaps private firms would have to struggle to find.

 

[Agnapostate]

Regardless, though I find myself repeating this over and over again today, Keynesianism has the effect of preventing stagflation, since capitalism has obvious tendencies toward market concentration.

 

[Paulie]

It only prevents stagflation in that it eventually induces more INflation, which is only an artificial boom period. When the boom slows back down, stagflation is likely until the money supply becomes dormant like we are seeing happening now. Most of '08 was stagflation, until the media finally admitted to the "crisis", which prompted consumers to hoard their money and deflation began to set in.

 

[Agnapostate]

It only prevents stagflation in that it eventually induces more INflation, which is only an artificial boom period. When the boom slows back down, stagflation is likely until the money supply becomes dormant like we are seeing happening now. Most of '08 was stagflation, until the media finally admitted to the "crisis", which prompted consumers to hoard their money and deflation began to set in.

That analysis relies on a utopian understanding of market exchange, and fails to account for capitalism's tendency toward market concentration. The problem with laissez-faire capitalists is that so many of them have a utopian conception of market exchange and competition, and indeed of political economy in general.

 

[Paulie]

It only prevents stagflation in that it eventually induces more INflation, which is only an artificial boom period. When the boom slows back down, stagflation is likely until the money supply becomes dormant like we are seeing happening now. Most of '08 was stagflation, until the media finally admitted to the "crisis", which prompted consumers to hoard their money and deflation began to set in.

That analysis relies on a utopian understanding of market exchange, and fails to account for capitalism's tendency toward market concentration. The problem with laissez-faire capitalists is that so many of them have a utopian conception of market exchange and competition, and indeed of political economy in general.

Utopian? That's funny. Injecting artificial amounts of cash into an economy in the hopes that consumers will spend it is far from utopia. What ultimately happens because of that policy is ALSO far from utopia. Inflation, slowdown, stagflation, deflation, reflation. We watched it all unfold the past couple years, especially 2008. Reflation is what now awaits us, as the Federal Reserve's policies clearly indicate. And then the cycle begins again.

 

[Agnapostate]

Utopian? That's funny. Injecting artificial amounts of cash into an economy in the hopes that consumers will spend it is far from utopia. What ultimately happens because of that policy is ALSO far from utopia. Inflation, slowdown, stagflation, deflation, reflation. We watched it all unfold the past couple years, especially 2008. Reflation is what now awaits us, as the Federal Reserve's policies clearly indicate. And then the cycle begins again.

I never claimed that Keynesianism was "utopian." I claimed that free marketers' had a utopian understanding of political economy, in that they relied on fallacies of perfect market exchange and competition, while not noting the inefficiencies generated by capitalism in the way of principal-agent problems. (Due to the hierarchical structure of the majority of enterprises.)

I have also indicated that the radical economic school predicted this crisis long before the orthodox school (or the Austrian school, for that matter) did, and that their solutions ought to be rationally considered.

 

[Paulie]

Utopian? That's funny. Injecting artificial amounts of cash into an economy in the hopes that consumers will spend it is far from utopia. What ultimately happens because of that policy is ALSO far from utopia. Inflation, slowdown, stagflation, deflation, reflation. We watched it all unfold the past couple years, especially 2008. Reflation is what now awaits us, as the Federal Reserve's policies clearly indicate. And then the cycle begins again.

I never claimed that Keynesianism was "utopian." I claimed that free marketers' had a utopian understanding of political economy, in that they relied on fallacies of perfect market exchange and competition, while not noting the inefficiencies generated by capitalism in the way of principal-agent problems. (Due to the hierarchical structure of the majority of enterprises.)

I have also indicated that the radical economic school predicted this crisis long before the orthodox school (or the Austrian school, for that matter) did, and that their solutions ought to be rationally considered.

I don't have a utopian view of capitalism. I recognize that resources can and will be misallocated. Unless humans evolve into perfection, any economic system is going to include misallocation of resources. It's simply a given. The major argument is how best to deal with it. Creating money and throwing it into the fire is not the best way to deal with it. Letting consumers and businesses find an equilibrium is. That isn't utopian, that's simply advocating freedom to succeed and freedom to also fail and subsequently find a balance again.

Capitalism will live or die based on exactly how informed the public wishes to be. If you'd rather rely on the government to protect you from your own financial shortcomings, then be prepared to be dealt a blow. If you instead choose to learn about resource allocation in the capitalist society you live in, you will be better suited to prosper rather than fail.

Capitalism looks as bad as it does right now because people are inherently greedy. That being the case, no one specific economic system is going to somehow be the savior. Your school of thought is still limited to the simple fact that people will still be greedy bastards. Your system will eventually see its own imperfections as the greed manifests itself.

Better to have the financial freedom to decide where your own resources go, then to have a higher authority deciding that for you. You have the ability to learn enough that you can lose as little as possible, and gain as much as possible.

Indebting yourself up to your eyeballs is simply ridiculous, and too many people don't understand that. Too much leverage and not enough knowledge is a recipe for disaster.

Knowledge is key. A smart, informed population will make the most out of their economic system, WHATEVER that system is. A dumb, uninformed, dependant society will conversely lead to a break-down of any economic system.

 

[Ravi]

Rav, here's a pretty good article that explains it succintly as far as I'm concerned:

and it is far from a foregone conclusion that it will create more or better jobs in the public sector.

Yep. And the same is true about the private sector, it is far from a foregone conclusion that it will create more or better jobs.

Jobs are jobs. When the private sector cannot create them and in fact sheds them like is happening now, only the government can create jobs. That doesn't mean that the government does a better job, or should do it continually...it just means that at particular points in time it is the only one that can. At this point it doesn't matter who is creating jobs, it just matters that they are created.

 

[Kevin_Kennedy]

Rav, here's a pretty good article that explains it succintly as far as I'm concerned:

and it is far from a foregone conclusion that it will create more or better jobs in the public sector.

Yep. And the same is true about the private sector, it is far from a foregone conclusion that it will create more or better jobs.

Jobs are jobs. When the private sector cannot create them and in fact sheds them like is happening now, only the government can create jobs. That doesn't mean that the government does a better job, or should do it continually...it just means that at particular points in time it is the only one that can. At this point it doesn't matter who is creating jobs, it just matters that they are created.

When the private sector does not create a certain job, or "loses" a certain job that is a very important function of the market. It means that demand for that job is not wanted or at least not absolutely necessary, and that those resources for that job should be freed up for other uses.

 

[Ravi]

Rav, here's a pretty good article that explains it succintly as far as I'm concerned:

and it is far from a foregone conclusion that it will create more or better jobs in the public sector.

Yep. And the same is true about the private sector, it is far from a foregone conclusion that it will create more or better jobs.

Jobs are jobs. When the private sector cannot create them and in fact sheds them like is happening now, only the government can create jobs. That doesn't mean that the government does a better job, or should do it continually...it just means that at particular points in time it is the only one that can. At this point it doesn't matter who is creating jobs, it just matters that they are created.

When the private sector does not create a certain job, or "loses" a certain job that is a very important function of the market. It means that demand for that job is not wanted or at least not absolutely necessary, and that those resources for that job should be freed up for other uses.

That's nice, Kevin, but quite honestly I think the overall economic health of the country is a better goal than some Libertarian utopia where the USA ends up being a third world country.