Keynes vs Hayek

LOki

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Sorry if these have already been posted.

[ame=http://www.youtube.com/watch?v=d0nERTFo-Sk&feature=player_embedded]Fear The Boom & The Bust[/ame]

[ame=http://www.youtube.com/watch?v=GTQnarzmTOc&feature=player_embedded]Fight Of The Century[/ame]
 

expat_panama

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Sorry if these have already been posted.
The "Fight" one was posted but I haven't seen the other. imho we need both reposted regularly anyway...
 
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LOki

LOki

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[ame="http://www.youtube.com/watch?v=hjh7mXPfMKs"]Is Capitalism "Pro-Business?"[/ame]

[ame="http://www.youtube.com/watch?v=4Ttbj6LAu0A"]Does Capitalism Exploit Workers?[/ame]

[ame="http://www.youtube.com/watch?v=gSgUENZ9O94"]How Cronyism is Hurting the Economy[/ame]

[ame="http://www.youtube.com/watch?v=kJeuoMh46JY"]Who Exploits You More: Capitalists or Cronies?[/ame]
 

EdwardBaiamonte

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Keynes vs Hayek:

I think the essential difference is that what Keynes saw as stimulus Hayak saw as mal-investment or bubble, using today's parlance. Hopefully the housing bubble killed off Keynes forever.
 

Widdekind

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Keynes vs Hayek:

I think the essential difference is that what Keynes saw as stimulus Hayak saw as mal-investment or bubble...
Governments can borrow at lower interest rates, compared to private businesses. Fiscal Stimulus, therefore, can be advantageous, when Governments borrow, for productive public "super-investments", like infrastructure, highways, the internet. Government spending can be good, on productive capital investments; Government bureaucracies are typically bad, at providing services.
 

percysunshine

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Keynes vs Hayek

Keynes was a south paw. He could never take a right jab.
 

Bfgrn

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Keynes vs Hayek

I'll take Hayek and lay the points.
Hey Jethro, can you name any country whose economy is Austrian school based?

Oh, that's right...America, before Keynesian economics ended the Great Depression. You know, the Great Depression, the one caused by following Hayek...

Economic Policy Under Hoover

Throughout this decline—which carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor force—the government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans’ Bonus, passed over President Hoover’s veto. That aside, the full employment budget surplus did not fall over 1929–33.

The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.

This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector’s task as the “liquidation” of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.

Contemplating in retrospect the wreck of his country’s economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:

The ‘leave-it-alone liquidationists’ headed by Secretary of the Treasury Mellon…felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate’.…He held that even panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people’.



The Federal Reserve took almost no steps to halt the slide into the Great Depression over 1929–33. Instead, the Federal Reserve acted as if appropriate policy was not to try to avoid the oncoming Great Depression, but to allow it to run its course and “liquidate” the unprofitable portions of the private economy.

In adopting such “liquidationist” policies, the Federal Reserve was merely following the recommendations provided by an economic theory of depressions that was in fact common before the Keynesian Revolution and was held by economists like Friedrich Hayek, Lionel Robbins, and Joseph Schumpeter.
 

Rshermr

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Keynes vs Hayek

I'll take Hayek and lay the points.
Hey Jethro, can you name any country whose economy is Austrian school based?

Oh, that's right...America, before Keynesian economics ended the Great Depression. You know, the Great Depression, the one caused by following Hayek...

Economic Policy Under Hoover

Throughout this decline—which carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor force—the government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans’ Bonus, passed over President Hoover’s veto. That aside, the full employment budget surplus did not fall over 1929–33.

The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.

This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector’s task as the “liquidation” of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.

Contemplating in retrospect the wreck of his country’s economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:

The ‘leave-it-alone liquidationists’ headed by Secretary of the Treasury Mellon…felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate’.…He held that even panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people’.



The Federal Reserve took almost no steps to halt the slide into the Great Depression over 1929–33. Instead, the Federal Reserve acted as if appropriate policy was not to try to avoid the oncoming Great Depression, but to allow it to run its course and “liquidate” the unprofitable portions of the private economy.

In adopting such “liquidationist” policies, the Federal Reserve was merely following the recommendations provided by an economic theory of depressions that was in fact common before the Keynesian Revolution and was held by economists like Friedrich Hayek, Lionel Robbins, and Joseph Schumpeter.
You are trying to confuse cons with facts. they only believe what they want to believe. Easier for them that way.
 

Norman

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Keynes vs Hayek:

I think the essential difference is that what Keynes saw as stimulus Hayak saw as mal-investment or bubble...
Governments can borrow at lower interest rates, compared to private businesses. Fiscal Stimulus, therefore, can be advantageous, when Governments borrow, for productive public "super-investments", like infrastructure, highways, the internet. Government spending can be good, on productive capital investments; Government bureaucracies are typically bad, at providing services.
I kind of agree but there is no free cake either.

Government burrowing always crowds out private investment. In the end it's not about who pays the most interest but which projects are the most efficient use of our resources. I believe private sector is far more efficient because there is far better incentive to be efficient.

I also don't think it's government's job to provide capital investments. There is just far too much incentives to blow all the money. On the other hand why could bureaucrat invest better than a business man that actually earned the money in the first place? Look at social security. Investing in future by spending all the money on entitlements and wars.



Anyway I don't think it's bad idea to have road construction etc. take place during recessions more so than on good times. But the problem is I think at this point there is just too much debt taking and stimulus so that it actually screws the whole economy into making the wrong "investments".
 

Rshermr

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Keynes vs Hayek:

I think the essential difference is that what Keynes saw as stimulus Hayak saw as mal-investment or bubble...
Governments can borrow at lower interest rates, compared to private businesses. Fiscal Stimulus, therefore, can be advantageous, when Governments borrow, for productive public "super-investments", like infrastructure, highways, the internet. Government spending can be good, on productive capital investments; Government bureaucracies are typically bad, at providing services.
I kind of agree but there is no free cake either.

Government burrowing always crowds out private investment. In the end it's not about who pays the most interest but which projects are the most efficient use of our resources. I believe private sector is far more efficient because there is far better incentive to be efficient.

I also don't think it's government's job to provide capital investments. There is just far too much incentives to blow all the money. On the other hand why could bureaucrat invest better than a business man that actually earned the money in the first place? Look at social security. Investing in future by spending all the money on entitlements and wars.



Anyway I don't think it's bad idea to have road construction etc. take place during recessions more so than on good times. But the problem is I think at this point there is just too much debt taking and stimulus so that it actually screws the whole economy into making the wrong "investments".
Too much stimulus??? there been no stimulus spending for a couple years. The stimulus was a one time thing. About $800B, of which 1/3 was tax decreases. Actual stimulus spending was about $525B, For the worst recession since the great depression.
So, if you suggest we need to decrease spending, then try to find a time when cutting taxes and spending ever worked in a bad economy. You will find that it NEVER HAS. Only made it worse. On the other hand, stimulus spending HAS worked, always. Great depression, Reagan admin., etc. So, we should do something that does not work, never has??? Politicians know better. Those voting against stimulus spending simply want the economy to tank. There is NO OTHER REASON.
 

Norman

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Governments can borrow at lower interest rates, compared to private businesses. Fiscal Stimulus, therefore, can be advantageous, when Governments borrow, for productive public "super-investments", like infrastructure, highways, the internet. Government spending can be good, on productive capital investments; Government bureaucracies are typically bad, at providing services.
I kind of agree but there is no free cake either.

Government burrowing always crowds out private investment. In the end it's not about who pays the most interest but which projects are the most efficient use of our resources. I believe private sector is far more efficient because there is far better incentive to be efficient.

I also don't think it's government's job to provide capital investments. There is just far too much incentives to blow all the money. On the other hand why could bureaucrat invest better than a business man that actually earned the money in the first place? Look at social security. Investing in future by spending all the money on entitlements and wars.



Anyway I don't think it's bad idea to have road construction etc. take place during recessions more so than on good times. But the problem is I think at this point there is just too much debt taking and stimulus so that it actually screws the whole economy into making the wrong "investments".
Too much stimulus??? there been no stimulus spending for a couple years. The stimulus was a one time thing. About $800B, of which 1/3 was tax decreases. Actual stimulus spending was about $525B, For the worst recession since the great depression.
So, if you suggest we need to decrease spending, then try to find a time when cutting taxes and spending ever worked in a bad economy. You will find that it NEVER HAS. Only made it worse. On the other hand, stimulus spending HAS worked, always. Great depression, Reagan admin., etc. So, we should do something that does not work, never has??? Politicians know better. Those voting against stimulus spending simply want the economy to tank. There is NO OTHER REASON.

By stimulus I mean very low interest rates combined with high deficits.

And what do you mean by "worked". Usually recessions come and go and that's true with cutting spending as well. I think you are a bit biased to put it mildly. BTW tax cuts are stimulus spending as well.
 

percysunshine

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Bugs Bunny used to say.."You are such an ultra-maroon."

He was addressing Keynes.
 

EdwardBaiamonte

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I think the essential difference is that what Keynes saw as stimulus Hayak saw as mal-investment or bubble...
Governments can borrow at lower interest rates, compared to private businesses.
so wasting money borrowed at lower interest rates is good??


Fiscal Stimulus, therefore, can be advantageous,
therefore??? there is an advantage in wasting money??

when Governments borrow, for productive public "super-investments", like infrastructure, highways, the internet. Government spending can be good, on productive capital investments;
too stupid!! how can it be considered an investment when it is other people's money?? A real investmetn risks you're own real hard earned money. The difference is night and day


Government bureaucracies are typically bad, at providing services.
so why are you advocating road and bridge services????????
 

Rshermr

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I kind of agree but there is no free cake either.

Government burrowing always crowds out private investment. In the end it's not about who pays the most interest but which projects are the most efficient use of our resources. I believe private sector is far more efficient because there is far better incentive to be efficient.

I also don't think it's government's job to provide capital investments. There is just far too much incentives to blow all the money. On the other hand why could bureaucrat invest better than a business man that actually earned the money in the first place? Look at social security. Investing in future by spending all the money on entitlements and wars.



Anyway I don't think it's bad idea to have road construction etc. take place during recessions more so than on good times. But the problem is I think at this point there is just too much debt taking and stimulus so that it actually screws the whole economy into making the wrong "investments".
Too much stimulus??? there been no stimulus spending for a couple years. The stimulus was a one time thing. About $800B, of which 1/3 was tax decreases. Actual stimulus spending was about $525B, For the worst recession since the great depression.
So, if you suggest we need to decrease spending, then try to find a time when cutting taxes and spending ever worked in a bad economy. You will find that it NEVER HAS. Only made it worse. On the other hand, stimulus spending HAS worked, always. Great depression, Reagan admin., etc. So, we should do something that does not work, never has??? Politicians know better. Those voting against stimulus spending simply want the economy to tank. There is NO OTHER REASON.

By stimulus I mean very low interest rates combined with high deficits.

And what do you mean by "worked". Usually recessions come and go and that's true with cutting spending as well. I think you are a bit biased to put it mildly. BTW tax cuts are stimulus spending as well.
Norman says:
By stimulus I mean very low interest rates combined with high deficits.
Interesting definition. Combined with high deficits?? Sorry. A stimulus is a stimulus with or without a deficit. A stimulus may increase a deficit, in the short term. And it may be aimed at decreasing the deficit over time.
Low interest rates? Sure, though in general, in times of a down economy, low interest rates are not part of a stimulus package, which is generally based on fiscal issues. Here is a definition:
n economics, fiscal policy is the use of government expenditure and revenue collection to influence the economy..
en.wikipedia.org/wiki/Economic_stimulus

And what do you mean by "worked". Usually recessions come and go and that's true with cutting spending well. I think you are a bit biased to put it mildly. BTW tax cuts are stimulus spending as well.
So, by your definition, we should do nothing at all with recessions. But repubs and dems do not agree, me boy. Almost all repubs say that we need to cut taxes and gov spending to get out of the unemployment problem we have today. I simply asked if you or anyone could name a time when that worked. So, since you think that all recessions just come and go (and they will, given time) you may want to take a look at the Reagan presidency. Remember that he decreased taxes greatly in his first year. And cut gov spending greatly also. Was supposed to take care of the relatively minor recession we were in at that time. But, unemployment went up quickly. Got to 10.8%, which is to this day the highest unemployment rate since the great depression. So, his admin then borrowed more money than all the presidents before him combined, and thereby tripled the national debt. And, he raised taxes 11 times. AND used the money raised by those two methods for stimulus spending. Which worked. By the way, he did not use tax cuts and decreasing gov spending to get out of the financial recession resulting from cutting taxes and decreasing gov spending, he used stimulus spending.
So, that is just history. You need to know what you are talking about before you suggest someone is biased. And yes, tax decreases can be stimulative, depending. that is a whole other issue.
 
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EdwardBaiamonte

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So, that is just history.
too stupid as usual!! The Reagan Era had more to do with the Fed Policy that raised interested rates to 20% to end liberal inflation.
To pretend otherwise is just plain liberal and stupid!!
 

Rshermr

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So, that is just history.
too stupid as usual!! The Reagan Era had more to do with the Fed Policy that raised interested rates to 20% to end liberal inflation.
To pretend otherwise is just plain liberal and stupid!!
yes, ed. Sure enough. Totally con dogma again. Question is, that since the problems with the economy were after the great tax decrease, why did he not decrease taxes again to fix the problems???
Oh, shit. Why am I addressing a question to you. You'r a con pushing con dogma. You don't know anything.
 

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