The proof about Keynes at long last

[EdwardBaiamonte]

Thank you.

yes thank you for not knowing what a bank is or the what the difference is between the public and private sector. You're a great advocate for Keynes!! Euro has no idea who he is.

 

[cbirch2]

The private sector can’t work without a good public sector. E.g building roads,infrastructure,education etc.

what???? even an idiot liberal bureaucrat can "built" a road when he can hire a private sector company in a competitive bidding process to actually built it. The private sector, in contrast, has infinite competencies that are honed every day in a survival of the fittest world wide market place. We got from the stone age to here because private companies invented things, not because government did. Indeed government record is that of our greatest enemy throughout history. NO you know why American was designed to be free of liberal government.

Baiamonte: "They put it in banks where professionals invest it in sustainable ways to grow the economy or they lose their jobs and customer."

Short-time profit just selling and buying to get a quick profit isn't sustainable.

you've got banks confused with stock speculators. Banks make loans to commercial real estate and business, for example! Typical liberal.

The only thing banks can do is allocate capital. They make their money on the interest. If they dont allocate the capital to useful projects they arent doing anything useful at all....

Hence a screening process for loans and credit...

He is right, and you are wrong.

 

[EdwardBaiamonte]

The only thing banks can do is allocate capital. They make their money on the interest. If they dont allocate the capital to useful projects they arent doing anything useful at all....

Hence a screening process for loans and credit...

Yes, banks allocate capital. If they do it well they survive and the recession ends. If they do it poorly they die and so does the economy. For example, if they make a loan to a horse and buggy company they die, but if they make a loan to support a successful new company they survive, the economy grows, and the recession ends.

Liberal bureaucrats cant perform this essential function at all. In fact they do it in a "soviet" liberal fashion. Red China just switched to private Republican bank allocation rather than liberal allocation so that every penny would be allocated by someone whose career would depend on the results. Now perhaps you understand a basic element of capitalism?

 

[EdwardBaiamonte]

Fannie and freddie are nice scapegoats for conservative anti-government ideology, but you cant and wont find me one set of data that says fannie/freddie were the cause of this crisis.

Actually there are entire books describing how Fanny Freddie destroyed the economy. "Reckless Endangerment" by NY Times reporters is one good example. Ever think of reading it?

. J. Bridges says:
Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005.

For 1996, HUD required that 12% of all mortgage purchases by Fannie and Freddie be "special affordable" loans, typically to borrowers with income less than 60% of their area's median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. Between 2000 and 2005, Fannie and Freddie met those goals every year, funding hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans, and made to borrowers who bought houses with less than 10% down.

 

[cbirch2]

The only thing banks can do is allocate capital. They make their money on the interest. If they dont allocate the capital to useful projects they arent doing anything useful at all....

Hence a screening process for loans and credit...

Yes, banks allocate capital. If they do it well they survive and the recession ends.

Lol i think weve pretty much prove that just making the banks do well wont make the recession go away. Thats such a simplistic view.

Liberal bureaucrats cant perform this essential function at all. In fact they do it in a "soviet" liberal fashion. Red China just switched to private Republican bank allocation rather than liberal allocation so that every penny would be allocated by someone whose career would depend on the results. Now perhaps you understand a basic element of capitalism?

In what world do you live in where liberal bureaucrats are controlling the economy?

Banks lend with discretion. It gives a loan to whoever it wants to give a loan to. The government isnt picking borrowers.

 

[cbirch2]

Yea ok ok ok

Data please?

Loans covered by CRA had lower delinquency rates than those not regulated

Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

 

[Truthseeker420]

On a Sunday show Krugman said Keynesian stimulus works. Of course, if this was true all would have accepted it by now and he would have written an historic blockbuster book to prove it making him the greatest economist in history.

Krugman used WW 2 as his best example which left everyone laughing. Actually, Paul, unemployment was low because 12 million men were drafted into the military and because our factories were working overtime to make weapons that we used to bomb the competitions economies into the stone age!

Except that Unemployment fell from about 25% to about 10% brfore the war started.

 

[cbirch2]

On a Sunday show Krugman said Keynesian stimulus works. Of course, if this was true all would have accepted it by now and he would have written an historic blockbuster book to prove it making him the greatest economist in history.

Krugman used WW 2 as his best example which left everyone laughing. Actually, Paul, unemployment was low because 12 million men were drafted into the military and because our factories were working overtime to make weapons that we used to bomb the competitions economies into the stone age!

Except that Unemployment fell from about 25% to about 10% brfore the war started.

Even if it didnt, why does a war matter?

Are conservatives really saying that government spending only works when its used to build bombs, or planes that will either crash or sit in a hanger?

 

[expat_panama]

On a Sunday show Krugman said Keynesian stimulus works. Of course, if this was true all would have accepted it by now and he would have written an historic blockbuster book to prove it making him the greatest economist in history. Krugman used WW 2 as his best example which left everyone laughing...

Even if it didnt, why does a war matter?...

The war did matter, but I'm talking about the one against the rich. It stopped in 1941 when Hitler invaded the USSR and the left allied with America. After the WWII the truth about Stalin came out and the American left's attacks on the rich wound back. Here're the annual unemployment rates for the era:

1929 3.2 1942 4.7
1930 8.0 1943 1.9
1931 15.9 1944 1.2
1932 23.6 1945 1.9
1933 24.9 1946 3.9
1934 21.7 1947 3.9
1935 20.0 1948 3.8
1936 16.9 1949 6.1
1937 14.3 1950 3.0
1938 19.0 1951 3.3
1939 17.2 1952 3.0
1940 14.6 1953 2.9
1941 9.9
​

 

[cbirch2]

Even if it didnt, why does a war matter?...

The war did matter, but I'm talking about the one against the rich. It stopped in 1941 when Hitler invaded the USSR and the left allied with America. After the WWII the truth about Stalin came out and the American left's attacks on the rich wound back. Here're the annual unemployment rates for the era:

1929 3.2 1942 4.7
1930 8.0 1943 1.9
1931 15.9 1944 1.2
1932 23.6 1945 1.9
1933 24.9 1946 3.9
1934 21.7 1947 3.9
1935 20.0 1948 3.8
1936 16.9 1949 6.1
1937 14.3 1950 3.0
1938 19.0 1951 3.3
1939 17.2 1952 3.0
1940 14.6 1953 2.9
1941 9.9
​

 

[EdwardBaiamonte]

Except that Unemployment fell from about 25% to about 10% brfore the war started.

Here's what Henry Morgenthau, FDR's Secretary of the Treasury (the man who desperately needed the New Deal to succeed as much as Roosevelt) said about the New Deal stimulus: "We have tried spending money.We are spending more than we ever have spent before and it does not work... We have never made good on our promises...I say after eight years of this administration we have just as much unemployment as when we started... And an enormous debt to boot!"

"The New Republic"( at the time a FDR greatest supporter") noted. In June 1939, the federal public works programs still supported almost 19 million people, nearly 15% of the population" [page 313]

In fact in 1939, unemployment was at 17%, and there were 11 million additional in stimulus make work welfare jobs. Today when the population is 2.5 times greater we have only 8 million unemployed. Conclusion: legislation to make Democrats illegal
is urgently needed

 

[EdwardBaiamonte]

Yea ok ok ok

Data please?

Loans covered by CRA had lower delinquency rates than those not regulated

Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

Odd isn't it that entire Federal Governement was mobilized to subvert free market to get more folks in homes than the Republican free market would allow and then when the market collapses the liberal subversion didn't exist??

Even before "Reckless Endangerment" our best economists on left and right and best newspapers on left and right agreed that liberals were responsible.

"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NY Times and the Wall Street Journal agree on its validity!"...John B. Taylor( arch conservative, author of the Taylor Rule)


" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz"

 

[cbirch2]

Yea ok ok ok

Data please?

Loans covered by CRA had lower delinquency rates than those not regulated

Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

Odd isn't it that entire Federal Governement was mobilized to subvert free market to get more folks in homes than the Republican free market would allow and then when the market collapses the liberal subversion didn't exist??

Even before "Reckless Endangerment" our best economists on left and right and best newspapers on left and right agreed that liberals were responsible.

"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NY Times and the Wall Street Journal agree on its validity!"...John B. Taylor( arch conservative, author of the Taylor Rule)


" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz"

What part of "mortgages issued by banks regulated by the CRA had lower default rates", do you not understand?

You began this ignorant little post with a tirade about liberal subversion of the free market. That fits awesome into your totally wrong world view, but it is in no way what happened

And as a matter of fact im no fan of alan greenspan, so criticize the fed all you want. Im all for contractionary monetary policy during boom times and expansion during recessions. Green span pretty much failed at that. He was incompetent.

But again, the fed did not cause the recession.

 

[Wiseacre]

As far as sciences go, economics is about as inexact as you can get. You can find all kinds of explanations for what happened in the past, and all sorts of theories about what's going to happen if we do this or if we do that. 'Proof" simply does not exist when it comes to economics.

The one thing I will say about Keynesian economics, it probably wasn't designed for situations where the debt and deficits are this large. And projected to go higher. Going deeper into debt scares the hell out of me, don't know why everyone else isn't scared too.

 

[cbirch2]

As far as sciences go, economics is about as inexact as you can get. You can find all kinds of explanations for what happened in the past, and all sorts of theories about what's going to happen if we do this or if we do that. 'Proof" simply does not exist when it comes to economics.

The one thing I will say about Keynesian economics, it probably wasn't designed for situations where the debt and deficits are this large. And projected to go higher. Going deeper into debt scares the hell out of me, don't know why everyone else isn't scared too.

Keynes would definitely say to save when things are good so that you can spend when theyre bad.

But the amount of debt doesnt matter one bit when it comes to how fiscal expansion effects the economic condition in the present. That is, if it doesnt raise interest on US debt. And in the US it wouldnt, because some institutions will always buy treasuries...always (see, bank of china).

So yes, the fact that we are in this situations is regrettable. Each solution leads to a less than desirable outcome. We can let the economy fall back into a recession while maintaing a balanced budget (because right now a balanced budget would mean recession), or we can spend more money on growth and go more into debt.

And this is the discussion we should be having. Its the only honest discussion to have. Everything else is just rhetoric.

And now im waiting for them to pounce on the "a balanced budget means recession" comment....

 

[editec]

The proof about Keynes at long last

Snore.

Go read Keynes.


My guess is you know nothing about economic theory.

 

[cbirch2]

The proof about Keynes at long last

Snore.

Go read Keynes.


My guess is you know nothing about economic theory.

Lol.

"My guess is...".

This is this the problem with the internet. People that have no idea whats going on dont believe other people simply because they think they shouldnt. They dont look at any facts, and cant contradict the ones theyre presented with. So eventually they just ignore everything, and return with an unrealistic statement like "you dont know anything". Nevermind that ive just posted loads of data and facts that prove everything you say wrong, and you have no rebuttal.

Wow.

 

[EdwardBaiamonte]

Each solution leads to a less than desirable outcome. We can let the economy fall back into a recession while maintaing a balanced budget (because right now a balanced budget would mean recession), or we can spend more money on growth and go more into debt.

of course that is a perfect liberal lie. When the liberals stop spending like drunkin irresponsible whores we will stop digging ourselves into a deeper hole. When you are $15 trillion in debt you start to pay off the debt, you don't go deeper and deeper into debt to guarantee bankruptcy and collapse.

A child can understand this, just not a liberal.

 

[EdwardBaiamonte]

.

But the amount of debt doesnt matter one bit when it comes to how fiscal expansion effects the economic condition in the present. That is, if it doesnt raise interest on US debt. And in the US it wouldnt, because some institutions will always buy treasuries...always (see, bank of china).

What the liberal meant to say was that debt would not matter one tiny bit if you did not have to pay it all back!

Of course if irresponsible, idiotic, liberal debt caused growth our economy would be exploding past the sun right now!!

 

[Wiseacre]

As far as sciences go, economics is about as inexact as you can get. You can find all kinds of explanations for what happened in the past, and all sorts of theories about what's going to happen if we do this or if we do that. 'Proof" simply does not exist when it comes to economics.

The one thing I will say about Keynesian economics, it probably wasn't designed for situations where the debt and deficits are this large. And projected to go higher. Going deeper into debt scares the hell out of me, don't know why everyone else isn't scared too.

Keynes would definitely say to save when things are good so that you can spend when theyre bad.

But the amount of debt doesnt matter one bit when it comes to how fiscal expansion effects the economic condition in the present. That is, if it doesnt raise interest on US debt. And in the US it wouldnt, because some institutions will always buy treasuries...always (see, bank of china).

So yes, the fact that we are in this situations is regrettable. Each solution leads to a less than desirable outcome. We can let the economy fall back into a recession while maintaing a balanced budget (because right now a balanced budget would mean recession), or we can spend more money on growth and go more into debt.

And this is the discussion we should be having. Its the only honest discussion to have. Everything else is just rhetoric.

And now im waiting for them to pounce on the "a balanced budget means recession" comment....

I think the amount of debt/deficits does make a difference, the CBO came out with a projection awhile back, saying the interest payments will rise to approx 800 billion by 2021. We're talking somewhere between 5 and 7 trillion over the next ten years, you can blow that off if you want to, but that much money going out of the economy does have an effect.

You gave a couple of solutions, neither of which I liked. Why don't we gradually reduce gov't spending so as not to induce another recession. And to boot we should be agreesively working on improving the business climate here, starting with a total reform of the tax code for both individuals and businesses. Cut the rates and pay for it by reducing or eliminating tax deductions, loopholes, credits, whatever. Mostly on the rich guys.