Krugman's piece was glib, but gets the point across. A more nuanced view is from J. Bradford Delong (econ prof at Cal) who writes:
As long as stock prices are buoyant, business leaders are not scared of future taxes or of policy uncertainty. As long as interest rates remain low, there is no downward pressure on public investment. And as long as inflation remains low, the extra debt that governments are issuing is highly-prized as a store of value, helps savers sleep more easily at night, and provides a boost to the economy as it assists deleveraging and raises the velocity of spending.
Economists, you see, don't watch just quantities--the amount of debt a government has issued--but prices. And the prices of government debt are the rate of inflation, the nominal interest rate, and the level of the stock market as people trade bonds for commodities, bonds for cash, and bonds for stocks. And all three of these prices are flashing green: saying that markets would prefer and it would be better for the economy if government debt were growing at a faster pace than under current forecasts.
There still isn't any evidence of inflationary pressure in the economy yet, and Yellin has pretty much said outright that she is going to raise rates so as to kill off any possible inflation tendencies that might be lurking behind the couch somewhere (I think this is way too fucking cautious, as the economy is only just starting to recover from the Great Recession).
It's a bubble created by the Fed. Pump 50 billion a month into wall street has worked wonders...for Wall Street.
Krugman's piece was glib, but gets the point across. A more nuanced view is from J. Bradford Delong (econ prof at Cal) who writes:
As long as stock prices are buoyant, business leaders are not scared of future taxes or of policy uncertainty. As long as interest rates remain low, there is no downward pressure on public investment. And as long as inflation remains low, the extra debt that governments are issuing is highly-prized as a store of value, helps savers sleep more easily at night, and provides a boost to the economy as it assists deleveraging and raises the velocity of spending.
Economists, you see, don't watch just quantities--the amount of debt a government has issued--but prices. And the prices of government debt are the rate of inflation, the nominal interest rate, and the level of the stock market as people trade bonds for commodities, bonds for cash, and bonds for stocks. And all three of these prices are flashing green: saying that markets would prefer and it would be better for the economy if government debt were growing at a faster pace than under current forecasts.
There still isn't any evidence of inflationary pressure in the economy yet, and Yellin has pretty much said outright that she is going to raise rates so as to kill off any possible inflation tendencies that might be lurking behind the couch somewhere (I think this is way too fucking cautious, as the economy is only just starting to recover from the Great Recession).
It's a bubble created by the Fed. Pump 50 billion a month into wall street has worked wonders...for Wall Street.
Apologies to Sven for un-redeeming the thread -
Mike- We don't disagree. The bailout and the way this "recovery" has gone, it hasn't really helped the economy as a whole. On a macro level, these bubbles and a few other tweaks (which I won't get into here, because (a) too wonky and (b) you don't care) have carted a shit-ton of wealth from the middle class. Real earnings are flat even with very low inflation rates. Pensions and retirement funds are getting looted left and right.
My beef was simply that the majority of economic thought tends to believe that nation-states are not like households in their approach to debt, nor should they be. While there are upper bounds on what they can do (see 1970's stagflation) government debt is not in and of itself evil. Unless you think government itself is evil, which you might, judging by the tenor of your poasts here.
Krugman's piece was glib, but gets the point across. A more nuanced view is from J. Bradford Delong (econ prof at Cal) who writes:
As long as stock prices are buoyant, business leaders are not scared of future taxes or of policy uncertainty. As long as interest rates remain low, there is no downward pressure on public investment. And as long as inflation remains low, the extra debt that governments are issuing is highly-prized as a store of value, helps savers sleep more easily at night, and provides a boost to the economy as it assists deleveraging and raises the velocity of spending.
Economists, you see, don't watch just quantities--the amount of debt a government has issued--but prices. And the prices of government debt are the rate of inflation, the nominal interest rate, and the level of the stock market as people trade bonds for commodities, bonds for cash, and bonds for stocks. And all three of these prices are flashing green: saying that markets would prefer and it would be better for the economy if government debt were growing at a faster pace than under current forecasts.
There still isn't any evidence of inflationary pressure in the economy yet, and Yellin has pretty much said outright that she is going to raise rates so as to kill off any possible inflation tendencies that might be lurking behind the couch somewhere (I think this is way too fucking cautious, as the economy is only just starting to recover from the Great Recession).
It's a bubble created by the Fed. Pump 50 billion a month into wall street has worked wonders...for Wall Street.
Apologies to Sven for un-redeeming the thread -
Mike- We don't disagree. The bailout and the way this "recovery" has gone, it hasn't really helped the economy as a whole. On a macro level, these bubbles and a few other tweaks (which I won't get into here, because (a) too wonky and (b) you don't care) have carted a shit-ton of wealth from the middle class. Real earnings are flat even with very low inflation rates. Pensions and retirement funds are getting looted left and right.
My beef was simply that the majority of economic thought tends to believe that nation-states are not like households in their approach to debt, nor should they be. While there are upper bounds on what they can do (see 1970's stagflation) government debt is not in and of itself evil. Unless you think government itself is evil, which you might, judging by the tenor of your poasts here.
I wouldn't say government debt is evil, I would say it's not helpful in the long run. It's takes money from productive pursuits that would grow the economy and shifts it to largely non productive and no growth endeavors. Keynesian economic policy has created the mess we see today. And we are trying to get out of it with more Keynesian policy.
And yes, the last five years have seen a shit ton of wealth carted off from the middle class at an accelerated rate.
Krugman's piece was glib, but gets the point across. A more nuanced view is from J. Bradford Delong (econ prof at Cal) who writes:
I debated plenty of Econ professors when I was getting my undergrad in Econ, many of them are just into mental masturbation and like to hear themselves speak. There is nothing special about having a PhD associated with one's name, and for every Prof that will agree with Delong, there are plenty of others from universities just as good if not better in the Econ field (Chicago, MIT, Harvard) that will disagree.
Occasional debt is fine, but a multi-decade debt of the magnitude we've had, weakens the dollar. We don't notice the ever weakening dollar because it happens gradually... bit by bit... over time, but the buying power of the dollar is not what it used to be... and the debt is the reason.
Krugman's piece was glib, but gets the point across. A more nuanced view is from J. Bradford Delong (econ prof at Cal) who writes:
Occasional debt is fine, but a multi-decade debt of the magnitude we've had, weakens the dollar. We don't notice the ever weakening dollar because it happens gradually... bit by bit... over time, but the buying power of the dollar is not what it used to be... and the debt is the reason.
I would argue that it matters less if you are earning 4 dollars for each dollar you used to earn 20 years ago...
Krugman's piece was glib, but gets the point across. A more nuanced view is from J. Bradford Delong (econ prof at Cal) who writes:
Occasional debt is fine, but a multi-decade debt of the magnitude we've had, weakens the dollar. We don't notice the ever weakening dollar because it happens gradually... bit by bit... over time, but the buying power of the dollar is not what it used to be... and the debt is the reason.
I would argue that it matters less if you are earning 4 dollars for each dollar you used to earn 20 years ago...
Why do you hate the hard working retired living on fixed incomes?
Krugman's piece was glib, but gets the point across. A more nuanced view is from J. Bradford Delong (econ prof at Cal) who writes:
I debated plenty of Econ professors when I was getting my undergrad in Econ, many of them are just into mental masturbation and like to hear themselves speak. There is nothing special about having a PhD associated with one's name, and for every Prof that will agree with Delong, there are plenty of others from universities just as good if not better in the Econ field (Chicago, MIT, Harvard) that will disagree.
Occasional debt is fine, but a multi-decade debt of the magnitude we've had, weakens the dollar. We don't notice the ever weakening dollar because it happens gradually... bit by bit... over time, but the buying power of the dollar is not what it used to be... and the debt is the reason.
Mike- Yep, they do. Both sides have their arguments. I'm more persuaded by "mainstream" Keynesians than the Chicago school. The Chicagoans have had a hard time as of late...
Criticisms[edit]
Paul Douglas, who returned to teach economics at the University of Chicago after his military service in WW II, and in 1947 was elected president of the American Economic Association, was uncomfortable with the environment he found at the university. He stated that,” . . . I was disconcerted to find that the economic and political conservatives had acquired almost complete dominance over my department and taught that market decisions were always right and profit values the supreme ones . . . The opinions of my colleagues would have confined government to the eighteenth-century functions of justice, police, and arms, which I thought had been insufficient even for that time and were certainly so for ours. These men would neither use statistical data to develop economic theory nor accept critical analysis of the economic system . . . (Frank) Knight was now openly hostile, and his disciples seemed to be everywhere. If I stayed, it would be in an unfriendly environment.”[18]
The Chicago school's methodology has historically produced conclusions that favor free market policies and little government intervention (albeit within a strict, government-defined monetary regime). These policies came under attack in the wake of the financial crisis of 2007–2010.[19] The school has been blamed for growing income inequality in the United States.[20]
Economist Brad DeLong of the University of California, Berkeley says the Chicago School has experienced an "intellectual collapse", while Nobel laureate Paul Krugman of Princeton University, says that recent comments from Chicago school economists are "the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten."[21] Critics have also charged that the school's belief in human rationality contributed to bubbles such as the recent financial crisis, and that the school's trust in markets to self-regulate has offered no aid to the economy in the wake of the crisis.[22]
In response, Chicago economists such as James Heckman have conceded that there were excesses in the use of Chicago school theory by politicians and public commentators, but that this represented a small fraction of the contributions of Chicago school economics. In particular, Heckman points out that the alleged failures or misapplications of efficient-market hypothesis is a fault of Chicago's contributions to financial economics, which are conceptually distinct from its widely praised contributions to microeconomics and macroeconomics.[23]
Mike- Yep, they do. Both sides have their arguments. I'm more persuaded by "mainstream" Keynesians than the Chicago school. The Chicagoans have had a hard time as of late...
Criticisms[edit]
Paul Douglas, who returned to teach economics at the University of Chicago after his military service in WW II, and in 1947 was elected president of the American Economic Association, was uncomfortable with the environment he found at the university. He stated that,” . . . I was disconcerted to find that the economic and political conservatives had acquired almost complete dominance over my department and taught that market decisions were always right and profit values the supreme ones . . . The opinions of my colleagues would have confined government to the eighteenth-century functions of justice, police, and arms, which I thought had been insufficient even for that time and were certainly so for ours. These men would neither use statistical data to develop economic theory nor accept critical analysis of the economic system . . . (Frank) Knight was now openly hostile, and his disciples seemed to be everywhere. If I stayed, it would be in an unfriendly environment.”[18]
The Chicago school's methodology has historically produced conclusions that favor free market policies and little government intervention (albeit within a strict, government-defined monetary regime). These policies came under attack in the wake of the financial crisis of 2007–2010.[19] The school has been blamed for growing income inequality in the United States.[20]
Economist Brad DeLong of the University of California, Berkeley says the Chicago School has experienced an "intellectual collapse", while Nobel laureate Paul Krugman of Princeton University, says that recent comments from Chicago school economists are "the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten."[21] Critics have also charged that the school's belief in human rationality contributed to bubbles such as the recent financial crisis, and that the school's trust in markets to self-regulate has offered no aid to the economy in the wake of the crisis.[22]
In response, Chicago economists such as James Heckman have conceded that there were excesses in the use of Chicago school theory by politicians and public commentators, but that this represented a small fraction of the contributions of Chicago school economics. In particular, Heckman points out that the alleged failures or misapplications of efficient-market hypothesis is a fault of Chicago's contributions to financial economics, which are conceptually distinct from its widely praised contributions to microeconomics and macroeconomics.[23]
Keynesian economics has given us what we have today. 16 trillion in debt and a fed and economic policies that creates bubbles and crashes while the middle class gets beat down a little more each time. Growing dependence on government and an electorate that votes to feed the beast as they take more in government handouts. It's a proven failure. It's not sustainable.
I will refrain from pasting the Wikipedia criticism... You can do your own research. Just be careful of confirmation bias.
It's alright 'cause the historical pattern has shown How the economical cycle tends to revolve In a round of decades three stages stand out in a loop A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery Huger slump and greater wars and a shallower recovery
You see the recovery always comes 'round again There's nothing to worry for things will look after themselves It's alright recovery always comes 'round again There's nothing to worry if things can only get better
There's only millions that lose their jobs and homes and sometimes accents There's only millions that die in their bloody wars, it's alright
It's only their lives and the lives of their next of kin that they are losing It's only their lives and the lives of their next of kin that they are losing
It's alright 'cause the historical pattern has shown How the economical cycle tends to revolve In a round of decades three stages stand out in a loop A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery Huger slump and greater wars and a shallower recovery
Don't worry be happy things will get better naturally Don't worry shut up sit down go with it and be happy
Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah
I think it's funny because you and I start from opposite sides of the spectrum and tend to work to similar conclusions, but for vastly different reasons. I look at the looting which has been done by the "1%" and the radical increase in income inequality since the late 1970's, you see the hand of the government. A little of column a, a bit of column b most likely.
It's alright 'cause the historical pattern has shown How the economical cycle tends to revolve In a round of decades three stages stand out in a loop A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery Huger slump and greater wars and a shallower recovery
You see the recovery always comes 'round again There's nothing to worry for things will look after themselves It's alright recovery always comes 'round again There's nothing to worry if things can only get better
There's only millions that lose their jobs and homes and sometimes accents There's only millions that die in their bloody wars, it's alright
It's only their lives and the lives of their next of kin that they are losing It's only their lives and the lives of their next of kin that they are losing
It's alright 'cause the historical pattern has shown How the economical cycle tends to revolve In a round of decades three stages stand out in a loop A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery Huger slump and greater wars and a shallower recovery
Don't worry be happy things will get better naturally Don't worry shut up sit down go with it and be happy
Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah
I think it's funny because you and I start from opposite sides of the spectrum and tend to work to similar conclusions, but for vastly different reasons. I look at the looting which has been done by the "1%" and the radical increase in income inequality since the late 1970's, you see the hand of the government. A little of column a, a bit of column b most likely.
However, I don't see income inequality as the problem. Because I don't believe the economy is a fixed pie.
I would like to hear about the 1er% looting...
Also, I do take note of your inflammatory language.
It's alright 'cause the historical pattern has shown How the economical cycle tends to revolve In a round of decades three stages stand out in a loop A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery Huger slump and greater wars and a shallower recovery
You see the recovery always comes 'round again There's nothing to worry for things will look after themselves It's alright recovery always comes 'round again There's nothing to worry if things can only get better
There's only millions that lose their jobs and homes and sometimes accents There's only millions that die in their bloody wars, it's alright
It's only their lives and the lives of their next of kin that they are losing It's only their lives and the lives of their next of kin that they are losing
It's alright 'cause the historical pattern has shown How the economical cycle tends to revolve In a round of decades three stages stand out in a loop A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery Huger slump and greater wars and a shallower recovery
Don't worry be happy things will get better naturally Don't worry shut up sit down go with it and be happy
Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah
I think it's funny because you and I start from opposite sides of the spectrum and tend to work to similar conclusions, but for vastly different reasons. I look at the looting which has been done by the "1%" and the radical increase in income inequality since the late 1970's, you see the hand of the government. A little of column a, a bit of column b most likely.
However, I don't see income inequality as the problem. Because I don't believe the economy is a fixed pie.
I would like to hear about the 1er% looting...
Also, I do take note of your inflammatory language.
Income inequality - agree not a fixed pie, but still a problem if income is piling up in a few hands while wages are stagnant for most people in the country...
Societies that manage a narrower gap between rich and poor enjoy longer economic expansions, according to research published this year by the International Monetary Fund. Income trends in the U.S. mean that future U.S. expansions could last just one-third as long as in the late 1960s, before the income divide began widening, says economist Jonathan D. Ostry of the IMF.
Looting by the top 1% - I'll let Warren Buffet do the talking:
In the last 20 years we have been moving in the wrong direction. According to the IRS, in 1992 the 400 highest incomes averaged $45 million. In 2009, they averaged $350 million. The rest of the U.S. went no place over these years. The average tax rate for the highest income earners has declined from 28% down to 16% over this time period.
It's alright 'cause the historical pattern has shown How the economical cycle tends to revolve In a round of decades three stages stand out in a loop A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery Huger slump and greater wars and a shallower recovery
You see the recovery always comes 'round again There's nothing to worry for things will look after themselves It's alright recovery always comes 'round again There's nothing to worry if things can only get better
There's only millions that lose their jobs and homes and sometimes accents There's only millions that die in their bloody wars, it's alright
It's only their lives and the lives of their next of kin that they are losing It's only their lives and the lives of their next of kin that they are losing
It's alright 'cause the historical pattern has shown How the economical cycle tends to revolve In a round of decades three stages stand out in a loop A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery Huger slump and greater wars and a shallower recovery
Don't worry be happy things will get better naturally Don't worry shut up sit down go with it and be happy
Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah
I think it's funny because you and I start from opposite sides of the spectrum and tend to work to similar conclusions, but for vastly different reasons. I look at the looting which has been done by the "1%" and the radical increase in income inequality since the late 1970's, you see the hand of the government. A little of column a, a bit of column b most likely.
However, I don't see income inequality as the problem. Because I don't believe the economy is a fixed pie.
I would like to hear about the 1er% looting...
Also, I do take note of your inflammatory language.
Income inequality - agree not a fixed pie, but still a problem if income is piling up in a few hands while wages are stagnant for most people in the country...
Societies that manage a narrower gap between rich and poor enjoy longer economic expansions, according to research published this year by the International Monetary Fund. Income trends in the U.S. mean that future U.S. expansions could last just one-third as long as in the late 1960s, before the income divide began widening, says economist Jonathan D. Ostry of the IMF.
Looting by the top 1% - I'll let Warren Buffet do the talking:
In the last 20 years we have been moving in the wrong direction. According to the IRS, in 1992 the 400 highest incomes averaged $45 million. In 2009, they averaged $350 million. The rest of the U.S. went no place over these years. The average tax rate for the highest income earners has declined from 28% down to 16% over this time period.
Comments
The definitive voice of experience is strong in your poast.
There still isn't any evidence of inflationary pressure in the economy yet, and Yellin has pretty much said outright that she is going to raise rates so as to kill off any possible inflation tendencies that might be lurking behind the couch somewhere (I think this is way too fucking cautious, as the economy is only just starting to recover from the Great Recession).
It's a bubble created by the Fed. Pump 50 billion a month into wall street has worked wonders...for Wall Street.
Apologies to Sven for un-redeeming the thread -
Mike- We don't disagree. The bailout and the way this "recovery" has gone, it hasn't really helped the economy as a whole. On a macro level, these bubbles and a few other tweaks (which I won't get into here, because (a) too wonky and (b) you don't care) have carted a shit-ton of wealth from the middle class. Real earnings are flat even with very low inflation rates. Pensions and retirement funds are getting looted left and right.
My beef was simply that the majority of economic thought tends to believe that nation-states are not like households in their approach to debt, nor should they be. While there are upper bounds on what they can do (see 1970's stagflation) government debt is not in and of itself evil. Unless you think government itself is evil, which you might, judging by the tenor of your poasts here.
Mike- We don't disagree. The bailout and the way this "recovery" has gone, it hasn't really helped the economy as a whole. On a macro level, these bubbles and a few other tweaks (which I won't get into here, because (a) too wonky and (b) you don't care) have carted a shit-ton of wealth from the middle class. Real earnings are flat even with very low inflation rates. Pensions and retirement funds are getting looted left and right.
My beef was simply that the majority of economic thought tends to believe that nation-states are not like households in their approach to debt, nor should they be. While there are upper bounds on what they can do (see 1970's stagflation) government debt is not in and of itself evil. Unless you think government itself is evil, which you might, judging by the tenor of your poasts here.
I wouldn't say government debt is evil, I would say it's not helpful in the long run. It's takes money from productive pursuits that would grow the economy and shifts it to largely non productive and no growth endeavors. Keynesian economic policy has created the mess we see today. And we are trying to get out of it with more Keynesian policy.
And yes, the last five years have seen a shit ton of wealth carted off from the middle class at an accelerated rate.
Occasional debt is fine, but a multi-decade debt of the magnitude we've had, weakens the dollar. We don't notice the ever weakening dollar because it happens gradually... bit by bit... over time, but the buying power of the dollar is not what it used to be... and the debt is the reason.
Why do you hate the hard working retired living on fixed incomes?
The Reinhart/Rogoff FAIL comes to mind as well.
The Reinhart/Rogoff FAIL comes to mind as well.
Keynesian economics has given us what we have today. 16 trillion in debt and a fed and economic policies that creates bubbles and crashes while the middle class gets beat down a little more each time. Growing dependence on government and an electorate that votes to feed the beast as they take more in government handouts. It's a proven failure. It's not sustainable.
I will refrain from pasting the Wikipedia criticism... You can do your own research. Just be careful of confirmation bias.
It's alright 'cause the historical pattern has shown
How the economical cycle tends to revolve
In a round of decades three stages stand out in a loop
A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery
Huger slump and greater wars and a shallower recovery
You see the recovery always comes 'round again
There's nothing to worry for things will look after themselves
It's alright recovery always comes 'round again
There's nothing to worry if things can only get better
There's only millions that lose their jobs and homes and sometimes accents
There's only millions that die in their bloody wars, it's alright
It's only their lives and the lives of their next of kin that they are losing
It's only their lives and the lives of their next of kin that they are losing
It's alright 'cause the historical pattern has shown
How the economical cycle tends to revolve
In a round of decades three stages stand out in a loop
A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery
Huger slump and greater wars and a shallower recovery
Don't worry be happy things will get better naturally
Don't worry shut up sit down go with it and be happy
Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah
Dumb, dumb, dumb, de dumb dumb, de duh de duh de dumb dumb dum... ah ah
I think it's funny because you and I start from opposite sides of the spectrum and tend to work to similar conclusions, but for vastly different reasons. I look at the looting which has been done by the "1%" and the radical increase in income inequality since the late 1970's, you see the hand of the government. A little of column a, a bit of column b most likely.
I would like to hear about the 1er% looting...
Also, I do take note of your inflammatory language.
Looting by the top 1% - I'll let Warren Buffet do the talking: http://pragcap.com/buffett-on-income-inequality
Looting by the top 1% - I'll let Warren Buffet do the talking: http://pragcap.com/buffett-on-income-inequality
I'll let the Cato Institute do the talking..
cato.org/publications/commentary/incomeinequality-myth
As to point #2, you did not explain to me how it was done by looting by the 1% vs government.