Forum Post: Paul Krugman Crushed by Spanish Austrian Economist Pedro Schwartz
Posted 12 years ago on July 12, 2012, 11:36 p.m. EST by PeaceNow
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Paul Krugman crushed by Spanish Austrian Economist Pedro Schwartz
That was one of the best econ videos I’ve ever watched. Paul Krugman is left stuttering and near speechless. I want more videos from Pedro Schwartz!
http://www.dailypaul.com/244349/paul-krugman-crushed-by-spanish-austrian-economist-pedro-schwartz
The Origins of 'The Austrian School Economists'.
In 1876 the Hapsburg Emperor Franz Joseph hired Carl Menger (1840-1921), who would become known as the founder of the Austrian School, as tutor to his son, Crown Prince Rudolph. Menger took Prince Rudolph around Europe for three years, acquainting him with the quandary facing the undead feudal Hapsburg family and their Austro-Hungarian Empire.
The United States had recently survived the rebellion of the slave-owners, rebels armed and instigated by the British. The American republic had survived despite the pincers, Rudolf's Uncle Maximilian being put on an imperial throne over Mexico, and British troops occupying Canada.
Abraham Lincoln's America had counterattacked, by spreading nationalism, protectionist economics, and the drive for modern industry and technological progress, to Germany, Russia, Ireland, Italy, Japan, and many other nations.
Carl Menger explained to the Prince how the old feudal oligarchy of bankers and autocrats might maintain their death grip on humanity, against America's energy.
The old form of empire was breaking down. The Inquisition, the New Dark Ages religious police state imposed by the Hapsburgs on Europe, could not stand against the American ideal of separated Church and State. Austrian forces, occupying Italian principalities with mass imprisonment and executions, and Austrian sponsorship of the feudalism-mad Pope Pius IX, could not prevail against Emilio Cavour's genius. An ally of Lincoln's economist Henry Carey, Cavour unified Italy just as Lincoln became the U.S. President.
A new imperialism was required, based on global financial looting and new forms of colonial regimes outside Europe. Carl Menger explained the new Liberal economics, worked out in concert with the British Empire.
Menger warned the Prince that the enemy doctrine of national sovereignty had spread from the arch-nationalist Lincoln to German Chancellor Otto von Bismarck, who copied Lincoln's tariffs and railroad-building strategy.
Menger's new dogma, that the State must not be allowed to interfere with financial freedom — the right of imperial financiers to deploy their Money Power — took its place beside other "liberal" anti-republican instruments forged in the Hapsburgs' crypts: pessimism in literature, soulless psychology, deliberate ugliness in art, crazed atonality to overpower Mozart's and Beethoven's beauty. (Carl Menger's brother, the socialist attorney Anton Menger, crystallized this assault on reason and progress into what became known as the Frankfurt School.)
Germans reacted to Menger's polemics against Lincoln and Bismarck by referring derisively to the "Austrian School" — meaning those who argue for the presumed logic of imperial Free Trade economics while declining to discuss any actual history whatsoever. This is the origin of the term, Austrian School, which has identified Menger's disciples such as Hayek and von Mises and here is the 'Money Power' against which the USA has struggled throughout its history.
In Menger's day, the extended royal family of Austria, Britain, and Belgium coordinated with international bankers for nightmare colonial experiments, such as the Congo. Belgian King Leopold II had married Marie Henriette, archduchess of Austria. Emperor Franz Joseph's brother Maximillian had married Leopold II's sister Carlotta. Meanwhile, Leopold II's father, Leopold I, had arranged the marriage of his niece, British Queen Victoria, to his nephew Albert.
When Menger's student, Austrian Crown Prince Rudolph, married Leopold II's daughter Stephanie in 1881, she was the heir to the Congo, a giant province of central Africa which her father had made his private property. The Belgian Congo was the scene of such brutality and mass extermination of looted natives, that it has stood since then as the very emblem of the disgrace of latter-day imperialism.
To the present day, the Austrian School and its agents condemn as tyranny Lincoln's insistence that the Union be preserved. The Von Mises Insitute's paid writer Thomas DiLorenzo, in his hilariously misnamed book The Real Lincoln, defends secession and claims that slavery would have ended peacefully if only the United States had been successfully destroyed.
In the last chapter of Friedrich von Hayek's book, The Road to Serfdom, Hayek demands that national governments be prevented from interfering with international trade: a global police force must be set up, to usher in the final world empire of Free Trade.
This is the heritage and rationale of the Austrian School, which teaches that the American People nor any other people have the right to defend their lives and their families against the Money Power.
I also append herewith, a highly relevant article :
e tenebris, lux ...
~~~~[I'm grateful to forum-poster, 'arturo' as this comment above is substantially culled from his comment on http://occupywallst.org/forum/why-ows-is-wrong/#comment-769903 & it is posted here to provide some context and historical perspective on 'The Cult of The Austrian School of Economists' !!]
Crushed? r u serious? That guy is presenting theory against REALITY. The way markets are controlled today, reality, is not buy supply and demand so much as manipulation. It's that manipulation which is wreaking havoc. For better or worse, Krugman has it right; WE HAVE TO DEAL WITH THE ISSUE AT HAND.
not sure we watched the same video. Krugman argues for manipulation..this guys arguing against it.
The guy talks in broken sentences, contradicts himself several times,'what we did was the right thing','we didn't do that' blah, blah.'what we should have done is' blah blah. A lot of money was put into the system and sucked out by a few. These bitches are getting richer and richer and richer and who are they hiring? hmmm? Krugman is arguing for investments in JOBS. A manipulation but, a reverse manipulation. Waiting for the system to fix itself after what has been done to it with de-regulation would be suicidal. Krugman not only got it right, this idiot is butchering his words.
Krugmans policies are the reason we got into this mess. I'm not sure why anyone would listen to that man. He's an ideologue now...not an economist in my view. While the Austrians were screaming at the low interest rates that would cause the housing bubble (many talking about this in 2001), krugman was arguing for those very policies which created an artificial housing bubble....his words:
Paul Krugman
http://www.pkarchive.org/global/welt.html
“During phases of weak growth there are always those who say that lower interest rates will not help. They overlook the fact that low interest rates act through several channels. For instance, more housing is built, which expands the building sector. You must ask the opposite question: why in the world shouldn’t you lower interest rates?”
May 2, 2001
http://www.pkarchive.org/column/5201.html
I’ve always favored the let-bygones-be-bygones view over the crime-and-punishment view. That is, I’ve always believed that a speculative bubble need not lead to a recession, as long as interest rates are cut quickly enough to stimulate alternative investments. But I had to face the fact that speculative bubbles usually are followed by recessions. My excuse has been that this was because the policy makers moved too slowly — that central banks were typically too slow to cut interest rates in the face of a burst bubble, giving the downturn time to build up a lot of momentum. That was why I, like many others, was frustrated at the smallish cut at the last Federal Open Market Committee meeting: I was pretty sure that Alan Greenspan had the tools to prevent a disastrous recession, but worried that he might be getting behind the curve.
However, let’s give credit where credit is due: Mr. Greenspan has cut rates since then. And while some of us may have been urging him to move even faster, the Fed’s four interest-rate cuts since the slowdown became apparent represent an unusually aggressive response by historical standards. It’s still not clear that Mr. Greenspan has caught up with the curve — let’s have at least one more rate cut, please — but the interest-rate cuts do, cross your fingers, seem to be having an effect.
If we succeed in avoiding recession, this will mark a big win for let- bygones-be-bygones, and a big loss for crime-and-punishment. And that will be very good news not just for this business cycle, but for business cycles to come.
July 18, 2001
http://www.pkarchive.org/economy/ML071801.html
“KRUGMAN: I think frankly it’s got to be — business investment is not going to be the driving force in this recovery. It has to come from things like housing, things that have not been (UNINTELLIGIBLE).
DOBBS: We see, Paul, housing at near record levels, we see automobile purchases near record levels. The consumer is still very much in this economy. Can he or she — or I should say he and she, can they bring back this economy?
KRUGMAN: Well, as far as the arithmetic goes, yes, it is possible. Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time? We don’t know”
August 8^th 2001
http://www.pkarchive.org/economy/ML082201.html
“KRUGMAN: I’m a little depressed. You know, inventories, probably that’s over, the inventory slump. But you look at the things that could drive a recovery, business investment, nothing happening. Housing, long-term rates haven’t fallen enough to produce a boom there. The trade balance is going to get worst before it gets better because the dollar is still very strong. It’s not a happy picture.”
August 14, 2001
http://www.pkarchive.org/column/81401.html
“Consumers, who already have low savings and high debt, probably can’t contribute much. But housing, which is highly sensitive to interest rates, could help lead a recovery…. But there has been a peculiar disconnect between Fed policy and the financial variables that affect housing and trade. Housing demand depends on long-term rather than short-term interest rates — and though the Fed has cut short rates from 6.5 to 3.75 percent since the beginning of the year, the 10-year rate is slightly higher than it was on Jan. 1…. Sooner or later, of course, investors will realize that 2001 isn’t 1998. When they do, mortgage rates and the dollar will come way down, and the conditions for a recovery led by housing and exports will be in place.
October 7, 2001
http://www.pkarchive.org/economy/ML071801.html
“Post-terror nerves aside, what mainly ails the U.S. economy is too much of a good thing. During the bubble years businesses overspent on capital equipment; the resulting overhang of excess capacity is a drag on investment, and hence a drag on the economy as a whole.
In time this overhang will be worked off. Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer. But it seems inevitable that there will also be a fiscal stimulus package”
Dec 28, 2001
http://www.pkarchive.org/column/122801.html
“The good news about the U.S. economy is that it fell into recession, but it didn’t fall off a cliff. Most of the credit probably goes to the dogged optimism of American consumers, but the Fed’s dramatic interest rate cuts helped keep housing strong even as business investment plunged.”
interest rates were NOT low before the bubble. They were low after the bubble. After the bubble, they dropped in half,if not more. I don't need Krugman to tell me that. Banking needs immediate fundamental reforms. People need to be put in prison. Banks aren't making funds available at the low rates; they're putting all kinds of caveats on it. If they weren't, I'd be taking advantage of them. So the low rates are doing NOTHING. States have been given funds to help consumers with difficult mortgages and the states are using them for slush funds....worsening the crisis. What is going on is a strangulation of the "little people" as the BP asshole put it. Private Industry is choking the very thing that got them in such good financial condition...the American Consumer. All of a sudden all we hear from the corporate dicks is that they're afraid to invest. What they really mean is; We're afraid to invest HERE. Paul is saying if you don't empower the consumer RIGHT NOW, we're going down. Yes, it's a short-term manipulation. But, also the facts are we don't really know what corporations deem as capital investment. Anyone whose worked for one as long as I have know they can call a cat a dog anytime they want. The real problem is this...We are the greatest consuming nation ever. We created China with our consumption. We overbuy, per person, all nations by hundreds and even thousands of percentage points. Free markets,as they have been called, have been perverted and manipulated by the 1%. That has carried over to the Euro. So this is a guy saying the free market will fix itself right of a very grave crisis? Not a chance. As for America, the truth is really, what happens here will happen to them, not the reverse. There is no time for the markets to fix themselves. If I were the Germans, I would be loaning nothing to no one and withdraw from that union. The rest of Europe should have paying attention to their methods, not circumventing them. That's what we're good at here and because of our stature, we have been given a lot, and I mean a lot of leniency, but we won't for long and then we'll make Europe's crisis look infantile. Then what do we do?
Interest rates were incredibly low before the bubble. In 2001 greenspan cut rates to 1 percent to try to pull us out of the dot com crash and Krugman actively supported these polices saying he wished it was even more drastic....this caused an expansion in the money supply from 2000-2007 that resulted in more credit being created than in the rest of the republics history. Then look at what the gov did the solidify the bubble...created tax incentives for owning a house, created the community reinvestment act and mortage backed banks run through the gov Fannie and Freddie who's lending standards were non-existent...all a monster of the government and Fed. How is this anywhere near the free market???? It isn't, it is absolutely ridiculous to call what happened the happenings of a free market...everything about the market was twisted and shaped to produce over-investing in housing. I worked at a land developement company around this time and we loooooved it...because housing was through the roof.
"We are the greatest consuming nation ever. We created China with our consumption. We overbuy, per person, all nations by hundreds and even thousands of percentage points. "
With this ridiculous consumption comes a 16 trillion dollar debt...it is unsustainable and will not last...it's impossible to think that we can consume like this and keep running debts...the day of reckoning is coming.
Perhaps the most important aspect of a free market is interest rates and the money supply...from Jon Stewart himself (30 seconds)
http://www.youtube.com/watch?v=K-sk6-gbEBc
This is not and has not been a free market.
And just to add my last statement! they were WARNED of the consequences. Now they want to call it 'a mistake.' A mistake? How about in any debate, we put a billion dollar price tag on the use of that word?
I could dig out my old re-fi info from '97,'98,but I don't believe they were ever at 1%. I was on the market for an auto in '01, then, I know there were no 1% rates. Items that were in oversupply were being peddled for that and still are, so it's a misnomer. I don't believe in flooding the system with money either. So, how do you get real estate to rise in value again? How do you get state and local government to quit clamoring for more money? You know who they want it from, right? With all these needs, we have boatloads of money in the hands of a few being used to further manipulate and bankrupt the system. Either that or it's not even on our shores. The only way to fix it is "upward mobility." So, it falls back on that great phrase, doesn't it? How do we get it in swing again? Another problem is; politics is 'local.' For all the hoopla, World Banks and Multi-Nationals disregarded that. They created their own problem. The debate of the Austrian just becomes a mincing of words to that effect.
"Greenspan suggested that more homeowners should consider taking out Adjustable Rate Mortgages (ARMs) where the interest rate adjusts itself to the current interest in the market.[65] The fed own funds rate was at a then all-time-low of 1%."
Auto-loans are further down the cascade of interest rates than the fed funds target.
Agree with you that the money is manipulating the system.
lol, i post this and within 10 seconds someone votes it down...all i provided was one fact...i guess someone doesn't like facts (not claiming it was you nazihunter).
It wasn't me. I enjoy the debate..and appreciate your integrity in the matter. Krugman is a pretty smart guy, so, I felt a little compelled to defend him. The video you posted only gave us a sentence from Krugman's point-of-view. But, the reality is Europe's political system is very different from our own, in that it has all those mechanisms seen as US conservatives as 'socialism' or 'social welfare.' It's really a complex problem. But our politicians are the ones to fault. Politics is local, no matter what markets are. They bought w/o thought. That's the caliber of the elected today. It's like Georgia wanting a 1% tax hike to pay for the mess THEY created. They had a boom after the Olympics, lots and lots of tax money coming in as jobs were created 8-fold. But what did they do with the cash?? The roads around Atlanta are a nightmare. Just getting out of your neighborhood is a nightmare. Trying to be accomodating is not what the good 'ol South is known for, but taxing and re-taxing people to pay for their mistakes. As a result, the value of my home has fallen 40% in a few short years. Their fix?? They don't need one. They have millage rates they can increase to accomodate falling home values. Nice people! The original thoughts on Capitalism a few centuries ago was that it works because everyone benefits. It's been a little perverted, no? There IS only ONE answer for the US: a return to the completely progressive tax system of the 50s. It's not the answer half the country wants to hear but, it really is the only answer. That's how the money supply gets re-invested. Europe is definately going to suffer, but the union should dissolve. In this guy's opinion, that's the answer for them. But if you have some ideas of your own, I'd like to hear them. BTW, If Krugman was saying we should 'print' more money, I can't believe he'd say that. I'd like to know what his rational was.
I wouldn't say "crushed" at all.
He was very respectful and genial and insightful.
The fact that Krugman was biased is the way things go in politics.
Krugman was hardly left "stuttering and near speechless." Quite the contrary. Krugman spoke, then Schwartz. Krugman than answered. They disagreed very briefly about whether some of Schwatz's comments were personal criticisms of Krugman, Krugman saying he thought they were, Schwartz saying they were directed towards Krugman's book. There were two other men on stage. One spoke only in Spanish and seemed be the moderator. The other man spoke some, at one point saying that he agreed with Krugman on an essential point. There was some interchange between Krugman and this man (pleasant). This was followed by questions from the audience....All of which were directed to Krugman, with only 1 question directed to both men. All questioners were respectful, not confrontational. They were selecting the person who they wanted to answer their question, and this was Krugman. Schwartz was essentially left out. Towards the end, he interjected a response in Spanish after Krugman finished answering a question, and, as stated, one and only one questioner asked that both men respond, which they did in English. Then it ended with applause.
Eh, Schwarts seems a little hyper and maybe living in the past (the problem).
But I'll give him some respect for being on stage, being an economist, and knowing his subject.
He is right you don't want to expand demand when times are good. Because you can't cut interest rates once they go to zero and after 4 years of rate cuts. We did the same thing in the US, cut rates after the dot com crash, cut them after 911, kept them low during the wars... blah blah. There is no US War Chest. They either steal social security, raise taxes, or increase debt to fund war!!!!
So Schwartz is saying Spain, Europe, the US has incorrectly used monetary policy. I agree. We went to war and ruined our economy by keeping interest rates low while ignoring financial problems like dot com financing.
Supply problem versus demand problem?
I like what Krugman is saying. I like the theory that Krugman is disproving. In the end, the over supply of money should lead to higher interest rates and inflation. Krugman agrues against this.
But Krugman is looking at short term, short horizon. We do have inflation of gas prices, transportation costs, food prices, etc. But we have deflation of wages and home prices. Krugman is saying the 'Federal Government' is printing money and keeping inflation rates low in the USA with no change on the horizon.
But things never stay the same. There is a lesson in the Federal Printing of money while interest rates stay low. We now know there is a threshold (or a moat) to cross. And we have to look to see if lower demand is really driving prices (demand side).
If we have lower demand, lower consumption, then it seems prices are not being driven up and in some cases like gas prices are falling. House prices are falling. But the demand side also points out that consumption falling is going to hurt the economy and hurt the GDP and industry.
And Krugman say look at what happens when government cuts spending - there is no economic expansion. The spending cuts, austerity, have hurt Europe. All you have to do is look at the soup kitchen lines in Greece. Look at the people out of work and protesting in all of the fringe European countries. This is demand side economics because there is less money for people to spend. No money - No Consumption. This is bad for Business, bad for taxes, Bad for GDP, and bad for country credit ratings and debt repayment. The economy in Europe is contracting due to less demand from less public spending/less public jobs/less public social services.
Krugman say Keynesian demand Side Economics is proving the most useful in Europe and in the US at this time.
1) Thatcher's Austerity in the UK was no jobs economy.
2) Japan's Stagnation over nearly 20 years shows the problem with high interest rates and over control of the money.
3) Now Japan has demographics problems with too many people past the prime earning years and pulling pension payments.
4) And now Japan has Nuclear fall out, and an energy crisis on top of the stagnant economy.
5) Japan & Thatcher's lessons from the 1980s are that austerity hurts the economy, loose money policies will serve better.
Krupman's guidance that Europe must spend more, and the US must spend more to get out of the recession seems to make sense.
Krugman did a couple great OP-ED story in the NYTimes recently. take a look:
http://www.nytimes.com/2012/06/18/opinion/krugman-greece-as-victim.html?ref=paulkrugman
http://krugman.blogs.nytimes.com/2012/06/17/what-a-real-external-bank-bailout-looks-like/ (Click this link, it is earier to digest on the fly)
You have it right again.
Thanks. I appreciate your opinion here.
"This is bad for Business, bad for taxes, Bad for GDP, and bad for country credit ratings and debt repayment. The economy in Europe is contracting due to less demand from less public spending/less public jobs/less public social services."
Temporary...until the junkie is weened off his drugs....then a foundational economy with firm support from the bottom up is formed. Debt liquidation has to occur...much like withdrawal from an ever increasing drug.
Krugman was the guy in 2001 agreeing with Fed policies to cause overinvestment in housing which led directly to the bubble. At the same time the Austrians were screaming that this was creating a housing bubble and would have devastating consequences. Why listen to Krugman?
Because Krugman correctly believes you do not cut middle class services and jobs (austerity) in the middle of a recession.
The Austerity economists got it wrong. If we really want to improve economy we must boost middle class consumer spending (demand). Cut middle class taxes! forgive middle class debt!! Raise taxes on the wealthy (they ain't been the job creators, (more like outsourcers)) and they ain't created any demand. They just hoard their money.
And it was the wealthy that crashed the world economy. Debt forgiveness as punishment of criminal banksters!!
It's the only way.
VQ...if there was one video i would ask you to sit down and watch it would be this one from youtube (youtube...no virus youtube..so you shouldn't be afraid to click on the link). It should start at minute 14:30...if not..fast forward to that. I've seen Tom rip apart limbaugh, hannity, oreilly, romney etc....he's not a shill for the right...he hated bush. Please watch it.
http://www.youtube.com/watch?v=JlUwkC_B2p8&t=14m30s
Unfortunately the Austerity economists like Pedro predicted what would occur many years ago (like he explains in the video)...and once again people want to listen to the jackasses that got them into the mess.
Alright I listened to your guy. (Thomas Woods)
I heard him say there's too much financial regulations (I disagree)
I heard him claim he is a believer of "Austrian eco theory" I'm more Keynesian.
He ridiculed stimulating the economy. (I support stimulus)
Claimed stimulus takes money from the private sector. (our private sector has been sitting on trillions of dollars, so that is just wrong)
Seemed to be against low interest rates. But he wasn't clear about it.
He was disrespectful of Barney Frank, Paul Krugman, and the left. (I support all)
I also found a book of his (Politically Incorrect Guide to American History) that appears to be a right wing screed, and a review that states he "stands with neo confederates in claiming slavery wasn't a reason for the civil war" Do you support that?
So what is it you like about him? Sounds like he supports the same mistakes we made (at the behest of the 1% plutocrats) between 1981 and 2008. Supply side, Austrian conservative economic policies.
Peace
The interest rate thing is what i really want you to understand....the most important part of it. That's pretty much the whole basis of Austrian economics...is the interest rate problem.
I know he chewed out Barney...but i've heard him rip into Reagan, Bush, Fox....the entire neocon apparatus that is out there right now..even Romney. Completely ripped them apart.
Here...copied and pasted from my website about interest rates: These are my words.
Interest rates are a way for banks to turn more profits by loaning out your money (instead of just charging you a storage fee and keeping your money in its vaults). Before our current system, banks would set interest rates on their own (now the Federal Reserve does it). How did the banks used to set interest rates? First you need to understand that banks like to keep their bank vaults filled with a certain amount of money (reserves). This is because people want to be able to withdrawal their money, and if there isn’t any money at the bank you could force a run on the bank (as everyone becomes worried that by the time they get to the bank all the money will be gone). So interest rates used to work like this - if there are big gains in productivity and everyone’s savings swell at the banks, the banks would in essence have vaults full of money which would allow them to drop their interest rates to entice borrowers to take out more loans and clear out the vaults a little. When the bank vaults money supply became too low the bank would increase interest rates to entice depositors (as they make more money with higher rates) and deter borrowers. This would fill the vaults back up to a comfortable level of money. This allows a balance between savings and loans to occur in an economy as the interest rates would adjust and correct an imbalance if either savings or loans became too great. Today interest rates are controlled by the Fed. How do they lower interest rates? By inflating the money supply, or creating money and loaning it to the banks to “fill up their vaults”. This tips the balance away from savings (as the Fed creates money, or debt, which drives rates down instead of real savings by the people driving rates down as would happen in a free market). This creates the false impression of a healthy economy (one in which adequate savings have taken place), when in fact it's an economy expanding on credit/debt. This makes investors invest in things that the people haven't been able to put aside adequate savings for to purchase when these investments are completed. This creates a temporary credit boom and stimulates the economy...but it leads to an inevitable bust when the malinvestment and lack of savings from the people comes crashing down. There are a number of ways the Fed can lower interest rates, but each one inflates the money supply.
Inflating the money supply is in bold because it’s an ingenious way of stealing money from you and you don’t even realize it. You still have your $1,000 in the bank who cares what the money supply is doing? The problem is increasing (or inflating) the money supply causes prices to rise (we’ve seen this with food and energy prices recently), so your $1,000 can’t buy what it used to. It is exactly the same as someone keeping prices the same and physically stealing part of your $1,000 you have in the bank. The amazing thing about it is you don’t know it’s happening – you’re being stolen from without your knowledge. Even more amazing is it’s delayed. So if you add $1 trillion dollars to the economy it will take awhile for prices to begin to rise and you to realize you can’t buy as much. By this time you don’t attribute the rising prices to the creation of new money. It is theft, plain and simple. The genious of inflation can be compared to you stealing money out of someones bank account, but the bank accounts balance doesn't change because of it (and hence the person never suspects fraud). The real kicker is who benefits the most - the institutions lending out the new money first. Say you’ve counterfeited a million dollars – it’s not in the money supply yet it’s at your house. You are able to buy 4 houses with this fake money for the current price of the houses on the market. You buy the houses and over the course of a few months inflation occurs because you inflated the money supply by a million dollars when you added it to the economy by buying the houses (assume this is a tiny economy). This causes prices to rise (including the prices of the houses you bought which is ok with you because you already bought them). So because you were the first person to inject the money into the economy you benefited a little from it (your houses are now worth a little bit more). Any time inflation occurs it’s the people who receive the money first that benefit the most and at the expense of the late receivers of the money (the everyday working man on fixed incomes). Who receives the money first in the real world? The institutions that handle the money. Think of this as an incremental transfer of wealth. The further you are from the newly created money the worse off you are. This is because by the time the money has trickled down to you, prices have already begun to rise and your paycheck hasn't changed.
Two minute video explaining this very well:
http://www.youtube.com/watch?v=hx16a72j__8&feature=player_embedded
You study the recessions that have taken place over the last couple hundred years...and you will always see this artificial credit during the boom state (credit could come from fractional reserves, lowering the interest rate, or just printing money), which after a few years is always followed by the crash...the booms usually benefit the elite...and the busts completely screw over the 99%.
So how do we solve this problem?
Yeah i'm not saying we have to cut all regulations...strip our whole society of the rules etc...but to stop the banking system from screwing us over you have to get the Fed out of fixing interest rates (actually its more just credit creation...but that's what fixing interest rates does..creates credit for the banks). The artificial fixing of interest rates is precisely what causes the business cycles....you can track this over its history. This would help a great deal to mitigate boom/bust cycles...but debt pyramiding is also a problem (like fractional reserves and derivatives etc....as if there is a slight downturn in the economy this debt pyramid comes crashing down and causes a significantly worse downturn (this is what can lead to serious deflation periods....as these debt pyramids come crashing down and the money supply shrinks very fast because of it).
This is why Austrians talk about gold all the time...it stops this insidious process and theft of wealth from the poor and middle class. It really doesn't even have to be gold...you could create a currency that can't be manipulated (its supply would have to remain consistent..meaning the money supply stays the same)..but history has shown that if it's reproducible....governments always wind up resorting to printing...that's why gold is attractive...it can only be made in a dying star..you can't counterfeit it.
Ok. So you said "i'm not sayin we have to cut all regulations" Which I interpret as meaning you wanna cut some financial regulations. Your guy was clearly against financial regulations (seemed like all but whatever, you said not all).
I am for fin regulations. I think if we don't watch these guys they're gonna steal our money again. They will be reckless and irresponsible and they will crash the world economy again (LIBOR)
Your insistence that stopping fed interest manipulation would end the boom/bust business cycle (like thomas Woods says) ignores the fact that before the fed existed we had boom/bust cycles. In fact more! And more damaging. Same thing with the Gold standard. we had boom/bust during gold standard days.
So let me see. Cut some (but not all) fin regulations (which ones?) End the Fed? is that what you want? and go back to gold standard. Yes?
And if we do that, will we no longer have boom/bust business cycles? How will these actions help the 99%?
Peace
Yeah, you're absolutely right we had boom/bust cycles before the Fed...but that doesn't mean the same thing wasn't taking place (artificial credit expansion). This occurred prior to the Fed via fractional reserve banking and similar forms of credit creation. Woods has a whole lecture explaining these boom/bust cycles (first link) as well...but it's the same process of credit creation fueling a boom that leads to a bust. The government was very much involved in causing the same types of cycles by forcing currencies on the population and increasing credit...fractional reserves were also fraudulently used causing similar phenomenon. Fractional reserves (fraudulent) can create a false gold standard...there isn't enough gold in circulation to back the amount of money in circulation..so this was a time of a pseudo gold standard. There are also some really good books on this:
http://www.youtube.com/watch?v=TxcjT8T3EGU
Besides the busts...you have the panics (although you could argue a bust and a panic were pretty much the same). The only way for there to be a banking panic is for there not to be enough reserves at the bank to fulfill depositors rushing to it and withdrawing their money....why wouldn't there be enough reserves at the bank to fulfill these deposits? Fractional reserve banking. A picture of how this works:
http://hmscoop.com/FractionalReserves.html
We don't have to go back to a gold standard. Just legalize gold as a currency. Those who want to still use federal reserve notes so be it...but those of us who don't want our wealth stolen would have the option to get out of it. This would cause the collapse of the dollar system eventually...because as the dollar is continually eroded by endless printing and people would flock out of it for a safe currency.This is why they had to seize the citizens gold, and force them into this currency with the force of law...they know citizens will gravitate towards the stable currency that holds its value.
These actions will help the 99% because the transfer of wealth via inflation (from poor to rich) is put in check with a stable currency which this 2 minte video explains.
http://www.youtube.com/watch?v=hx16a72j__8&feature=player_embedded
Without artificially manipulated interest rates (the fed) and fractional reserves, boom bust cycles would be incredibly minimized, if they exist at all. Many think they would disappear. This helps the 99% because who benefits the most during the boom (the 1% who get the credit and invest it before prices rise from inflation) and then who gets screwed during the bust (the 99% while with savings whiped out and unemployment going up while the 1% is getting bailed out by its partner in crime...the gov....at the expense of the rest of us).
This is all too convoluted for my laymans brain to digest. My apologize. My limited understanding of the specifics of this theory raises serious questions about it's viability.
What I do understand is that Woods is clearly not progressive, I am. He would cut fin regs, he would cut economic stimulus, I disagree with these concepts. His "Austrian theory" sounds like supply side to me. We've tried Supply side for 3 decades. It don't work. It created the largest transfer of wealth from the 99% to the 1%. Supply side economic policies crashed the world economy.
I trust Krugman. I agree with Krugman, Krugman disagrees with Austrian theory and Woods. Krugman is a progressive and believes we must focus on improving the state of the middle class in order to improve demand. He believes that the middle class consumer class is the real job creators. I agree. You and I disagree.
Sorry. Krugman also doesn't support the neo confederate notion that slavery wasn't the reason for the civil war. So he's got that goin for him too.
Peace
I wouldn't let Woods ideology dissuade you from considering the logic of it...or the facts that back it up.
See, i don't trust Krugman at all....Krugman was advocating the very policies that led to the housing bubble while the Austrians were screaming that "you're just creating a housing bubble"...which is exactly what happened...and then it popped. He was advocating it by suggesting interest rates cut to get us out of the dot com bust....interest rate cuts creates huge demand in housing and an artificial bubble, which the austrians warned about. Here are some of Krugman's own words -
Here is Paul Krugman from his blog (provided by Benjamin Lee)
Paul Krugman
=================================================
German Interview, undated
http://www.pkarchive.org/global/welt.html
“During phases of weak growth there are always those who say that lower interest rates will not help. They overlook the fact that low interest rates act through several channels. For instance, more housing is built, which expands the building sector. You must ask the opposite question: why in the world shouldn’t you lower interest rates?”
May 2, 2001
http://www.pkarchive.org/column/5201.html
I’ve always favored the let-bygones-be-bygones view over the crime-and-punishment view. That is, I’ve always believed that a speculative bubble need not lead to a recession, as long as interest rates are cut quickly enough to stimulate alternative investments. But I had to face the fact that speculative bubbles usually are followed by recessions. My excuse has been that this was because the policy makers moved too slowly — that central banks were typically too slow to cut interest rates in the face of a burst bubble, giving the downturn time to build up a lot of momentum. That was why I, like many others, was frustrated at the smallish cut at the last Federal Open Market Committee meeting: I was pretty sure that Alan Greenspan had the tools to prevent a disastrous recession, but worried that he might be getting behind the curve.
However, let’s give credit where credit is due: Mr. Greenspan has cut rates since then. And while some of us may have been urging him to move even faster, the Fed’s four interest-rate cuts since the slowdown became apparent represent an unusually aggressive response by historical standards. It’s still not clear that Mr. Greenspan has caught up with the curve — let’s have at least one more rate cut, please — but the interest-rate cuts do, cross your fingers, seem to be having an effect.
If we succeed in avoiding recession, this will mark a big win for let- bygones-be-bygones, and a big loss for crime-and-punishment. And that will be very good news not just for this business cycle, but for business cycles to come.
July 18, 2001
http://www.pkarchive.org/economy/ML071801.html
“KRUGMAN: I think frankly it’s got to be — business investment is not going to be the driving force in this recovery. It has to come from things like housing, things that have not been (UNINTELLIGIBLE).
DOBBS: We see, Paul, housing at near record levels, we see automobile purchases near record levels. The consumer is still very much in this economy. Can he or she — or I should say he and she, can they bring back this economy?
KRUGMAN: Well, as far as the arithmetic goes, yes, it is possible. Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time? We don’t know”
August 8^th 2001
http://www.pkarchive.org/economy/ML082201.html
“KRUGMAN: I’m a little depressed. You know, inventories, probably that’s over, the inventory slump. But you look at the things that could drive a recovery, business investment, nothing happening. Housing, long-term rates haven’t fallen enough to produce a boom there. The trade balance is going to get worst before it gets better because the dollar is still very strong. It’s not a happy picture.”
August 14, 2001
http://www.pkarchive.org/column/81401.html
“Consumers, who already have low savings and high debt, probably can’t contribute much. But housing, which is highly sensitive to interest rates, could help lead a recovery…. But there has been a peculiar disconnect between Fed policy and the financial variables that affect housing and trade. Housing demand depends on long-term rather than short-term interest rates — and though the Fed has cut short rates from 6.5 to 3.75 percent since the beginning of the year, the 10-year rate is slightly higher than it was on Jan. 1…. Sooner or later, of course, investors will realize that 2001 isn’t 1998. When they do, mortgage rates and the dollar will come way down, and the conditions for a recovery led by housing and exports will be in place.
October 7, 2001
http://www.pkarchive.org/economy/ML071801.html
“Post-terror nerves aside, what mainly ails the U.S. economy is too much of a good thing. During the bubble years businesses overspent on capital equipment; the resulting overhang of excess capacity is a drag on investment, and hence a drag on the economy as a whole.
In time this overhang will be worked off. Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer. But it seems inevitable that there will also be a fiscal stimulus package”
Dec 28, 2001
http://www.pkarchive.org/column/122801.html
“The good news about the U.S. economy is that it fell into recession, but it didn’t fall off a cliff. Most of the credit probably goes to the dogged optimism of American consumers, but the Fed’s dramatic interest rate cuts helped keep housing strong even as business investment plunged.”
So you believe that the crash of the world economy occured because the Fed lowered interest rates.?
The banksters dishonest, reckless, irresponsible, even criminal misuse of our money, of our mortgages, is not part of your theory?
We clearly disagree. The bankster 1% plutocrats crashed the world economy. It was their behavior not interest rate levels that caused the crash. Nothing to do with what Krugman said 10 years before.
Sorry. I like low interest rates.
I don't like supply side theories that help the wealthy at the expense of the working class. Sounds like Voodoo economics to me. Tried it for 30 years. redistributed wealth from the 99% to the 1%. Supply side crashed the world economy. And the banksters you give a pass to took taxpayer bailouts, and still enrich themselves with obscene bonuses/salaries.
Theres your problem. Austrian eco don't touch on that. That is a glaring hole that tells us where they stand. With the plutocrats!
Peace
've heard Krugman criticize Pres Obama and dems mercilessly. does that do it for you? Your numbers are off about 2-3 trillion on what Bush cost us. Anyway. Peace
My Answer:
Those aren't my numbers...those are your boy Krugmans..that's why that was in quotes.
whatever. I trust Krugman. not you, not Woods, not any supply side conservative pro 1% plutocrats.
Peace
"But my guy Krugman understands Austrian supply side theory and I trust him. At least he doesn't have to insult people to make a point. At least he doesn't believe the racist south was fighting for something other than enslaving people. Peace"
He's an ideologue and has let it spill over into his economics. Woods will absolutely destroy the right along with the left. You watch what krugman says though...the exact opposite stuff depending on who's in office. For example...everyone knows his support of massive government spending at the moment..you can even hear him say "they haven't spent enough to get the job accomplished". Yeah, if only they'd spend 5 trillion a year...instead of 3 trillion...if only the defiicit was a little bigger. Now, take a look at what he said caused the collapse (the collapse he didn't predict...and the collapse that the Austrians said his policies of lower interest rates would cause)...here he is:
"The answer is, three main things. First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs."
So suddenly under a republican a deficit matters....not under a dem though. You gotta find the people who will rip apart their own people when their argument isn't consistent.
I've heard Krugman criticize Pres Obama and dems mercilessly. does that do it for you?
Your numbers are off about 2-3 trillion on what Bush cost us.
Anyway.
Peace
You said:
"Please don't start with the insults. I'm sorry we don't agree. but we don't. We both have to be big boys and allow others to disagree. You haven't convinced me with your history of Austrian theory, you haven't convinced me with their supposed predictions (did they predict the reckless behavior of the banks?) You haven't convinced me with Woods offensive treatment of the people (Krugman, Frank, left) who disagree with him. Your not gonna convince me by insulting me. The intimidating schoolyard bullying tactics of your candidate Romney only work when the threat of physical violence exists. It doesn't work in a virtual world. You get that?. Woods insults, and your insults of people who disagree just betrays a weakness in your arguments. thats not just a clever retort. It is a trueism that goes back centuries. Peace"
My Answer:
Once again...don't call Romney my candidate. I can't stand the guy, and i wouldn't vote for him...ever.
Its unfortunate that you can't understand the interest rate problem (like you said)...because that is what is going to continue the exact same thing we've had. Until people can understand how it works, things aren't going to change. To say you're against Austrian economics...but to also say you don't understand the interest rate problem doesn't make a whole lot of sense...because that's the foundation of Austrian economics...the interest rate.
But my guy Krugman understands Austrian supply side theory and I trust him. At least he doesn't have to insult people to make a point. At least he doesn't believe the racist south was fighting for something other than enslaving people.
Peace
"The collapse occurred because of greedy, dishonest, reckless, irresponsible banksters. Not the interest rates. Sorry. We disagree. Peace"
Any data to back this up? Concrete proof built over a couple hundred years of data collection? Or just something that seems right in your head?
Please don't start with the insults.
I'm sorry we don't agree. but we don't. We both have to be big boys and allow others to disagree.
You haven't convinced me with your history of Austrian theory, you haven't convinced me with their supposed predictions (did they predict the reckless behavior of the banks?) You haven't convinced me with Woods offensive treatment of the people (Krugman, Frank, left) who disagree with him.
Your not gonna convince me by insulting me. The intimidating schoolyard bullying tactics of your candidate Romney only work when the threat of physical violence exists. It doesn't work in a virtual world.
You get that?.
Woods insults, and your insults of people who disagree just betrays a weakness in your arguments. thats not just a clever retort. It is a trueism that goes back centuries.
Peace
"Tried it for 30 years".....no we haven't...we haven't been anywhere close to it...that's the whole point of everyhitng i've been talking to you about.
Why wouldn't you listen to the guys who were warning about the creation of a housing bubble close to a decade before it collapsed and ask "how the heck were these guys able to spot this so many years ago...what were they looking at that told them this disaster would happen."
The Fed lowering interest rates absolutely played a major role in building the housing bubble. You dont think low rates fuel major development in housing? I worked for a land development company around that time...we loved it. It's artificial though...and the collapse eventually comes.
One of the best analogies i've heard of this goes something like..."Say you own a restaurant and business isn't great...but it isn't bad...you make enough to get by. Then the Olympics comes to town and you have a ridiculous amount of business..you start pulling in all kinds of money...you have a ton of money left over to spare...so for some crazy reason you believe that this type of business will continue (you don't realize for some reason that this is temporary from the influx of the olympics)...and so what do you do? You open up another restaurant, invest in improvements in the old one as well because you expect this type of business. What happens when the olympics leaves? The whole whole thing comes crashing down on you." Artificially low interest rates are the olympics to investors.
The collapse occurred because of greedy, dishonest, reckless, irresponsible banksters. Not the interest rates.
Sorry. We disagree.
Peace
You do not cut middle class services, and jobs in the middle of a recession.
Raise taxes on the wealthy, Cut the military (cut 50% we would still be more powerful than all our enemies combined)
Cut middle class debt, taxes. Invest in infrastructure and green tech jobs.
Is that what your guy supports? If not. What? cutting taxes on the wealthy? cutting govt spending (but not military)?
Is that what you want me to watch.?
No...watch the video...you obviously click on links, because you know waht this post is about.
But you can't say?
Please stop wasting my time.
VQ..i don't know why you enter in discussions online. Your mind is made up on everything and you won't even take the time to look at another perspective of the argument. It's reminiscent of people from history who said the world was flat....or that vitamin C couldn't cure scurvy. Stubborn people who won't look at any information besides what they already have. Open your mind a little..explore...if not to just weed out what is actually false.
I do not subscribe to your offensive accusation that I am closed minded.
Why would I want to watch something that someone who is so consistently offensive suggests?. Clearly you are hostile, I think also unstable. You don't treat people with respect. (not me anyway)
I have opinions based on 50 years of life experiences in NYC. Why you refuse to describe what it is you want me to watch, I don't know. But if you can't say, then you may not understand the clip, or maybe you don't agree with it, or maybe you are afraid to express its premise. Whatever,
My mind is open to your comments. You wanna say.? Fine make your case. Don't wanna say? Fine as well. Then its a waste of time.
thanks
Peace
I already have described everything that i want you to look at in the website that i wrote and is layed out very nicely that you won't click on the link for. You want me to copy and paste the whole thing here? Its something you'll have to spend about 15 minutes on that will give you the other perspective of things. You were mad that it was my website then...saying that i'm making tons of money off of it. So i posted a youtube video that i don't have any association with that covers similar information.
"Clearly you are hostile, I think also unstable." lol, man you got issues. Those are the types of tactics fox news uses against people who are tearing apart their argument and can't figure out anything to say.
"I have opinions based on 50 years of life experiences in NYC"...pretty sure that's probably what the people arguing against a round world were saying a couple hundred years ago.
Huh? "round world"? I believe in a round world. I don't watch Fox news too conservative. You watch them?
I like Paul Krugman. I like his politics. I like his economics. That doesn't mean I'm stupid, or closed minded like medieval europeans. It simply means I have different opinion. Can you handle that without the insults.
Please try.
Peace
Yeah, i can handle your different opinion...but don't talk to me if you're not going to explore the things i'm talking about. Why even communicate, you have your mind made up. So stop talking to me.
You ain't talkin!!
I wanna explore but you ain't talkin about what you want me to explore.
You wanna make me watch a video! That ain't talkin. I wanna talk. You refuse to talk.
You already refused to talk. Now your refusing again. You don't wanna talk. Maybe you don't understand the subject. thats ok. Maybe you don't have your own opinion on the subject. It is a very complicated issue. Nothing to be ashamed of.
Maybe your embarrassed to actually go on the record supporting a position so obviously wrong. Who knows.?
no one knows. because.
ready?
wait for it.
You won't talk.
Peace
You have made some points that are new to me. I have to dig further. So far I take it that Krugman stays on course and is honest. But if you are questioning that, then I have to keep looking into it.
Personally I think I was way ahead of the wonks and politicos. I sort of sensed that if you bailed out the banks and instituations there would be no fix or resolution. For me it was like daja vu. Bailing out main street would have made the system whole and everyone would have said okay there is integrity in the US Mortgage system.
Instead the Politicos have scuttled the New york FInancial Center's reputations (deservidely), and they have scuttled the derivatives (ABS, CDOs) which used mortgages as security.
Basically the US reputation in finance is ruined for any banker that wants to sell international paper.
Question: If the junky gets off the dole, what money is invested into the economy to give it a start.
We know trickle down doesn't work. Look at Thatcher's UK. Look at the USA. There must be more than cutting taxes. If you cut my taxes, I'm not going to spend more. ANd if you raise the sales tax, I'm going to spend the same or spend less. I'm not going to hire more employees becuase of a tax decress. I'll only hire more employees as a last resort to grow my business if I want to expand (or expand production).
Trickle down is crap. I'd like capital gains tax to exclude the first $12000 dollars I make. Or tax the first $12000 dollars in dividiends at 15%. If I have a second home to rent out, I'd like the first part of the rent excluded or at least a write off of the taxes on the mortgage. Say write off my first $3000 in rent from my taxes, then tax the dollars above that.
Hey Middleaged,
If you really want to get the gist of this stuff the best book I could recommend is Tom Woods "Meltdown"....it's the shortest, to the point, easily understood book with lots of historical data that explains this stuff more in detail. He was one of the one's that predicted the crisis also, so it's not some random guy giving economic advice. If you don't want to buy something the next best thing to listen to is him giving a speech explaining these things...this link should take you to 14 minutes and 30 seconds...if not just fast forward to there:
http://www.youtube.com/watch?v=JlUwkC_B2p8&t=14m30s
I'm not sure on your politics...but Woods doesn't throw favors to either side....i've heard him absolutely hammer the right and left. He can't stand fox and the usual right wing bs...so don't let his tone in areas dissuade you from listening to the ideas being presented.
Taxes are complex in the world today and i think under our system if the people choose to enforce higher taxes on the rich...or a similar system that you suggested...then so be it...i just wish more people would become aware of these ideas (from the post) and really dig into them, because there really are some extremely good lessons to be learned.
Thanks. I spent some time watching his lecture on the depression and kinda feel like he is twisting history a little. But I'm thinking he is a little smarter than me and is citing real sources. Your video was good. He does a great job.
I'm firmer on doing away with the FED, than I am on changes to our fiat or currency. Control the money and you control the people. There is a good argument from Bill Still that the money changers or people with gold will be the rich guys if we went to a gold standard.
I do get pulled into the Libertarian line, but really think I am socialist since I think social security, medicare are good programs. We can't do away with food stamps and we need a progressive tax.
Tom Woods says there are to many Banking regulations, but not sure if he has the experience that i have had. The federal government is pretty much 'Hands-off' of industry.
You have to admit that in the Libor Scandal, PFGBest, the federal government knew about the Fraud and did next to nothing. JP Morgan trading losses look like they were known by the FSOC in May and they told JP Morgan to go public (my opinion, but look at the FSOC minutes for the May Meeting). The MF Global Scandal was so big, there is little excuse for the government not to pursuit Fraud charges. No excuss not to pursuit the systemic fraud in the finanical crisis 2008. There are regulations, but only a couple of bank examiners and they are not getting the job done.
Obviously the Ratings Agencies and Independent Accounting Firms were supposed to protect the shareholders and protect outside investors. The whole system was corrupted.
The only things that holds everything together is Law and Regulations that discourage Fraud and risky behavior.
But Tom Woods nails it in that we don't have free markets. I have been pinging subsidies for a while now.
The interest rate thing has got me thinking that I need to read something. Tom Woods actually has me a little confused, but I got the concept that floating interest rates can help get proper investment in the system. I'm sure that capital investment for heavy industry happens at the same time as investment to provide goods to consumers. But would think that today there is little investment into heavy industry unless there is some government incentive (Remember Solara Solar Panels).
The problem with Tom Woods program is it is a shift in culture from our socialist system. Really we grew up with social programs. We understand our economy needs money flows to keep going - including the money flowing from our social programs. We understand that to cut spending is to contract the economy (GDP).
So how can we possibly shift our view from dependence on money flows, public jobs, public spending, public debt, and the view that we need the money flows to keep the economy functioning?
That is why I have this idea that if we cut off our spending on subsidies, we shift that money to spending on something else that stimulates the economy. This should prevent a crash or depression. Ditto if we cut spending on wars, military budgets, 14 Intelligence agencies, and housing non-violent criminals in prison.
Oh adding that I blame Greenspan for a lot also. I guess the OTS under the treasury was closed down and consolidated under OCC in the Treasury. OTS and OCC seem pretty hands off the Banks. That is why they formed the FSOC. We don't know if the FSOC will actually be any different that another chum for the banks though.
Let me check it out. The MMT Economist like the Austrians.
Hey, I need help with this MIT Study I found. I have taken a lot of classes in college, but all of a sudden the computer monitor looks too small to read this information. Maybe you can get someone to help digest what it is saying...
http://occupywallst.org/forum/who-is-responsible-for-our-us-financial-risk-fsoc-/
Really. Krrugman is a liberal loser....no better than a faux news economist!
IF I HAD A SON, HE'D LOOK LIKE BRIAN TERRY. holder has to go
and ron paul is a free market zealot - and the gold standard and hard money - to say nothing of the free market is a joke to prop up the 1%. i like his foreign policy ideas though!
Austrian economics is as outdated as capitalism. The only real purpose of Austrian economics was to support the rich getting richer, while ignoring historical evidence to the contrary.
What evidence to the contrary?
That's always a big cop out without an explanation.....Austrian economics is "outdated".
These guys predicted the housing crisis...if you'd been listening to them ten years ago we wouldn't be in the mess we're in. Little respect is due i think.
I don't think so.
Many economists predicted the crash of 2007-2008. Austrian economics with its laissez faire gods and praxeology. The Austrian economists disprove their own their theories when they start, If our underlying assumptions are correct... LOL.
Start out with historical analysis as Marx did then build on that dialectic as opposed to "induction" and supposed irrefutable characteristics of human behavior. Historical analysis of previous economic systems clearly indicates the present state of capitalism and its dismal future.
What Marx book?
Start out with The Communist Manifesto, in which Marx traces the history of different economic systems, though very briefly, since the Manifesto is nothing more than a pamphlet. If you are interested in historical analysis of political-economic systems, research all three volumes of Das Kapital.
Marx clearly sets out how previous political-economic systems starting with tribalism, through feudalism with the growth of the merchant class, who founded the cities, which led to a society in which the landed nobility opposed the burghers.
As modes of manufacturing improved and eventually replaced artisanal manufacturing, still part of feudalism, and means of productions became so expensive only a wealthy few could afford them, the political-economic power shifted to these wealthiest of burghers, the bourgeousie.
Labor, the work of humans, became a commodity to be exploited like any other commodity.
Of course the theory and historical reasoning and proof take much, much longer.
Right. And, Ron Paul will be the next President.
Schwartz was extremely rude and he was mostly reading from his notes which didn't inspire confidence. I learned more from Krugman in 2 minutes (and I'm no apologist for Krugman) than I did from angry Schwartz who allowed his emotions to get in the way of clear thinking.
The Austrians are wrong. Free-wheeling capitalism would put us back to the early days of the Industrial Revolution. You want to pay a toll to go down the road you live on? Pay tuition for your kids to go to school because public schools are defunct? Have no labor laws or environmental protection laws? Want your water safety protected by some company merely seeking profits? Etc. etc.
The infestation of Occupy by crazy laissez faire right wingers like this guy is what turned me off of the movement when I first explored being part of it.
Most of them, in my opinion, are for "liberty" without having full knowledge of the implications of laissez-faire capitalism. They don't realize how quickly it would put them in chains.
The guys who blew up the economy in 2008 did it by using their poorly regulated economic liberty to create massive massive networks of over-leveraged debt. Paul & Co think we should give them even more liberty. I can't give the benefit of the doubt to these people any more. How stupid can they be? We need more financial regulation, not less. We need more social solidarity and a stronger rule of law - not just ever more personal liberty.
We need an economic system that works for all people, not just the wealthy and corporations. An unregulated laissez-faire capitalist system would work well for the wealthy and corporations, and horribly, worse than what we have today, for everyone else.
I gave a point back as well, for this is surely what we need. Not some economic system based on bubbles and bursts, designed to fail, and accepted as such, like some early Microsoft Operating System.
Well said!
Someones did not like your comment - I gave you back one twinkle.
Now strike again as you apparently hit a nerve.
Must be some sort of Shillsockpuppet user.
RustyButt?
I insulted them, but I don't mean it as an insult, I mean to inform them because it's the truth. Most "libertarians," that is, ordinary people, who love all the libertarian talk of "freedom" and "liberty" do not understand that the economic system that comes along with that will put them in shackles. They just don't get that, but it's the truth. The truth hurts.
With Freedom comes grave responsibility... this is what is lacking with todays Austrians and Libertarians who claim to understand freedom. The sociopaths in Wall Street have proven themselves over and over to not be responsible.
You are exactly right, geo.
Yes - that is a huge problem - getting people to face the truth. Even if it is not their fault often times people feel responsible for an-others actions as they belong to the same group/association. So denial/defense is what often times happens.
Yes, :)
Sheesh..............what in the world ever happened to objective reality.
I mean when I was growing up I was taught to look at the truth in any given situation and accept the fact.
People are not perfect and it stands to reason peoples creations are not perfect - this goes for organizations as well as it does for anything else.
I was taught to recognize this accept it own it and try to do better.
Where has society gotten to when it can not recognize and accept it's own failures and then try to to better?
Paul and Co also believe that the entire thing should have crashed, and we should be in a real recovery with more decent people making the decision now.
That is the trade off. Multinationals will always screw themselves due to greed. But that is when they fail, and new choices pop up.
We do not need to screw-up personal liberty - which is what is happening - we need to regulate proffessional/business liberties which are all fucked-up.
The point of this thing was to have a diverse crowd against the banks and the wars....
So much for htat....
BTW, we are all against the banks and the wars, but no one ever said we would all be proponents of Austrian economics.
I never did either. Im just stating that people tend to take the perverted version of something (capitalism, Keynes, socialism, Austrian, etc) and assume thats how it was meant to be in the beginning.
Doesnt matter which one you choose, if the public is as apathetic as this, it will become perverted.
Understood and agreed, :)
Study up on Austrian economics. It's a way to make the rich richer while everyone else is placed in economic shackles. Don't believe me? Ask the prominent libertarians if they'd be willing to even out the wealth of all Americans before implementing true laissez-faire capitalism. They'd say no, of course, because they know damn well that the people who already have the capital (they themselves) have the upper hand. So basically they want to implement laissez-faire capitalism with the rich already starting out with an upper-hand. This is the ridiculous stuff a lot of people don't understand. Yeah, yeah, all that "liberty" stuff sounds good, but economically it would be very ugly.
Excellent comment & also 'fyi', 'bw' :
pax et lux ..
Thanks, :).
You're welcome & I append below for you and others as an attempted antidote to 'All Things Austrian' yet still within the wider ambit of 'economics' :
http://costsofwar.org/ ,
http://www.rdwolff.com/ ,
http://www.webofdebt.com/ ,
http://publicbankinginstitute.org/ &
http://www.warresisters.org/sites/default/files/FY2012piechart-color.pdf .
ad iudicium ...
They are against the fed and the wars as well. That is what this was. It was a movement against corruption at the top. And it was growing very rapidly with a diverse base.
Which is why the media needed to get invloved and start playing only the soundbites of the Obama supporters. It was on the verge of becoming a movement of people against corruptoin. That is a big threat to the establishment.
But the media started to get involved, political hacks became involved, and basically it has dwindled down ever since.
There were no right wingers in OWS when it began. I was there. And there ain't none now either.
It has always sought the end of the injustice created by conservative policies (whether voted on by Dems or repubs).
from the beginning the right has attached OWS. You are gravely mistalen.
Sorry Peace
Sorry, you are wrong. Again. You are probably the worst poster on this board, you know this right?
There were some sprinkled throughout, but for you to realize this, you would have to realize what this thing is to begin with, which you dont.
Stop trolling me with your stupidity. You're too dumb to think for yourself, your poli sci classes were a joke, you are a media toadie.
Go campaign for Obama, sell your soul, your dignity and your pride, and get it over with. Then write letters to all the people that will die from the bombs afterwards.
insults=weak arguments.
You know I'm correct, thats why you resort to the schoolyard bully tactics of your candidate Romney.
The right wing never protested with us in Zuccotti. Thats BS. The right has consistently insulted us (like you) called us dirty, drug addicts, lazy, freeloaders, and much more.
just because it passes through your word hole don't make it true. Look through the live streams you will find progressive minded people. None of your right wing wackos.
Sorry. You have your tea baggers dude.you can squat with them.
Peace
People who endorse wars should be insulted. Vigorously.
You're a freakin moron, and if you think there wasnt a few conservatives who were tired of war and banking corruption, sprinkled around, then you are just further proving your idiocy.
How have your pro Obama rants gone at the GA lately?
I think you have come unhinged boss. Perhaps you should take a break.
inults = weak arguments.
Your right wingers hate OWS. they love your tea baggers. Everyone knows that. Take a breath it's ok.
Peace
There will be no peace until people like you regain their dignity and stop endorsing criminal parties.
I support progressive solutions to the destructive conservative 1% policies created by and benefitting the plutocrats.
Elect progressives, Vote pro plutocrat politicians
This is not free wheeling capitalism we are in, its fascist nonsense due to a vastly apathetic public.
What I'm addressing is how it would be if we had the truly free-wheeling capitalism that proponents of Austrian economics would like to see.
It would be nice to have a few more options for energy and everything else...
Why would you listen to Krugman? He was advocating the very policies in 2001 that lead to the housing bubble...while the Austrians were screaming about the inevitable bubble and the disaster would ensue afterwards.
They were screaming about it in 1960. I still have the books, some signed. Even a stopped clock is right once a day. I knew the screamers then, Lefevre, Harry Browne, Murray Rothbard, Sy Leon, Nathaniel Brandon. Andrew J. (the J. was very important to him) Galombos, and some of you now.
Hmmm 50 years? Might need to tighten up the timelines on the predictions to have serious credibility.
What Krugman has been saying since 2008 has been largely correct.
Everything they've talked about has been proven accurate.....read Woods meltdown where he goes into detail how all major credit expansions have ended in a recession. I can't believe anybody even refutes this stuff anymore....its like how many times does it have to happen before people are like "well..there does kinda seem to be a correlation here..maybe we should explore this area slightly"?
Krugman has lost his economic middle ground by becoming more of a political ideologue than an actual economist.
They are not mutually exclusive.
I don't listen to Krugman. Like I said I'm no apologist for Krugman. Capitalism doesn't work any which way, but the Austrian way is the very worst for the most people.
Great video. Krugman even makes stuff up outside of economics "attacked my credentials".
crushed - weird word for what happened - your ron paul stand in said very little except supply side and more supply side. krrugman is correct in saying that history shows it does not work. just look at europe - ron paul is insane along with hayek and ayn rand - read max neef to get some idea of economics. as to credential here is chomsky on the subject - In my own professional work I have touched on a variety of different fields. I've done my work in mathematical linguistics, for example, without any professional credentials in mathematics; in this subject I am completely self-taught, and not very well taught. But I've often been invited by universities to speak on mathematical linguistics at mathematics seminars and colloquia. No one has ever asked me whether I have the appropriate credentials to speak on these subjects; the mathematicians couldn't care less. What they want to know is what I have to say. No one has ever objected to my right to speak, asking whether I have a doctor's degree in mathematics, or whether I have taken advanced courses in the subject. That would never have entered their minds. They want to know whether I am right or wrong, whether the subject is interesting or not, whether better approaches are possible - the discussion dealt with the subject, not with my right to discuss it.
But on the other hand, in discussion or debate concerning social issues or American foreign policy, Vietnam or the Middle East, for example, the issue is constantly raised, often with considerable venom. I've repeatedly been challenged on the grounds of credentials, or asked, what special training do you have that entitles you to speak of these matters. The assumption is that people like me, who are outsiders from a professional standpoint, are not entitled to speak on such things.
Compare mathematics and the political sciences -- it's quite striking. In mathematics, in physics, people are concerned with what you say, not with your certification. But in order to speak about social reality, you must have the proper credentials, particularly if you depart from the accepted framework of thinking. Generally speaking, it seems fair to say that the richer the intellectual substance of a field, the less there is a concern for credentials, and the greater is concern for content.
What does Europe have to do with Austrian econs?
if you do not know the answer to that question you haven't been watching the news - read max neef - enlighten yourself. and nothing to say about your man and his stand on credentials - what a wimp
Europe is about as far from austrian econ as a country could be, correct?
austerity is the way out right!
See, the problem with the "austerity" that the govs in the west are implementing is that they are not addressing the issues at the top as well.
There is too much theft at the top, and the western govs arent addressing that. They are punishing the people and not the bankers. That is not austrian. That is fascist bullshit at its finest.
yu are right about those at the top but i do think that the austrian school would advocate austerity and punish those at the bottom. hayek is full of shit
Those who believe in the austrian model are appauled at what is going on at the top.
There are many more very rich people, who have nothing to do with the current rip off at the top. who are appauled at what is going on.
the austrian's i read are appauled by the highly paid workers at the bottom - don't asy much about the greed at the top. i stand by my statement - hayek is full of shit and was part of the ideological underpinning of the nazis!
Possibly, Im just going off guys I know that I talk to...
I could care less what this hayek guy considers himself.... Im sure Bush saw himself as a patriot, so to each his own...
hayek is the father of the austrian school as far as i know
Whers the link to Gilligans island?
Ron Paul claptrap !
You remember “George-yellowcake uranium”.
You remember “ Dick-Iam not a crook”.
You remember “Ronnie-I don’t remember my treasonous acts”.
Now we have “Ron-I don’t remember my disgusting newletters”.
@--> A 1992 passage from the Ron Paul Political Report about the Los Angeles riots read, “Order was only restored in L.A. when it came time for the blacks to pick up their welfare checks.” Another Paul newsletter asserted that people with AIDS should not be allowed to eat in restaurants because “AIDS can be transmitted by saliva”;
@--> In 1990 one of Ron Paul’s publications criticized Ronald Reagan for having gone along with the creation of the federal holiday honoring the Rev. Dr. Martin Luther King Jr., which it called “Hate Whitey Day.”
@--> Ron Paul’s newsletter called Barbara Jordan, the African-American Texas congresswoman, a “half-educated victimologist” and said of crime in Washington, D.C., “I think we can safely assume that 95 percent of black males in that city are semi-criminal or entirely criminal.”
@--> ”If you have ever been robbed by a black teen-aged male, you know how unbelievably fleet-footed they can be." - Ron Paul, 1992
@--> "Given the inefficiencies of what D.C. laughingly calls the `criminal justice system,' I think we can safely assume that 95 percent of the black males in that city are semi-criminal or entirely criminal." - Ron Paul, 1992
@--> "We don't think a child of 13 should be held responsible as a man of 23. That's true for most people, but black males age 13 who have been raised on the streets and who have joined criminal gangs are as big, strong, tough, scary and culpable as any adult and should be treated as such." - Ron Paul, 1992
@--> Ron Paul’s newsletter was listed by a neo-Nazi group called Heritage Front, as recommended reading. { you gotta believe the doctor }
@--> The September 1994 issue of the Ron Paul Survival Report states that “those who don’t commit sodomy, who don’t get blood a transfusion, and who don’t swap needles, are virtually assured of not getting AIDS unless they are deliberately infected by a malicious gay.”
@--> In the April 1993 Ron Paul Survival Report, the author states, “Whether [the 1993 World Trade Center bombing] was a setup by the Israeli Mossad, as a Jewish friend of mine suspects, or was truly a retaliation by the Islamic fundamentalists, matters little.”
@--> Ron Paul SIGNED 1993 appeal for funds letter: "Israeli lobby plays Congress like a cheap harmonica," warned of a "race war" and said there was a gay-led cover up of AIDS. The letter suggests, that new $100 bills distributed by the Treasury and ostensibly aimed at tracking drug money were instead aimed at keeping track of all citizens. "I held the ugly new bills in my hands," the letter says. "I can tell you -- they made my skin crawl!"
Then "my training as a physician helps me see through" what he calls the "federal-homosexual cover-up on AIDS." The letter warns of a "coming race war in our big cities"
@--> Ron Paul December 2, 2011 Ron Paul Believes that Corporate Lobbying = Liberty: “I Take The Position That You Should Never Restrict Lobbying…”
About Citizens United - "It's corporations' money, they can do whatever they want with it."
You can claim – b.b.b.b.b.but Ron did not write these awful things! HE PRINTED THEM!
Four years ago, Ron Paul generated controversy by not repudiating the endorsement of the neo-Nazi group Stormfront, This time, they seem proud about getting the support of a Nebraska Pastor who has made some revealing comments:
Ron Paul’s Iowa chairman, Drew Ivers, recently touted the endorsement
of Rev. Phillip G. Kayser,
praising “the enlightening statements he makes on how Ron Paul’s approach to government is consistent with Christian beliefs.” Kayser’s views on homosexuality go way beyond the bounds of typical anti-gay evangelical politics and into the violent fringe - Kayser recently authored a paper arguing for
criminalizing homosexuality and advocated imposing the death penalty
against offenders based on his reading of Biblical law: “As we have seen, while many homosexuals would be executed, the threat of capital punishment can be restorative.”
Has Ron Paul repudiated this endorsement?
My guess is that just like
Ron Paul tried to shove the
Ron Paul Newsletters under the carpet,
Ron Paul will try to shove his
Ron Paul endorser there too
It is fascinating how, despite the fact that fox hates Ron Paul,
he uses the same tactics of deceit and obfuscation.
Please note – I’m not saying Ron is 100% nuts – just 99.4% pure
.................................................................
just a tiny fun fact - do you know who Ron named his senator son after?
google the libertarian queen’s name together with the name “William Hickman”
You know I don't see krugman in this vid at all, presenting one side is a tell, another is this guy starts by saying "you got no right to speak" a tatic of the 1% forever .
Hey I got a question for you, if your boss says "Let me sleep with your wife, or get another job." that's his right isn't it?