Forum Post: Still confused about REAGANOMICS??
Posted 12 years ago on Nov. 4, 2011, 12:46 p.m. EST by Dutchess
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Well Reagan did NOT practice Capitalism. He practiced Keynesian economics with FIAT money ( money not backed by anything) and BROKE DOWN the protections of Keynesian economics that are necessary to protect the current system.
The current system ( Keynesian economics with fiat money) DOES NOT HAVE CAPITAL!
Here's how our current "Fiat Money" system works, only on a much larger scale than described below:
It is a slow day in the small Saskatchewan town of Pumphandle and the streets are deserted. Times are tough, no one has any money, everybody is in debt and is living on credit.
A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs and possibly pick one for the night.
The motel owner hands the tourist a few of the empty room keys and as soon as the guest walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher immediately takes the $100 and runs down the street to pay off his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill to his feed supplier, at the local Co-op.
The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer "services" on credit.
The hooker rushes to the hotel to pay her room bill with the hotel owner. The hotel proprietor, surprised to see the bill back, then places the $100 down on the counter so the traveler will not suspect anything.
At that moment the traveler comes back down the stairs, states that the rooms do not meet his needs, picks up the $100 bill and leaves.
All of the people of the town feel relief, because they are "out of debt", but what really happened here?
Because there was no real money, everyone in town had to borrow (thereby creating Fiat money, in a sense) to conduct their business. When all of the business debts were paid, everyone was still broke and there was no money left in the town! But in the real world, everyone would still have to pay their income taxes to cover the interest owed to the central bank (The Federal Reserve), on the money that was really never there, until it was borrowed into existence by the townspeople. But the catch is that there isn't any money left in town to pay those taxes which still need to be paid, until more "money" is borrowed into existence, by the people of the town. As the Fed creates more "money" from debt, the people become further and hopelessly enslaved to the central government and the central bank.
Now you see how the Fiat money scam works! Any Questions????
The bottom line is this:
Keynes and embedded liberalism were dominant frrom the mid-30s through the 70s, which coincided with the biggest increase in the standard of living and the growth of the middle class that the world has ever seen.
Neoliberal economics including Reaganomics and Friedman's Chicago School theories became dominant in the 70s. This is closer to Austrian economics than we had before (but not pure - it's not YET the Gilded Age). It has seen the decline of the middle class and the decline of our civilization.
Which does the 99% prefer?
Lockean--- I've seen a lot of your posts and find I agree with much, if not all, of what you argue. I imagine your views to be very similar to mine, but there are some holes in my knowledge of history, economics and philosophy so I'm trying to keep learning as much as I can. So--- this is a total side note, but can you explain briefly or direct me to some (hopefully succinct) reading on why you've chosen your screen name? Like, in a sentence or paragraph summing up the core of Locke's thought and why it's best applied to our current situation. Thanks.
Hi sassafrass.
It's a little misleading. Locke is just one of several social contract theorists, and I don't think his is even the best definition. What I'm trying to do, however, is reclaim Locke from the radical "rugged individual" libertarians who only see half of his argument - that government exists to protect their liberty and property.
They forget that the social contract is about giving up some of our natural rights that might exist in a state of nature. Property and liberty are protected by government when a portion of those rights and properties are given up to the government.
Also, they like to ignore other parts of his philosophy, for example about the common nature of resources (Lockean proviso), or that the accumulation of goods is wasteful and breaks the social contract. Locke made a mistake in conceding that money, because it doesn't rot, and is fungible, does not fall into the category of goods that are wasteful when accumulated... I am certain he would revise his thoughts given an understanding of the history of wealth since his time.
So, he does leave a lot of doors open for them, and as such I recommend reading Locke as one facet of Enlightenment thinking that affected the founders, and also of those modern philosophers that have brought enlightenment thinking into more contemporary focus. Rousseau, Kant, Rawls and Mill should all be considered alongside Locke to get a comprehensive understanding of American liberalism.
So, in short, if you like my views, know that I am a liberal. Not a neoliberal, but an old school pre-1970s liberal. For more, check out http://en.wikipedia.org/wiki/Modern_liberalism_in_the_United_States
That explains it well, I agree, and will add to my reading list. Thanks!
You are looking at this all wrong and the facts are that Kenynes took over in 1913 when the fed was created. This caused the boom in the 20's and the crash in the 30's. It wasn't until after world war 2 when we had 10 million people come home from the war and the government cut spending by 60% and cut taxes did we come out of the depression. These are facts that liberals don't like to look at. The fact of the matter is that people gaining wealth and becoming more productive do standards of living go up. True not everyone gets to be "rich" but the more productive we become the cheaper stuff becomes and the more everyone has. This is because someone under consumed, saved, and took risk. There is a reason that we have all the stuff we have today. Just look back and see how little changed and how long change took before 1776 and how fast change started coming after 1776. The past 235 years have ushered in advancement after advancement due to free markets and limited government. The more Government controls the less productive we become, the more expensive things become, the less free we all become. Liberals just want to make the 1% all powerful and the 99% slaves to the state. They can't see that the 1% control the regulators and only use this power to stop competition. The insurance and pharmaceutical company's wrote Obama care. The FDA is filled with X- and future Monsanto employees. Who do you think controls the FDA? Monstanto. This is all made possible due to the support of liberals and bureaucratic regulation system we have. A free market would regulate itself because when a corporation fails they go out of business and sell off what they have that can be used for something more productive.
Keynes was a kid when you claim his theories took over. Fact-checking is a worthwhile endeavor.
yes he was just 30 years old in 1913 born 1883, the fact remains that his way of thinking were you can have endless money and debt is better then savings is just wrong and we will all find this out when the dollar crashes and we return to the middle age way of life.
What ridiculous propaganda. Keynes is not about monetary policy, it's an afterthought. Also check out: http://www.brianrogel.com/the-100-percent-solution-for-the-99-percent
Also, regarding the depression, you know GDP grew every year between 1932-1940, except 1938 when FDR was forced by the GOP to balance the budget, right? Some of these years had 10-15% growth! Unemployment also fell every year from 1932-1940 (leaving out the war years because then Keynesian spending really takes off and its not even fair for you), except 1938, as well. We set NEW RECORD GDP and NEW RECORD INDUSTRIAL OUTPUT in 1936 as well - and it was still going up. Check out these charts: http://www.ourfuture.org/blog-entry/2009020603/fdr-failed-myth
Have you ever heard of the liberal consensus? Look it up. 40s-70s. I claim as my type of liberal everyone from FDR to Ike to even Nixon (to some extent). There are very few liberal politicians in the Democratic party today. They are all neoliberals now, same as the Republicans. Their disagreements are pretty minor - they share the same corporate-oriented, free market, free trade worldview. Every president since Reagan has been a neoliberal. So don't look at modern "liberals" to judge my POV.
Finally, back to the top, if anything 10 million unemployed people returning from the war should have been a downer for the economy, but it barely slowed the unabated growth (there was a small recession in 1945). The war itself, again, was Keynesian stimulus.
the guy you are debating is baiting you.
You're right. It's working, too. So sick of mindless dittoheads. Thanks.
You loose your audience when you resort to ad homs.
Keynesian economics main trait is that Government gets to be involved in central economic planning.
Capitalisms main trait is that Government stays OUT of its economic planning.
BOTH do demand requirements to keep from the weak sides of the ideologies to bring down the house.
Your government has been breaking down measures like Glass Steagal and the Sherman Anti trust Act with regards to the current Keynesian model ( governments central economic planning).
The war wasn't the stimulus, it was the government cuts - you can't stimulate an economy. Your whole way of thinking will be proven wrong in the coming years as our dollar will have no value and people will starve on the streets before Keynes is finally put to rest. He will cause more harm then any other single person in history. He took something simple and made it overly complex. That is all he has done. FDR and Nixon were the worst presidents ever. If it was not for FDR the Depression would have been over the following year. If it wasn't for Nixon we would still be on the gold standard and wouldn't be in the mess we are in now.
Keynes is not at play! There is nothing Keynesian about the neoliberal regime. Government spending is not Keynesian. Countercyclical government spending IS. We've been blowing surpluses on military and tax cuts for 30 years, hence the debt. It is not Keynes! He was for balanced budgets over the long haul - so cutting spending and paying down the debt in the postwar years was ALSO Keynes.
FDR extending the depression is an ideological wish, and not reality-based AT ALL.
@Lockean and @looselyhuman, keep fighting the good fight. If nothing else you are educating the spectators.
It's kind of weird to me that self-confessed rationalists favor paper theories of a social science over empirical evidence. I think other people keeping track of this understand how weird that is, too.
Thanks. I think me and Lockean are brothers from another mother. :) We definitely steal each others points and links...
It's weird, but it's not. It's because they use reason like everyone else does, to achieve outcomes that line up with their values. What these cognitivists don't understand is that normal human values are a product of emotion, intuition, sense experience, etc. And their values are messed up. They are interested in themselves almost exclusively, don't understand that's not normal, and demonize things like empathy and altruism. I blame thier mothers.
Blame their amygdalas. It's more fair. Their moms might be wonderful people - but we're all subject to human frailty.
Good point. I agree, though I'm a nature and nurture guy, myself...
"Keynes is not at play! There is nothing Keynesian about the neoliberal regime. Government spending is not Keynesian"
??
Keynesian economics hands the planning into the hands of a CENTRAL GOVERNMENT.
It is the very government that has taken oversight measures like Glass Steagal and Sherman Anti trust Act away.
but it is YOUR GOVERNMENT that has broken down the protections for Keynesian economics ( centralized government economic planning)
Reagan created government distrust, precipitating a loss of faith, expectation, and participation. "government is the problem." So, why expect it to be anything but a tool for the elite? Which it now is. Self-fulfilling prophecy. It's not my government anymore, and that's the problem. He achieved his end, which is the masses accepting they're on their own, while the elite knew better and took advantage.
"YOUR GOVERNMENT." Not our government. The problem, in a nutshell.
Right. They abdicate, and advocate abdication by the people, then expect government to be a force for good (or nonexistent, so we can have unfettered private tyranny).
Bull...I AM the one holding Government accountable.
Most people on the left want to hold private entities accountable.
Thats why I emphasized YOUR government because quite frankly...there is a lot of confusion WHO is to blame...just NOT by me!
Many people on the left are confused indeed. The buck does indeed stop with government.
No. Government is a tool. It does not fall upon DC from on high. It does not self-instantiate. It doesn't simply come into being from nothing.
Government works for the hand that wields it. The line of thinking you profess is no different than saying, "the buck stops with the gun" - and doesn't acknowledge that a gun requires a finger to pull the trigger.
Ask yourself who or what wields government in theory, and who or what wields it in practice.
thank you!
FDR did extend the depression, Just as Bush and Obama is doing now. Also Keynesian is all about central planing and bail outs and taking from productive private sector and giving to less productive public sector were its not about making money just what politician you know and how much pac money you gave him/her. Government can't plan an economy. Economies are based on Savings, Production, Consumption in that order. It doesn't matter what I think, the end result will be socialism and then communism. The ultimate goal of Keynesian thinking is socialism, most of Keynes ideals came from Fred Hegal and Karl Marx. Here is a chart showing how this all plays out. The chart is over simplified but all the same here it is.
http://web.archive.org/web/20080128195659/http:/www.calvertonschool.org/waldspurger/pages/hegelian_dialectic.htm
Sigh. Keynes led to the socialism of the 40s-70s. Got it. Liberals are socialists. Got it. Socialism means the greatest increase in prosperity and relative equality the world has ever seen. Got it.
limited government and free markets created what we have now not anything FDR or Nixon did. Also its all about to fall apart due to people thinking like you.
I thought we didn't have free markets? They are certainly more free since 1980, and that's when the decline started. They were less free during, again, the greatest period of prosperity for the middle class in history that was the 40s-70s, under the embedded liberalism built upon the policies of FDR and the economics of Keynes.
its called...........collectivism.
Socialism ( although with the best intentions) is a part of the COLLECTIVIST ideologies..With Communism on one end of the political spectrum and Fascism on the other.
Collectivist ideologies pave the road to tyrrany. Whenever people surrender their Individual liberties ( in this case economic freedoms) to a central government, they become dependent on government officials to have the best interest at heart for the masses.
so what has happened under the Keynesian model? The very government has broken down protective measures that would have ensured Keynesian ( central govt economics) to work FAIRLY.
It has been your government ( the one you handed over your economic liberties to) that has destroyed the safety net.
No it is NOT closer to Austrian school of economics ( which is Free market capitalism).
The system that operated under Reagan did NOT have Capital. It is the very system practiced today. What Reagan did is BREAK DOWN the protective barriers of the current system which is NOT based on Capital but debt based spending.
Hayek and Friedman are the patron saints of neoliberals the world over. You say they bastardize Austrian, I say they go even further to bastardize Keynes.
By the way, you realize that most of the period of Keynes' dominance we had Bretton Woods, right? Not pure fiat.
Nixon took us of the Gold standard ;)
Reagan practiced the exact reverse of Keynesian economics.
He BROKE DOWN the protections of Keynesian economics that were put in place...but he did practice Keynesian with fiat money There was absolutely central government planning in economics under Reagan. That is NOT Free Market Capitalism.
I'm sorry, I didn't understand your distinction here. Yes, you are right, in the sense of central planning he was Keynesian. He just used a Keynesian approach to dismantle Keynesianism. Wow, I managed to say that!
This is true.
repost ;)
Do you know how long the Washington Consensus has been around? Trickle down economics is what's failing us. Give the money to the little man and he will consume here. Give it to the rich man and he will fly across the world looking for the biggest return on investment, no matter how shoddy it is.
WTF. Is Hayek your sugar daddy? Every post I read of yours is HAyek this Hayek that. You do realize that the Chicago Boys are the architects of our current economic policies. The Washington Consensus should be called the Chi-town Consensus. If you are going to read right wing economic books, be intellectually honest and read counter claims. Your allegiance to one man's ideas is as detrimental to your brain as a Christian Fundamentalist's inability to read Buddha. Get over It; there will never be utopia, no matter how much you hang on the words of your sugar daddy.
Even if it's that simple, the hotel owner ate meat, the butcher received product, the pig farmer received pig food, the feed producer got laid, and the tourist was free to go somewhere else. Those are the important things. As for the taxes, If they were not paid, how the hell would the tourist have gotten to the hotel in order to turn down services. all you described is the reason why money looses value over time. As long as the services are provided who cares. That is why we have ss, Medicare, and other government programs. I f we were to save money ourselves, the money would be useless. That is why minimum wage should go up, and government programs should be indexed to inflation. That has not happened so here we are.
My understanding of the history of the Fed is that it was created to ensure economics would not be used as a political football. Imagine if we had no fed and we had to deal with partisanship every year to move the economy foreword. The problem, I perceive, is that Greenspan did not do his job efficiently and allowed a bubble. He thought that giving a speech about irrational exuberance would deflate the bubble. It did not. If he was not a market fundamentalist, He would have raised the interest rate and that would have ended irrational exuberance. The problem we have is that we keep putting the wrong people in that position. Greenspan was a Wall Streeter so he only seen the problem from that perspective. Now the new fed chairman has to fix the problem that the derelict caused. It is not an evil conspiracy; it is just a problem caused by a man who listened too much to a quack, Ayn Rand. Besides, Fiat money was around when Reagan was still living in California. Thank Nixon for fiat money.
We ARE thanking Nixon for fiat money and we are thanking the Fed for deficit spending which is spending WITHOUT having actual Capital. If there is NO Captial there is only ONE way to go for deficit spending......creating more money out of nothing and continuing to dilute the money supply, resulting to the expansion of the deficit and getting deeper in the hole...........OWING more in taxes for the taxpayer............resulting in the elimination of any kind of social programs and eventually the crashing of a nation. One close look at the history of EMPIRES. We ARE an Empire today.
ever studied the history of clipping coins in empires? Thats what has been happening for the past so many decades. It is called the erosion of capital...
reagan effectively turned this country into a corporation, his hollywood persona was perfect for the times
Reagan was the corporatist arch-stooge. Under Regan the corporatists went from being the most significant national force, to being virtually the ONLY national force. Propaganda terms such as "freedom" pertain primarily to the freedom of corporatists to screw over America unfettered by any governmental checks.
Reagan broke down the protective barriers of Keynesian economics and fiat money ( which is NOT Free market capitalism because it is NOT based on Capital but debt based spending).
I am not an economist, but find little to dispute. I do however know enough to know that the U.S.A. has NEVER had free market capitalism, in the past or now. In broad terms winners and losers are pre-selected. It’s a rigged game.
Who was behind Reagan's economic policies ?
Milton Fiedman sycophants.
they're still there...the same people or the puppets that have replaced them.
Who are they ?
See, Chicago school of economics.
Yup obama's friends
Reagan, Bush, Clinton, Bush2 and now Obama, have all pushed free market, free trade,neoliberal policies.
Ya ... I know so what are we going to do about it ? If we still live in a democracy where a vote counts who do we vote for ? How do we get ride of these guys ? Can we kick them all out ?
Check this guy out http://thinkprogress.org/special/2011/11/01/358280/buddy-roemer-loss-of-jobs/
those murderous cowards will never come out of hiding, but they are the ones pulling the strings of the puppet show we watch on tv every night.
I know
Austrian Propaganda.
Keynes and Reaganomics are not compatible.
Keynes' is a DEMAND-SIDE theory that's focused on producing bottom-up aggregate demand in major downturns as the spender of last resort, not to mention is for paying down the debt between business cycles - it is COUNTERCYCLICAL. It's also not strictly concerned about monetary policy. Tax revenue and borrowing work just as well for stimulating aggregate demand when the market fails to.
Reaganomics is a SUPPLY-SIDE theory. Not to mention includes "deficits don't matter" which is NOT Keynesian. Reagan blew surpluses on tax cuts and military spending when we should have been paying down the debt in a COUNTERCYCLICAL fashion.
As I understand it, Reaganomics is still Keynesian. It just gets it's effect from military spending and tax cuts. "Keynes for the rich" if you will.
They are simbiotic - that is they only exist becauese of the other. One is supply side and the other is demand side - Stimulus when you need it. The only different is, Reagan and the subsequent generation of Supply-siders see stimulus as a purely Keynsian element...
Well, here's what Reaganomics has in common with Keynes: It's supposedly meant to be stimulative.
Now here are the differences:
1.) Keynes was about demand-side stimulation - put money in the pockets of the little guy which flows throughout the economy. This worked. Reaganomics was about putting money in the hands of the big guys... This didn't work.
2.) Keynes was about counter-cyclical policies that boost demand only when there's a demand problem, and then stop stimulating when the problem has passed, and pay down any debt incurred. Reaganomics was about cutting taxes and spending on the military during busts, then cutting more taxes and spending more on the military during booms. Hence the debt.
It's hard to say exactly what Reason did, because the Democrats controlled Congress and the budget too. They probably deserve as much credit as the president.
We went from the stagflation of Nixon, Ford, and Carter to an economic boom by 1985. That boom continued onward through the Bush years and the Clinton years, until it finally ended near the end of Clinton's term (1999 and 2000).. aka the Dot-com crash
The EFFECTIVE tax rate (after deductions) on the wealthiest 1% was 38% in the 70s (source: politifact.com) and had dropped to 31% by 1990. It appears freeing-up money allowed the rich to hire more workers and create a boom through the late 80s and into the 90s.
IMHO :-)
How did Clinton beat Bush if economic prosperity was uninterrupted from the '80s? Wait, no it wasn't uninterrupted at all, in fact the country was in a recession when Clinton got elected. And what about the S&L scandal? No, it seems to be true that all the periods from Reagan, Bush, Clinton, Bush, and Obama had their series of booms and busts. I see you would like to hold Reagan in reverence and Clinton to account, but it just don't add up. Nice try though.
Consider the alternate possibility that each boom and bust is just the consequence of bad bets catching up to reckless gamblers. At one point, the markets and financial industries were closely regulated and the incentive system encouraged conservative practices. From the '80's on, financial regulations have been relaxed and new incentive systems have been created that rewarded risk taking. The necessary legislation has all pushed by the interests of the finance industry through the largest lobbying operation in DC. Both parties have been corrupted by this extremely powerful force. Don't blame either Reagan, Bush, Clinton, Bush or Obama for this, blame each and everyone of them, and every member of congress for the last 30 years.
When congressional candidates start talking about this is when you know OWS is working.
The Republican votes were split between Bush and Ross Perot. (Ooops forgot that didn't you.)
Wow, you got me. You're pretty clever.
Which (if either) system is sustainable from an ecological perspective?
In otherwords, which results in a steady state economy ecologically?
If it's neither, then neither would work because resources are finite.
It's a fair question, and the answer is neither. Both (and this applies to Keynes, Reagan/Chicago, Austrian, etc) are dependant on an underlying capitalist engine, and capitalism requires infinite growth (or constant cycles of creation/destruction - with resources dwindling each cycle).
However, with Keynes, the form of that growth might be better guided into beneficial/sustainable directions...
I would say, using Keynes (and some ooh-scary colective planning), we'd have the best chance of harnessing capitalism's power, to drive our advancement as a civilization into a more sustainable direction, and perhaps prepare for something approaching steady-state, long-term.
I'm thinking in terms of large-scale programs to replace fossil-fuel dependency with renewables such as massive solar (ever hear of solar highways?) and wind projects, high-speed rail, and investment in technologies like the laser inertial containment fusion at Lawrence Livermore, etc...
These would easily fit into a Keynesian economic regime - which is responsible for most of our current national infrastructure (roads, bridges, dams, many schools, hospitals, etc).
Of course, this feeds into the Austrian criticism that Keynes and central planning go hand in hand. I guess I just argue that he provides a powerful set of tools, for good or ill... The central planners could be we, the people, or leaders like FDR, or...
thank you for answering honestly
he forgot to tell you...its not capitalism failing today...its corporatism......because of the collectivist support through keneysian economics...that encourages government intervention in the economy.
Well, I think unforeseen forms of collaboration are to be expected.
I'm not a fan of the monetary-market system (which both Keneysian and Austrian economic systems fall under) because it is dependent on a few factors that would lead to an unsustainable system. In otherwords, they are extremely difficult to manipulate.
These are cyclical consumption/infinite growth (as mentioned by Locklean), scarcity (which is often maintained or created artificially), and most importantly competition.
People must agree to compete over resources within the context of rules. The only way of maintaining 'fairness' of such rules in a competition is to enforce them.
I've heard the argument that it's human nature to compete. I'll argue that just the opposite is also true. It's human nature to attempt to collaborate. (We are social creatures) A system dependent on competition will fall apart when groups begin collaborating in unforeseen ways to win the competition.
The monetary system is a competition with acquisition as its end goal. And it's only natural that groups will collaborate to acquire as much as possible(Government + Corporations), even if it is to the detriment of another group(The people).
Personally I'd prefer an economic system which is collaborative in it's design and reward groups for working together in unforeseen ways but that's just me.
I guess it all comes down to oversight and accountability...which in all essence is the original job of government alltogether.
Currently reading Glenn Greenwalds "With Liberty and Justice for some' who explains explicitly how our government IS corporate and how they are EXEMPTED from the Rule of Law while this nation is a Nation of Laws and NOT of men..........or at least is supposed to be.
That is true.
However for oversight to work, someone must hold the overseers accountable as well. Then to ensure fairness, that group must also be held accountable by their own overseers. And so on.
Somewhere in that chain of oversight, people will collaborate. I doubt that every judge, politician, and economist will be incorruptible in a competitive system.
And a system built around distrust is unlikely to remain transparent. That in turn makes oversight and accountability much less effective.
Keynesian economics IS DEBT BASED SPENDING!
How do you think Reagan ran up the debt percentage wise like no one else has as of yet. Yes Obama ran up the deficit in dollar amounts but PERCENTAGE wise Reagan is still at the top!
He did it by ignoring the intrinsic COUNTERCYCLICAL nature of Keynes.
He BROKE DOWN the protections of Keynesian economics....and Capitalism REQUIRES 1) a sound monetary policy, which was NOT in place and secondly 2) a sound legal system ( which was NOT in place....think about Iran Contra getting off).
Just think of money like you would think of an ecosystem. If you take from the middle class and give it to the rich, you single out the poor. because the poor spend the money, at the middle class shops, and the middle class shops buy product from the rich. It has to be circular. That is why trickle down does not work. As is now, gov't takes from the middle and gives to the rich, while the private sector is giving to the rich too. It is a good system for globalization, but not for a nation.
I think you 'miss' the point.......
The current system needs protections.Those protections have been eroded in the name of Free Market Capitalism like implementing a free market concept that DOES NOT WORK under the current system. The problem is...we didn't have free market capitalism to begin with. We have had a mixed economy. And the more we meddle in the markets and the more we have created TOO BIG TOO FAIL ( which is ANYTHING BUT Free market Capitalism) the more we HAVE to meddle to fix the problem.
And the TOO BIG TOO FAIL........is the very Corporatism you are upset with today.
TOO BIG TOO FAIL has created Big Corp/Banks in bed with bought up Govt VERSUS Small business/credit unions and the Individual!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
It is a fact that nobody...NOBODY in the world has the answers as to how to artificially fix the current problems with the current tools!!
"with the current tools!!"
You said it before. We had the tools, and the neoliberals destroyed them. Market capitalism (the buying and selling of goods and services with minimal state intervention) was the driving engine for the development of the most prosperous and relatively equal society the world has ever seen. Under Keynesian economics.
You can continue your quixotic crusade against the Fed all you like, but leave Keynes out of it.
"""""Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle."""
How does that exclude current govt intervention?
It's about the definition of minimal.
Keynes is meant to be applied in the event of major market failures that result in mass unemployment and a dirth of demand, causing permanent damage to the nation's productive capacity, which in turn makes rapid recovery impossible. Keynes is not about cost controls or any other (sometimes still valid, but not Keynesian) policies that are considered interventionist.
Also that quote about monetary policy is, again, really not important to Keynes. He saw monetary policy as it was used at the time as inefficient, and something that could aid fiscal policy as a countercyclical tool. Fiscal policy is where it's at though.
I cannot believe you don't see I don't necessarily disagree. As I pointed out Reaganomics BROKE DOWN the necessary protections Keynesian economics needed ESPECIALLY in light of the fact of ANY govt control of the economy.
Fact is our monetary policy eroded , especiall aftrer Nixon took us of the Gold standard. Not at any 'fault' of Keynes but after the fact of the implementation of govt control to the extend as Keynes saw fit.
And yet you continually attribute the failures of neoliberalism and Reaganomics to Keynes.
I contribute the failures of Neo liberalism/conservatism to collectivism....which is CENTRAL GOVERNMENT planning in the economic process ( which is what Keynes advocated for)! With the emphasis on central government planning!
That's an extrapolated inference (aka strawman) by Austrians of Keynes' policies, not his actual policies. Austrians argue "that such theories encourage centralized planning." When in fact that's not what he's saying at all.
I guess that equals the same strawman argument that it is Capitalism that has led to today's failure....
Keynes praised Hayek's book The Road to Serfdom, writing to the Austrian economist that, "Morally and philosophically I find myself in agreement with virtually the whole of it."[
Hayek's business cycle theory is wrong - and therefore so is the basis for his opposition (on top of that supposed collectivism which is not actually Keynes) to Keynesian stimulus - that is the problem.
Also, the problem for me as a liberal, goes beyond Keynes v. Hayek. Here's a good quote:
'Economist Jeffrey Sachs observes that among developed countries, those with high rates of taxation and high social welfare spending perform better on most measures of economic performance compared to countries with low rates of taxation and low social outlays. He concludes that Friedrich Hayek was wrong to argue that high levels of government spending harms an economy, and "a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness."'
I pretty much agree with most of these criticisms: http://en.wikipedia.org/wiki/Austrian_School#Criticisms
Lockean, you have said that you are moderate. Where do you draw the line on too much socialism. Because private sector production comes first in the economy. Once a profit is generated from private sector production then the government can tax it and put it in the hands of the public sector. There is a limit to even higher rates of taxation and higher welfare spending, to where the government wipes out incentive for anyone to work in the private sector in order to pay for the benefits of those in the public sector.
I have to argue that Hayek is right and that we can see now that this relatively high rate of government spending, that we currently have, where we borrow 40 cents on the dollar, is harmful to our economy. How can it be anything other than harmful to this extent? Maybe it was good when we were only a few billion in debt. But at $15 trillion? We can't pay without massive inflation. Whoever has the sweat shops and slaves will outdo the competition internationally. Whoever has the most fairness will get the least business.
I will respond more in depth later. However, in considering the debt, which is a serious problem, please consider that revenue as a percent of GDP is the lowest in 60 years.
Also, please review: http://www.brianrogel.com/the-100-percent-solution-for-the-99-percent
More tomorrow.
"The key is raising top marginal taxes high enough to be successful in reenergizing the economy without removing financial incentives and motivation in the society." Rational. He understands the incentive factor.
It seems like some on the left are completely blind to this characteristic of human nature. I'm also glad that he realizes that stimulus spending won't work with this debt.
The dems say raise taxes and keep the spending. Repubs say stop spending a little bit within the next 10 years and don't raise a tax. Both completely opposed to anything sensible.
Hey number2, sorry, I forgot to get back to you.
"It seems like some on the left are completely blind to this characteristic of human nature."
You probably have been affected by the caricature of liberals/progressives popular in libertarian/conservative circles. In truly socialist countries, liberals are the bourgeoise capitalist pigs. That's what happens to moderates when nations move to extremes of political thought, which is where we have been for 30+ years, and especially since 2001.
"I'm also glad that he realizes that stimulus spending won't work with this debt."
He's talking about the utility of stimulus given the debt, as an argument for increasing revenue. We are in a bind, because, when debt should have been paid down in surplus years, instead the free market radicals have insisted on tax cuts (to starve the beast), while the Reaganites and neocons have insisted on massive military spending. So, stimulus that is badly needed is off the table. That said, as it gets worse, the calculation will change. We need to address revenue first.
Stopping spending would only increase our problems. Fiscal austerity during a recession is the quickest way to constrict an economy to death - that sort of policy, along with maintaining revenues and paying down the debt, is what needs to happen when we have growth again. Efficiency measures would not be unwelcome of course. Other spending-reduction options are subsidies that don't make their way into the economy at large - like for oil companies, that just pad their profits.
We can, however, safely increase revenue at the top, right now, because trickle down, or stimulus for the "job creators" is truly a myth. The tax policy correlation with inequality (not trickling down) and the associated drag on the economy as demonstrated by Rogel makes that point well. There are piles of cash just sitting stagnant right now, and we need to get that into the economy.
it's funny how unreasonable some people can be with their ideologies. I'm in favor of the government doing less most times. But if a tax is what is needed, just to off-set a previous tax reduction, why fight it tooth-and-nail for the ideology while putting what is best for the country, second?
Also, if you have time: http://www.ted.com/talks/richard_wilkinson.html
I watched this and totally agree about how wrong the US is. I think the government should set the playing field to even and then get out of the way. You pointed out that I was moderate and though I never have been accused of such heresy, I thought about it and you're right. I just think it means that I am rational and reasonable about my perspective. There is nothing rational about the republicrat party.
So in my life's experience I can see that if we commission the dem party to make life fair, then they will make it fairer and fairer and fairer until we're bankrupt, just to spite the repubs. And in the end it is not fair because all the treats have just been shifted to union bosses.
So I know that you have thought of a way to balance this being the moderates that we are. Yes we need to go in the direction of more equality. But how far?
How far. I like where we were in 1960. We had prosperity, relative equality, and stability.
Union bosses. Whatever. I'd like to see a study on the amount of wealth in the hands of union bosses, or teachers. There is a labor problem, but its not because labor has become greedy, but because home bias has been overcome by the huge cost differentials involved in offshoring, and we're being sucked dry.
Labor takes the brunt of criticism for not allowing the race to the bottom to continue unabated. We need intelligent trade policy. The deficit is ridiculous. We could win any trade war, and it's a war worth fighting. Our trade policy has been unilateral disarmament for far too long - and it benefits only the multinationals. No other advanced market democracy does so little to protect its citizens - or even the working conditions, environment, etc, in places like China.
Maybe my positions seem immoderate to you? I think it's about perspective. This country has lost its way my friend.
However, if any of this comes off as support for Democrats, don't be fooled. There are few, if any, liberals in the Democratic party. That's the problem. There's no real choice. Corporate neoliberals dominate both parties. The thing is, that's supposed to be the case for Republicans, it makes sense there, but Clinton's embrace of neoliberalism destroyed the Democrats as a viable option. We are truly screwed in that respect. Even if you agreed with 60% of what I'm saying, we'd have nobody to support.
things seem to have worked better in the 50's until the late 70's. your perspective is slightly different than mine. but we agree on most things.
But here is the key....the minute Government takes on the role of provider......rather than the institution of 1) Oversight and 2) Accountability...........it ..C A N lead to tyranny. If you read Hayek, he specifically explains....no matter how good the intentions...like Socialism....the DOOR OPENS to tyranny by handing that level of power to the government.
Pre WWII socialistic tendencies in the Weimar Republic showed his observations to materialize. And whomelse like a Jewish person himself to recognize the writing on the wall.
When Hitler came to power, there was already centralized stagnation. All it took was for the WRONG person to enter the scene of centralized power.
There is also a private tyranny, and that's what we have now. Economic slavery. There is also the tyranny of neoliberals forcing their policies down peoples throats, like the banksters in Greece, or the Kochs and all the others that bought our government here, or Pinochet in Chile.
agreed...but WHOM is imposing this tyranny today?
Matt Taibi came out with his research in Rolling Stone Magazine how the SEC (Security and Exchange Commision....the GOVERNMENT) shredded............over 9000 documents that could have led to the indictment of a private bank like Goldman Sachs.
"but but...I think we are on the same side ;)"
'and Friedrich Hayeks quote says it best..........."probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all of the principle of laissez-faire capitalism"'
If you think we're on the same side you don't know most of the people who push Hayek. You're reading something into his concession about laissez faire that most Austrians do not. It is the econo-religion of fundamentally free markets. No regulation. Hayek is, indeed, too accomodating to progressives (in his criticism of his own "liberals") in this regard for many - who prefer Mises. That doesn't change that Hayek is of the Austrian school and we are therefore not on the same side.
I'm not going to keep doing this with you. You argue free market fundamentalism, you really do, then when that argument goes awry you point back to the exceptions in Hayekian/Austrian thought to make the philsophy, incorrectly, seem friendly to progressivism. It does not faithfully represent the ideology and it is a "con scam" as gawdoftruth would say. These quotes you're using are not considered to be Austrian canon. They are not part of Ron Lawl's philosophy either. He and they are most definitely about laissez faire, so much so that even Hayek felt a need to reign them in - these quotes are basically the exceptions that prove the rule. The Road to Serfdom IS, in its entirety, an argument for radically free markets and against almost all government intervention or welfare.
No, actually I think the American libertarians are doing an aweful job interpreting Hayek. IF you had read Road to Serfdom, you would be surprised that Hayek does not necessarily advocates against a certain level of 'welfare' for the general public.
"Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance - where, in short, we deal with genuinely insurable risks - the case for the state's helping to organize a comprehensive system of social insurance is very strong... Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make the provision for the consequences, such communal action should undoubtedly be taken." Friedrich Hayek
The tyranny is that of market agents - neoliberal financialists - that have taken over our government. They have used manipulation of libertarian ideals as political support for "free markets" (corporations and banks free from regulation and interference) and for the freedom of political speech (aka cash to purchase our democratic process), and in a mirror to Pinochet's actual coup in Chile, have performed a financial coup.
We need to take government back and wield it against these agents, as has been done in the past by Teddy, FDR, and others.
From that Moyers speech I sent you to yesterday:
Thomas Jefferson had hoped that “we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to a trial of strength and [to] bid defiance to the laws of our country.” James Madison feared that the “spirit of speculation” would lead to “a government operating by corrupt influence, substituting the motive of private interest in place of public duty.”
Jefferson and Madison didn’t live to see reactionary justices fulfill their worst fears. In 1886 a conservative court conferred the divine gift of life on the Southern Pacific Railroad. Never mind that the Fourteenth Amendment declaring that no person should be deprived of “life, liberty or property without due process of law” was enacted to protect the rights of freed slaves. The Court decided to give the same rights of “personhood” to corporations that possessed neither a body to be kicked nor a soul to be damned. For over half a century the Court acted to protect the privileged. It gutted the Sherman Antitrust Act by finding a loophole for a sugar trust. It killed a New York state law limiting working hours. Likewise a ban against child labor. It wiped out a law that set minimum wages for women. And so on: one decision after another aimed at laws promoting the general welfare.” The Roberts Court has picked up the mantle: Moneyed interests first, the public interest second, if at all.
The ink was hardly dry on the Citizens United decision when the U.S. Chamber of Commerce organized a covertly funded front and rained drones packed with cash into the 2010 campaigns. According to the Sunlight Foundation, corporate front groups spent $126 million in the fall of 2010 while hiding the identities of the donors. Another corporate cover group – the American Action Network – spent over $26 million of undisclosed corporate money in just six Senate races and 26 House elections. And Karl Rove’s groups – American Crossroads/Crossroads GPS - seized on Citizens United to raise and spend at least $38 million that NBC News said came from “a small circle of extremely wealthy Wall Street hedge fund and private equity moguls”– all determined to water down financial reforms designed to prevent another collapse of the financial system. Jim Hightower has said it well: Today’s proponents of corporate plutocracy “have simply elevated money itself above votes, establishing cold, hard cash as the real coin of political power.”
This is the legacy of libertarianism as applied to the market.
and Friedrich Hayeks quote says it best..........."probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all of the principle of laissez-faire capitalism".[
but but...I think we are on the same side ;)
No argument with that here. And while you are only addressing the issue as it pertains to financial institutions and economics, I think it would be a mistake to entirely overlook the mergers and acquisitions that have been permitted throughout all industries, largely at the behest of that financial industry. This has created another seat of concentrated power to the detriment of the oft reviled consumer, and to much true competition, corporatist propaganda be damned.
agreed.
I don't understand Reaganomics either, but I can see the result:
We went from the stagflation of Nixon, Ford, and Carter to an economic boom by 1984. That boom continued onward through the Bush years and the Clinton years, until it finally ended during Clinton's last years (1999 and 2000). aka the Dot-com crash.
It's hard to say exactly what Reason did, because the Democrats controlled Congress and the budget too, so do we give credit to R or D??? Instead we can note that the EFFECTIVE tax rate (after deductions) on the wealthiest 1% was 38% in the 70s and had dropped to 31% by 1990. It appears freeing-up money allowed the rich to hire more workers and create a boom through the late 80s and into the 90s.
IMHO :-)
Or, try this:
http://www.brianrogel.com/the-100-percent-solution-for-the-99-percent
Stagflation was a failure of monetary policy and energy policy (oil).
America has always had imperialistic tendencies. After Vietnam, the people said ex nay on the war-a, so the imperialists moved to a new strategy, which is called globalization. those times are over. Now we are back to the same condition we were in before WWII. Is it not great to be American. JUst keeping it real.
Yeah, and what was going on internationally?
Russia (and eastern europe) collapsed under the weight of failed Socialism.
Reagan PRACTICED Keynesian economics with FIAT MONEY. Please show me otherwise! And REagan BROKE DOWN the PROTECTIONS of Keynesian economics!!!!!!!!!!!!!!
The fiat money issue is a red herring. Keynesian economics can theoretically be practiced with, or without fiat money. Keynes preferred "bottom up stimulus" to "top down" stimulus. Reagan strictly adhered to top down. While much there has been much confusion about the "deficits don't matter" idea, Keynes was clear in stating,this is true only in the short term. In that sense, Lockean, is correct. Reagan ignored Keynes advice and did not pay down the deficit when it was possible to do so. Keynes cautioned against trying to micro-manage the economy with stimulus. What does not work is trying to use Keynesian stimulus when, free market, neoliberal economic policies have been put in place,as Reagan was quick to do, much of that money is very quickly removed from circulation by sending it to a Chinese,(or other slave wage nations) factory.
Bottom line is.....Reagan USED Free Market Capitalism principles to break down protective barriers necessary for Keynesian economics to work. Facto is also that we already had a fiat monetary policy under Reagan which aided the total corruption of an entire economics platform.
I think I point out that liberal economics,the predecessor of neoliberal economics (neo-new, in this case revived) created a situation that brought about the Great Depression. This was under the gold standard. Over leveraging by banks can occur with or without fiat.
"""In the mid 1920s, the Federal Reserve used its cartel power to set interest rates at a really low level. This caused inflation and an economic boom. Politically-connected insiders knew that an economic boom was being created. At the start of the boom, they loaded up and debt and bought assets before inflation set in.
The Great Depression is blamed on "greedy speculators". With artificially low interest rates, it made sense to borrow and buy assets. If interest rates are 2% and inflation is 10%, then borrowing to invest is sensible. Many farmers and small business owners were forced to borrow to expand, to keep up with their competition.
The "greedy speculators" were acting independently in the "free market". The Federal Reserve and negative interest rates were the real culprit. The speculators were following the false signal the Federal Reserve was sending via artificially cheap interest rates.
In 1929, the Federal Reserve insiders decided to jack up interest rates worldwide, causing a depression. The insiders knew what was coming. They stopped issuing loans and converted all their holding to cash.
At that time, the Federal Reserve did not publish its interest rate target to the general public. The Federal Reserve did not publicly state in advance whether it was planning to raise or lower interest rates. Even in the present, someone who knew in advance about a Federal Reserve move could profit immensely.
The insiders had converted their holdings to cash before the crash. After the crash, they were able to buy assets at a huge discount. Since they were unleveraged, they were able to borrow and buy up even more assets at the bottom of the Great Depression.
In 1933, President Roosevelt confiscated everyone's gold, defaulted on the dollar, and declared the USA bankrupt. The dollar was devalued relative to gold, from $20/oz to $35/oz. Since the dollar was no longer redeemable in gold, this allowed a further increase in the money supply. The insiders who borrowed to buy assets at the bottom of the Great Depression were allowed to default on their loans, repaying their debts with devalued dollars. Many loan contracts contained "gold clauses" requiring payment to be increased if the dollar were devalued relative to gold. Congress declared these "gold clauses" invalid, ripping off creditors and providing a massive subsidy to debtors.
In this way, politically connected insiders profited from all three legs of the Great Depression. They profited by borrowing and buying assets at the start of the boom. They were first in line to buy assets with the newly printed money, so they were the primary beneficiaries of inflation. Due to their political connections, they were able to foresee the crash coming. They converted their holdings to cash before the crash. At the bottom of the Depression, they were able to borrow and buy assets at a discount. Later, they were able to default on these loans via inflation; inflation meant these loans could be repaid with devalued dollars.
Insiders profit in this manner EVERY TIME there is a boom/bust cycle. The Compound Interest Paradox means that boom/bust cycles are an inevitable consequence of debt-based money. No matter what the Federal Reserve does, there will be boom/bust cycles. Insiders who know what the Federal Reserve is going to do have the opportunity to profit immensely.
The Great Depression accomplished several goals. It forced small farmers off their land when they were unable to repay their mortgages. It forced many small businesses to close. It caused the cartelization of many industries. Conditions of great poverty enabled the welfare state apparatus to be put into place. The Great Depression converted the USA from a nation of farmers and small business owners into a nation of wage slaves.
Nowadays, boom/bust cycles as severe as the Great Depression are no longer needed. The independence of the average American was permanently broken during the Great Depression."""
Excellent
I think we pretty much agree.
"REagan BROKE DOWN the PROTECTIONS of Keynesian economics!!!!!!!!!!!!!!"
Which is why it is NOT Keynesian.
It is......because Keynes...advocates....CENTRAL economic GOVERNMENT planning.
and it is your Government that continues to remove the protections Keynesian economics need in reality. Just like Capitalism requires measures SO does Keynesian economics.
Central planning is government involvement in industry at a microeconomic level, and Keynes advocates not doing that.
We are so not on the same side.
Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle...
So elaborate what the difference is between 'your' version and the official version.
Central planning is a microecomic activity. Get into this or that industry and determine what will be built, where, by who, how it will be priced, etc.
Macroeconomic policy is about adapting and responding to the broad forces of the market to absorb/minimize shocks.
and it has become quite appearent....that our government is into both sides of the economy Micro and macro.....through horrendous amounts of legislation against small businesses.....70 small businesses left California because they were crippled by regulations of all sorts.....
Keynes is NOT fiat money. That preceded him. Keynes is about fiscal policy first. Monetarist Keynesians that rely on managing interest rates are not central to Keynesian theory.
Thats correct but Keynes would NOT work WITHOUT a fiat currency.....
No. Government still collects tax revenues and it can still borrow on the open market.
what does your reply have to do with my post? Govt collects tax revenue and your income tax solely goes to pay interest to the private and independent agency within our govt called Federal Reserve for money they never had.
Your gasoline tax goes to infrastructe of roads. Your property tax goes to public schools. and your income tax goes to private profits of an agency that is under disguise of being federal but is private instead.
Borrowed money can be used to deficit spend on a countercyclical basis without fiat currency.
Deficit spending depends on the creation of fiat money in order to not default...
No. It does not. COUNTERCYCLICAL Keynesian deficit spending, as we practiced for 40 years, involves paying down the debt when a surplus is achieved (post-recession). There is no default danger until politicians like Reagan begin blowing surpluses on even more spending (or tax cuts).
Blame Nixon and Reagan who did NOT practice what they preached!
Trickle Down Economics - The piss trickled down all over our faces.
Reagan did not take us off the gold standard
One "hope" I had for this thread is that some things can become clear. If each general position - TP and OWS - is simply articulated - just stated with clarity - it will show a dramatic contrast in what each side expects and wants.
what if now the money was backed by gold? what restriction is there for the townsfolk to lend out their money?
If the money is backed by gold.......at the end of the story...if you had realized.....there is no capital or money and so the money for these people to pay their taxes has to be created out of thin air by the Federal Reserve....only for the townspeople to even get further in debt because for every dollar created out of nothing, they owe the Fed interest...on money the Fed never had in the first place. If there would be gold....the Fed could not just print money because the gold would keep the monetary system in check through 1) the accountability factor of gold and 2) by having the markets solely react to what it is supposed to do...supply and demand. It would mean that TOO BIG too fail would not exists and it would mean that business would constantly flow in different directions WITHOUT the monoplies currently in existence. Does this make sense?
so gold backing is bad then? since there wouldn't be enough money in the town to pay taxes?
No it is the accountability factor to keep the markets in check in a true free market economy to PREVENT from monopolies and to PREVENT from TOO BIG TOO FAIL institutions you are now demonstrating like the monster banks..........who rape the taxpayer and have you enslaved.
but what is preventing businesses from lending money that was backed by gold, as above?
the money may be backed by gold, but i can still borrow $100 from my friend and lend a $100 to a business, thus creating another $200 in the economy?
Gold ( or basically anything can be used and has been used throughout history) keeps the amount of paper money in circulation in check so inflation does not take place and the markets constantly correct themselves through supply and demand therefor creating capital. Its the actual money supply in circulation that we are talking about.
The Quantitative Easing the Federal Reserve is using DILUTES the value of the dollar instantly. The more dollars are in circulation the more you will pay for goods and services. The value of your currency goes down when the Fed .........just creates more money. Now interest rates SHOULD go up to keep the value of the dollar. But the government keeps interests rates down to 'fix' the moment which INEVITABLY will lead to the destruction of the dollar.
Again great post
repost ;)
Reagonics in a nut shell:
"Shit rolls down hill!"
This is what the masses seem unable to grasp:
If we replace our current leaders with human beings, they will sell out just as far as the current bunch. Our leaders weren't born sold out. Wall Street executives weren't born evil. They were born human. With a natural instinct to gather and store for survival. A natural instinct to care for family and community.
When modern society was formed, we began to sell out our natural instincts. Survival turned into survival with a little more elbow room. Then survival with a little more elbow room and a nice view. Then survival with a little more elbow room, a nice view, and something pretty to hang around our neck.
Fast forward a few thousand years. With the industrial revolution came mechanized transportation, air conditioning, and television.
We had become somewhat spoiled. Somewhat motivated. Still relatively down to Earth. Still modest enough to appreciate one another, care for one another, and work towards a common goal.
Along the way, the potential for increased personal wealth became more and more intoxicating. Now, just about everyone wants to be rich. They want it so badly, they are willing to sell out basic morality to attain it. They WILL sell out basic morality if given the opportunity.
How can I be so sure? That's easy. Human nature plus years of corrupt influence plus opportunity.
Mother Nature did not plan for modern society. She did not plan on such corrupt influence. She never intended for any of us to seek or attain extreme personal wealth. We simply can not process the concept without being corrupted by it. Without compromising basic morality.
Extreme wealth is the single greatest corrupt influence of modern society. With every 'zero' on the paycheck, our basic instincts to care for family and community are compromised.
Those of you who still aren't convinced, consider this:
If God himself gave you the power to end poverty, bring about world peace, and take a bonus of $100,000,000 for yourself, would you do it?
If God himself gave you the power to end poverty, bring about world peace, OR take a bonus of $100,000,000 for yourself, which would you choose?
Not only is the greatest concentration of wealth in world history the single greatest underlying cause of economic instability. The very concept of extreme personal wealth is the most corrupt influence in the history of mankind.
I speak the ugly truth.
There will be no reform on Wall Street.
There will be no recovery for the vast majority.
There will be no government "of the people" and "for the people".
Not one of us will live to see it.
The ugly truth. America's wealth is STILL being concentrated. When the rich get too rich, the poor get poorer. These latest figures prove it. AGAIN.
According to the Social Security Administration, 50 percent of U.S. workers made less than $26,364 in 2010. In addition, those making less than $200,000, or 99 percent of Americans, saw their earnings fall by $4.5 billion collectively. The sobering numbers were a far cry from what was going on for the richest one percent of Americans.
The incomes of the top one percent of the wage scale in the U.S. rose in 2010; and their collective wage earnings jumped by $120 billion. In addition, those earning at least $1 million a year in wages, which is roughly 93,000 Americans, reported payroll income jumped 22 percent from 2009. Overall, the economy has shed 5.2 million jobs since the start of the Great Recession in 2007. It’s the worst economic downturn since the Great Depression in the 1930’s.
Another word about the first Great Depression. It really was a perfect storm. Caused almost entirely by greed. First, there was unprecedented economic growth. There was a massive building spree. There was a growing sense of optimism and materialism. There was a growing obsession for celebrities. The American people became spoiled, foolish, naive, brainwashed, and love-sick. They were bombarded with ads for one product or service after another. Encouraged to spend all of their money as if it were going out of style. Obscene profits were hoarded at the top. In 1928, the rich were already way ahead. Still, they were given huge tax breaks. All of this represented a MASSIVE transfer of wealth from poor to rich. Executives, entrepreneurs, developers, celebrities, and share holders. By 1929, America's wealthiest 1 percent had accumulated around 40% of all United States wealth. The upper class held around 30%. The middle and lower classes were left to share the rest. When the majority finally ran low on money to spend, profits declined and the stock market crashed.
Of course, the rich threw a fit and started cutting jobs. They would stop at nothing to maintain their disgusting profit margins and ill-gotten obscene levels of wealth as long as possible. The small business owners did what they felt necessary to survive. They cut more jobs. The losses were felt primarily by the little guy. This created a domino effect. The middle class shrunk drastically and the lower class expanded. With less wealth in reserve and active circulation, banks failed by the hundreds. More jobs were cut. Unemployment reached 25% in 1933. The worst year of the Great Depression. Those who were employed had to settle for much lower wages. Millions went cold and hungry. The recovery involved a massive infusion of new currency, a World War, and higher taxes on the rich. With so many men in the service, so many women on the production line, and those higher taxes to help pay for it, the lions share of United States wealth was gradually transfered back to the middle class. This redistribution of wealth continued until the mid seventies. This was the recovery. A massive redistribution of wealth. Then it began to concentrate all over again. Here we are 35 years later. The richest one percent now own well over 40 percent of all US wealth. The lower 90 percent own less than 10 percent of all US wealth. This is true even after taxes, welfare, financial aid, and charity. It is the underlying cause. No redistribution. No recovery.
The government won't step in and do what's necessary. Not this time. It's up to us. Support small business more and big business less. Support the little guy more and the big guy less. It's tricky but not impossible.
No redistribution. No recovery.
Those of you who agree on these major issues are welcome to summarize this post, copy it, link to it, save it, show a friend, or spread the word in any fashion. Most major cities have daily call-in talk radio shows. You can reach thousands of people at once. They should know the ugly truth. Be sure to quote the figures which prove that America's wealth is still being concentrated. I don't care who takes the credit. We are up against a tiny but very powerful minority who have more influence on the masses than any other group in history. They have the means to reach millions at once with outrageous political and commercial propaganda. Those of us who speak the ugly truth must work incredibly hard just to be heard.
Corrupting link......the Congress which is bought up by Big Corp and Banks....... thats where the demonstrating also needs to take place more then ever...In front of the Halls of Congress or your local Reps office.
They created the monster called the Federal Reserve Act! They can undo what they put in place. ' the Congress passed the Federal Reserve Act for private bankers to make a profit of the taxpayer IN EXCHANGE for Congress to SPEND. on whatever war or program they please for political reasons..............WITHOUT the taxpayer knowing it is being taxed and enslaved to a system they never can escape!
You've posted a cute story but I can't see the similarity to Reaganomics.
I didn't read about Reaganomics in any book but I was a part of the American workforce while his policies were Alive and well.
Reagan BROKE DOWN the protections of Keynesian economics for this format of economics to work fairly. Like the Sherman Anti trust Act for example.
For how long you going to keep the Queen your master
Well stated. This is exactly how Reagan took the US from being the world's biggest creditor to the world's biggest debitor in eight years.
thank you ;)
GAY
am I gay? is that the question? No I am not. I am a mother and married to my husband.
But yest, I am FOR equal rights to ALL under the law including the rights of gays ;)
Economics and most of the replies here are a bit arcane for me, though I did understand the original post. And I lived through the Reagan years--barely--and watched that SOB systematically attack everything of value that made the US the prosperous country it was up until then. He began the right wing looting spree that continues today. We began to see homeless people on the streets where we had never seen them before. Whatever Reaganomics is or was, it didn't work for me, and it didn't and doesn't work for most.
agreed!
Economics, in my humble opinion, should be seen through the lens of Chaos Theory. The same reason why meteorologists cant predict long term trends is why economists fall on their face. All thing never hold constant, too many variables.
sure...especially when you don't allow for the constant and consistent correction free markets provide. But free market capitalism requires sound legal and monetary policies, both are corrupted today with our Two Tier justice system and our fiat money.
If money is based on resources and infrastructure, then inflation would never be a problem.
its called...capital...
yes, you are right; I know. I too went to college
lolllll
I can't argue against that. Although, i believe the two tier problem is greater.
I agree..
well..that could end up giving you a Nobel Peace prize ;)
you did see the humble part, right? lol
what about my humble part ? ;)
that's cute.
Demand side and Supply side both miss half the picture.
Econ 101 is about two curves...how come people forget this the further they go?
Isn't Reagan the one who gave us "trickle-down economics", which is why so many millions of American are PISS POOR?
Yup but he applied a free market concept on a NOT so free market economic format. In the meanwhile he broke down the very protections this not so free market format had to keep accountability on the books.
In order to understand key reasons that Ronald Reagan is the bane of the Leftists, we need to consider the following two questions:
What specifically do the Left-wingers really hate about Ronald Reagan? They will point to some policy or issue of economics, but this does not account for the irrational and unreasonable rage that always ensues at the mere mention of his name.
Why does he remain a fond memory in the hearts of Americans and grow in stature, despite the constant bombardment and revisionist histories slamming him? In a February 2011 national poll by Gallup, people were asked “who do you regard as the greatest United States president?” Reagan received the highest percentage, followed by Lincoln. In addition, the percentage of people who chose him increased from the previous year. Why is this? The Left-wingers will never consider this question; they are afraid to do so.
In order to understand key reasons that Ronald Reagan is the bane of the Leftists, we need to consider the following two questions:
What specifically do the Left-wingers really hate about Ronald Reagan? They will point to some policy or issue of economics, but this does not account for the irrational and unreasonable rage that always ensues at the mere mention of his name.
Why does he remain a fond memory in the hearts of Americans and grow in stature, despite the constant bombardment and revisionist histories slamming him? In a February 2011 national poll by Gallup, people were asked “who do you regard as the greatest United States president?” Reagan received the highest percentage, followed by Lincoln. In addition, the percentage of people who chose him increased from the previous year. Why is this? The Left-wingers will never consider this question; they are afraid to do so.
Forget the labels lef / right/conservative/liberal....they are all so distorted in this country they have no meaning whatsoever.
classical liberalism are libertarians for example who advocate for lassaiz faire capitalism.
But to get back to Ronald Reagan...he did NOT practice what he preaced! The deficit EXPANDED..........PERCENTAGE wise more then any other President ever has up until today. President Obama EXPANDED the deficit DOLLAR WISE like no other president up until today but Reagan still trumps the list PERCENTAGE wise!
i think its pretty obvious keynesians have got us into this mess and where is the light at the end of the tunnel? Spend more worthless paper money?
and i love the fact that we think we can stimulate the economy by makingsure folks spend rather than save. Why would poor people spend money useless stuff just to save the economy? They need to save!!
i just find it funny that we have tried all these scams to subvert the economic laws of supply and demand and think we can have this utopia with a welfare state, federal reserve, fiat money. It only makes the situation worse in the long run and people still buy this idea that the govt can regulate markets. As if barter trade and the like can be wished away and that we can force humans to not look out for themselves.
the supply and demand in free markets ( as so well described by Edward Griffin in his book 'the Creature from Jekyll Island , a second close look at the Federal Reserve) is really the constant check and balance to prevent from the booms and busts and the monopolies we are now demonstrating but it does require Sound Monetary Policies and Sound Legal Framework to protect emminent domain.
You are not worthy to mention his name.
lolll. Reagan did NOT practice what he preached. But in all honesty...I believe he suffered Alzheimers from early on and therefor I am not necessarily holding Reagan accountable for the mess he left.
Mess he lefty. No sonny...that Was Carter. His administration was the lowest point in recent American history. Reagan rescued America. Learn history child.
this 'child' did her homework....Reagan spend spend spend...militarily and cut cut cut services for the Veterans that came home...
While Reagan spoke of making government smaller and more efficient, Republicans instead exploded the size of government. Since 1980, government expenditures have increased fourfold. Sixty percent of this government growth occurred under "conservatives" Reagan and Bushes, Jr. and Sr. With government under the control of a "conservative" for 16 of the last 24 years, shouldn't we have a smaller government by now? We certainly would if Republicans really believed in smaller government.
Please don't discuss spending...with that moron Odumba sitting in the white house
well said. "Carters WAS the lowest point in American history". hard to imagine anyone could screw up worse. though another year of office and Clintons housing mortgage bundle bubble and dot.com crash would have BOTH happened on his own watch, not the next presidents, but even with these great economic disasters of our previous democrat leader, Carter was an embarrassment to most Americans and remained the title holder.
I wonder if our Obama worshiping friends can figure out who is NOW the Undisputed WORST president to ever hold office in this country.
I'll never understand the populist appeal of the gold standard and ending the Fed.
Ron Lawl's ancestors were Texas sharecroppers who couldn't get credit because we were on the gold standard.
What was so great about the late nineteenth century?
Those Texas populists provided the mass political impetus that led to the Fed in the first place.
Just the fact....you cannot type in Ron P a u l and it changes to Ron Lawl is another indicator who is really a threat. I suggest reading a book on the Fed first to understand the monetary system and the cycles of booms and busts.....
I've read quite a few such books and I follow the MMT blogs religiously.
then you should know that our current system lacks monetary policies and legal ramification, two factors needed to have free markets. Without them it cannot exist.
Can I get your definition of "free markets"?
I don't understand Reaganomics either, but I can see the result:
We went from the stagflation of Nixon, Ford, and Carter to an economic boom by 1984. That boom continued onward through the Bush years and the Clinton years, until it finally ended during Clinton's last years (1999 and 2000).
It's hard to say exactly what Reason did, because the Democrats controlled Congress and the budget too, but we can note that the EFFECTIVE tax rate (after deductions) on the wealthiest 1% was 38% in the 70s and had dropped to 31% by 1990. It appears freeing-up money allowed the rich to hire more workers and create a boom through the late 80s and into the 90s.
IMHO :-)
In my state we experienced your "economic boom" this way: In 1981 my business was fed by customers from six retailers. By 1985, one retailer remained in business. Many of our neighbors had abandoned their homes because they had lost their jobs and had no money to pay out. Our state experienced growth only long after the end of the Reagan years.
The only states and industries experiencing your "boom" were those which depended on military spending. Ronald Reagan the B movie actor was nothing more than a shill for the military-industrial complex.
All you have to do is look at the DOW index skyrocketing to disprove your message. From 1984 onward the economy took-off and continued through the Bush and Clinton years (until 1999 when the dot-com crash began) .
The DOW was as irrelevant to me, my family, and our neighbors as the price of lentils in Hyperabad, India. We had no stocks, savings, or retirement accounts. We were working our asses off to make ends meet. I was working 14 hours a day. In 1984 our family of four lived on $9K. We ate off the trees in the backyard. We even used food stamps for a month. That's reality.
What part of "took off" do you not understand? It wasn't an instant boom, but was merely the start of the boom. What was your life like in 1990? Better or worse?
The problem with your example is that Pumphandle does not exist; it's a figment of your imagination. In the real Pumphandle, no one borrows from the bank to pay a debt, but only to acquire an asset. If the ability to generate independent income does not exist to pay the bill or our maintenance, the town as an incorporation of people will not exist.
We the people live in a real world where the value of money is a negotiable item. And it matters not how it arrives, as either a negative balance or a positive, if it accomplishes the same purpose.
To put this another way, we only finance assets because it is the only means of most to acquire them. The mistake here is in so recklessly growing the national debt; it matters not to whom the money is owed. (Although I would personally prefer that they be American. And so we have a Fed, which is this thing which nobody, even they themselves, cannot put a finger on.)
sure it does...If money does not represent Capital...we have a huge problem which is quite appearent today or we would not be where we are, now would we?
The problem is that this model is flawed in that we do not borrow to pay the motel manager who pays the butcher, etc. And this is not fiat money; the value of our money is determined by you and I, and not the Fed.
I have 12 bucks; I need three chickens to feed the family. You have 12 chickens and you need 60 dollars to pay the mortgage. So you ask for 5; which leaves me short; I can only buy two at that price and someone is gonna go hungry. So I offer you 3 and we negotiate to 4. We agree; my kids eat, and you recalculate and expand your chicken business to pay the mortgage. And this is how the value of the dollar, or it's purchasing power, is determined in America.
The relative ability of the fed to expand and contract the value of the dollar is virtually nil, except as it relates to borrowing. But the average American only borrows for his home and his car. And if possessed of any sense at all, hopefully only for minor purchases for like an LCD or the living room couch which is intended as manageable and short term debt. The availability of easy or liberal financing may effect the dollar's purchasing power in respect to a home - it drives up cost - but it does not effect the value of the dollar in respect to consumer items. While our factories may borrow to create product, the value of the product is regulated by the competitive market. Again, yearly operating budgets and hopefully short term and manageable debt.
Municipalities borrow in advance of revenue; if revenue fails to meet their yearly requirement, then a deficit is born, and they borrow more. If you work for the municipality you could say that you are living on the borrowed dollar. But it's a fallacy because there is sweat equity; you owe the employer nothing; there is no debt to the employer. The municipality is solely responsible for the debt. And it matters not from whom they borrow. This debt arrives by way of tax which is society's way of theoretically financing its communal needs.
The fallacy of the government is that it wrongly believes that it can spend for benefit of the corporation or in effect to create more favorable conditions overseas, and charge it to the American people. The fallacy of government is that it wrongly believes that it can spend and charge or tax for the support of a third world people or subsidize an entire continent like South America, in an effort to expand their market here. There are many commonly accepted fallacies in government.
But again it matters not from who we borrow, although in the case of a failure to diversify debt there is this sense of empowering others as a threat to our economic security.
What matters is that we, and they, do not spend excessively.
My point is that our money is not fiat money and in America no local economy works in the manner that is suggested here.
Our money IS FIAT money and is merely created..........out of nothing!
its called.............FRACTIONAL RESERVE BANKING!
It is created out of nothing but its value is not regulated by government; it is NOT fiat money.
lolll...well I cannot help you, sorry but I will have to respectfully agree to disagree.
People don't get to make up their own facts though.
Well, then you need to give it some more thought. In the meantime, I have 5 bucks... what will you give me for it?
a handshake and call it good ;)
How 'bout two shakes? And a smile?
lollllll ok ;)
Well, almighty then. And now I know what my five bucks is worth. I'm good with that.
its a deal ;)
Reagan pulled us out of the economic mess that Carter created. The economy under Carter was in terrible shape. The economic boom that lased into Clinton's terms, allowed Clinton to raise taxes and balance the budget. It was thenrightbtime to raise taxes. Read Clinton's new book where henis very clear on this.
Not over my dead body did he NOT. I am just posting...REagan EXPANDED the deficit like NO other president ever PERCENTAGE WISE.
President Obama has expanded the deficit DOLLAR AMOUNT like no one else but Reagan STILL trumps every president up until today..........with expanding the deficit in percentage!!!!!!!!!!!!!!!!!!!!!!!
Obama did it with a demodratic house and senate!
Please.....it was the Tip O'Neil (sp?) congress that spent like crazy and caused that deficit. As Reagan would say " there you go again". He was a great great president
He was a President who suffered Alzheimers and was taken advantage of. FYI it is the president that signes legislation into law ;)
The legislation comes from the congress and can be signed or vetoed by the president. Then the congress can over ride the veto. Ronny asked for he line item veto so he could rid the budget of the pork. The budgets during Reagan's presidency were democtratic budgets. His AZ disease did not impact his entire terms in office, if at all
the pork being.........the horrendous Military spending? Communism broke down and eroded from within.Ever been behind the Iron Curtain then? I have...I was there in 1974. It was already decaying from within...
And actually the evidence his Alzheimers did affect his terms in office. There is footage available on YT where he is giving speeches and being propped up having others feed him the lines.
Reagan did not practice what he preached. This is from 2004
"While Reagan spoke of making government smaller and more efficient, Republicans instead exploded the size of government. Since 1980, government expenditures have increased fourfold. Sixty percent of this government growth occurred under "conservatives" Reagan and Bushes, Jr. and Sr. With government under the control of a "conservative" for 16 of the last 24 years, shouldn't we have a smaller government by now? We certainly would if Republicans really believed in smaller government."
And we all know it is true. Reagan increased the deficit like nobody has percentage wise..Not even today under Obama who has increased the deficit dollar amount wise!
The deficits and size of government is the fault of both parties. The correct facts are that under the Reagan presidency the democratic controlled congress increased the size of government and the deficit. Yes i have spent much time in China and have seen their evolution from communism. Yes russia decayed from within due to communism and govt control. I spend time now in Moscow and they enjoy a 15 percent flat tax and boast more billionaires than NYC. They celebrate success and the middle class is thriving. China is even more amazing as its economy has transformed
Can't agree more. We have a ONE party system
The Federal Reserve Act was passed by Congress so Congress could SPEND on whatever program in EXCHANGE for private profits to the private and independent Fed .............WITHOUT the people knowing they are being taxed