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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Sat Nov 28, 2009 9:43 am Post subject: |
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| Of those two very substantive links, you picked out the two most superficial and meaningless pieces. Try again? |
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Sergio Stefanuto
Joined: 14 May 2009
Location: UK
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| Posted: Sun Nov 29, 2009 11:47 am Post subject: |
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Economic Facts and Fallacies is such a good book at introductory level, I might even say that it's at least as good as Henry Hazlitt. So much leftist twaddle is overturned in that, it's incredible. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Mon Nov 30, 2009 9:10 am Post subject: |
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| mises wrote: |
| Of those two very substantive links, you picked out the two most superficial and meaningless pieces. Try again? |
Honestly, I didn't have the time or patience to read more than a small part of the article. Maybe you could clear up a few points for me. Isn't Keen a Post -Keynesian economist? Doesn't he understand debt? Have you rethought your repeated assertion that Keynesians don't understand debt? Do you agree with his assertion that Austrian economists have a surprisingly simplistic analysis of money? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Nov 30, 2009 9:25 am Post subject: |
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I don't keep up with the academic shouting matches about who is or is not a Keynesian. I have very recently reread General Theory and Steve Keen (and Minsky's financial instability hypothesis) does not square with JMK. Keen rails about low interest rates and Keynes wanted 0.0 for ever. Keen finds asset bubbles (targeted inflation) where they exist and JMK argued over and over that any/all inflation isn't possible outside of complete full employment.
In other words, I don't give a damn about what they call themselves or who they like and don't like and the scores they settle at academic conferences. I do care, however, that dominant economic theories of credit creation are backwards. That is, the banks produce the credit first and then seek reserves. In all the classes in economics I took over three programs I was never taught that. And I studied monetary economics as my main focus in my MSc.
The Austrians respect debt but do not mathematically model their ideas, which makes them "simplistic" in modern academic economics. Take a peek into any of the major econ journals. Economics is applied maths now. The Austrians buck this trend. We all know how much academics like it when their trends are bucked. The Keynesian do not respect debt. Keen claims to be a Keynesian but is completely focused on debt. Keynes was indifferent to debt. But if Keen wants to call himself a Keynesian, fine. I don't care. I am interested in if he is right. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Mon Nov 30, 2009 9:40 am Post subject: |
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| mises wrote: |
I don't keep up with the academic shouting matches about who is or is not a Keynesian. I have very recently reread General Theory and Steve Keen (and Minsky's financial instability hypothesis) does not square with JMK. Keen rails about low interest rates and Keynes wanted 0.0 for ever. Keen finds asset bubbles (targeted inflation) where they exist and JMK argued over and over that any/all inflation isn't possible outside of complete full employment.
In other words, I don't give a damn about what they call themselves or who they like and don't like and the scores they settle at academic conferences. I do care, however, that dominant economic theories of credit creation are backwards. That is, the banks produce the credit first and then seek reserves. In all the classes in economics I took over three programs I was never taught that. And I studied monetary economics as my main focus in my MSc.
The Austrians respect debt but do not mathematically model their ideas, which makes them "simplistic" in modern academic economics. Take a peek into any of the major econ journals. Economics is applied maths now. The Austrians buck this trend. We all know how much academics like it when their trends are bucked. The Keynesian do not respect debt. Keen claims to be a Keynesian but is completely focused on debt. Keynes was indifferent to debt. But if Keen wants to call himself a Keynesian, fine. I don't care. I am interested in if he is right. |
Well if you don't even know who is and who is not a Keynesian, than your Keynesians who don't understand debt would pretty much be straw men wouldn't they? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Nov 30, 2009 10:02 am Post subject: |
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No, it wouldn't. Keynes operated in a theoretical world where debt was not a meaningful force. Krugman also lives in this world, though only when a Democrat is in the White House.
Steve Keen, whatever he calls himself, makes an excellent case for why we are where we are. If you want to have a full understanding of our situation, you should read him or at the very least watch his lecture. If you don't and you're only worried about me then I don't really know what to tell you. And if you're still with a finger in your arse about my Citi posts then get over it. Citi failed and the government propped it up. I was right about Citi and wrong about the willingness of the government to prop up dead banks. I completely underestimated the extent of regulatory capture but my economic analysis was dead right. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Mon Nov 30, 2009 11:10 am Post subject: |
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| mises wrote: |
No, it wouldn't. Keynes operated in a theoretical world where debt was not a meaningful force. Krugman also lives in this world, though only when a Democrat is in the White House.
Steve Keen, whatever he calls himself, makes an excellent case for why we are where we are. If you want to have a full understanding of our situation, you should read him or at the very least watch his lecture. If you don't and you're only worried about me then I don't really know what to tell you. And if you're still with a finger in your arse about my Citi posts then get over it. Citi failed and the government propped it up. I was right about Citi and wrong about the willingness of the government to prop up dead banks. I completely underestimated the extent of regulatory capture but my economic analysis was dead right. |
So, are you retracting your assertions that Keynesians don't understand debt and instead asserting that only Keynes himself and Krugman don't understand debt? The reason I worry about you, is just because you have those graduate degrees in Economics. I expect more from you. You can do better than the sloppy, simplistic knee jerk arguments that the hagwon monkeys make. Get it right. Some Keynesians at least (possibly even Krugman ) do understand debt. As for the Austrians, Keen faults them not for a lack of math but for a lack of an explanation. As for Citibank, your economic analysis may or may not have been correct, but my investment analysis was correct. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Nov 30, 2009 11:57 am Post subject: |
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| So, are you retracting your assertions that Keynesians don't understand debt and instead asserting that only Keynes himself and Krugman don't understand debt? |
It is possible for someone to take other ideas and place them into the Keynesian framework, with a good deal of dancing and such. The mainstream Keynesians do not consider debt in their financial models. That's just a fact. Steve Keen calls his opponents neo-classical and neo-liberal, yet in his book Debunking Economics does, in my mind, go for the Keynesian jugular. I haven't finished it though. He calls himself a post-Keynesian. I just don't care. So, ok. To get you off my arse about this, I should not have used such a wide brush.
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| As for the Austrians, Keen faults them not for a lack of math but for a lack of an explanation. |
That might be fair. I'm not using them for a model of the economy but for a sufficient description of the present situation. Many Austrians are anarchists, which I'm not. They're also contemptuous of people, it seems. But Mises's analysis of the credit cycle is excellent, even if another excellent analysis (from Keen) doesn't perfectly square with it.
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| As for Citibank, your economic analysis may or may not have been correct, but my investment analysis was correct. |
This is a limit of economics and financial analysis. The economy doesn't exist in a vacuum. The political economy is completely unpredictable. So Citi failed and my naked economic look says it is going to fail then that's it. I'm not sitting in Fed boardrooms so I don't know what the political economy is going to do. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Mon Nov 30, 2009 12:05 pm Post subject: |
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| mises wrote: |
This is a limit of economics and financial analysis. The economy doesn't exist in a vacuum. The political economy is completely unpredictable. So Citi failed and my naked economic look says it is going to fail then that's it. I'm not sitting in Fed boardrooms so I don't know what the political economy is going to do. |
In other words your economic theories can't tell you what is going to happen in the real world? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Nov 30, 2009 12:16 pm Post subject: |
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| jaykimf wrote: |
| mises wrote: |
This is a limit of economics and financial analysis. The economy doesn't exist in a vacuum. The political economy is completely unpredictable. So Citi failed and my naked economic look says it is going to fail then that's it. I'm not sitting in Fed boardrooms so I don't know what the political economy is going to do. |
In other words your economic theories can't tell you what is going to happen in the real world? |
Yes. That is essentially true. Who can predict how long the Americans will hold up the TBTF? Who can predict what China will do with their peg? What if Ron Paul gets his way and we peek into the Fed and nothing is home? What then? What if the Senate craps on the audit? Of course economic analysis is limited. They aren't "my" ideas though. I've written about how we're flying blind many, many, many times.
That said, I do see a broad explanation of why we're here. Debt. As Steve Keen wrote in his latest:
http://www.debtdeflation.com/blogs/
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In fact �normal� for the last half century has been an unsustainable growth in debt, which has finally reached an apogee from which it will fall. As it falls�by an unwillingness to lend by bankers and to borrow by businesses and households, by deliberate debt reductions, by default and bankruptcy�aggregate demand will be reduced well below aggregate supply. The economy will therefore falter�and only regular government stimuli will revive it.
This however will be a Zombie Capitalism: the private sector�s reductions in debt will counter the public sector�s attempts to stimulate the economy via debt-financed spending. Growth, if it occurs, will not be sufficiently high to prevent growing unemployment, and growth is likely to evaporate as soon as stimulus packages are removed.
The only sensible course is to reduce the debt levels. As Michael Hudson argues, a simple dynamic is now being played out: debts that cannot be repaid, won�t be repaid. The only thing we have to do is work out how that should occur.
Since the lending was irresponsibly extended by the financial sector to support Ponzi Schemes in shares and real estate, it is the lenders rather than the borrowers who should feel the pain�which is the exact opposite of the bailout mentality that dominates governments around the world.
Unfortunately, it will take a sustained period of failures by conventional policy before unconventional policies, like deliberate debt reduction, will gain political traction. Implementing them will require both a dramatic change of mindset and probably also a widespread changing of the political guard.
It will also require the breaking of the hegemony of neoclassical economics over economic thinking, but I doubt that the academic profession, or economists in Central Banks and Treasuries, are up to the task of changing their spots. Change in economics will have to come from the rebels, and from outsiders taking over a discipline that economists themselves have failed.
The second decade of the 21st century promises to be a dramatic one, politically and economically. |
Now leave me aside for a moment. In your opinion, what is incorrect or flawed with the above? Be serious. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Mon Nov 30, 2009 3:49 pm Post subject: |
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| mises wrote: |
In other words, I don't give a damn about what they call themselves or who they like and don't like and the scores they settle at academic conferences. I do care, however, that dominant economic theories of credit creation are backwards. That is, the banks produce the credit first and then seek reserves. In all the classes in economics I took over three programs I was never taught that. And I studied monetary economics as my main focus in my MSc. |
That article was a real eye opener. I had never considered that to be a possibility. It pretty much debunks 30% of what we are taught in macro classes.
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| The Austrians respect debt but do not mathematically model their ideas, which makes them "simplistic" in modern academic economics. Take a peek into any of the major econ journals. Economics is applied maths now. The Austrians buck this trend. We all know how much academics like it when their trends are bucked. The Keynesian do not respect debt. Keen claims to be a Keynesian but is completely focused on debt. Keynes was indifferent to debt. But if Keen wants to call himself a Keynesian, fine. I don't care. I am interested in if he is right. |
This is the reason that 99% of people are 100% economically illiterate. Some pretty interesting, enlightening ideas are obfuscated by dry theoretical models that don't really improve the students understanding of the material. Most of economic theory can be explained in stories and pictures. It doesn't require the person to do derivations and calc that doesn't fit properly in order to be illuminated on a subject. |
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TNizzle
Joined: 19 Nov 2009
Location: Seoul via: Indiana
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| Posted: Thu Dec 10, 2009 6:52 am Post subject: |
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| Peter Schiff |
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