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I'm no Keynes academic, but I can tell you that I find the bubbles to be the alcoholism, the busts to be the hangovers, and Keynesian strategies to be the hair of the dog.
Really, why have a central bank if it won't gut check stock/asset bubbles? As a Seeking Alpha article (just today) puts it, "The Federal Reserve is instrumental in starting the bubble while Wall Street provides the endless supply of air." And here we are blaming President X vs. President Y. Why? When everyone from Ronald Reagan to Bill Clinton to G.W. Bush will bow to Greenspan, and Greenspan will say all the right things while doing all the wrong ones?
Keynesian economics are like FEMA. We look to it in the wake of disaster when what we should really do is look to the cause and decide we're not going to build our houses in hurricane alley.
Ok. I didn't claim they did.Keynesians haven't argued for deregulation.
I'm not sure how the GOP going batshit crazy is very connected to FR chairman appointments or Ronald Reagan. What about our monetary policies has changed in thirty years?That's what the Fed is supposed to do. What happened, was that Ronald Reagan threw the way the Fed operates askew when he started making overt political appointments to the Fed Chair and other seats on the FOMC and Board of Governors. And yes, Bush, Clinton and Bush continued it as the two parties became more divisive as the GOP moved further into batshit crazy and away from reality.
I've not excused anyone.There's some validity to this, but, it does not excuse the legislature or Executives...
I'm not here championing the Austrian school or deregulation of financial markets. Nonetheless we are putting ourselves in positions to need Keynesian rescue policies just to avert recessions or financial disasters, ultimately (I think) because we chase growth like an addict chases his next fix.Funny thing is, had policy makers been listening to Keynesians (particularly to New Keynesians), the wwhole mess may have been avoided by learning the lessons from the Great Depression, Japan's real estate bubble and the East Asian financial crisis of the late 1990s. Don't say they didn't warn you. Krugman's Return of Depression Economics came out in 2000. Robert Shiller, Dean Baker and others did the heavy lifting in their work on asset bubbles. But Austrians School cultists and supply-siders know better, in spite of being wrong.
Greenspan should have put a halt to the super low interest rates after deregulation. He didn't. He talked up market superiority. And then, with the deregulation of lenders, he contributed to a large scale housing bubble and financial crisis.
Not really. WWII saw deficits in today's money of $7 ttrillion a year. The national debt was far higher than we have. And it was paid down through infrastructure spending (and the jobs it created) and much higher tax rates.
That's not what I said. SS had the side effect of making it possible to get rid of pensions. If companies had tried that back in 1930 before SSI existed, no worker in his mind would have agreed to give up a pension to pay for his retirement UNLESS THE GOVERNMENT WAS PROVIDING IT. In other words the existence of SSI reduced a benefit the private sector was providing to it's workers. It's the same thing with welfare -- since the government is providing a minimum standard of living, businesses are much more likely to try to lowball wages, because they know that the food stamps and section 8 housing and so on are out there. I expect the same thing to happen with health care -- having the government provide health insurance means that businesses will no longer provide it. It's already happening, as retail outlets lower work hours to less than full time, thus not having to provide health insurance. Would workers be as likely to stand for that if Obamacare wasn't a law? I doubt it. That's what happens -- when the government provides something the private sector stops providing it.Social Security was never meant to replace pensions. Neither were 401(k) plans. It wasn't palatable at all to workers. It's been an all out assault on the rights by conservatives on people to look for the freedom to bargain for benefits and fair wages.
Again, made possible because the government is taking up the slack. You don't get it. Had there been no government SSI, it would have been hard to sell a worker on the idea of a job that didn't offer a pension. Before Obamacare, a job that doesn't offer health insurance is a non-starter, however once people get used to the idea that the government will provide health insurance, that same work arrangement may become the norm.That's not usually by choice. That's only because companies are able to skirt laws and desert the people who made those companies successful by leaving with a kick of dirt to their employees' faces.
We do, it's just not a formal system. Our system facilitates job hopping by making it easy to be between jobs and by providing those benefits that used to be given by businesses as an inducement to stay long term. Pensions used to be a reward for loyalty, but since the SSI program allowed businesses to get rid of them, which of course means that there is one less inducement for a person to stay long term. So it makes more economic sense for a person to move anytime that there's better pay elsewhere, because he doesn't lose a benefit by switching.we don't have any such system in the US.
It's not crumbling. The roads are pretty good.not enough. The US used to be the best in the world with paved roads; clean, safe water and and wastewater treatment, plentiful supply of power because of the public works for hydro electric dams, transmission lines, etc. And now, after years of neglect and the conservatives blocking improvements and maintenance, it's all largely crumbling.
If you're saying that the "stimulous" caused by war ended, there's a major problem with that. We've been at war the entire time, which means that we're doing exactly what you say we aren't doing -- stimulating the economy by wars. There is no peace dividend, because peace now means no stimulous of the economy. Which means of course that from now on, we're going to have to kill people all over the world because it's good for the economy.And...? Do you have a point?
I am amazed when folks have positions like yours that ignores basic tenets of economics. There is nothing ideological about aggregate demand. It is a known principle in macro that has nothing to do with one school or another, it simply is aggregate demand. How you manipulate it becomes a bone of contention. Watch this simple clip by a professor on the topic. This is basic econ buddy.
Keynesian Vs Monetarist on the LRAS curve - YouTube
If the argument is now over models instead of Keynes, then someone in this group better have a PHD in Economics or Math because that is what it is going to take to understand the complexities of current modeling theory. Since I doubt any of us is truly qualified to either create a model or improve upon one, I suggest we instead look to real experts in the matter for their guidance. In this regard, we can list a few economists who are world renown and discuss their opinions of modeling. We can start with Rogoff, Stiglitz, Keen, Krugman and perhaps a European. What you will see quite quickly is that in the world of high economics, there are virtually no Austrians in the discussion except at the extremes. In issues as complex as economics or climate science, I tend to focus more upon the experts and their track records of success or fame within their own circles. Laymen can voice opinions but unless you are truly an expert, it is like asking a first year physics major to correct a NASA flight plan for a mission to Mars.
ronpaul, Peter Schiff, Lew Rockwell (who actually provides ronpaul with his marching orders), John Taylor, John Plosser, etc. have made predictions, and none has come true, for the most part, since before the financial crisis.
Keynesians were the first to identify the housing bubble, identify the problems it was going to create in the financial, housing, job and market sectors before the recession. And their predictions since the recession have proven true.