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Originally posted by Geezer:
Nope. I get the point of Keynesian theory. Throw enough money at it and recession/depression goes away. The problem is that you can't convince folks to dig holes and bury jars of money. You need something like a war - the imminent threat of killing, destruction, bombing, gas chambers, etc. - to get people to willingly make such sacrifices and go so far into national debt. So I'm back to thinking that the Keynesian solution is to have a nice big war.

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Originally posted by Geezer:

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Originally posted by NewOldBrownCoat:

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Originally posted by SIGNYM:


BTW GEEZER, there was a huge recovery under FDR from 1930-1936. By the spring of 1937, production, profits, and wages had regained their 1929 levels. But in 1936, the Federal Reserve had tightened the money supply, and the US Treasury had insisted in budget cuts and increased taxes to "balance the budget". As a result, the economy took a swift downturn in 1937. Your reading of the Great Depression, and the lessons to be learned from it, is superficial at best.

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Thanx , Sig. That is the conventional theory of how the history went. I was gonna post that same point in refutation of Geezer, that's how I remembered learning it when I studied 20th Century history.

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Unemployment right before the recession of 1937-38 was 14.3%. This is a success? Not sure how it refutes anything.

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Nope. Read wiki.

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Smoot-Hawley was gone by 1934. The Depression remained.

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Not if you look at the actual amount of debt as shown in my cite. Actual dollars of debt went up steadily from 1929 to 1941.

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You need something like a war - the imminent threat of killing, destruction, bombing, gas chambers, etc. - to get people to willingly make such sacrifices and go so far into national debt. So I'm back to thinking that the Keynesian solution is to have a nice big war.

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I read your previous post. It's pretty funny that you complain about ideologues then go on an ideological "But Bush..." rant yet again.

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And you seem to be in the same boat as KPO, deciding that if it takes a world war to end a depression, then that's a good thing. Somehow, I'm not too comfortable with that. It must be a liberal thing.

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Originally posted by SIGNYM:

So, in today's economy, OUR effort to end the recession would involve lots and lots of government jobs... let's call it the "War on Global Climate Shift". Renovate every single water/energy- inefficient home, condo, or apartment. Engage in a massive resettlement of coastal people 50' higher than they are now. Build massive north-south wildlife corridors for plants and animal to migrate northward, and pre-plant them with heat-tolerant species. Develop 1-mile-wide firebreaks through all of our national forests by thinning trees and laying down biochar. Remove invasive species. Rebuild and rehabilitate our wetlands. Put in trolleys and land-ferries (trains which carry cars to their destination)

Bring our soldiers home, and make them part of THIS effort. Raise the minimum wage. Tariff goods from environmentally-unsound nations. Raise taxes to 90% at the top level, and raise corporate taxes and eliminate tax loopholes.

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Originally posted by M52NICKERSON:

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Originally posted by Geezer:
Nope. I get the point of Keynesian theory. Throw enough money at it and recession/depression goes away. The problem is that you can't convince folks to dig holes and bury jars of money. You need something like a war - the imminent threat of killing, destruction, bombing, gas chambers, etc. - to get people to willingly make such sacrifices and go so far into national debt. So I'm back to thinking that the Keynesian solution is to have a nice big war.

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The only people you can't convince are the people who think that the government running up a debt will cause them to have to bury money. Even with that the US government has not had much problem running deficits.

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The real problem is getting government spending to be reduced when the economy is good and revenues are high. That is the point government spending should shrink, but not taxes, to act as a calming force in the economy.

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Originally posted by NewOldBrownCoat:
You're not listening, OldRap.

Both Sig and I are claiming that there was a signifigant recovery by 1936, out of the deepest deep and back toward better times; that in '36 policies got more conservative; and that that set off a double dip in '37, that lasted until the War. Negative stats from '37-38 kinda prove our point. And 14.% before '37 is better the millions datandin in breadlines and at soup kitcheds in '30-'32.

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Originally posted by kpo:
I've read Wiki. The question is not whether HH carried out some liberal policies, it's whether he and FDR carried out unrestricted Keynesian liberal policies throughout the whole of the GD. They didn't.

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Smoot-Hawley was gone by 1934. The Depression remained.

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1. I don't know what your point is. Are you disputing that protectionism exacerbated the GD?

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2. Things started to improve around that time (until 1937, when FDR enacted austerity)

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3. One would not expect global trade to recover instantly. Viable businesses and factories had closed down, it would take time to regrow them.

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Not if you look at the actual amount of debt as shown in my cite. Actual dollars of debt went up steadily from 1929 to 1941.

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Ok. Technically the budget wasn't completely balanced, but the correct economics way to look at it is debt as a % of GDP. So although debt was growing slowly, so was the economy, and so the debt burden was not growing. That's what my graph shows. And it shows that the brakes were firmly on the government spending.

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Ok, I think you're halfway to understanding Keynesian theory. The key point that I think you might be missing is that Keynesian economists do not really advocate wasteful spending as a solution to recessions - but rather economically useful spending. Like infrastructure investments. Imagine for e.g. if all the money of WWII was spent instead on infrastructure, education, research and development projects. How much MORE of a boost to the US economy would it have been? In the long term, as well as the short term? That's what Keynes advocates as the solution to recessions. And when you have situations like the one in the US at the moment, with a weak economy and infrastructure that desperately needs improving, stimulus spending would be a win-win. It's a complete no-brainer. And yet, because we live in a time when US politics have been dragged far to the right, desperately needed stimulus spending is not even on the agenda. Economists and historians will look back on this period of US history and pull their hair out.

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I'm listening to you and SignyM tell me that the liberal policies of Hoover and Roosevelt took six years to reduce unemployment to 14.3%, and that the 1936 recovery wasn't sustainable and failed. I am still not finding this persuasive proof that liberal ideas of how to end a depression/recession work all that great.

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You and others talk about the unlikeliness of selling Libertarian philosophy to the masses. I suggest that your version of Keynesian economics would be just as hard a sell.

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Originally posted by Geezer:
Talk to KPO. He thinks that the FDR administration, despite tripling the national debt, wasn't spending enough until WWII came along and bailed the Keynesians out.

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Originally posted by Geezer:
Sort'a like what Coolidge was doing after WWI. He dropped the national debt from $26 billion to $16 billion by cutting government spending and cutting taxes.

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Talk to KPO. He thinks that the FDR administration, despite tripling the national debt, wasn't spending enough

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until WWII came along and bailed the Keynesians out.

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Originally posted by SIGNYM:
Because you still have failed to grasp the other part of what we were saying: Government spending worked. It's just that a LOT MORE was needed than what FDR and his economic advisors anticipated, and more than what conservatives would allow. It wasn't until WWII came along and squashed the objections of the conservatives by confronting them with a such a compelling challenge (world war) that they were FORCED to spend. Also, FDR, the old dog, apparently knew that the Japanese were going to bomb Pearl Harbor and allowed it to happen, knowing that this would get the ditherers off their seats- not only in terms of spending but also in terms of confronting a world threat.

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But I think Keynes doesn't have it quite right. Under Keynesian theory, pumping up the money supply is good enough. In HIS theory, it doesn't matter where the money get injected. But the reality is that economies ARE driven by demand, and unless you can boost demand you can pump all kinds of money into th wealthy class and all you will do is drive up the cost of diamonds, fine art, and yachts. And that doesn't create enough demand to power an economy.

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The point I keep making is that money is like blood: It doesn't do any good unless it's circulating. The rate of exchange of money is called it's velocity]: A dollar bill can be used to power one exchange per year, or it can be used to power 1000. The higher the velocity, the more the economic activity. Adding more money to a moribund economy is a bit like infusing a corpse: unless that money is going to power purchases of goods, which powers employment, which creates further demand for more goods and services etc all you will do is bloat up the body. As long as money is being hoarded and sequestered by the wealthy, who really DON'T create demand, the stimulus will bypass the vast majority of people.

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The EU is an extreme example. They not only didn't do the right things, they specifically did the wrong things. The EU technocrats were extremely worried about "the value of the EU". So in response to the financial crisis (created by private banks) the EU banking technocrats did two things: (1) They did not backfill the failing banks with money from the European Central Bank (ECB) or any of the other stabilization mechanisms that they had on-hand. Instead they required that the individual national governments take up that task. (Why, I don't know, since the national governments neither borrowed the money nor wrote the laws under which the EU banks operated). And (2) They required that the national government not create additional debt (deficit spending) in order to fill bank coffers. Instead, the national governments had to take money out of their social programs ... literally, money from the mouths of the hungry... in order to prop up the banks.

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As far as the USA is concerned, let's take a look at GWB's policy to begin with: he reduced taxes and engaged in massive wartime deficit spending. Technically, that should have propelled the economy into greater activity. And it did, for a few years. The problem was, it was all based on debt, and everything GWB did concentrated more and more money into fewer and fewer hands. So the pile of bank-created money evaporated, the poor had no more $$ with which to buy, and the economy collapsed.

Obama was left to pick up the mess. He threw money at the banks, and managed SOME stimulus spending, but conservatives in Congress enventually put the brakes on more deficit spending. So The Fed (unlike the ECB) took up the slack, and backfilled all of the banks' poor investments by buying them up with real dollars, putting more $ into circulation. (Infusing the corpse.) The problem is, the $ never got to those who would have created a demand for goods and services. And, if it had, much of that money would simply have flowed to China.

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The answer to ending this recession in a positive way requires several steps, which nobody is about to do:

Impose increasing tariffs on cheap-labor imports. As the "cost of doing business" equalizes, manufacturers will choose to invest here. (Instead, Obama is pushing for yet another free-trade" agreement: the TPP)

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Raise the minimum wage, and index it to inflation.

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Create massive jobs-programs at home. We need to prepare for global climate change and (re)invest in our environment and our infrastructure. Private industry will NEVER front that money.

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Prepare for the end of the petrodollar by reducing our need for oil and gas (imported or otherwise) and boosting agricultural and manufacturing output. (Our dollar will only be worth what people can buy from the USA.)

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Increase taxes on the wealthy, and eliminate corporate tax loopholes.

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You and others talk about the unlikeliness of selling Libertarian philosophy to the masses. I suggest that your version of Keynesian economics would be just as hard a sell.

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Most people are already FOR a raised minimum wage, single-payer health care, higher taxes in the rich, reduced military spending, and so forth. Your point being...?

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Originally posted by M52NICKERSON:

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Originally posted by Geezer:
Sort'a like what Coolidge was doing after WWI. He dropped the national debt from $26 billion to $16 billion by cutting government spending and cutting taxes.

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Yes, it could be argued that he should have simple cut the spending and kept the taxes near where they were to lower the debt even more and offering even more of a cooling effect.

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So it was Hoover and Roosevelt who had no idea what to do about recessions?

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So Smoot-Hawley may have had an effect

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2. Things started to improve around that time (until 1937, when FDR enacted austerity)


Because the Keynesians couldn't convince enough folks to bury jars of money?

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And this was all Smoot-Hawley's fault? Nothing else caused it?

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This graph shows Federal spending as a percent of GDP went from less than 4% in 1929 to almost 11% in 1936. Doesn't look like spending was being brakes much to me.

http://www.usgovernmentdebt.us/spending_chart_1920_1940USp_15s1li011mc
n_F0f_US_Federal_Spending

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You and others talk about the unlikeliness of selling Libertarian philosophy to the masses. I suggest that your version of Keynesian economics would be just as hard a sell.

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I grasp what you and KPO are saying. I'm just appalled by it.

You're saying that a world war every once in a while is GOOD for the economy

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So when Bush created debt through deficit spending it was BAD, but when Obama created debt through deficit spending it was GOOD

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But...But... KPO blamed tariffs

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...total government revenue, even with tax cuts, went up every year from 1923 to 1929. Tax cuts put more money in circulation

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Originally posted by Geezer:

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Originally posted by M52NICKERSON:

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Originally posted by Geezer:
Sort'a like what Coolidge was doing after WWI. He dropped the national debt from $26 billion to $16 billion by cutting government spending and cutting taxes.

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Yes, it could be argued that he should have simple cut the spending and kept the taxes near where they were to lower the debt even more and offering even more of a cooling effect.

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Checking here...
http://www.usgovernmentrevenue.com/breakdown_1929USmt_15ms1n

...total government revenue, even with tax cuts, went up every year from 1923 to 1929. Tax cuts put more money in circulation so income (and income taxes), government fees, etc. went up.

As noted before, during this period the national debt was also reduced by more than a third.


"When your heart breaks, you choose what to fill the cracks with. Love or hate. But hate won't ever heal. Only love can do that."

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I grasp what you and KPO are saying. I'm just appalled by it.

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You're saying that a world war every once in a while is GOOD for the economy

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Interesting that what you see as 'hoarded and sequestered' I see as invested.

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But isn't backing up the banks an example of Keynesian interventionism? Sort'a like this?

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So when Bush created debt through deficit spending it was BAD, but when Obama created debt through deficit spending it was GOOD and should have been allowed to continue. No ideologues here.

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But...But... KPO blamed tariffs, specifically Smoot-Hawley, for worsening the Great Depression. And wouldn't tariffs be more a conservative thing?

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Got no problem with decreasing need for oil and gas, but still think it'll take a long time to accomplish, especially if you want to boost agriculture (which is particularly oil-dependent) at the same time. I might also point out that if we impose manufacturing tariffs on other countries, I'd bet they'll impose agricultural tariffs on us. Then we got lots of food we can't sell.

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And the price of everything goes up. Not saying this is a bad thing, but its something of which you need to be aware.

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Saw that coming. [Increase taxes on the wealthy, and eliminate corporate tax loopholes.]

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My point being that 'a raised minimum wage, single-payer health care, higher taxes in the rich, reduced military spending, and so forth' isn't what you and KPO have been selling here. You're selling deficit spending at massive rates, preferably powered by world war.

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Originally posted by SIGNYM:

The point I keep making is that money is like blood: It doesn't do any good unless it's circulating.

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Originally posted by SIGNYM:
Oh BTW- this sums up Keynes quite nicely.

http://en.wikipedia.org/wiki/Keynesian_economics

If you use Wikipedia, please donate. I do.

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THE ELEVENTH MARBLE

by Michael Rivero

Any five-year old child knows that if you put ten marbles into a tin can, you can only take ten marbles back out. No amount of wishful thinking, dreaming, or praying, will yield that eleventh marble from inside that can. That eleventh marble does not exist. It never did, and it never will. All discussions about the eleventh marble are the product of imagination. The eleventh marble is a fantasy.

Private central bankers issuing the public currency as interest-bearing loans operate on the belief that they can put ten marbles (dollars) into a tin can (the world) and magically get 11 marbles back out. Thus, we may conclude that the bankers are dumber than five-year old children! But unlike five-year old children, the bankers will take your home, your business, and your nation when they don't get that eleventh marble! The spoiled child may cry and throw a tantrum, but that will be the end of their upset. The spoiled banker, however, in his or her arrogant rage that they cannot have the eleventh marble their imagination says must still be in that tin can, may start a war before they will admit that eleventh marble was never really there.

Economies are like tin cans. Before you can take a marble out, you must have put a marble in. Nobody can give you a marble that does not exist, yet this simple reality is lost to the priests of that fantastic religion called "economics" in that unholiest of temples called the Private Central Bank. Their religious doctrine seems to be that there must always be an eleventh marble inside the tin can, and that the tin can unfairly withholds that eleventh marble, indeed cheats them of their right to the eleventh marble, purely out of spite. That faith in the existence of the eleventh marble, unseen and improvable, is the article of faith the religion of banking rests on. It is far easier to burn the heretics than to question the dogma.

Today we see the bankers, having already retrieved their ten marbles from the tin can, flogging the world for that missing eleventh marble. Greece does not have that eleventh marble, so they turn to Germany and ask, "Do you have an eleventh marble", and Germany replies, "Sorry, but the bankers already took the ten marbles they put in our tin can, and we are searching for an eleventh marble ourselves. Try the Americans." The Americans, of course, have only just surrendered the last of their ten marbles back to the bankers and are looking under seat cushions for that missing eleventh marble nobody seems able to find.

But the eleventh marble will never be found. After all that mayhem brought down on the tin can there still will be no eleventh marble. It does not exist. It never did, and it never will.

The problem with all modern reserve banking systems is that the moment the first bank note goes into circulation as the proceed of a loan at interest, more money is owed to the banks than actually exists. Ten marbles have been put into the tin can, but the bankers see 11 marbles owed back to them. Sooner or later the non-existence of that eleventh marble will create a crisis of faith. People will stop believing in the religion called private central banking, and that crisis of faith will bring the system crashing down, as did the Temple of Baal in ancient times when the Syrians saw through the priests' trickery. This evil magic of creating money out of debt was a fraud all along, as fraudulent and silly as the idea that one can put ten marbles into a tin can, and take out eleven.

In ages to come economists will look back at this failed experiment in debt-based currency, and dump it into the same category of human folly as Tulip mania, The Nation of Poyais, Credit Mobilier, the Great South Seas Company, and Mortgage-Backed Securities.

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Originally posted by FREMDFIRMA:
I have a better and more accurate description, Courtesy of Michael Rivero.
(Reprinted with express permission)

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THE ELEVENTH MARBLE

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-F

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Originally posted by SIGNYM:
A dollar bill can be used to power one exchange per year, or it can be used to power 1000. The higher the velocity, the more the economic activity. Adding more money to a moribund economy is a bit like infusing a corpse: unless that money is going to power purchases of goods, which powers employment, which creates further demand for more goods and services etc all you will do is bloat up the body. As long as money is being hoarded and sequestered by the wealthy, who really DON'T create demand, the stimulus will bypass the vast majority of people.

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Originally posted by FREMDFIRMA:

Simplistic it may be, but the relevance of it here is that the Banksters hoard the marbles they have until they've picked the country clean and then start to squeeze, looking for the 11th one, and that almost inevitably leads to serious nasty.

As for the complete shell game of how the marbles move around, Sheldon Emry did a pretty good assessment on this.
http://liberty-tree.ca/research/Billions.for.the.Bankers
Mind you this has snowballed as more and more "money" is naught more than etheral and easily manipulated numbers in electronic banking systems.

And if you REALLY want to get into the very devil of the details, this RSA primer on why this bullshit is inevitable in a Capitalistic system is a pretty good breakdown.

Worth a note as well, I consider the so-called-science of Economics to be complete bullshit, a semi-religious pseudoscientific load of horseshit used as excuse/explaination/justification for the practice of usury in malicious fashion, cause just like that old shoveljob about how we all need a leash to protect us from ourselves, those espousing it (outside of fools taught it in school who never learned better/different) have nefarious intentions for advancing such a dangerous and destructive myth.

-Frem

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Originally posted by kpo:
First of all, the national debt before FDR was small, so tripling it does not necessarily mean FDR spent massively. Secondly, again, look at the graph of debt/GDP -


FDR came in in 1933, and kept debt as a proportion of GDP steady. So although the debt increased in dollar amounts, FDR practiced fiscal restraint and kept the debt burden steady - against what Keynes recommended. So yes, I would say FDR didn't spend enough - the GD could've ended much sooner!

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until WWII came along and bailed the Keynesians out.

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Do you have your own, non-Keynesian explanation for how WWII ended the Great Depression? If not then wouldn't it have been much better if FDR had spent massively in 1933, instead of 1941, and pulled America out of the GD sooner?

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Another two points about Keynesian spending:

1. It's only ever practised when the economy is in a mess.
2. It's usually practised on a half-hearted scale, with too many people fretting about deficits

These two facts together mean that the result of stimulus spending is rarely resoundingly successful, and usually the economy will still be in a weak state afterwards (though better than it was, and would've been). So people will question whether the stimulus did anything at all. The answer is invariably yes, but the spending was not big enough.

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Originally posted by kpo:

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So it was Hoover and Roosevelt who had no idea what to do about recessions?

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They both did poorly. This shouldn't be a surprise - we're talking about the Great Depression here. A lot of FDR's policies promoted long term growth, which was good, but not the short term growth that was needed.

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So Smoot-Hawley may have had an effect

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Good. So no more talk about '10 years of liberal policies', as if there are no other variables.

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2. Things started to improve around that time (until 1937, when FDR enacted austerity)


Because the Keynesians couldn't convince enough folks to bury jars of money?

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That's a foolish statement, and a non sequitur.

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And this was all Smoot-Hawley's fault? Nothing else caused it?

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If you owned an export business then yes, it's likely that Smoot-Hawley killed your factory. But the only person blaming the GD on a single factor is yourself, Geezer. I'm saying there are many factors.

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This graph shows Federal spending as a percent of GDP went from less than 4% in 1929 to almost 11% in 1936. Doesn't look like spending was being brakes much to me.

http://www.usgovernmentdebt.us/spending_chart_1920_1940USp_15s1li011mc
n_F0f_US_Federal_Spending

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Nice graph. Yes spending went up, BUT revenues increased at about the same rate. So the government was putting money into the economy at about the same rate that it was taking it out. Not what Keynesianism calls for. As I said, the US was being fiscally neutral at a time when Keynes called for deficit spending

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You're saying that a world war every once in a while is GOOD for the economy

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Originally posted by M52NICKERSON:
Okay, but that has little to do with Keynesian economics. If does not matter how much or how little the government debt is. What matter is how much money the government is puting into the economy as opposted to how much it is talking out.

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Had government spending been lower, and taxes stayed high the economy of the 20's may not have been as roaring but it might have helped prevent the Great Depression.

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Originally posted by Geezer:
I thought one of the cornerstones of Keynes was high government (deficit) spending. More spending was one of the liberal ideas for ending recession stated in the cite from the original post.

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Originally posted by Geezer:
If I used "might" and "may not" like that, people would call me names. I'll just ask for a cite.

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Originally posted by SIGNYM:
No, we're saying that the spending required to re-ignite the economy would need to be the EQUIVALENT OF a war. I even lined out an entire spending program which... amazingly... has not one war in it! Despite the fact that we have REPEATEDLY said... over and over... that war per se is not the answer, why do you keep insisting that is our goal? Please DON'T BRING THIS UP AGAIN, or you will look like even more of a tool than you already do.

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Just because the wealthy have money piled somewhere doesn't mean it's being "invested" in economically productive ventures. Not sure if you know this, but the wealthy are "investing" their money either in already-produced unique items (diamonds, gold, Bitcoins, fine art) or in futures/ hedge funds. This is part of a complex discussion about what happens to "savings", already addressed by Keynes and other economists.

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In a tit-for-tat trade war, we'd come out ahead.

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And the price of everything goes up. Not saying this is a bad thing, but its something of which you need to be aware.

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Not if you increase production at the same time. That is the OTHER part of my plan: Increase production (manufacturing specifically).

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Saw that coming. [Increase taxes on the wealthy, and eliminate corporate tax loopholes.]

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And so...??

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My point being that 'a raised minimum wage, single-payer health care, higher taxes in the rich, reduced military spending, and so forth' isn't what you and KPO have been selling here. You're selling deficit spending at massive rates, preferably powered by world war.

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Are you being stupid on purpose? The point of raising taxes is to reduce the deficit. And neither of us in interested in world war. That seems to be a GOP thing, or a Geezer fixation. But then, you've never met a war you didn't like. You've ALWAYS managed to defend out little "interventions", haven't you? Must be a Geezer thing.

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Originally posted by M52NICKERSON:
Yes, during recessions Keynes call for government spending to go up to keep people employeed. The spending is the important part, the deficit part narually comes along for the ride and is a result of the spending but not part of what helps.

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Originally posted by Geezer:
But you generally do end up with a deficit, which has to be paid off at some point, or uncertainty about the ability of the government to remain solvent arises.

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Originally posted by Geezer:
Not sure I see much in these to support "Had government spending been lower, and taxes stayed high the economy of the 20's may not have been as roaring but it might have helped prevent the Great Depression."

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The reason I keep bringing this up is that you are more likely to have a good-sized war than you are to implement the spending programs you propose.

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Not sure if you know this, but the wealthy are "investing" their money either in already-produced unique items (diamonds, gold, Bitcoins, fine art) or in futures/ hedge funds. This is part of a complex discussion about what happens to "savings", already addressed by Keynes and other economists. -signy

Anecdotal. Cites? -geezer

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Individual preferences play a large part in HNWIs’ (High Net Worth Individuals) decisions to commit to investments of passion, especially given emotive variables such as aesthetic value and lifestyle/status appeal. But HNWIs also view many investments of passion as alternative vehicles for preserving and appreciating their capital over time, diversifying their portfolio exposure or even capturing short-term speculative gains.
As wealth levels rebounded in 2010, interest in all forms of investments of passion also revived. HNWIs’ relative allocations to those investments changed very little from 2009, but new and growing demand was discernible from emerging markets. The following were among the developments in major categories of investments of passion in 2010:

Luxury Collectibles (e.g., luxury automobiles, boats, jets) remained the largest single segment (29%) of investments of passion. Demand for luxury cars rebounded broadly in 2010, but especially from emerging economies in Asia-Pacific, Russia, and the Middle East. Mercedes-Benz, for example, said its worldwide sales rose 15% in 2010, while sales in China including Hong Kong jumped 112% and sales in other emerging markets including India, Brazil, and Russia also rose sharply. Ferrari reported China sales in 2010 were up nearly 50% from 2009, its best ever year. Ferrari added that the “Greater China Area” (including Hong Kong and Taiwan) is now one of its top five international markets.

Art accounted for 22% of investments of passion overall, but that share was higher among European HNWIs (27%) and highest among Latin American HNWIs (28%). Art is also most likely to be seen as a form of financial investment. In fact, 42% of Advisors say they believe their HNW clients invest in Art primarily for its potential to gain value. While it is hard to generalize about Art values, auctions in early 2010 certainly
generated headlines when two world records were broken for artworks sold at auction —first a Giacometti painting sold for US$104.3 million in February, then a Picasso sold for US$106.5 million in May. Later auctions were less ebullient, but auction houses report demand remains strong for high-quality pieces. Newly wealthy Chinese buyers are widely reported to be keen bidders and buyers at galleries and auction houses, especially to acquire the fast-diminishing supply of works from native artists. In April 2010, “Bright Road” by Liu Ye, a contemporary Chinese artist, was auctioned for US$2.45 million, almost three times the pre-auction estimate. That sale was part of a Sotheby’s auction of contemporary Asianart, which yielded US$18.7 million, topping the pre-auction estimate by about US$2.5 million. Chinese demand is also reported to be strong for European art and Fine Arts, and Chinese collectors were said to be aggressive bidders on many...

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Didn't work in Smoot-Hawley. Any reason to expect different now?

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And the price of everything goes up. Not saying this is a bad thing, but its something of which you need to be aware. -geezer
Not if you increase production at the same time. That is the OTHER part of my plan: Increase production (manufacturing specifically). -signy
But increased production only works if you have increased demand. I can make all the blivits I want, but if the blivit market isn't there, I got a lot of leftover blivits.-geezer

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[g]Saw that coming. [Increase taxes on the wealthy, and eliminate corporate tax loopholes.] -geezer
And so...?? -signy
So nothing. Just a comment.-geezer

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Originally posted by M52NICKERSON:
It's funny that you think economics is bullshit, but post an article that accuses bankers of using simple economics to control people.

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Originally posted by FREMDFIRMA:

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Originally posted by M52NICKERSON:
It's funny that you think economics is bullshit, but post an article that accuses bankers of using simple economics to control people.

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It's not Economics, Dreamtrove, it's Usury.
Which you already knew.

-F

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Yep. Need a good war to make Keynes work.

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Apparently there are no policies (short of world war) that are liberal enough for you

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Where did I say there was a single factor causing the GD?

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Graphs above show national debt going up during the 1929-1939 period, so revenues did not increase at the same rate as spending.

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Originally posted by M52NICKERSON:
Call it what you want, Economics/Usury it is still hypocritical to say it is bullshit and then post an article talking about using it as control.

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Originally posted by SIGNYM:
GEEZER, before you get all apoplectic about Federal debt, and before everyone gets focused on the government, I want to re-introduce something that every seems to have forgotten.

As far as I can tell, the largest inflator of USD is the investment banks. They have - literally- 10 times as much money in hedge funds as there are assets throughout the entire world. Domestic banks, too, have a license to "print money"- by the rules of the FDIC they are allowed to loan out approximately 10X as much money as they actually have on hand.

Since almost ALL money exists in one bank account or another, and banks are free (under current laws) to loan out far more than they have on-hand, banks have proved to be very capable of expanding the US money supply by a factor of five- or more. All of this non-government money-printing tends to go under the radar.

This excessive speculative lending (on real estate, and then stocks in 1929; and on subprime mortgages in 2000-2007) inflated the money supply, and that inflation completely bypassed government spending controls bc the government wasn't even part of it.

If you want to stop bubbles before they start, you NEED to require that banks have a LOT MORE money on-hand as part of their lending practices, and also that they define their asset classes in something other than fantasmic terms (how do you value your loan or bond portfolio when their prices are gyrating? "Mark to market"? "Mark to maturity"?)

Anyway, will be busy today. Just wanted to point out that the Federal budget is not the main money-supply-expander, it's the banks.

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Originally posted by M52NICKERSON:
Deficits would get paid down when the economy is doing well. I covered that already. Please try and follow along. Second you really need to understand that governments using their own issued fiat currency can't go insolvent.

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Originally posted by Geezer:
Not sure I see much in these to support "Had government spending been lower, and taxes stayed high the economy of the 20's may not have been as roaring but it might have helped prevent the Great Depression."

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Okay I will spoon feed you. Look at the Specific theories of cause section. It talks about how lending increased as interest rates fell. They fell because people were paying off thier debts and the banks needed to make loans more appealing. If the economy had not grown as fast as it had in the twenty loans would have stayed more stable as people would not have paid down thier debts and banks would not have looked to lower interest rates.

You also had productivity shock which again stemmed from the economic growth in the twenty. The heavy flow of money in the twenty and the easy of finding investors ment that production skyrocketed. That caused a flood of stock and a fall in prices.

Look at an of the explantions you want and will find that they all have one thing in common, a tie into the rapid growth of the economy of the twenties.

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Originally posted by SIGNYM:

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The reason I keep bringing this up is that you are more likely to have a good-sized war than you are to implement the spending programs you propose.

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Well, that is your supposition, but not our proposal. So don't keep saying that KPO and I think that was is the answer. War is YOUR answer.

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AFA getting stimulus spending thru, I think a lot of ppl already recognize that much of our infrastructure is well past its safe lifespan, that our health care system is a clusterfuck, that a lot of big jobs need doing. Where they are stymied is not at the level of "the people" (because polls show that people support spending on specific programs) but at the level of "Congress".

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Not sure if you know this, but the wealthy are "investing" their money either in already-produced unique items (diamonds, gold, Bitcoins, fine art) or in futures/ hedge funds. This is part of a complex discussion about what happens to "savings", already addressed by Keynes and other economists. -signy

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Anecdotal. Cites? -geezer

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Oh, this is all over the economic news. Chinese wealthy are buying a crapload of gold, wine, art, vehicles, etc. The EU wealthy are buying up gold, art, diamonds, mansions. The mix varies from year to year (one year its art, the next year its Bitcoin) but speculation is definitely the ongoing game:
www.ml.com/media/114235.pdf

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Didn't work in Smoot-Hawley. Any reason to expect different now?

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Because in an increasingly resource-poor world, we got the goods- if we can manage our farms, water supplies, fisheries, to be sustainable. The only other nations that match our resource wealth are Russia, Brazil, and (maybe) Canada.

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Geezer, son, this isn't rocket science. If people have more $ in-hand, they will be in the market to buy.

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So nothing. Just a comment.-geezer

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So, you have no problem with increased taxes. Good to know.

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And finally- bringing up the point that you didn't address -- how do you feel about 1% of the population taking in more $ than the bottom 50%? Are you aghast, do you see it as a problem, or are you OK with it?

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Originally posted by kpo:

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Yep. Need a good war to make Keynes work.

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No, Keynesian stimulus always works. If the spending is small, the effect will be small. If the spending is big, the effect will be big. A big stimulus is better than a small stimulus. But a small stimulus is better than no stimulus at all. If WWII had not happened and Roosevelt had spent all that money on infrastructure it would have worked EVEN BETTER. He could've spent a fraction as much, and it would've worked better.

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Apparently there are no policies (short of world war) that are liberal enough for you

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World war is a liberal policy... another one for your anti-liberal scrapbook.

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Where did I say there was a single factor causing the GD?

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Let me rephrase: You were the one who made out that only one type of policy was tried during the GD ('10 years of liberal policies').

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Graphs above show national debt going up during the 1929-1939 period, so revenues did not increase at the same rate as spending.

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You're forgetting GDP again. Debt was steady as a proportion of GDP.

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The reason I keep bringing this up is that you are more likely to have a good-sized war than you are to implement the spending programs you propose.-geezer

Well, that is your supposition, but not our proposal. So don't keep saying that KPO and I think that was is the answer. War is YOUR answer. -signy

As the only example you or KPO can give of the Keynesian cure working is WWII, I think it's a pretty well-founded supposition.-geezer

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AFA getting stimulus spending thru, I think a lot of ppl already recognize that much of our infrastructure is well past its safe lifespan, that our health care system is a clusterfuck, that a lot of big jobs need doing. Where they are stymied is not at the level of "the people" (because polls show that people support spending on specific programs) but at the level of "Congress". -signy

Yep. When you ask people if they support spending, they do until told that they will be providing the money spent. Then they vote out the congressperson who is spending their money.-geezer

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Not sure if you know this, but the wealthy are "investing" their money either in already-produced unique items (diamonds, gold, Bitcoins, fine art) or in futures/ hedge funds. This is part of a complex discussion about what happens to "savings", already addressed by Keynes and other economists. -signy

Anecdotal. Cites? -geezer

Oh, this is all over the economic news. Chinese wealthy are buying a crapload of gold, wine, art, vehicles, etc. The EU wealthy are buying up gold, art, diamonds, mansions. The mix varies from year to year (one year its art, the next year its Bitcoin) but speculation is definitely the ongoing game: http://www.ml.com/media/114235.pdf-signy

The ml.com piece shows total worth of the high wealth individuals at $42.7 trillion. They don't say how much if spent on "investments of passion", but When they talk about millions spent on art, etc., that leaves a lot of $42.7 trillion that's not.-geezer

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Didn't work in Smoot-Hawley. Any reason to expect different now? -geezer

Because in an increasingly resource-poor world, we got the goods- if we can manage our farms, water supplies, fisheries, [ETA forests] to be sustainable. The only other nations that match our resource wealth are Russia, Brazil, and (maybe) Canada. -signy

Quite a bit or resource, much of it undeveloped, in Africa and other South American countries as well. China is moving to get raw materials out of Africa, as well as places like Afghanistan. Also populations in many places who will work for a lot less than folks here and feel like they're making a good living. Also, you will be playing tariff wars with countries with a command economy and leaders who don't care about the effect of their bans on buying and selling on the people, as long as their political aims are advanced.-geezer

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Geezer, son, this isn't rocket science. If people have more $ in-hand, they will be in the market to buy.[RE excess blivits]-signy

But if they have more money in hand because they are getting higher wages, then the price of the things they are making and buying will be higher (even if it's made overseas, since your tariffs will increase the price). Therefore they can buy less of it. I suppose that there might be a balance point at which an increase in wages is larger than the increase in price, but finding it will be rocket science.-geezer

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So nothing. Just a comment [RE tax hikes and tax reform] .-geezer
So, you have no problem with increased taxes. Good to know. -signy
Depends on how it's done.-geezer

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And finally- bringing up the point that you didn't address -- how do you feel about 1% of the population taking in more $ than the bottom 50%? Are you aghast, do you see it as a problem, or are you OK with it?

To keep on the subject of cures for recession, I don't care for the bailouts of banks, etc. by the Bush and Obama administrations during the most recent recession. Story noted the increasing divide between the rich and poor caused by government policy then.

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Originally posted by Geezer:
The last time the national debt went down was 1957. I think there were periods since then when the economy was doing well. So apparently the debt doesn't get paid down.

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Originally posted by Geezer:So you're saying that the government should have raised taxes at a time when government spending was going down, just so people would not have enough money to pay off their loans?

Maybe you and SignyM should discuss whether the flow of money is a good or bad thing.

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You're forgetting GDP again. Debt was steady as a proportion of GDP.


Nope.

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This graph shows Federal spending as a percent of GDP

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As noted, the only success story you can show for Keynes is WWII.

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As we have stressed in this year’s Article IV Report, we at the IMF believe that the new policy framework provides a unique opportunity for Japan to end decades-long deflation and sluggish growth, and reverse the rise of public debt.

Japan has already made progress in this direction. Here, I would like to list a few achievements:

The economy grew strongly in the first half of this year, driven by sizeable stimulus spending, robust private consumption and a rise in exports.

Headline inflation rose substantially in recent months, and several indicators also point to an in increase in long-term inflation expectations.

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Originally posted by SIGNYM:
Not true. Keynesian spending stabilized and began to reverse the plunge that was the Great Depression. And redistributive spending (Social Security, etc) was followed for many years AFTER WWII, and we had a robust economy.

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Not really. People have consistently polled for a tax on the wealthy, it would be THOSE (wealthy) people who would by paying for the spending.

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But doesn't address the trillions spent in hedge funds, which are simply bets made in the direction of future indexes. Sort of llike the housing bubble was bets made in the direction of housing price futures. And, as I mentioned before, there is roughly 10 TIMES the total world GDP placed in hedge funds at the moment. That's a lot of speculation!

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Except for tantalum, chromium, and titanium (and we can trade for those) we really don't NEED Africa, and Africa is being flayed alive for resources. Whatever is there isn't doing Africans any good (except the few corrupt leaders at the top) and isn't developing their economy. So as far as being a unified force, Africa is a non-entity.

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