REAL WORLD EVENT DISCUSSIONS

Conservatives have no ideas what to do about recessions

POSTED BY: KPO
UPDATED: Thursday, December 23, 2021 01:06
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Thursday, January 9, 2014 10:19 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

I don't particularly believe in Hayek or von Mises or anyone else.

In other threads, you have made it quite plain that you Believe in a Libertarian approach. You kept citing economists who you (now) claim you don't believe.... and which, BTW, you keep on citing. This is exactly why you should be explaining what YOU think IN YOUR OWN WORDS. Then you can start drawing distinctions between what YOU believe and what others believe.

Quote:

As I said early in the thread, "If you look even shallowly into analysis of the Great Depression, you'll find out that pretty much every economist has his pet theory for the causes and solutions, and that they differ in many ways. Which one would you base your reaction on?"
To this day, rappy insists that there were enough WMD in Iraq to be worth a war. Believers and flat-earthers and all kinds of delusionists abound. It is your responsibility, as a thinking adult, to sort out fact from fiction, and not just wave your hands helplessly and say So many people believe in so many things!

So look at the data. Try to figure out what was really happening, discuss and hone your ideas with others.

You've been given both a time-series example (the Great Depression) and a parallel example (USA v EU). Every single time wealth is sharply concentrated, the economy tanks. The more the wealth is concentrated, the worse it gets.

"You shall not crucify mankind on a cross of gold"? A depression which occurred while we were on the gold standard. Just look thru history, you'll find a lot of information there.

The mechanisms for how this happens have been detailed. On YOUR side of the coin, you have not been able to explain... well, anything. And you're not interested in doing so. Why should we take you seriously?


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Thursday, January 9, 2014 5:59 PM

KANEMAN


Quote:

Originally posted by kpo:
Very good article:

http://www.businessinsider.com/conservatives-have-no-idea-what-to-do-a
bout-recessions-2013-12#ixzz2ngv5fJ4P


Quote:

To be clear, conservatives absolutely do have an economic policy agenda. They favor lower taxes, less regulation, government spending cuts, more domestic energy production, school choice, free trade, and low inflation. They often cite these policies as ones that might alleviate recession and speed recovery. They favor these policies now, they favored them in 2008, and they favored them in 2004.

That is, conservatives favor the same set of economic policies when the economy is weak and when it is strong; when unemployment is high and when it is low; when few homeowners are facing foreclosure and when many are. The implication is that conservatives believe there is nothing in particular the government should do about economic cycles.


Well conservatives, is it true?




Hey genius, "they believed those things in 2004 and 2008". Were they in a position of power on a federal level to act? No. Kaneman 1 KPO 0

Now, take a look at the states run by conservatives and compare them to liberal run states in respect to getting out of recession and good fiscal standing. Notice anything? Man, you're still unsmart.

Kaneman 2 KPO 0

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Thursday, January 9, 2014 6:57 PM

MAL4PREZ


A few days of successful Rappy ignoring, and Kaneman suddenly appears. It's first post in 3 years, and yet it steps in like it's never been away.

Hmmmm.


*-------------------------------------------------------------*
MAL4PREZ: Clearly [The Rap]'s doing nothing but trolling now.
STORYMARK: And not even cleverly.
RAPPY: [My trolling] did its job, did it not? Easiest marks in the 'verse.
http://www.fireflyfans.net/mthread.aspx?bid=18&tid=57146
*-------------------------------------------------------------*

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Thursday, January 9, 2014 8:29 PM

MAGONSDAUGHTER


Must have gotten out of jail.

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Thursday, January 9, 2014 8:48 PM

M52NICKERSON

DALEK!


Quote:

Originally posted by KANEMAN:
Now, take a look at the states run by conservatives and compare them to liberal run states in respect to getting out of recession and good fiscal standing. Notice anything? Man, you're still unsmart.



You should read articles before posting like you know what they say. The article talks about red and blues states as they voted in the presidential election, not who control the state. For example Florida is controlled by a super majority Republican, and the state's growth was -1.4%

Also many of the red states have seen natural resource booms and with their lower population it is easier to show increases in overall income.

So reality 1, Kaneman 0.

I do not fear God, I fear the ignorance of man.

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Friday, January 10, 2014 8:55 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by kpo:
Quote:

Use the definitions stated in the article you posted


You mean this one?



I mean the ones in the article.

Quote:

For the last five years, liberals have promoted three main economic policies to shorten or ameliorate the Great Recession and speed the recovery from it.
Deficit-financed spending to compensate for demand gaps in the private sector.
Easy monetary policy to raise inflation and support demand.
Mortgage modifications to reduce foreclosures and support consumption.



Quote:

To be clear, conservatives absolutely do have an economic policy agenda. They favor lower taxes, less regulation, government spending cuts, more domestic energy production, school choice, free trade, and low inflation. They often cite these policies as ones that might alleviate recession and speed recovery. They favor these policies now, they favored them in 2008, and they favored them in 2004.



Quote:

Quote:

Be aware that if you claim that conservatives used stimulus, that pretty much invalidates the claim of the article you cited, and the title of this thread.

That's bad logic. It suggests that conservative policies can only be implemented by conservatives, and liberal policies implemented only by liberals. Obama is a liberal and his ARRA stimulus was approximately 1/3 tax cuts. So are tax cuts a liberal policy now?



But per the article, conservatives have no policy to deal with recession.

ETA: Interesting that your article didn't mention the tax cuts in the ARRA stimulus. Wonder why that was.


"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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Friday, January 10, 2014 10:08 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

But per the article, conservatives have no policy to deal with recession.
Per you, conservatives have a "passive policy". We're taking your seriously. You should be grateful.

Yep, noticed that about Kaneman who, IIRC lives in his mom's basement in CT, and is just like rappy in every other respect.


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Friday, January 10, 2014 10:36 AM

BIGDAMNNOBODY


And 1Kiki is Rue.
And ElvisChrist is Kwicko.
Mal4Prez is useless.
And Signy is ...
And Chrisisall is...

Bored now.

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Friday, January 10, 2014 11:06 AM

KPO

Sometimes you own the libs. Sometimes, the libs own you.


Quote:

I mean the ones in the article.

Quote:
To be clear, conservatives absolutely do have an economic policy agenda...


But you asked specifically about conservative responses to recession - not general conservative economic policy. So I take it you want me to comment on general conservative economic policy - as applied in times of recession. Is that right? And compare that to Keynesianism?

Quote:

Interesting that your article didn't mention the tax cuts in the ARRA stimulus.

Neither did you, or any of the other conservatives here. the way I see it, if a group of conservatives when challenged couldn't name that particular conservative policy idea, then a liberal(?) journalist can be forgiven not for thinking of it.

It's not personal. It's just war.

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Friday, January 10, 2014 1:01 PM

SIGNYM

I believe in solving problems, not sharing them.


Yanno, Geezer will just nitpick and question your statements to death, without ever coming up with a statement and rationale for his own preferred Propertarian approach. I'm sure you can bird-dog him down... I know I have (when it came to vehicle efficiency) but I just want to point out that he doesn't hold himself to the same standard that he holds you.


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Friday, January 10, 2014 1:11 PM

KPO

Sometimes you own the libs. Sometimes, the libs own you.


So Kaneman's back.

Quote:

Hey genius, "they believed those things in 2004 and 2008". Were they in a position of power on a federal level to act? No. Kaneman 1 KPO 0

I think you missed the point of the article.

Quote:

Now, take a look at the states run by conservatives and compare them to liberal run states in respect to getting out of recession and good fiscal standing.

Interesting point, and I think I see what study you're talking about... not really what this thread's about. Maybe start a new thread for that topic?

It's not personal. It's just war.

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Saturday, January 11, 2014 10:42 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by kpo:
Quote:

I mean the ones in the article.

Quote:
To be clear, conservatives absolutely do have an economic policy agenda...


But you asked specifically about conservative responses to recession - not general conservative economic policy.



Once again, I cite the article you posted.
Quote:

They often cite these policies as ones that might alleviate recession and speed recovery. They favor these policies now, they favored them in 2008, and they favored them in 2004.


I sense the beginnings of a bob and weave on your part, since you can obviously read both your article and the descriptions of liberal and conservative policy I listed above.



Quote:

Quote:

Interesting that your article didn't mention the tax cuts in the ARRA stimulus.

Neither did you, or any of the other conservatives here. the way I see it, if a group of conservatives when challenged couldn't name that particular conservative policy idea, then a liberal(?) journalist can be forgiven not for thinking of it.



When they're writing an article specifically to define recent liberal responses to recession? Blow some more smoke.


"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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Saturday, January 11, 2014 10:51 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by SIGNYM:
Per you, conservatives have a "passive policy". We're taking your seriously. You should be grateful.



Why, how condescending of you.

Per the article, conservatives believe their general economic policy of "...lower taxes, less regulation, government spending cuts, more domestic energy production, school choice*, free trade, and low inflation." will work recession or no. It is 'passive' in that it does not prescribe and change in policy during a recession, expecting that existing policy will succeed in ending the recession.

(*Not quite sure why the authors if the article threw 'school choice' into economic policy either.)


"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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Saturday, January 11, 2014 10:56 AM

GEEZER

Keep the Shiny side up


And speaking of ending recessions.

Quote:

Ready for a shocker?

A Washington Post-ABC poll from December 19, 2013 shows that – get this – a staggering 79% of people still believe we’re in a recession.

So either they didn’t get the memo from the NBER that the recession officially ended in June 2009, or they’re clueless, right?

Maybe not…

This chart of corporate profits versus median household incomes reveals two shockingly different economic realities.







http://www.wallstreetdaily.com/2014/01/10/recession/


"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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Saturday, January 11, 2014 12:20 PM

M52NICKERSON

DALEK!


Quote:

Originally posted by Geezer:
Per the article, conservatives believe their general economic policy of "...lower taxes, less regulation, government spending cuts, more domestic energy production, school choice*, free trade, and low inflation." will work recession or no. It is 'passive' in that it does not prescribe and change in policy during a recession, expecting that existing policy will succeed in ending the recession.



Which proves the whole point of the thread, conservatives have no idea what to do. Using the same policies you used before a recession started to get you out of one is like burning yourself and expecting the fire to heal your hand if you stick it back in.

I do not fear God, I fear the ignorance of man.

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Saturday, January 11, 2014 1:02 PM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by m52nickerson:
Which proves the whole point of the thread, conservatives have no idea what to do. Using the same policies you used before a recession started to get you out of one is like burning yourself and expecting the fire to heal your hand if you stick it back in.



Conservatives believe that the market will self-correct and end recession with no intervention by the government, especially not the massive liberal intervention described in the article.

To meet your analogy with analogy, they believe that if you burn your hand in a fire, you should let the fire go out, not throw more wood on it.


"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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Sunday, January 12, 2014 9:49 AM

M52NICKERSON

DALEK!


Quote:

Originally posted by Geezer:
Conservatives believe that the market will self-correct and end recession with no intervention by the government, especially not the massive liberal intervention described in the article.



Here is the thing, Conservative say they think thing will self correct but while in power have never once done it. Each time they have used some type of stimulus...just as Keynes calls for. Tax cuts are stimulus, massive spending on military, stimulus.

They also advocate for cutting government spending, which depresses the economy and is also intervention.

So Conservatives say they know what to do, never do that, but try and do things that work against each other. In other words they have no idea what they are doing.

I do not fear God, I fear the ignorance of man.

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Sunday, January 12, 2014 10:22 AM

KPO

Sometimes you own the libs. Sometimes, the libs own you.


Quote:

I sense the beginnings of a bob and weave on your part, since you can obviously read both your article and the descriptions of liberal and conservative policy I listed above.

You keep directing me to the article for my definition of conservative 'response to recession', seemingly missing the fact that the whole point of the article (and its title!) is that conservatives have no specific response to recession - their economic policy is the same, whatever the economy is doing. So your phrasing of the question is perverse.

Quote:

They favor these policies now, they favored them in 2008, and they favored them in 2004.

There was no recession in 2004. Did you miss that point?

Ok. Now let's talk about the conservative economic policy agenda, in particular, when its implemented during times of recession.

Quote:

To be clear, conservatives absolutely do have an economic policy agenda. They favor...


1. Government spending cuts

I've already shown, and to anyone who's had their eyes open over the past few years it should be obvious, that spending cuts in a depressed economy HURTS growth.

2. Less regulation

If we're talking about loosening of banking regulations, these might boost economic activity a little in the short term, but what about the medium, and long term? The biggest effect of this kind of policy is to speed along the NEXT recession. If we're talking about other regulations like environmental regulations, then we're moving out of purely economic considerations. The question is not 'will this policy create growth', it's 'is the growth that this policy will create worth raping the environment for?'

3. More domestic energy production

See what I just answered to (2).

4. school choice

I don't know much about the claimed economic merits of this, but it seems clear to me it will have little effect on the economy in the short term - so is not an answer to recession.

5. Free trade

I support free trade, as do a lot of people on the left (including the president). Not really a uniquely 'conservative' policy, and its benefits are more in the medium to long term. Good economic policy in my view, but not a great answer to recession.

6. Low inflation.

From what I've seen deflationary policies HURT economic growth in the short term, like Thatcher in the early 1980s: the UK economy tanked, unemployment soared, and industrial output was so devastated that large parts of Britain have never recovered. http://en.wikipedia.org/wiki/Premiership_of_Margaret_Thatcher#Deflatio
nary_strategy


But I'm open to counter-evidence.

7. Lower taxes

I've saved this till last, as it's probably the best case conservative policy has for stimulating the economy in the short term. One of the key questions is how it is financed. By matching spending cuts? Because we've seen that this hurts the economy, and might outdo the stimulus effect of the tax cuts. The alternative is deficit-financed tax cuts. This is like a conservative answer to Keynesianism, and was done by Bush in 2002 and was also a significant part of the ARRA. The question is whether it's as effective as deficit spending. Here's an analysis:



And this article might be a good thing for you to read Geezer: http://www.economist.com/blogs/democracyinamerica/2010/02/stimulus_and
_jobs_bills


So all in all with conservative economic policy we have ideas that hurt the economy in the short term, ideas that may help, but not in the short term, ideas that may help but at the expense of other things, and tax cuts which work in the short term, but not as well as Keynesian spending.

It's not personal. It's just war.

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Sunday, January 12, 2014 12:37 PM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by kpo:
You keep directing me to the article for my definition of conservative 'response to recession', seemingly missing the fact that the whole point of the article (and its title!) is that conservatives have no specific response to recession - their economic policy is the same, whatever the economy is doing. So your phrasing of the question is perverse.



Yep. Bob and weave.

All you have to do is prove that the liberal cures for recession, as enumerated in the article you cited, actually work more effectively to end recessions than the conservative economic policy the article lists (aside from 'school choice'. I have no idea why the authors of your article put that in).

ETA: I'd note that all recessions end, so proving they all end because of the liberal cure will be interesting.

Quote:

Quote:

They favor these policies now, they favored them in 2008, and they favored them in 2004.

There was no recession in 2004. Did you miss that point?



I got the point, stated in the article, that "They (conservatives) often cite these policies as ones that might alleviate recession and speed recovery". Mention of 2004 and 2008 would seem to indicate they favored these policies in their 2004 and 2008 election cycle platforms.



Quote:

1. Government spending cuts

I've already shown, and to anyone who's had their eyes open over the past few years it should be obvious, that spending cuts in a depressed economy HURTS growth.



Spending was cut pretty much every year in the 1920s, and the two small recessions in that decade ended pretty quickly.

Quote:

2. Less regulation

If we're talking about loosening of banking regulations, these might boost economic activity a little in the short term, but what about the medium, and long term? The biggest effect of this kind of policy is to speed along the NEXT recession. If we're talking about other regulations like environmental regulations, then we're moving out of purely economic considerations. The question is not 'will this policy create growth', it's 'is the growth that this policy will create worth raping the environment for?'



You really should ask the author of your article, he's the one who stated 'less regulation' without defining it. I'd guess less paperwork required of business by the government.

Quote:

3. More domestic energy production

See what I just answered to (2).



Quote:

4. school choice

I don't know much about the claimed economic merits of this, but it seems clear to me it will have little effect on the economy in the short term - so is not an answer to recession.



I'm also curious as to why the author of your article threw this in. It does make me wonder about his economic knowledge chops.

Quote:

5. Free trade

I support free trade, as do a lot of people on the left (including the president). Not really a uniquely 'conservative' policy, and its benefits are more in the medium to long term. Good economic policy in my view, but not a great answer to recession.



You should talk to SignyM about the Trans-Pacific Partnership.



Quote:

6. Low inflation.

From what I've seen deflationary policies HURT economic growth in the short term, like Thatcher in the early 1980s: the UK economy tanked, unemployment soared, and industrial output was so devastated that large parts of Britain have never recovered. http://en.wikipedia.org/wiki/Premiership_of_Margaret_Thatcher#Deflatio
nary_strategy




As noted in the wiki article, she also raised taxes in the middle of the recession, thereby lengthening it.

Quote:

7. Lower taxes

I've saved this till last, as it's probably the best case conservative policy has for stimulating the economy in the short term. One of the key questions is how it is financed. By matching spending cuts? Because we've seen that this hurts the economy, and might outdo the stimulus effect of the tax cuts. The alternative is deficit-financed tax cuts.


Coolidge cut tax rates in the 1920's and government revenue increased. His biggest problem was trying to keep congress from spending the increase instead of using it to pay down the national debt.



Quote:

This is like a conservative answer to Keynesianism, and was done by Bush in 2002 and was also a significant part of the ARRA. The question is whether it's as effective as deficit spending. Here's an analysis:



So the article is incorrect in stating tax cuts are only a conservative economic policy, since liberals will use them in times of recession?




"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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Sunday, January 12, 2014 2:44 PM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

ETA: I'd note that all recessions end, so proving they all end because of the liberal cure will be interesting.
There WMD in Iraq! There were!

Geezer, channeling rappy much?

This is where it pays to look at the data with some kind of hypothesis in mind, and understanding that there are lags between when a policy is implemented and when it takes effect. For example, Bush very specifically grew the wealth gap from the time he got into office, but it took 8 years to crash the economy.

The thing that frightened Keynes was that the Great Depression showed no signs of ending. That was the basis of Keynesian insight: That an economy can stabilize at a very much lower rate of activity, permanently. (The basic supply-demand curve assumes that the economy is functioning at 100%)

So, shall we walk into the weeds of the data together? It WILL require that you put forth some opinions, and reach actual conclusions.... something you seem loathe to do.


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Sunday, January 12, 2014 3:43 PM

KPO

Sometimes you own the libs. Sometimes, the libs own you.


Quote:

Yep. Bob and weave.

I answered your question thoroughly...? You just don't like me saying that the way you phrased your question was perverse. But it was.

Quote:

All you have to do is prove that the liberal cures for recession, as enumerated in the article you cited, actually work more effectively to end recessions than the conservative economic policy

I've thoroughly discussed conservative policy ideas, and how they work (or don't) in recessions. And I've shown evidence that Keynesian spending works, and is superior to tax cuts in stimulating the economy. I could go further, and defend other liberal anti-recession policies, but what I've demonstrated so far doesn't seem to have been recognised. When you admit or refute the evidence for Keynesian spending working, and when you admit or refute the arguments that conservative policies don't work in the short term, then we can move onto discussing these other points.

Quote:

ETA: I'd note that all recessions end, so proving they all end because of the liberal cure will be interesting.

Are you asking me to prove things I've never said? That's creative.

Quote:

Spending was cut pretty much every year in the 1920s, and the two small recessions in that decade ended pretty quickly.

Cites? And can I suggest that you show that spending was cut *during* the recessions, and not just 'in the the same decade'.

Quote:

Quote:
3. More domestic energy production

See what I just answered to (2).


Quote:
4. school choice

I don't know much about the claimed economic merits of this, but it seems clear to me it will have little effect on the economy in the short term - so is not an answer to recession.


I'm also curious as to why the author of your article threw this in. It does make me wonder about his economic knowledge chops.


I can understand the economic aspect to both of those policies, just not their relevance to tackling recession.

Quote:

As noted in the wiki article, she also raised taxes in the middle of the recession, thereby lengthening it.

No doubt that didn't help. And that was part of the anti-inflation strategy by the way - 'fiscal tightening'. The opposite of Keynesianism.

Quote:

Coolidge cut tax rates in the 1920's and government revenue increased.

By more than it would have without the tax cuts? That's the key question. Bush cut taxes in 2001 and revenue eventually grew above what it had been, but CBO analysis predicted $2 trillion in revenue was lost over the following decade (if I remember right).

Quote:

So the article is incorrect in stating tax cuts are only a conservative economic policy, since liberals will use them in times of recession?

More bad logic. And misrepresentation - the author never claimed it was an exclusively conservative policy idea.

It's not personal. It's just war.

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Sunday, January 12, 2014 3:57 PM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


So Geezer

Not much for facts, are you?

Nope, despite all the references, all the data, all the charts, all the links, you've got your eyes tightly closed, your fingers firmly in you ears, and are stomping your little feet yelling 'but you haven't PROOOOVED anything'. That and you seem unable to understand common English.

Whatever.

Just be grateful (a very few) people still take you seriously enough to actually reply. But persist in your non-discussion and you just might end up in rappy land. Say hi to him for me, OK? You may be the only people talking to each other.

But, don't let me interrupt whatever it was you were doing. Carry on.




RUSH LIMBAUGH is a BLUE PILL ADDICT!
As evidence of "rape mentality"
Tuesday, July 30, 2013 8:11 PM
MAL4PREZ
And just remember, according to Rappy, the term befitting a women who wants the insurance she pays for to cover medications affecting her reproductive organs is
whore

Wednesday, July 31, 2013 4:23 PM
little rappy
The term applies

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Monday, January 13, 2014 9:18 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by SIGNYM:
Quote:

ETA: I'd note that all recessions end, so proving they all end because of the liberal cure will be interesting.
There WMD in Iraq! There were!

Geezer, channeling rappy much?



So you're saying all recessions in the U.S. haven't ended? I'll admit that the 2008 recession still hasn't really cleared up, what with household incomes still dropping and unemployment at 6.7%, mostly due to Christmas retail jobs, but generally they end.

Here's a good place to start.

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

and a graph.



Note that all these recessions ended.

Quote:

The thing that frightened Keynes was that the Great Depression showed no signs of ending. That was the basis of Keynesian insight: That an economy can stabilize at a very much lower rate of activity, permanently. (The basic supply-demand curve assumes that the economy is functioning at 100%)

But Hoover started pretty much the Keynesian cure for depression right from the get-go. Even if you don't agree with Rothbard's economic philosophy, he describes Hoover's actions pretty well here.

http://mises.org/rothbard/AGD/contents.asp

Quote:

So, shall we walk into the weeds of the data together? It WILL require that you put forth some opinions, and reach actual conclusions.... something you seem loathe to do.


I already have a conclusion. It's that no one really knows the best method of ending a recession, since pretty much everything has been tried (including doing nothing), and recessions end when any solution is applied. What's difficult is deciding whether recessions end because of a particular cure, or despite it.


"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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Monday, January 13, 2014 10:04 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by kpo:
I've thoroughly discussed conservative policy ideas, and how they work (or don't) in recessions. And I've shown evidence that Keynesian spending works, and is superior to tax cuts in stimulating the economy. I could go further, and defend other liberal anti-recession policies, but what I've demonstrated so far doesn't seem to have been recognised. When you admit or refute the evidence for Keynesian spending working, and when you admit or refute the arguments that conservative policies don't work in the short term, then we can move onto discussing these other points.



Of course you've done this from a Keynesian point of view, which pretty obviously is going to determine that Keynesian actions are the correct ones.

So here's a list of recessions in the U.S. since 1789.

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

If the Keynesian cure (or the version of Keynesian shown in the article) works better than conservative economic policy, you should be able to use this list to show where Keynesian-type principles were more successful in ending recessions.


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Spending was cut pretty much every year in the 1920s, and the two small recessions in that decade ended pretty quickly.

Cites? And can I suggest that you show that spending was cut *during* the recessions, and not just 'in the the same decade'.



http://www.usgovernmentspending.com/spending_chart_1920_1930USb_15s1li
011mcn_F0f


The recessions were in 1923-24 and 1926-27.

Also noted this in the book "Coolidge" by Amity Shlaes

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3. More domestic energy production

4. school choice


I can understand the economic aspect to both of those policies, just not their relevance to tackling recession.



Same here. I have no idea why they would be cited.

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As noted in the wiki article, she also raised taxes in the middle of the recession, thereby lengthening it.

No doubt that didn't help. And that was part of the anti-inflation strategy by the way - 'fiscal tightening'. The opposite of Keynesianism.



The Wiki article suggests she followed "monetarist" policies. Guess I need to read Friedman.

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Coolidge cut tax rates in the 1920's and government revenue increased.

By more than it would have without the tax cuts?



Coolidge's goal wasn't primarily to increase revenue, it was to reduce government spending. He didn't want more revenue, which he believed would only encourage Congress to spend it. Again, I got this from the Coolidge biography cited above.

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So the article is incorrect in stating tax cuts are only a conservative economic policy, since liberals will use them in times of recession?

More bad logic. And misrepresentation - the author never claimed it was an exclusively conservative policy idea.



The article's author listed what he considered the liberal ideas as to what to do about recession.

Quote:

For the last five years, liberals have promoted three main economic policies to shorten or ameliorate the Great Recession and speed the recovery from it.
Deficit-financed spending to compensate for demand gaps in the private sector.
Easy monetary policy to raise inflation and support demand.
Mortgage modifications to reduce foreclosures and support consumption.



If he had considered tax cuts as a liberal (as well as conservative) idea, seems he would have listed it in the liberal arsenal. After all, he didn't have any problem adding things like school choice to the conservative list.


"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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Monday, January 13, 2014 5:28 PM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


"... and recessions end when any solution is applied ..."

Even the 'do-nothing' solution? I'm sure you have AMPLE historical examples. I'll wait. But I'm not going to hold my breath. I suspect you will never post even one example.

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Monday, January 13, 2014 5:33 PM

KPO

Sometimes you own the libs. Sometimes, the libs own you.


Quote:

Of course you've done this from a Keynesian point of view

What the hell does that mean? The graphs I've been using have been 'Keynesian' graphs, with crafty, Keynesian data?

Quote:

If the Keynesian cure (or the version of Keynesian shown in the article) works better than conservative economic policy, you should be able to use this list to show where Keynesian-type principles were more successful in ending recessions.

It's notable that recessions are on average *much* shorter post WWII (Keynesianism biggest defining moment) than they were pre-1929, and much, *much* shorter than they were pre-1900, in libertarianism's laissez-faire heyday. And this is true worldwide, not just in the US; Governments have learned, and recessions have been shallower and shorter, as a result. "We're all Keynesians now", remember?

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http://www.usgovernmentspending.com/spending_chart_1920_1930USb_15s1li
011mcn_F0f


The recessions were in 1923-24 and 1926-27.


You still haven't shown that there were spending cuts in the middle of those recessions. For all I know spending cuts caused those two recessions, and spending increases alleviated them.

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I have no idea why they would be cited.

Because they're "conservative economic policy".

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Coolidge's goal wasn't primarily to increase revenue, it was to reduce government spending. He didn't want more revenue, which he believed would only encourage Congress to spend it. Again, I got this from the Coolidge biography cited above.

This is a nice tangent, but we still haven't answered the question of how stimulus tax cuts in a recession are financed. Let's say the recession is severe, and the tax cuts need to be big. Revenue has already cratered because the economy has tanked, and we're slashing it even more. So do we have huge deficits for a year, or two, or three, until the economy recovers? Or do we implement big spending cuts to finance the tax cuts?

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But Hoover started pretty much the Keynesian cure for depression right from the get-go.

Would you show me this with graphs, and data, and not just claim it with words?

It's not personal. It's just war.

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Tuesday, January 14, 2014 1:34 AM

SIGNYM

I believe in solving problems, not sharing them.


Geezer is demanding "proof". But in the scientific process Usually, a hypothesis can be supported or refuted through experimentation or more observation. [but] A hypothesis can be disproven, but not proven to be true.





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Tuesday, January 14, 2014 9:49 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by 1kiki:
"... and recessions end when any solution is applied ..."

Even the 'do-nothing' solution? I'm sure you have AMPLE historical examples. I'll wait. But I'm not going to hold my breath. I suspect you will never post even one example.



The recessions of 1923-24 and 1926-27, as noted above, ended with no change in Coolidge's policies. He continued to reduce tax rates and spending through both of them, and they ended.



"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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Tuesday, January 14, 2014 10:15 AM

M52NICKERSON

DALEK!


Quote:

Originally posted by Geezer:
Quote:

Originally posted by 1kiki:
"... and recessions end when any solution is applied ..."

Even the 'do-nothing' solution? I'm sure you have AMPLE historical examples. I'll wait. But I'm not going to hold my breath. I suspect you will never post even one example.



The recessions of 1923-24 and 1926-27, as noted above, ended with no change in Coolidge's policies. He continued to reduce tax rates and spending through both of them, and they ended.




Don't get ahead of yourself...

Quote:

Originally posted by kpo:
You still haven't shown that there were spending cuts in the middle of those recessions. For all I know spending cuts caused those two recessions, and spending increases alleviated them.



Plus you would have to show that Coolidge reduced taxes did not add more money to the economy that the government spending reductions took out. If not the tax cut could still have been a very mild stimulus during very mild recessions.

Now second please explain how Coolidge reducing spending during the 1920's was not Keynesian. The twenties was a decade of growth and Keyne's advocated that governments spending should be countercyclical.

I do not fear God, I fear the ignorance of man.

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Tuesday, January 14, 2014 10:48 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by kpo:
Quote:

Of course you've done this from a Keynesian point of view

What the hell does that mean? The graphs I've been using have been 'Keynesian' graphs, with crafty, Keynesian data?



Means you've been looking at data from a Keynesian point of view. You expect to see Keynes' cure work, so you interpret the data to support this point, while dismissing alternate explanations.

Sort'a like me saying I went to the doctor with a headache, he diagnosed it as an excess of bile, then he bled me and the headache went away. If I believed in the "Four Humours" theory of medicine, that'd confirm it.

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It's notable that recessions are on average *much* shorter post WWII (Keynesianism biggest defining moment) than they were pre-1929, and much, *much* shorter than they were pre-1900, in libertarianism's laissez-faire heyday. And this is true worldwide, not just in the US; Governments have learned, and recessions have been shallower and shorter, as a result. "We're all Keynesians now", remember?


The average recession 1900-1928 is 18 months, and the average 1929-present is 13.25 or so. Not that big a difference. The again, the reduction in average length could be attributable to things other than Keynes - better communications and resulting business and market efficiencies, for example.

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The recessions were in 1923-24 and 1926-27.

You still haven't shown that there were spending cuts in the middle of those recessions. For all I know spending cuts caused those two recessions, and spending increases alleviated them.


Of course there weren't. Remember, the conservative cure is to continue what you're doing - tax cuts, reduced spending, free trade. Coolidge continued to reduce taxes and spending, and pressed for removal of tariffs during these recessions, just like he did when the country was not in recession.

BTW, the cited graph...
http://www.usgovernmentspending.com/spending_chart_1920_1930USb_15s1li
011mcn_F0f


...shows no Federal spending increases until 1927. it is interesting to note that once spending increased, the Great Depression followed. Obviously, increased government spending causes recessions/depressions (;<)

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I have no idea why they would be cited.

Because they're "conservative economic policy".



If increased jobs is "economic policy", the energy one might apply. Can't find school choice tied to economics in the 2008 Republican platform. http://www.presidency.ucsb.edu/ws/index.php?pid=78545


Quote:

This is a nice tangent, but we still haven't answered the question of how stimulus tax cuts in a recession are financed. Let's say the recession is severe, and the tax cuts need to be big. Revenue has already cratered because the economy has tanked, and we're slashing it even more. So do we have huge deficits for a year, or two, or three, until the economy recovers? Or do we implement big spending cuts to finance the tax cuts?


Once again, Conservatives support "...lower taxes, less regulation, government spending cuts, more domestic energy production, school choice, free trade, and low inflation. They often cite these policies as ones that might alleviate recession and speed recovery."

So conservatives won't increase tax cuts as stimulus. They won't speed spending cuts. They won't change their economic plan. This is what Coolidge did in the 1920s.

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But Hoover started pretty much the Keynesian cure for depression right from the get-go.

Would you show me this with graphs, and data, and not just claim it with words?



Government spending went up.

http://www.usgovernmentspending.com/spending_chart_1920_1934USb_15s1li
011mcn_F0f


The Deficit went up.

http://www.usgovernmentdebt.us/spending_chart_1928_1934USp_15s1li011mc
n_G0f_Annual_Federal_Deficit


In "America's Great Depression", Rothbard discusses Hoover's push for increases in farm aid, public works, and wage support, which sounds pretty Keynesian to me. Sorry that he doesn't provide charts, and quoting him would fill pages, but it's in there. You could follow the references in the Table of Contents here:
http://mises.org/rothbard/AGD/contents.asp


"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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Tuesday, January 14, 2014 10:50 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by M52NICKERSON:
Don't get ahead of yourself...



Says the person who repeats KPO's question before I have time to answer it.


"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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Tuesday, January 14, 2014 5:18 PM

KPO

Sometimes you own the libs. Sometimes, the libs own you.


Quote:

You expect to see Keynes' cure work, so you interpret the data to support this point, while dismissing alternate explanations.

Unlike you, I expect (and require) that my pet theories and philosophies be backed up by data. If they're not visible in the data, they're not valid theories. As for my 'dismissing alternate explanations': I've pointed to several instances of government spending rising, and GDP rising in response, and government spending being cut, and GDP falling in response. I've provided this as evidence that the two seem to be linked. What 'alternate explanations' for this phenomenon have I dismissed? The only thing I've dismissed are alternate theories which are contradicted by the data.

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Sort'a like me saying I went to the doctor with a headache, he diagnosed it as an excess of bile, then he bled me and the headache went away. If I believed in the "Four Humours" theory of medicine, that'd confirm it.

Again, just like Auraptor giving climate scientists a lecture on the scientific method. Take my word for it that being able to read a graph, is not voodoo. It's maths.

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The average recession 1900-1928 is 18 months, and the average 1929-present is 13.25 or so. Not that big a difference.

That's a very significant difference. And I notice that you include the 1929-33 depression in the 'Keynesian' camp, even though you haven't been able to back that up with data. So remove that 3 year depression and the average post-Keynesian recession is 11 months. Almost a 40% reduction in recession time.

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the reduction in average length could be attributable to things other than Keynes - better communications and resulting business and market efficiencies

All I can show (and have shown) is that Keynesian policies correlate strongly with improved short term economic performance. And all you can say (and are saying) is that it's a lucky coincidence that Keynesian policy seems to have served us so well.

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Government spending went up.

http://www.usgovernmentspending.com/spending_chart_1920_1934USb_15s1li
011mcn_F0f


This is your evidence for Hoover carrying out 'the Keynesian cure from the get go'. Spending increased 3.8% in 1929. Less than it did in 1928. In 1930 spending increased 3.9%. Again, less than the jump from 1927 to 1928. So Hoover's response to financial meltdown and the Great Depression was... a small, un-extraordinary increase in government spending. Again, if you want a testbed for Keynesianism look at 1933 and 1941, and stop wasting everyone's time with your libertarian nonsense about Hoover's massive Keynesianism.

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The Deficit went up.

http://www.usgovernmentdebt.us/spending_chart_1928_1934USp_15s1li011mc
n_G0f_Annual_Federal_Deficit


This graph shows that the US didn't have a significant deficit until 1932 (and actually ran a surplus in 1929 and 1930). A Keynesian response from the get go. Right.

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Rothbard discusses Hoover's push for increases in farm aid, public works, and wage support, which sounds pretty Keynesian to me.

It would appear that those quotes are only there to mislead the economically illiterate. A massive surge in spending is not visible in the data at all. It didn't happen. It's a libertarian fantasy.

It's not personal. It's just war.

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Tuesday, January 14, 2014 5:25 PM

KPO

Sometimes you own the libs. Sometimes, the libs own you.


Oh, and some more evidence on the ARRA:

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Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.


http://www.nytimes.com/2010/02/17/business/economy/17leonhardt.html?_r
=0


It's not personal. It's just war.

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Wednesday, January 15, 2014 9:48 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by kpo:
[Unlike you, I expect (and require) that my pet theories and philosophies be backed up by data. If they're not visible in the data, they're not valid theories. As for my 'dismissing alternate explanations': I've pointed to several instances of government spending rising, and GDP rising in response, and government spending being cut, and GDP falling in response. I've provided this as evidence that the two seem to be linked. What 'alternate explanations' for this phenomenon have I dismissed? The only thing I've dismissed are alternate theories which are contradicted by the data.



As noted, government spending started to increase in 1927, and the Great depression followed soon after. See. I've proved that increased government spending causes depressions.

Or it could be possible that correspondence does not necessarily imply causality.


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The average recession 1900-1928 is 18 months, and the average 1929-present is 13.25 or so. Not that big a difference.

That's a very significant difference. And I notice that you include the 1929-33 depression in the 'Keynesian' camp, even though you haven't been able to back that up with data. So remove that 3 year depression and the average post-Keynesian recession is 11 months. Almost a 40% reduction in recession time.



I'll get to Keynes and the Great Depression below.

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the reduction in average length could be attributable to things other than Keynes - better communications and resulting business and market efficiencies

All I can show (and have shown) is that Keynesian policies correlate strongly with improved short term economic performance. And all you can say (and are saying) is that it's a lucky coincidence that Keynesian policy seems to have served us so well.



Quote:

Keynes's influence waned in the 1970s, partly as a result of problems that began to afflict the Anglo-American economies from the start of the decade, and partly because of critiques from Milton Friedman and other economists who were pessimistic about the ability of governments to regulate the business cycle with fiscal policy.

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

So it hasn't been quite the Keynes-fest you claim, with sort of a 40 year gap.


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Government spending went up.


This is your evidence for Hoover carrying out 'the Keynesian cure from the get go'. Spending increased 3.8% in 1929.



Depression didn't start until Sept. 1929.

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In 1930 spending increased 3.9%.


Yep. President doesn't just snap his fingers and start spending instantly. Legislation must be proposed and passed. This especially applies in the early 20th century when the power of the Executive wasn't anything like it is now, and Congress wasn't in session near as much.

Legislation like the Reconstruction Finance Corporation Act wasn't passed until early 1932.

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So Hoover's response to financial meltdown and the Great Depression was... a small, un-extraordinary increase in government spending. Again, if you want a testbed for Keynesianism look at 1933 and 1941, and stop wasting everyone's time with your libertarian nonsense about Hoover's massive Keynesianism.


Hoover was president until March of 1933, so he and his legislature pretty much set the federal budgets for 1933 and 1934. Where spending went up around 30%.

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The Deficit went up.


This graph shows that the US didn't have a significant deficit until 1932 (and actually ran a surplus in 1929 and 1930). A Keynesian response from the get go. Right.



Once again, Depression didn't start until late 1929, and in a democracy it takes time to get things started. Once the larger budgets were passed, deficit went right up.

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Rothbard discusses Hoover's push for increases in farm aid, public works, and wage support, which sounds pretty Keynesian to me.

It would appear that those quotes are only there to mislead the economically illiterate. A massive surge in spending is not visible in the data at all. It didn't happen. It's a libertarian fantasy.



Condescend much?

Less than $4 billion in 1930 to around $6 billion in 1934 seems pretty massive to me. Not on the scale of a world war, of course, but...




"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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Wednesday, January 15, 2014 11:22 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by kpo:
It would appear that those quotes are only there to mislead the economically illiterate. A massive surge in spending is not visible in the data at all. It didn't happen. It's a libertarian fantasy.




So I showed the spending increased as quickly as one would expect, given the way government functioned at that time.

I have to ask, then, how these quotes mislead anyone who doesn't want to hear them.

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As Hoover recalls:

the primary question at once arose as to whether the President and the Federal government should undertake to investigate and remedy the evils. . . . No President before had ever believed that there was a governmental responsibility in such cases. No matter what the urging on previous occasions, Presidents steadfastly had maintained that the Federal government was apart from such eruptions . . . therefore, we had to pioneer a new field.



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As his admiring biographers, Myers and Newton, declared, "President Hoover was the first President in our history to offer Federal leadership in mobilizing the economic resources of the people." He was, of course, not the last. As Hoover later proudly proclaimed: It was a "program unparalleled in the history of depressions in any country and any time."


Using the jawbone, he immediately got business to increase investment and high wages.

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Hoover acted quickly and decisively. His most important act was to call a series of White House conferences with the leading financiers and industrialists of the country, to induce them to maintain wage rates and expand their investments. Such artificially induced expansion could only bring losses to business and thereby aggravate the depression. Hoover phrased the general aim of these conferences as "the coordination of business and governmental agencies in concerted action." The first conference was on November 18, with the presidents of the nation's major railroads. Attending for the government were Hoover, Mellon, and Lamont, and also participating was William Butterworth, President of the United States Chamber of Commerce. The railroad presidents promised Hoover that they would expand their construction and maintenance programs, and publicly announced this promise on November 19. Later, the railroad executives met in Chicago to establish a formal organization to carry this program into effect.


He inflated credit.

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President Hoover was proud of his experiment in cheap money, and in his speech to the business conference on December 5, he hailed the nation's good fortune in possessing the splendid Federal Reserve System, which had succeeded in saving shaky banks, had restored confidence, and had made capital more abundant by reducing interest rates. Hoover had done his part to spur the expansion by personally urging the banks to rediscount more extensively at the Federal Reserve Banks. Secretary Mellon issued one of his by now traditionally optimistic pronouncements that there was "plenty of credit available." And William Green issued a series of optimistic statements, commending the Federal Reserve's success in ending the depression. On November 22, Green said:



All the factors which make for a quick and speedy industrial and economic recovery are present and evident. The Federal Reserve System is operating, serving as a barrier against financial demoralization. Within a few months industrial conditions will become normal, confidence and stabilization in industry and finance will be restored.



He increased public works at both the State and Federal level.

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With Hoover's views, we would not expect him to delay in sponsoring public works and unemployment relief as aids in curing depressions. On November 23, Hoover sent a telegram to all the governors, urging cooperative expansion of all state public works programs. The governors, including Franklin D. Roosevelt of New York, heartily pledged their cooperation, and on November 24 the Department of Commerce established a definite organization to join with the states in public works programs. Hoover and Mellon also proposed to Congress an increase in the Federal Buildings program of over $400 million, and on December 3 the Department of Commerce established a Division of Public Construction to spur public works planning. Hoover himself granted more subsidies to ship construction through the federal Shipping Board and asked for a further $175 million appropriation for public works. By the end of the year, Professor J.M. Clark of Columbia University was already hailing President Hoover's "great experiment in constructive industrial statesmanship of a promising and novel sort."



He upped farm subsidies.

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As Secretary of Commerce, Herbert Hoover did a great deal to subsidize farmers, and especially farm coops. He aided the latter in many ways-solving their research and marketing problems, helping find export markets for their produce, and making many speeches on their behalf. He also supported tariffs for agricultural produce. Furthermore, he was the man chiefly responsible for the appointment of the strongly pro-cooperative Secretary Jardine. Hoover had been one of the earliest proponents of a Federal Farm Board to aid cooperative marketing associations, and he helped write the Capper-Williams Bill of 1924 to that effect. And so it is no surprise that, as Presidential candidate, Hoover advocated support for farm cooperatives and promised the farm bloc that he would soon institute a farm-price support program. As soon as he took office, he fulfilled both promises, In June 1929, the Agricultural Marketing Act was passed, establishing the Federal Farm Board (FFB).

The new scheme was, in essence, the old "Jardine Plan." The Federal Farm Board was furnished with $500 million by the Treasury and was authorized to make all-purpose loans, up to a 20-year period, to farm cooperatives at low interest rates. The Board could also establish stabilization corporations to control farm surpluses and bolster farm prices.

...

As the depression struck, the FFB went into action. Its first big operation was in wheat, prices of which had been falling sharply for over a year. When first established, in August, the FFB advised farmers not to send wheat forward to market too rapidly, but rather to hold wheat in order to wait for higher prices. In September, it made additional loans to cooperatives to withhold stocks and raise prices. Yet the wheat price continued to fall sharply. On October 26, shortly after the stock market crash, the FFB announced that it would lend $150 million to wheat coops, at up to 100 percent of the market price, to try to hold up prices by keeping wheat off the market. Soon after the stock market crash, the FFB established a Farmers' National Grain Corporation, with a capital of $10 million, to centralize cooperative marketing in wheat and other grains. The old dream of a wheat cartel had at last come true. The FFB was supposed to work largely through such "corporations," or favored farm marketing cooperatives; and the Farmers' National was selected to centralize all farmers' grain cooperatives, eliminate competition among them, and thus stabilize and raise the market price. At first, the FFB and Farmers' National loaned money to farm cooperatives to hold wheat off the market, then, after prices continued to fall, the Farmers' National itself began to buy wheat at the loan prices.



This is all in Chapter 8 of America's Great Depression, as cited above.

Do you claim these events didn't happen?

Then we move to Chapter 9 and 1930.

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In December, 1930, the Emergency Committee for Federal Public Works, headed by Harold S. Butenheim, editor of American City, appealed for large-scale borrowing of one billion dollars for public works, and the plea was endorsed by 93 leading economists. Among these were Thomas S. Adams, Thomas Nixon Carver, Edgar S. Furniss, Edwin R.A. Seligman, Leo Wolman, and many of the names on the Wagner Bill petitions.[17] Finally, in February, 1931, Congress passed the Employment Stabilization Act in original form and Hoover gladly signed the measure. He quickly designated the Secretary of Commerce as chairman of the Federal Employment Stabilization Board.[18] The Senate also did something in the same month destined to have far-reaching effects in the future: it passed the Wagner resolution to study the establishment of Federal unemployment insurance.


I could keep going, but this gives you the idea.


"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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Wednesday, January 15, 2014 1:47 PM

KPO

Sometimes you own the libs. Sometimes, the libs own you.


Quote:

As noted, government spending started to increase in 1927, and the Great depression followed soon after. See. I've proved that increased government spending causes depressions.

Or it could be possible that correspondence does not necessarily imply causality.


If I had pointed to only one example of GDP growth following on the back of Keynesian spending, instead of several, that would be a reasonable retort. As it is it's just an excuse to keep your head in the sand.

Quote:

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

So it hasn't been quite the Keynes-fest you claim, with sort of a 40 year gap.


'His influence has waned' doesn't mean his ideas have been rejected completely. Basic Keynesian thought, the belief that government spending causes short term growth, is still conventional macroeconomic wisdom.

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Hoover was president until March of 1933, so he and his legislature pretty much set the federal budgets for 1933 and 1934. Where spending went up around 30%.

My contention was that it's clear from the data that US spending did not ramp up in response to the GD 'from the get go', or anything like it. This is the important point. You yourself admit this. What the machinery of 1930s US government was like, and whether Hoover was a Keynesian champion or not, does NOT matter, all that matters is that US GOVERNMENT SPENDING UNDER HOOVER WAS NOT KEYNESIAN.

Yes spending boomed in 1933/34 (after Hoover's presidency). That's what I've been saying all along! And what happened to economic growth in 1934?

Quote:

I could keep going, but this gives you the idea.

All I need to see is the graph of government spending, to know whether or not government policy was Keynesian. A relevant graph says >1000 words.

Quote:

I have to ask, then, how these quotes mislead anyone who doesn't want to hear them.

The suggestion being it's ok to mislead people if you're telling them what they want to believe? The misleading aspect is that people will think Hoover/the US implemented immediate Keynesian spending in response to the GD, when he/it didn't. Again, the important thing is not whether Hoover was a sinner or a saint, it's the spending numbers. Government spending in 1929-1932 grew less than 4% year on year. That's LESS than the growth in spending in EVERY SINGLE YEAR under Reagan and Bush2.



So can we move on from the idea that US spending in 1929-32, in answer to the Great Depression, was Keynesian?

It's not personal. It's just war.

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Wednesday, January 15, 2014 10:42 PM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


Geezer

Top marginal tax rates rose slightly during the 1923-1924 recession - there indeed was a change of policy.

As for 1926-1927: "This was an unusual and mild recession, thought to be caused largely because Henry Ford closed production in his factories for six months to switch from production of the Model T to the Model A." (WIKI) If that was the entire 'recession' it doesn't say much about economic policy.

So, your first example was wrong, your second not applicable. As usual, you are wrong.


NEXT!

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Thursday, January 16, 2014 9:09 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by kpo:
If I had pointed to only one example of GDP growth following on the back of Keynesian spending, instead of several, that would be a reasonable retort. As it is it's just an excuse to keep your head in the sand.



GDP also went up in the Coolidge era (through two recessions) when Federal spending and taxes were reduced.

http://www.usgovernmentspending.com/spending_chart_1920_1940USb_13s1li
011mcn__US_Gross_Domestic_Product_GDP_History



Quote:

Quote:

So it hasn't been quite the Keynes-fest you claim, with sort of a 40 year gap.

'His influence has waned' doesn't mean his ideas have been rejected completely. Basic Keynesian thought, the belief that government spending causes short term growth, is still conventional macroeconomic wisdom.



Yep. Just ignore what you don't want to see. The Wiki article gives a long section on "Economics out of favour 1979–2007", but that's probably just more misleading by folks who don't agree with you. Right?

Quote:

Quote:

Hoover was president until March of 1933, so he and his legislature pretty much set the federal budgets for 1933 and 1934. Where spending went up around 30%.

My contention was that it's clear from the data that US spending did not ramp up in response to the GD 'from the get go', or anything like it. This is the important point. You yourself admit this. What the machinery of 1930s US government was like, and whether Hoover was a Keynesian champion or not, does NOT matter, all that matters is that US GOVERNMENT SPENDING UNDER HOOVER WAS NOT KEYNESIAN.



Interesting how Keynes got to be about ONLY GOVERNMENT SPENDING all of a sudden. And Hoover's action, even though the machinery of government slowed things down, DOES matter. It started things in motion, and put agencies in place that Roosevelt used later. I'd note that even with the much larger government bureaucracy and efficiencies of communication, it took 10 months to get the first stimulus legislation passed for the 2007-09 recession, and 16 months for the second one.

Then again, I could note that per your analysis, Hoover did not follow Keynes, but the Great Depression officially ended in March of 1933, while he was still in office. Sort'a shoots down the Great Depression as a exemplar of the Keynesian cure.

ETA: And I have to ask, how much of Keynes is in this?

- Deficit-financed spending to compensate for demand gaps in the private sector.
- Easy monetary policy to raise inflation and support demand.
- Mortgage modifications to reduce foreclosures and support consumption.






"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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Thursday, January 16, 2014 11:13 PM

M52NICKERSON

DALEK!


Quote:

Originally posted by Geezer:

ETA: And I have to ask, how much of Keynes is in this?

- Deficit-financed spending to compensate for demand gaps in the private sector.
- Easy monetary policy to raise inflation and support demand.
- Mortgage modifications to reduce foreclosures and support consumption.



All of it.

In arguing the minute points you have missed the big picture. That is the the heart of Keynesian economics it to boost the economy when it start falter. That is what Hoover did and what FDR continued in different ways.


I do not fear God, I fear the ignorance of man.

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Thursday, January 16, 2014 11:18 PM

M52NICKERSON

DALEK!


Double Post

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Thursday, January 16, 2014 11:24 PM

M52NICKERSON

DALEK!


Quote:

Originally posted by kpo:

My contention was that it's clear from the data that US spending did not ramp up in response to the GD 'from the get go', or anything like it. This is the important point. You yourself admit this. What the machinery of 1930s US government was like, and whether Hoover was a Keynesian champion or not, does NOT matter, all that matters is that US GOVERNMENT SPENDING UNDER HOOVER WAS NOT KEYNESIAN.



No Hoovers spending was not, but he did take measures to boost the flow of money in the economy, which is the heart of Keynesian economics. That is why the recovery started in early 1933 and thing did not get worse. Of course the recovery was not at all great and it took much more stimulus (government spending) to finally have a true recovery.

I think arguing the minute points with Geezer you missed the fact that he is basically proving Keyne's point.

I do not fear God, I fear the ignorance of man.

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Friday, January 17, 2014 8:49 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by m52nickerson:
That is the the heart of Keynesian economics it to boost the economy when it start falter. That is what Hoover did and what FDR continued in different ways.



So the idea is to boost the economy by government spending during recessions and then throttle back when things get back on track.

The problem is, once governments start spending, they don't stop.

Federal spending has done nothing but increase since shortly after the de-militarization decrease following WWII.

http://www.usgovernmentspending.com/spending_chart_1930_2010USb_13s1li
011mcn_F0f



"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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Friday, January 17, 2014 9:53 AM

KPO

Sometimes you own the libs. Sometimes, the libs own you.


Quote:

GDP also went up in the Coolidge era (through two recessions) when Federal spending and taxes were reduced.

Very minor recessions and very small (~1%) decreases in spending. Two very weak examples that go against the statistical evidence of spending cuts that I've shown. We've every reason to believe that the economy was set to recover on its own without the 'help' of those small spending cuts. It was a boom decade after all. Show me BIG spending cuts in a DEEP recession, and GDP responding STRONGLY. In other words show me no less than what I've shown for Keynesian spending. And we'll see who has the stronger case.

Quote:

Yep. Just ignore what you don't want to see. The Wiki article gives a long section on "Economics out of favour 1979–2007"

I'm aware that Keynes has fallen out of favour, and that many of his ideas have been revised, and challenged. He is not taken as gospel now, and if he was, he should never have been. And yet, what I said is still completely true:

http://www.igmchicago.org/igm-economic-experts-panel/poll-results?Surv
eyID=SV_cw5O9LNJL1oz4Xi


80% of economists surveyed said that the ARRA lowered the US unemployment rate in 2010 - to 4% who disagreed. And this is in America, bastion of libertarianism and anti-Keynesian thought. Anywhere else in the world and these numbers would be even greater than the 20-1 in Keynes' favour. So, as I said, government spending is stimulative = economic consensus.

Quote:

And Hoover's action, even though the machinery of government slowed things down, DOES matter. It started things in motion, and put agencies in place that Roosevelt used later.

Fine. Well done Hoover, for setting up the beginning of recovery in 1933.

Quote:

Then again, I could note that per your analysis, Hoover did not follow Keynes, but the Great Depression officially ended in March of 1933, while he was still in office.Sort'a shoots down the Great Depression as a exemplar of the Keynesian cure.

You judge the (implemented) US policy response to the Wall Street crash as a success if you want to. One thing we can safely say - it wasn't 'Keynesian'.

Quote:

ETA: And I have to ask, how much of Keynes is in this?

- Deficit-financed spending to compensate for demand gaps in the private sector.
- Easy monetary policy to raise inflation and support demand.
- Mortgage modifications to reduce foreclosures and support consumption.


This paper was posted at the bottom of the Wall Street Daily article you posted earlier. The article's writer didn't read it. I suggest you do.

http://www.aeaweb.org/aea/2014conference/program/retrieve.php?pdfid=71
3


Quote:

The problem is, once governments start spending, they don't stop.

Your own example of the 1920s contradicts you.

Quote:

I think arguing the minute points with Geezer you missed the fact that he is basically proving Keyne's point.

That hadn't escaped me.

I might be gone from this thread for a while.

It's not personal. It's just war.

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Friday, January 17, 2014 3:24 PM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

In other words show me no less than what I've shown for Keynesian spending. And we'll see who has the stronger case.
Geezer? Your move.



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Saturday, January 18, 2014 10:21 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by kpo:
Quote:

GDP also went up in the Coolidge era (through two recessions) when Federal spending and taxes were reduced.

Very minor recessions and very small (~1%) decreases in spending. Two very weak examples that go against the statistical evidence of spending cuts that I've shown. We've every reason to believe that the economy was set to recover on its own without the 'help' of those small spending cuts. It was a boom decade after all. Show me BIG spending cuts in a DEEP recession, and GDP responding STRONGLY. In other words show me no less than what I've shown for Keynesian spending. And we'll see who has the stronger case.



Once again, the conservative idea is not to do anything different than business as usual in response to a recession.

To quote the article yet again,

Quote:

They favor lower taxes, less regulation, government spending cuts, more domestic energy production, school choice, free trade, and low inflation. They often cite these policies as ones that might alleviate recession and speed recovery.


So there will be no BIG spending cuts during a recession. Regular conservative economic policy, they believe, will take care of it.

One might also wonder if the reason the recessions during Coolidge's administration were so small (as you noted) was due to his conservative economic policy.


Quote:

80% of economists surveyed said that the ARRA lowered the US unemployment rate in 2010 - to 4% who disagreed. And this is in America, bastion of libertarianism and anti-Keynesian thought. Anywhere else in the world and these numbers would be even greater than the 20-1 in Keynes' favour. So, as I said, government spending is stimulative = economic consensus.


Don't see this as a stunning proof of Keynes. Anyone would have to agree that if you throw enough money out there, some of it will be spent to hire new folks.

More to the point of effectiveness, looking at the responses to Question B, less than half agree that the benefits of the stimulus will end up exceeding its costs.


Quote:

Quote:

And Hoover's action, even though the machinery of government slowed things down, DOES matter. It started things in motion, and put agencies in place that Roosevelt used later.

Fine. Well done Hoover, for setting up the beginning of recovery in 1933

Quote:

Then again, I could note that per your analysis, Hoover did not follow Keynes, but the Great Depression officially ended in March of 1933, while he was still in office.Sort'a shoots down the Great Depression as a exemplar of the Keynesian cure.

You judge the (implemented) US policy response to the Wall Street crash as a success if you want to. One thing we can safely say - it wasn't 'Keynesian'..



Per NBER, the Great Depression ENDED in March 1933, the same month Hoover's term as President ended. So apparently Hoover's non-Keynesian actions ended the worst depression in U.S. history.



Quote:

Quote:

ETA: And I have to ask, how much of Keynes is in this?

- Deficit-financed spending to compensate for demand gaps in the private sector.
- Easy monetary policy to raise inflation and support demand.
- Mortgage modifications to reduce foreclosures and support consumption.


This paper was posted at the bottom of the Wall Street Daily article you posted earlier. The article's writer didn't read it. I suggest you do.

http://www.aeaweb.org/aea/2014conference/program/retrieve.php?pdfid=71
3




That paper tracks the length and severity of financial crises. The name "Keynes" is not found in it. Not sure it links the actions above to Keynes.


Quote:

Quote:

The problem is, once governments start spending, they don't stop.

Your own example of the 1920s contradicts you.



If you take that statement out of context, maybe.

However, when talking about the effects when Keynesian policies are applied, as I did...

Quote:

So the idea is to boost the economy by government spending during recessions and then throttle back when things get back on track.

The problem is, once governments start spending, they don't stop.

Federal spending has done nothing but increase since shortly after the de-militarization decrease following WWII.



...it certainly applies.

Quote:

I might be gone from this thread for a while.



Okay. Thanks for the discussion.


"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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Saturday, January 18, 2014 1:06 PM

SIGNYM

I believe in solving problems, not sharing them.


There is more to the question whether or not conservatives have "an idea" what to do about recessions, and that is whether or not that idea actually works to end or shorten them.

Geezer, you have demanded "proof" that Keynesianism works to shorten or end depressions. Now, as I pointed out earlier, it is impossible (from science philosophy standpoint) to "prove" anything. Even the most durable and repeatable phenomena, like gravity, can't be "proven" because - since it hasn't been universally tested - there might always be exceptions "out there"- things we don't know about. Even then, with reams and reams of what seem to be incontrovertible evidence, delusionists like flat-earthers will rebut the evidence, and subjectivists will retreat back into their minds and claim that reality is whatever they "think" it is. And so, while you have been demanding something that is actually impossible to provide, you yourself have brought nothing to the table in support of your own ideas.

At some point, if we're going to have a productive discussion on such a complex topic, there have to be a few ground rules. We have to agree that there actually IS evidence to support or refute an idea... we can't just willy-nilly decide to get all bizarre about evidence if it doesn't meet our expectations; we have to agree on when is there "enough" evidence and when it is significant; and we have to agree that there has to be more than correlation tying the pieces together- one must propose an actual mechanism for HOW these things are tied together, in real terms.

Care to engage? We both might learn something, but I expect you to bring as much to the table as I do, and not just sit back in a corner and cavil, as you've been doing.

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Saturday, January 18, 2014 2:18 PM

GEEZER

Keep the Shiny side up


And one more time...

Quote:

Originally posted by SIGNYM:
There is more to the question whether or not conservatives have "an idea" what to do about recessions, and that is whether or not that idea actually works to end or shorten them.



Could be, but that wasn't my question.

My original question was this:

"So recessions last between 8 and 18 months pretty much regardless of whether liberals or conservatives are in office*. So maybe both solutions work. Or one might ask if the government actually has anything to do with ending recessions.

Now if you could show that recessions didn't go away during conservative administrations, and did go away during liberal administrations, that might support the point of the cited article. However, that doesn't seem to be the case."

*This was describing recessions since 1980 or so.

You and KPO got the discussion off on Keynes, and my "libertarian" plans for ending recession (whatever you conceive those to be.), etc.

My main point is that several types of actions (and inactions) have been tried over the years, and recessions end no matter the 'cure' tried. In this case, providing substantial evidence that any particular method, and particularly the two alternatives presented in the article, works is going to be difficult. This is especially true given the massive number of factors involved in even day-to-day economics.

This is the discussion I wanted to have. I shouldn't have gotten distracted when others wanted to drag it off into Keynes vs. whoever.


Quote:

And so, while you have been demanding something that is actually impossible to provide, you yourself have brought nothing to the table in support of your own ideas.


So what do you consider my ideas relating to ending recessions? As noted above, I wonder if any type of government activity actually has anything to do with ending recessions, or if it's even possible to substantiate it one way or another.

Quote:

At some point, if we're going to have a productive discussion on such a complex topic, there have to be some ground rules. We have to agree on when is there "enough" evidence and when it is significant; and we have to agree that there has to be more than correlation tying the pieces together- one must propose an actual mechanism for HOW these things are tied together, in real terms.


And here is the problem. if the Keynesians, and the Monetarists, and the Austrian School, and the Marxists, and all the other multiplicity of economic schools can't get together on these definitions (and from what I've read, they can't), I'm not too sure we can do so here.

This is not to mention the fact that the definition of a recession itself is open to question. the NBER says one thing, and the paper KPO cited above, "Recovery from Financial Crises: Evidence from 100 episodes" says another. Per the NBER, the Great Depression was over in the same month Roosevelt took office.

Then again, I'm not trying to prove any particular school works, I'm doubtful of any of them. The only reason I've been questioning Keynes so much is that you and KPO are pushing Keynesian policy so hard. I've tended to use the Coolidge administrations policies as counter-examples because I happen to have just finished a couple of Coolidge biographies.

Quote:

Care to engage? We both might learn something, but I expect you to bring as much to the table as I do, and not just sit back in a corner and cavil, as you've been doing.


It might be worthwhile if you'd agree to the caveats that you'd stop insulting me when I don't agree with you, and that I'd only have to address one person, rather than getting pretty much the same questions from four or five, as has been common so far.

So to reiterate:

My position is that, given the complexities of all the elements included in the economic state of the U.S., or the world, it's not possible to provide convincing evidence that any one particular economic theory ends recessions faster, with less negative economic fallout (government debt, loss of jobs, etc.), and with less risk of failure than any other.

Anyone proposing that any particular theory does meet these criteria should first provide a generally agreed to definition of that theory, and then show how the application of the theory, and no other factors, accomplished the end of several specific recessions, and did so meeting the criteria above (faster, less impact, less risk of failure).


"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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Saturday, January 18, 2014 2:31 PM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

So what do you consider my ideas relating to ending recessions? As noted above, I wonder if any type of government activity actually has anything to do with ending recessions, or if it's even possible to substantiate it one way or another.
If this is the case- that government policies don't end recessions/ depressions one way or another- then clearly they can't initiate them either. Because, if you can't improve something, you've got no levers to make it worse either. In effect, what you're saying is that government policy has NO effect on economic performance whatsoever.

Well, if that is the case, then it doesn't matter WHAT government does. Tax at 100%? Tax at 0%? Print money? Don't print money? Create jobs programs? Tariff imports? Hey, it's all good! Right?

But if we can show that government policies DO effect living standards for everyone, then let's have the government go whole-hog into "meddling with" the economy, because- in YOUR view- it's feckless anyway as far as economic activity, but it can make life better for everyone.

ETA: So, you will first have to establish the mechanisms by which government can only make things worse, but not make thing better.

Your turn.

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Saturday, January 18, 2014 10:13 PM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by SIGNYM:
Quote:

So what do you consider my ideas relating to ending recessions? As noted above, I wonder if any type of government activity actually has anything to do with ending recessions, or if it's even possible to substantiate it one way or another.
If this is the case- that government policies don't end recessions/ depressions one way or another- then clearly they can't initiate them either. Because, if you can't improve something, you've got no levers to make it worse either. In effect, what you're saying is that government policy has NO effect on economic performance whatsoever.

Well, if that is the case, then it doesn't matter WHAT government does. Tax at 100%? Tax at 0%? Print money? Don't print money? Create jobs programs? Tariff imports? Hey, it's all good! Right?

But if we can show that government policies DO effect living standards for everyone, then let's have the government go whole-hog into "meddling with" the economy, because- in YOUR view- it's feckless anyway as far as economic activity, but it can make life better for everyone.

ETA: So, you will first have to establish the mechanisms by which government can only make things worse, but not make thing better.

Your turn.



Once again...

Quote:

My position is that, given the complexities of all the elements included in the economic state of the U.S., or the world, it's not possible to provide convincing evidence that any one particular economic theory ends recessions faster, with less negative economic fallout (government debt, loss of jobs, etc.), and with less risk of failure than any other.

Anyone proposing that any particular theory does meet these criteria should first provide a generally agreed to definition of that theory, and then show how the application of the theory, and no other factors, accomplished the end of several specific recessions, and did so meeting the criteria above (faster, less impact, less risk of failure).



Address this.



"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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Saturday, January 18, 2014 11:14 PM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

given the complexities of all the elements included in the economic state of the U.S., or the world, it's not possible to provide convincing evidence that any one particular economic theory ends recessions faster, with less negative economic fallout (government debt, loss of jobs, etc.), and with less risk of failure than any other.

Basically, you have doubts that any theory works. That includes yours, correct?
So, you've just proved the point of the thread, because you (a conservative) apparently really don't have any ideas what to do with recessions.


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