>> ^pyloricvalve:

That's a good summary of the Keynesian response. I guess my answer would be that even supposing the 10% unemployed were neatly then employed in building these weapons this would just be temporary. Later they will eventually all be unemployed again having wasted time and money in training for "fictional" work.

It seems to me that building real military spaceships would require real skills, real work, real factories, real technology, and there's no particular reason why if the demand for military spaceships evaporated, that they wouldn't just pivot into trying to serve a different market, like, say, commercial spacecraft.

That's the kind of adaptation free markets are supposed to be good at, right?

>> ^pyloricvalve:

Even if that work had some beneficial side effects, making unnatural economic growth will still be a net cost to the economy versus spending time finding real jobs. These are what they really 'should' in some sense be doing. To do this would surely be better unless you claim the 10% will continue unemployed permanently.

There's no reason to think additional idleness accelerates the process of someone finding their "right" job. That also presupposes that there's a right and a wrong job, and that there's inherently some economic damage being done by seeing someone doing real work producing real goods rather than having them stay idle and wait for Godot.

>> ^pyloricvalve:

These arguments can be seen in the two Hayek/Keynes rap videos. There are two inconsistent models of the economy. How can we decide which one is right? This argument is very old so I guess it's not that easy... Maybe look at long run growth in more and less interventionist countries? I suspect growth will be faster in the less interventionist nation.

Actually, it's not really a persisting argument amongst actual trained economists. The Austrian theory of economics has been invalidated time and time again by facts, but it lives on because it's a branch of economics that appeals to the ideological right.

That's not to say everything Hayek ever said was wrong, but the Hayekian idea that Keynesian fiscal and monetary policy will inevitably lead to utter ruin has definitely not been borne out by the facts. Also, no country that has followed a Hayekian prescription for recessions (keep money tight, and implement fiscal austerity) has ever done anything but deepen their recession and prolong their recovery.

That's a good summary of the Keynesian response. I guess my answer would be that even supposing the 10% unemployed were neatly then employed in building these weapons this would just be temporary. Later they will eventually all be unemployed again having wasted time and money in training for "fictional" work. Even if that work had some beneficial side effects, making unnatural economic growth will still be a net cost to the economy versus spending time finding real jobs. These are what they really 'should' in some sense be doing. To do this would surely be better unless you claim the 10% will continue unemployed permanently.

A typical argument against my response is that the economy is like a pump and that this is pump priming. Demand from these people's fictional labour will create the new jobs. The Austrian reply to that is that the pump metaphor is simply not valid and the economies grow organically. If you force a branch to grow with artificial sunlight, when that fake light gets turned off the branch will wither and all the people involved in its support spend a lot of time looking for what they should have been doing. I think Hayek would claim this type of fake labour policy is what causes the 10% unemployment to begin with.

These arguments can be seen in the two Hayek/Keynes rap videos. There are two inconsistent models of the economy. How can we decide which one is right? This argument is very old so I guess it's not that easy... Maybe look at long run growth in more and less interventionist countries? I suspect growth will be faster in the less interventionist nation.


>> ^NetRunner:
>> ^pyloricvalve: Just seems like straight up broken windows fallacy. If we spent 18 months preparing for war with aliens we might all be employed but we'd end up with a bunch of weapons pointed at the sky. Otherwise we could have spent the time making ipods, cars or whatever good or service you might want. Doesn't what he's saying just sound wrong? It clearly would not be a good thing for the world to spend 18 months that way.. I think that's the real problem with the broken window "fallacy" -- it assumes that as your starting point you already have full employment and no idle infrastructure or capital. That's not true in our situation at all. Unemployment is around 10%, factories are being left idle, and companies are sitting on mountains of cash. The idea here is to get people back to work doing something, because even if they're producing things there isn't a high demand for (windows, alien-fighting spaceships), it's not like those things come at the cost of the other things they would've otherwise been producing, since they're not producing anything at all right now. Oh, and in the case of alien-fighting spaceships, there's a pretty high chance that the technology and industrial infrastructure that's developed to build them will be able to be re-purposed for consumer goods once the alien threat is shown to be fake. Ideally instead of faking an alien invasion, we'd just have the government go and invest directly in our infrastructure (transportation, education, power generation), but without the alien threat it doesn't seem like Congress is willing to engage in any more fiscal stimulus, no matter how economically sound it would be.

>> ^VoodooV:

Sorry, but reality disagrees with you.
Demand for health care is not unlimited, it is finite. Sure it is a large demand, but it is quite finite. You're making a strawman argument because no one is advocating the absurd prolonging of life you're accusing others of.
News flash, we don't exist in a vacuum. We don't live in a universe where our decisions only affect us alone so your Ayn Rand fantasy utopia of everyone taking care of themselves and fuck the other guy doesn't exist..it never will.
It benefits everyone to give quality healthcare to all. We are more productive and contribute more when we don't have to bankrupt ourselves paying medical costs. We pay large amounts of money already because people don't have proper health care and don't do anything about it until they show up at the emergency room at death's door. Taxpayers foot that bill when they can't pay. So the question is simple: Do you want to pay for it now while it's cheap and easy to treat, or do you want to pay more later when it's a LOT worse and a hell of a lot more expensive.
Besides, you don't seem to mind spending other people's money and taking their lives when it comes to defense spending and invading other countries. And as the video already pointed out. We don't see Republicans sticking to their conservative "principles" and refusing Medicare/Medicaid when they need it....only when other people need it. So stop being such a hypocrite.


Most of the costs are borne by people who are retired, so I fail to see how borrowing trillions we don't have on life prolongation does anything but doom the future to crushing taxes and inflation for something the present desired but weren't productive enough to pay for. You can't do that, it's not fair, and many young people are waking up to the fact that this essentially a generational ponzi scheme with nothing in it for them. The first SS recipient contributed well below what she received and the final one will have paid in far more than they will receive in benefits. SS and Medicare, by their end, will have impoverished more people than any government programs in the history of mankind. Every naive socialist program is a sentimental black hole that accomplishes the opposite of what it intends. Fannie Mae and Freddie Mac, for example, made it easier to get a loan, but in doing so increased the price of homes and thus the size of the loan. Because suddenly you've got this "magic bottomless guarantee" to print up a loan, and now you've got damn near everyone seemingly capable of bidding up the prices. Of course, now we realize it wasn't bottomless after all, it just seemed that way for a while.

You've successfully convinced me that you really, really want health care at some future untold person's expense. The populace as a whole is resisting taxes. Their money has been devalued so thoroughly that they can't budget in broad tax increases today, so what makes you think the future can? It's also true that employers are not poor people. We've had nothing but more and more government involvement in this sector and, just like education, the costs have risen with how much the government is able to tax and borrow. I used to work for an online college called Kaplan. Kaplan's price IS what the government takes and loans. Why would they price below that? You just don't seem to understand how markets work. Look at something like LASIK and PRK aren't covered by private or public insurers. It's had nothing but price declines and quality improvements. Look at computers, constant price declines and quality improvements. When people are forced to spend their own money, the fear and greed offset works. When they're spending a pool of forcibly appropriated funds, they lose sight of its true cost to them and the future and become reckless.

Oh, and I'm not a Republican in favor of military adventures. I sympathize less with that nonsense than I do with you. I understand that public roads are of lower quality than toll roads, but I'd rather we bear that cost for the simplicity of not having to dick with toll booths. Everything governmental has that dynamic, but I say the government should be completely disallowed from borrowing in excess of revenue. If you want something now, pay for it now, the end. If you can't raise the revenue, don't cry about it and don't steal from the future.

And yes, demands are infinite. Austrian economics 101. You offer someone everything on earth for $100, they'll probably take it. Problem is, supply ISNT infinite, so the price will never be that low. If you found some way of making planets full of shit cheap and abundant, you'd see that demand is indeed infinite.

>> ^dystopianfuturetoday:

@Lawdeedaw - Individual members of the legislative branch don't have anything approximating the power of a president. It is true that idealists such as Kucinich, Wellstone, Weiner, Paul and Obama have managed to find a place in the legislative branch, but never have these idealists held the numbers to ever be a credible threat against corporate domination. (What's even more disheartening is the current epidemic of moronic idealists like Santorum, Bachman and Palin, who have been empowered by a decade of Republican campaigning that targets the lowest common denominator.)
Once the idealists enter the Presidential ring, all bets are off. McCain is a great example of a highly principled republican who was basically forced to renounce everything he ever believed in (most prominently campaign finance reform) to get a shot at the golden ring. Obama also broke his promise to only except public funding because he realized it would put him at a severe disadvantage. As long as our current system is in place, no presidential candidate (not even Saint Paul) has a chance of subverting it. This is not an insult against this man, whom I respect despite the fact that he holds some extremely naive economic views. This is just a frank assessment of how fucked up our campaign finance system is.
If you don't think Ron Paul plays the game too, then ask him about Texas pork barrel spending. There is a video on the sift where he freely admits to playing the pork barrel game. I don't blame him for it - you do what you have to do in a fucked up system.
I'm not here to bash Paul. My point is that our current system will not allow him to be what you want him to be, just as the system won't allow Obama to be the President I want him to be.
Speaking as someone who has already suffered through hopey-changey delusions, I'm just trying to save you some grief. Been there. Done that. I guess maybe you have to experience it first hand before you can truly accept this cruel reality on your own terms.
Until this system works for the voters rather than the funders, we are all destined for disappointment. I'd love to see a conservative-liberal truce until we can throw these money changers out of the temple.


You think Keynesian economics got us out of the Great Depression yet Paul's the naive one? Paul's been saying to get rid of the money changers his whole political career. If we had actually been following the Austrian school of economics, none of this would've happen. You can't give a select group of people total control of your economy and then not expect them to take advantage of it.

And Paul always voted against pork spending. That's hardly playing the game.

Obama hasn't been neutered, he was a fraud from the beginning. He's not bombing civilians and waging wars to secure campaign donations. He's been a puppet and PR salesman for Wall Street and their war machine from day one. He's not prosecuting white-collar fraud, he's prosecuting government whistleblowers. He's arming drug cartels in Mexico. He's using flying robots to rain down hellfire missiles in sovereign countries on the other side of the world. He's a neocolonialist. Not because someone is twisting his arm, but because that's what he signed up to be.
Obama can't be the President you want him to be because he's not that guy and never was.

That bloke is sort of famous now. Just this morning, a lonely article in some regional Austrian tabloid'ish newspaper was the only info about it. By now, he has been featured on the first page over at every single one of the major German news outlets.

Fucking brilliant, public mockery ftw
In reply to this comment by gwiz665:
Lol. That's just lovely. In reply to this comment by radx:
Austria offically recognized colanders as religious headgear. A pastafarian went all the way: his ID.

Not really a minor gaffe when you don't know what's in a 3rd grader's history textbook and you're being seriously considered for the office of the presidency. That said, for once, I agree with you on the other points here and I thought I'd mention that to you.

In reply to this comment by quantumushroom:
Minor gaffe and no one gives a shit, except Obama's lapdog media shills. Shitheels McReporter was almost falling over himself with glee.

His Earness of the 57 States has made plenty of gaffes. I've done you a favor by not including the trillion dollars thrown in a fire, high unemployment, high gas prices, higher food prices, higher taxes on the way, creeping inflation and alienating our allies.


This is the fellow the fools elected, not a private citizen:

"In case you missed it, this week, there was a tragedy in Kansas. Ten thousand people died -- an entire town destroyed." --on a Kansas tornado that killed 12 people

"How's it going, Sunshine?" --campaigning in Sunrise, Florida

"It was also interesting to see that political interaction in Europe is not that different from the United States Senate. There's a lot of -- I don't know what the term is in Austrian, wheeling and dealing." --confusing German for "Austrian," a language which does not exist, Strasbourg, France, April 6, 2009

"UPS and FedEx are doing just fine, right? It's the Post Office that's always having problems." –attempting to make the case for government-run healthcare, while simultaneously undercutting his own argument, Portsmouth, N.H., Aug. 11, 2009

"The Middle East is obviously an issue that has plagued the region for centuries." --Tampa, Fla., Jan. 28, 2010








BONUS: "Government should NEVER be able to do anything YOU can't do." --Anarchist Ron Paul

Minor gaffe and no one gives a shit, except Obama's lapdog media shills. Shitheels McReporter was almost falling over himself with glee.

His Earness of the 57 States has made plenty of gaffes. I've done you a favor by not including the trillion dollars thrown in a fire, high unemployment, high gas prices, higher food prices, higher taxes on the way, creeping inflation and alienating our allies.


This is the fellow the fools elected, not a private citizen:

"In case you missed it, this week, there was a tragedy in Kansas. Ten thousand people died -- an entire town destroyed." --on a Kansas tornado that killed 12 people

"How's it going, Sunshine?" --campaigning in Sunrise, Florida

"It was also interesting to see that political interaction in Europe is not that different from the United States Senate. There's a lot of -- I don't know what the term is in Austrian, wheeling and dealing." --confusing German for "Austrian," a language which does not exist, Strasbourg, France, April 6, 2009

"UPS and FedEx are doing just fine, right? It's the Post Office that's always having problems." –attempting to make the case for government-run healthcare, while simultaneously undercutting his own argument, Portsmouth, N.H., Aug. 11, 2009

"The Middle East is obviously an issue that has plagued the region for centuries." --Tampa, Fla., Jan. 28, 2010








BONUS: "Government should NEVER be able to do anything YOU can't do." --Anarchist Ron Paul

it's a bavarian or austrian dialect of german. and it's great

>> ^blankfist:

But he does propose a theory, that humans are too complex to quantify en masse. Central authorities cannot account for every complexity in human behavior, so it's ineloquent to set monetary policy from the top down. It should be placed in the hands of the people to decide how the economy should work.


Right, but that's just a mix of right-wing populism and saying "we don't know anything about economics." It's mostly just a failing of the video, not of actual Hayek.

Real Hayek had a pretty solid argument for why markets are better than centrally planned economies. In fact, it's Hayek's argument in particular that makes me a pro-market liberal, and not some sort of more left-wing radical. But that has to do with the inability for people to express information about preferences in some non-market way that a central planner could use to match up demand with supply appropriately.

The problem with that rearing its head in a conversation about Hayek vs. Keynes is that it doesn't apply to Keynes's theory at all. He isn't taking away the market mechanism and replacing it with a central planner.

The problem is that Hayek was never big on coming up with actual theoretical models for how economies react to certain things. Instead, he was just big on coming up with narratives about how he thought government doing things to the economy always led to folly. That's the whole Austrian "school" of economics in a nutshell though -- they aren't interested in modeling things like scientists, just telling stories like historians or philosophers. Maybe they're right, maybe they're not, but there's no real way to use data to validate or refute them, and that's the way they like to keep it.

Also, this is a great opportunity to mention Naomi Klein's The Shock Doctrine

The New Road to Serfdom
Christopher Hayes, In These Times, November 9, 2007

In the early ’80s, as Margaret Thatcher attempted to hack away at England’s substantial public sector, she found a frustrating degree of public resistance. The closer she got to the bone, the more the patient wriggled and withdrew. Thatcher doggedly persisted, yet her pace wasn’t fast enough for right-wing Austrian economist Friedrich von Hayek, her idol and ideological mentor. You see, in 1981, Hayek had traveled to Gen. Augusto Pinochet’s Chile, where, under the barbed restraints of dictatorship and with the guidance of University of Chicago-trained economists, Pinochet had gouged out nearly every vestige of the public sector, privatizing everything from utilities to the Chilean state pension program. Hayek returned gushing, and wrote Thatcher, urging her to follow Chile’s aggressive model more faithfully.

In her reply, Thatcher explained tersely that “in Britain, with our democratic institutions and the need for a higher degree of consent, some of the measures adopted in Chile are quite unacceptable. Our reform must be in line with our traditions and our Constitution. At times, the process may seem painfully slow.”

The Hayek/Thatcher exchange is one of many revealing historical nuggets unearthed in The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein’s ambitious history of neoliberalism. Hayek isn’t the star of The Shock Doctrine—that dubious honor goes to his protegé and fellow Nobel Laureate Milton Friedman. But Klein’s totemic, capacious and brilliant alternate history of the last three decades of global political economy can best be understood as a latter-day response to Hayek’s classic right-wing manifesto, The Road to Serfdom.

More of this review here: http://www.naomiklein.org/shock-doctrine/reviews/new-road-serfdom

A "Unique American artform"? COME ON... fricken American's and their bloody blinkered view of the world and history such that they think that they invented everything.

The Cars that Ate Paris: A 1974 Australian film by Peter Weir

Austrian Erwin Wurm creates Fat Cars

And I'm sure there are many others... fricken bloody Americans.

Gah.

>> ^quantumushroom:

The majority of the American people aren't buying the leftmedia's BS spin about this lone vermin, whose heinous act was apolitical.

A politician was specifically singled out at a political function. By that very fact, it can't be apolitical.

It wasn't like he went and robbed a 7-11 and ended up accidentally hit a member of Congress when the clerk pulled a gun. That would be apolitical.

The word "non-partisan" is a better fit, but firing a gun at a politician sounds pretty "partisan" to me.

He was clearly not right in the head, but also pretty clearly, he wasn't completely loopy. As much as the media has joked about "government using grammar as mind control", that's exactly what was going on in 1984, which was on his favorite book list.

Also, there's been mention of him burning the flag. Well, in his Youtube videos he explains that the flag isn't in the Constitution, therefore it's meaningless.

As much as the right likes to act like flag burning is something liberals do for fun, what does it mean if it's burned in protest of it being unconstitutional to even have an American flag?

He also talks at length about currency, and there he sounds like an Austrian economist -- the Fed is manipulating currency to control us, and the solution is that we should just individually create and use our own currency instead.

All that said, I'm perfectly happy to say that nothing about the above makes "the right" directly responsible for what happened. I think he had sterner stuff than cable news driving him nuts.

But I will say that the delusional nightmare he fell into is very much like the one the right is always trying to sell these days. The government is evil, all powerful, and coming for you, so get your guns, you "might" need them.

Do I think they should stop pushing that dystopian picture? Yes, and I always have felt that way. Do I think this is a good time to say so again? You betcha.

Do I think the left generates a significant chunk of the noise that adds heat to our debates without adding light? Sure. Does the left have a similar dystopian vision that they're constantly hammering home? Maybe. If so, ours is presented with non-violent calls to action and a kernel of hope that it's not too late to make a difference, not a call to lock and load, build a bunker, and your only hope is that you might survive the inevitable apocalypse.

And QM, if you read this far down, I'm not really directing this at you, you were just the catalyst for a rant that had been building for a while. Thanks for helping bring it out.

@imstellar28

Okay, I was hoping for some sort of philosophical argument for why Austrian schoolers don't quantify anything. Instead I got a rant about everything that is wrong with the world. For instance, it isn't clear what net neutrality has to do with why quantifying macroeconomic variables, and making testable predictions is somehow not the right thing to do. You can keep saying "you'll see." Meanwhile, I'll point to 300,000 private sector jobs created this past month, the most innovative research institutions in the world, and a dollar that remains the world's store of value.

>> ^NetRunner:

>> ^bmacs27:
Frankly, arguing for "Keynesian economics" isn't what anyone is doing anymore. The monetarists laid that to rest years ago.
True, but a bit misleading. The monetarists laid "Old Keynesian" economics to rest, but that led to the neoclassical synthesis and New Keynesian economics.
In other words, the Keynesians did exactly what the Austrians refuse to do -- they looked at the new data, and the theories of other schools, and used both to formulate new and improved theories of economics that retained some of the insights of the old theory that still hold up to scrutiny (e.g. price stickiness).


They can't because they don't quantify anything. That's what I meant by "Often I find it's the Austrian schoolers that are unwilling to accept facts (read data) that call their theory into question." Coincidentally, it's the same weakness that makes it a poor school of economics for evaluating the consequences of policy decisions with respect to a stated objective.

>> ^bmacs27:
Frankly, arguing for "Keynesian economics" isn't what anyone is doing anymore. The monetarists laid that to rest years ago.

True, but a bit misleading. The monetarists laid "Old Keynesian" economics to rest, but that led to the neoclassical synthesis and New Keynesian economics.

In other words, the Keynesians did exactly what the Austrians refuse to do -- they looked at the new data, and the theories of other schools, and used both to formulate new and improved theories of economics that retained some of the insights of the old theory that still hold up to scrutiny (e.g. price stickiness).