@ghark, thanks for the links, I read all of them, very informative.

I'm sure you know that economics has more than one school of thought, which often times are very opposed to each other not only in theory, but also in their interpretations of important historical events like the Great Depression or even the Industrial Revolution. It seems straightforward that, given all historical evidence we have, there should be only one account of what went down in history, right? It's too bad that's not the case Historians are, themselves, often influenced by their own ideological bias. At least we both know it would be naïve to think all historians agree exactly on everything in history! Ask economists from different schools what happened during the Great Depression and they will invoke very opposite historic accounts.

A quick google search gave me an article stating almost the opposite of your 1st article (which is no surprise given its purpose to dismiss an alleged economic myth):
http://economics.about.com/cs/taxpolicy/a/taxing_growth.htm

That being said, I'd like to address your statement that "higher taxes is bad for our economy" being a rumor spread by the rich. I could just as well state the opposite is a rumor spread by those with a vested interest on taxing other people: the government and those who aren't being taxed. Wouldn't you agree that's more likely, given there are more people with that vested interest than rich people in the world? Also, wouldn't it be more likely that, maybe, a socialist ideology would be behind an effort to spread such a statement? I'm not questioning socialism, just saying, it's very likely a socialist would take a biased interpretation of economic growth and higher taxation and state that they're related in direct proportion (socialists usually want bigger governments that require higher taxes).

Economists say controversial things like "war is good/bad for the economy", "inflation is good/bad for the economy", "when you break a window, that helps/hinders the economy", so it's no wonder that something like "higher taxes is good/bad for the economy" falls into that category.

We cannot solve all economic fallacies here, I'm just trying to point out that we should be aware of the underlying economic schools of thought to better understand the ideological bias motivating their own sets of conclusions.

Chile's approach does not seem free market to me, even if it appears to be closer to that because of privatization. All education there seems to be state funded. When the state comes into a market providing easy money, costs go up, it's supply and demand. If every student has X amount of money provided by the state, private schools stop competing over price, so tuition costs go up (at least that's what I could gather, I'm sorry if I'm not exactly an expert on the Chile situation!)

About the uneven distribution, what I was stating is that not much moral judgement can be made on distribution itself, but on how this distribution is happening. If you have more money than me, I don't have enough information to judge whether that situation is unfair or whether you're undeserving of that money.

When I consider those who benefitted from TARP bailouts though, it pisses me off , because they got money from the taxpayer, money that they're not legitimately entitled to, they didn't have to work for, they didn't deserve. That particular kind of uneven distribution is scandalous IMHO, and it's the kind of injustice that more often results from misallocation of taxpayer money that is more likely to happen with higher taxation.

@renatojj It's nonsense that lower taxes on the wealthy means they become more productive, that's simply a rumor spread by the rich. The problem with low/no corporate taxes (which is what RP wants) is that over time more and more wealth accumulates in the top bracket and less and less is available to the middle and lower classes, the wealthy then use this money to influence policy making and the problem becomes worse - which is exactly what is happening now. Yes, this is going to happen anyway, but poor tax policy exacerbates it.

If you don't believe me then just look at history: Coolidge became president in 1923 and signed into law the Revenue Act of 1924, the tax rate for the those earning above $10,000 (about $120,000 by today's standards) was only 6%, there was a surtax added to higher incomes but it only crept up very slowly. Guess what happened? 10 years of economic hell for America - otherwise known as the great depression. Guess what kick started the economy? In part higher taxes. For example the highest period of growth for America was when it had the highest tax rate for the upper bracket (91%) - which was during WWII. Once the tax rate's started coming down again, guess what happened to economic growth - right, it slowed.

If you look at one specific person that makes a lot of money, and you double there taxes, it's easy to make the assumption that you are harming them - but a countries economy is far more complex than that and works in ways most economists don't even understand. To assume that you know what is best for American tax policy is ridiculous unless you happen to know more than every other economist on the planet (and same goes for me). What is clear from history though is that lower tax rates on the wealthy do not help the economy grow, that is pure myth that has been perversely thrown out there to misdirect the general population while the wealthy accumulate more and more money.
http://www.huppi.com/kangaroo/L-taxgrowth.htm

As far as the RP - Chile connection - RP's 'free market' approach to education is exactly what has already happened in Chile - this privatization of higher education has resulted in Chile's technical schools, colleges and universities having the "highest costs of higher education of any OECD country and the lowest public expenditure" (from the doco I link below). And the quality of the education? Very poor according to an October Economist article:
http://www.economist.com/node/21531468

Is that what you want to happen to American education?

More info about the issues and protests:
http://en.wikipedia.org/wiki/2011_Chilean_protests

And I've sifted a documentary on the issue if you want to watch:
http://videosift.com/video/Chile-Rising

And lastly, maldistribution is simply uneven distribution - e.g. according to the NY Times "The current maldistribution of wealth is also scandalous. In 2009, the richest 5 percent claimed 63.5 percent of the nation’s wealth. The overwhelming majority, the bottom 80 percent, collectively held just 12.8 percent"

Please justify that to us.

Obama: "Occupy Wall Street" reflects "broad-based frustration"

President Obama on Thursday called the "Occupy Wall Street" protests a reflection of a "broad-based frustration about how our financial system works" and pledged to continue fighting to protect American consumers.

The president, speaking at a press conference, said he had heard about and seen television reports on the recent protests on Wall Street, and noted that "I think it expresses the frustrations that the American people feel."

"We had the biggest financial crisis since the Great Depression - huge collateral damage throughout the country, all across main street. And yet, you are still seeing some of the same folks who acted irresponsibly trying to crack down on abusive practices that got us in the situation in the first place," Mr. Obama told reporters. "I think people are frustrated.">> ^shagen454:

They are all bad. Democrap or Retardican. Its all the same shit bought by different... or the same, corporate greed. Obama has hardly even acknowledged Occupy and ALL OF THOSE PEOPLE. You voted for the change marketing strategy but you let corporate greed buy into even more Bushesque policy by believing that voting makes a difference. He doesnt want to publicize Occupy by even referring to it because he knows and the powers that be know that people are beginning to take note that it is all bullshit, its broken, its an illusion and it all fundamentally needs to be rebuilt... utilizing the constitution.
Instead of voting you should fucking protest a system that doesn't work on voting day!!!! Whether it is Romney, Paul or Obama its nearly the same shit. They strip you of liberties and steal from your coffers, deregulation for the corporate state, more police state, privatizing everything under the sun, raising the prices and gauging everyone who does not have a million dollars. Stop perpetuating the illusion.

I wish the term "conservative" was properly used. Today's so called conservatives are right wing extremists who have abandoned any sort of conservatism in favor of what is essentially a fascist state - a partnership between concentrated capital and government.
Secondly, this leaves the democrats off the hook. It was Clinton who ultimately signed off on de-regulating the banks and dispensing with Glass-Steagal - a law that prohibited banks from also being investment banks. A law put in place after the Great Depression
Clinton also ushered in a new era of "globalization" - policies that really only favored the wealthy. True globalization would allow free movement of money, goods, AND labor. However, the free movement of labor has been excluded, meaning that corporations country-shop for the cheapest labor- thereby speeding the process of exporting our industry.

Some relevant essays:
http://www.washingtonsblog.com/2010/10/fraud-caused-great-depression-and-this.html
http://www.washingtonsblog.com/2011/07/theres-no-recovery-because-government.html
http://www.washingtonsblog.com/2011/08/real-reason-sec-has-been-shredding.html
http://www.washingtonsblog.com/2011/11/obama-prosecuting-fewer-financial-crimes-than-under-either-bush-presidency.html
http://www.washingtonsblog.com/2011/11/real-free-market-capitalists-demand-that-financial-fraud-be-prosecuted.html
http://www.washingtonsblog.com/2011/11/i-will-never-do-business-in-the-united-states.html

>> ^marbles:

Don’t Blame Capitalism for Wall Street’s Corruption and Lawlessness:
When Mahatma Gandhi was asked what he thought about Western civilization, he answered:
I think it would be a good idea.
I feel the same way about free market capitalism.
It would be a good idea, but it is not what we have now. Instead, we have either socialism, fascism or a type of looting.
If people want to criticize capitalism and propose an alternative, that is fine . . . but only if they understand what free market capitalism is and acknowledge that America has not practiced free market capitalism for some time.


think you'll find that it's the move towards a more free market that made things worse, from deregulation in the 70's onwards. governments and presidents Preached about the reduction of big government, and letting the market do what it wants.
Granted, its never strictly speaking been, a free market, because you still had government taxing (though as Wolff has pointed out in the video, shifting the burden completely away from business, and therefore, the market) but what you can say is this:

history now tells us that the more free the market, the worse things become....what makes you think having a 100% free market would make things perfect?
It would be total anarchy. The wealth divide would become incomprehensible.

It's all there, in history. The proof to end all these arguments is there, because it's already happened. Regulation, after the great depression, immediately improved things for America, taxing the wealthy, using that money to put in infrastructure that made america a superpower.
Deregulate everything, and watch the western worlds decline (for the majority).
That is what happened, you cannot argue a situation that actually happened.

All you need is a government that isn't corrupt, that doesn't pander to the free market and peoples desires to win elections, but instead holds certain ideas to be true. The death of idealism was supposed to make individuals free, instead it produced a new kind of control that made things a lot worse for the majority of people.
I believe science will ultimately find out the definition of 'human flourishing' and therefore create a new idea of what is actually best for a society.

Dude, stimulus does not immediately kick in. It takes time to take effect.

Yes - so far it has taken over 2 years and STILL hasn't 'taken effect'. (rimshot)

And considering the economic data that suggests that this was the worst economic downturn in since the Great Depression, where unemployment reached 25%, how is it "balderdash" unemployment would have climbed into the teens?

Where is the evidence that 'proves' unemployment WOULD HAVE reached 13% or 17% or 25%? Depends on who you are talking to of course. There are indicators that US unemployement is indeed more along the lines of 17% when you take away 'book cooking' techniques such as not counting people who aren't looking for jobs anymore, and so forth. Regardless, there is no substantive economic evidence that unemployment as traditionally measured was going to keep increasing beyond the plateau it reached.

You also failed in your economic analysis.

It isn't my economic analysis. It is the economic analysis of economists. Argue with them. Just because you disagree with them doesn't make you right. It just makes you one of millions of people with an uninformed opinion.

"...the nonpartisan Congressional Budget Office released a report in August that said the stimulus bill has '[l]owered the unemployment rate by between 0.7 percentage points and 1.8 percentage points' and '[i]ncreased the number of people employed by between 1.4 million and 3.3 million.'"

I already talked about the CBO report - which is one of the most 'generous' interpretations possible and is based on fuzzy facts and a bunch of imagination. Other analysis is far more critical, and has a lot more concrete data to back it up.

"most economists believe"

Nope - you don't get to pull an Obama tactic here. When Obama says bullcrap like this he skates away because the media doesn't call him out. I'm different. I'm calling you out. Define your claim. "Most economists"... What economists? Name names. Name the organizations. Name the time. Name the place. Name the report. Name the data. Supply your proof to your claim that 'most economists' say the bill wasn't successful because it wasn't big enough. The only economnists who say that kind off garbage are prog-lib Keneysians - who aren't worth the powder to blow them up. There are HOSTS of economists who completely, unequivocally, and thoroughly disagree with that highly questionable position.

Again, I challenge you to show me a recession in modern times that was not ended after a period of deficit spending. You can't name one, can you?

Your position is spurious because for the past 70 years the US government has been on a constant deficit spending binge. I can with equal validity claim the following...

"I challenge you to show a recession in modern times that was not PRECEEDED by a period of deficit spending. You can't name one, can you?"

When the baseline of government is constant debt spending, for anyone you to claim that all 'positive' events are the result of deficit spending is nonsense. The chart proves nothing expect that the government has been debt spending 95% of its existence. It sort of also proves that that the recessions in the 60s, 70s, 80s, and this recession were preceeded by deficit spending.

there's no other way to explain it

Yes there is and I just showed it to you. Only people who are mired in a narrow, biased, bigoted, and blinkered Keneysian world-view can say there is 'only' one explanation. Reality and facts prove otherwise.

we've ALWAYS ended recessions with deficit spending

And this is why you are proven to be narrow-minded, biased, bigoted, and blinkered. Private sector growth is what ends recessions - not deficit spending. If deficit spending 'ended' recessions, then why are we still in a recession? Obama Jerkface the First has engaged in more deficit spending than any president in US history in raw terms. Why aren't we in an economic boom right now after 3 years on his debt steroids? If debt got rid of recessions, then we'd never go INTO a recession because we've been debt spending 95% of the time. Your analysis is so simplistic, so flawed, and so moronic that it begs the question whether you even think about what you write, or if you are just so steeped in leftist propoganda that you have abandoned free-thinking completely.

So what was WWII?! What were the 1980's?!

WW2 was a world war that was followed by a post-war private sector boom of increased private spending and greatly decreased government debt spending. The 1980s was a period of time when private businesses grew as a result of decreased government taxation - caused by a conservative president forcing a liberal congress to cut entitlements somewhat.

Explain how in the world deficits prolonged the Great Depression!

Like many prog-libs, you lack historical knowledge. FDR engaged in massive debt spending and public works long before WW2. The creation of public works based on deficits created an environment where government was a 'job creator', not the private sector. When the government is actively involved in setting wages, being the 'job creator', and otherwise setting a baseline of economic activity, then the private sector holds back its capital, jobs, and other activities. The reason is simple - the private sector cannot compete when the public sector is artificially manipulating costs and prices. It creates an atmosphere of massive economic uncertainty, and the private sector is unwilling to take risks, make bold moves, or otherwise do anything that might be jeopardized by a sudden decision by government to move in that direction.

So when government is subsidizing construction workers (such as with public make-work crap), it interferes with the private constriction industry. They are not going to hire workers at $20 an hour when government workers are getting tax-subsidized $30 jobs. They can't compete with that. So they don't hire anyone, and they fire people they already have, and they also have people quit because government is hiring at higher than market value wages. Then in a year when those jobs dry up, the private sector is flooded with workers who expect a 30 an hour job, but the job environment is full of employers who only pay 25 (or less), and who are scared to hire anyone because they have no idea if government is going to go on another bogus debt binge or not. The only time the private sector steps up in in periods of time when they know the government is NOT going to be rocking the boat with arbitrary decisions for a while. This is why there was a big boom AFTER the war (when government activity decreased) and in the 80s. Recessions are ended when the private sector has CONFIDENCE - and that only happens when government is NOT doing anything.

I could go on a long time, but I doubt you care to hear it. Prog-libs who believe only the Keneysian model don't care to hear how thier precious philosophy screws up the world market, prolongs economic downturns, and basically is the major cause of suffering, poverty, and economic unrest.

I don't for the life of me understand why people like you will literally argue the sky isn't blue if it fits your ideological narrative.

Pot - meet kettle. Your world view is 100% backwards. You are the one calling the sky green. You are the one saying the moon is made of cheese. We in the real world await your arrival some day when you're ready for it.

A. Overly simplistic, and you're confusing to some degree what is Keynesian. A central tenant of Keynesian economics is counter-cyclical budget deficits. When there's a recession, the government should run deficits, and the larger the recession, the larger the corresponding deficit. That's been a non-stop, although admittedly abused, government policy since the Depression. Also, Keynesian economics had components in it for monetary policy as well. Keynes advocated for lower interest rates during times of recession along with increasing the monetary supply. Yes, he did believe that during more severe recessions that monetary measures would not be enough, but he nevertheless advocated for the various monetary policies. These align up with most recessions as far as what the gov't did from the Great Depression on. Just because Keynesian policies disappointed during the 1970's, the ideas were not altogether abandoned ever since. The simple fact of the matter is aside from 2007, there hadn't been a particularly severe recession since the 1970s, so it's reasonable to assume that direct employment wasn't deemed necessary, not that it was seen as bad policy in all cases.

B. It happened to me by the hand of Microsoft. I'm pretty sure they didn't have flunky MBAs. ;-)

C. There are a lot of similar issues involved. My point was only that you can't just tie requirements to it, and that's that. There are a huge myriad of issues that would come hand in hand with stipulations to unemployment. Your idea is still something I'd be onboard with if those devils in the details were addressed. I do see as an example that some people become unemployed because of structural changes to the economy that causes their jobs to never come back. As a case in point, textile factory workers who lose their jobs due to offshoring are suddenly in a position where market forces have no remedy. They lack the skills to get jobs in areas of growth such as more in depth computer skills, and likely lack the financial resources to get the education and training to get said skills because they're unemployed. This is a perfect example in my opinion where the market and free trade fail from time to time, and some force, likely the gov't, needs to step in for the good of everyone. These people would benefit from retraining, so they can get a good job, business owners benefit from increasing numbers of workers who can do the jobs they're needing people to do, and it becomes a win win situation.

D. The last time we tried no deposit insurance, it failed miserably. Banks lent money for people to buy goods and services they couldn't afford, and stocks on the margin. People stuck their money in banks anyway. The only difference is when fear hit the market after the crash, a lot of people, many irrationally, pulled their money from banks, causing a collapse in the banking system, which tanked the entire economy even further.

People lack the time and/or motivation to stay informed on all kinds of issues from local politics, to PTA meetings. I don't see how they could begin to assess what loans their banks were making as far as riskiness. And the typical American when it comes to finances? Yikes! Next to no savings, can't understand how much they should be regularly investing, etc. And it's not just the stupid people. Most Americans don't even know what a mutual fund actually is. How could they possibly make intelligent decisions about the riskiness of their banks' portfolios? I consider myself smarter than the average bear, but even I'd be paralyzed with fear selecting a bank based what little info I could find of their portfolios. Instead, I make sure they're FDIC insured, because that in and of itself entails objective benchmarks to even get that insurance.

And honestly, I don't see many people making decisions about their banks based on rates alone. As a case in point, very few people I know put money in online high yield savings accounts instead of the local credit union, bank, or large megabank, despite the fact that in most cases online savings account providers such as ING Direct pay 2-3 times the interest. I don't believe that's what caused the madness in the banking industry at all. At the very least, there's a massive list of causes well above FDIC insurance, and even if FDIC insurance did play a role in causing the crisis, it also served well in preventing runs on the banks in general that would have compounded the crisis further.

>> ^bmacs27:

@heropsycho
A. Because we've been leaning on monetary policy as our intervention of choice. Direct employment has been called socialism for 30 years. That doesn't suggest a dominant Keynesian ideology. Really it's been this mix of monetarism and supply-side economics which morphed into some mutilated crony-capitalism.
B. I suppose it could happen, but it would take a rough business climate, or some flunky MBAs. In that situation I'd try to increase my business (i.e. make $200,000).
C. That's why we have food stamps. It isn't a perfect solution, but the kid starves if her folks spend the whole check on smokes too. Vices aren't the kind of "demand side" stimulus I'd like to see (one flaw in the Keynesian argument given the current living conditions of the American poor).
D. I really do believe that if the FDIC didn't exist, "the market" would not have allowed deposits to be leveraged by banks investing in exotic financial instruments. Like you said, even the bankers didn't know what the hell they were doing! Without the FDIC people would very quickly ask, "what the hell you doin' with my money?" Rather, since their money is backed by the government they ask, "what sorts of rates are you offering?" It's that pressure from the distorted marketplace that pushed banks into more and more leverage to stay competitive. Those rates were realized by making massively leveraged bets that were only possible by hedging with exotic instruments. Once upon a time people knew their banker. I think that's the best FDIC there could be. There might be some legal patchwork of the Glass-Steagall flavor that might make it work, but chasing down all the unintended consequences would be a challenge. Certainly figuring out how to unwind all the securitized mortgages that already exist makes that sort of policy direction seemingly prohibitive.
F-. Dude, Peter Schiff is a quack.

A. I don't understand how you're arguing we haven't been practicing Keynesian economics since the Great Depression. We've run deficits almost the entire time, lowered interest rates even further during recessions, and enact stimulus when recessions hit in the form of tax rebate checks, income tax cuts to consumers, gov't programs to provide jobs to increase demand, extended unemployment, etc., although we normally do a poor job of running surpluses when we should. But in a nutshell, that is Keynesian economics. And it has worked pretty well overall. Influence of monetarist policies have tamed the Keynesian interventions, but there's little doubt that all the above actions in the last two recessions were born of Keynesian thought.

B. If a business is making $100,000 off your labor, but is paying you $80,000, resulting in a $20,000 profit, why wouldn't they fire you if they could fire someone to do your job for $50,000, resulting in a 250% increase in profit? It does happen. I was the victim of it in 2004.

C. If the devils in the details could be worked out, and that's a big if, I'd be in favor of having stipulations to unemployment benefits. But you got a lot of issues you'd have to deal with. What if the person on unemployment has kids? You're gonna deny them welfare if the kids would starve? Very complicated issue as just one example.

I do think though we need in this age better education to retrain workers for the new jobs that come into the US as jobs get outsourced to other countries.

D. About the FDIC... First off, you're saying that people could check the banks' ability to make too risky of loans, but it's a whole other thing to say FDIC insurance encourages bad lending. It's simply not true. Again, regardless if deposits are insured or not, banks will go under if they make risky loans regardless of deposit insurance for consumers in most cases. Again, bailouts are a whole other issue. As for people checking the banks for bad lending, that's a pipe dream. The general consumer has no clue what are good or bad loans overall, nor the time to monitor the lending practices of banks. Hell, BANKERS didn't understand the crap they got themselves into in the mortgage crisis until it was too late, and they're professionals in the field. It's not a practical solution. On top of all that, the FDIC does in some ways help to ensure baseline qualities of banks. Not every bank can be FDIC insured, and many of the regulations FDIC insist upon make the banks more solvent, etc. So when consumers insist the bank is FDIC insured, they're insuring their deposits as well as guaranteeing a minimal level of integrity in the bank itself.

Lastly, I'm totally down with reasoned dialogue, even from points of view I completely oppose. I'm not slamming this guy because he's a conservative. I'm slamming him because he made ridiculous claims that are obviously factually inaccurate. Ideology shouldn't blind people from obvious fact that don't fit.

>> ^bmacs27:

@heropsycho
I'd disagree with you on a couple of points.

However, I will say once again, Keynesian economics works. We've practiced it since the Great Depression, and it works without a doubt.
First of all, we haven't really practiced Keynesian economics since stagflation during Carter. The decoupling of inflation and growth was very troubling to economists as the Keynesian theory had no explanation for it. In the period between Carter and Obama, we effectively practiced Monetarist economics, or "supply-side" economics. It's that economic policy everyone is railing against even though it was practiced during one of the periods of greatest growth in our history (obviously there are confounds, e.g. the personal computer). The Austrians just don't think that demand focused interventions will work any better than supply focused interventions. There is always a deadweight loss to taxation.

Profit centers do in fact get outsourced, although granted not as often as cost centers. Why would a company not outsource a profit center if it would increase profits in the long run?
Profit centers are most often NOT outsourced. If there is another profit center abroad, you expand, you don't fire the guy that's making you more money than he's costing you.

And prolonging unemployment has also provided an artificial market for goods and services for those who do have jobs. It's not so simple to suggest that extended unemployment is a disincentive to work. It's also providing those who are collecting it who actually can't find another job with income to spend, which props the entire economy up. It's not an either/or; it's both. And there are far more people right now on unemployment who cannot find another job than those holding out for something that pays what they're used to.
I understand the demand side argument. I'm saying, rather than giving them money for nothing, let's give them money to become hirable. It's similar to saying that the money handed to banks should have had conditions attached. When people are begging for money, they ought to accept some stipulations.

Finally, bear in mind that when it comes to finding common ground, and that kind of thing, you cannot find common ground with people who are fundamentally altering obvious fact to suit their views. Schiff made to completely ludicrous claims (child labor was ended by the market, and the FDIC deposit insurance fuels bank speculation). Both claims are preposterous.
I agree with you about child labor, however I'd disagree with you about the FDIC. People should be paying attention to what banks do with their money, and respond to poor decision making with the withdrawal of their deposits. Instead, they just assume it doesn't matter (in terms of risk) where they keep their money and just shop for the highest interest rate. Those higher interest rates are most often fueled by more than traditional lending (as anyone banking in such a manner would lose deposits to higher yields in the distorted marketplace).
Also, I'm Keynesian. I just don't think free market viewpoint you'd read in the Economist, Financial Times, WSJ, or any other reasonably reputable conservative source is being well represented on this website. If we all cheerlead for one team, we'll never substantially challenge our own groupthink.

@heropsycho

I'd disagree with you on a couple of points.


However, I will say once again, Keynesian economics works. We've practiced it since the Great Depression, and it works without a doubt.

First of all, we haven't really practiced Keynesian economics since stagflation during Carter. The decoupling of inflation and growth was very troubling to economists as the Keynesian theory had no explanation for it. In the period between Carter and Obama, we effectively practiced Monetarist economics, or "supply-side" economics. It's that economic policy everyone is railing against even though it was practiced during one of the periods of greatest growth in our history (obviously there are confounds, e.g. the personal computer). The Austrians just don't think that demand focused interventions will work any better than supply focused interventions. There is always a deadweight loss to taxation.


Profit centers do in fact get outsourced, although granted not as often as cost centers. Why would a company not outsource a profit center if it would increase profits in the long run?

Profit centers are most often NOT outsourced. If there is another profit center abroad, you expand, you don't fire the guy that's making you more money than he's costing you.


And prolonging unemployment has also provided an artificial market for goods and services for those who do have jobs. It's not so simple to suggest that extended unemployment is a disincentive to work. It's also providing those who are collecting it who actually can't find another job with income to spend, which props the entire economy up. It's not an either/or; it's both. And there are far more people right now on unemployment who cannot find another job than those holding out for something that pays what they're used to.

I understand the demand side argument. I'm saying, rather than giving them money for nothing, let's give them money to become hirable. It's similar to saying that the money handed to banks should have had conditions attached. When people are begging for money, they ought to accept some stipulations.


Finally, bear in mind that when it comes to finding common ground, and that kind of thing, you cannot find common ground with people who are fundamentally altering obvious fact to suit their views. Schiff made to completely ludicrous claims (child labor was ended by the market, and the FDIC deposit insurance fuels bank speculation). Both claims are preposterous.

I agree with you about child labor, however I'd disagree with you about the FDIC. People should be paying attention to what banks do with their money, and respond to poor decision making with the withdrawal of their deposits. Instead, they just assume it doesn't matter (in terms of risk) where they keep their money and just shop for the highest interest rate. Those higher interest rates are most often fueled by more than traditional lending (as anyone banking in such a manner would lose deposits to higher yields in the distorted marketplace).

Also, I'm Keynesian. I just don't think free market viewpoint you'd read in the Economist, Financial Times, WSJ, or any other reasonably reputable conservative source is being well represented on this website. If we all cheerlead for one team, we'll never substantially challenge our own groupthink.

bmacs27,

I actually agree with a lot of what you just wrote. Market interventions won't fix many of our problems. I'm not in favor of complete mortgage forgiveness. Printing the money to do this would cause hyper-inflation and would wreck the economy. Not to mention the fact that mortgages within people's retirement benefits would become worthless, destroying retirement plans.

However, I will say once again, Keynesian economics works. We've practiced it since the Great Depression, and it works without a doubt.

Profit centers do in fact get outsourced, although granted not as often as cost centers. Why would a company not outsource a profit center if it would increase profits in the long run?

And prolonging unemployment has also provided an artificial market for goods and services for those who do have jobs. It's not so simple to suggest that extended unemployment is a disincentive to work. It's also providing those who are collecting it who actually can't find another job with income to spend, which props the entire economy up. It's not an either/or; it's both. And there are far more people right now on unemployment who cannot find another job than those holding out for something that pays what they're used to.

Finally, bear in mind that when it comes to finding common ground, and that kind of thing, you cannot find common ground with people who are fundamentally altering obvious fact to suit their views. Schiff made to completely ludicrous claims (child labor was ended by the market, and the FDIC deposit insurance fuels bank speculation). Both claims are preposterous.

Dude, Schiff is the one spewing the most ridiculous things from a historical perspective I've ever heard, not West. Are you saying right now that Schiff is right that child labor was ended by the free market, not gov't regulation?! That's just patently absurd!

He's saying that a guarantee of deposits by the FDIC fueled speculation. Okay, so when and why was it instituted? In *1933*, it was instituted *after* massive stock speculation among other causes triggered the Stock Market Crash of 1929, which triggered the Great Depression. As banks had invested in stocks, etc themselves (outlawed by Glass-Steagall), made bad loans, including to allow people to buy stocks on credit, etc. etc. people made runs on the banks to get their deposits out before the banks went belly up, regardless of if individual banks themselves participated in the speculation because no one knew which banks were actually in trouble. Some Depression era people put their money "under their mattresses" and a few kept that attitude up until their deaths because of those runs on the banks. The FDIC was instituted to get people to put money back into banks to rebuild on hand deposits, so banks would be able to lend again and actually stay in business. We had the FDIC for almost 80 years now, and the banking system has remarkably MORE stable than it was before the FDIC without any doubt, and this clown says it fuels speculation?! You know what you didn't see in the last recession when the market tanked? MASSIVE RUNS ON MOST BANKS! That's precisely why we have it! And it's logically ridiculous on the surface of it. Just think about it. The FDIC guarantees that I get MY money back if I deposit it to a bank that is FDIC insured, and the bank goes belly up. What happens to the bank if it makes bad decisions? It goes belly up. So why would the bank speculate in that situation due specifically to the FDIC?! THEY STILL GO BELLY UP! You can say the bank bailouts had something to do with it because now the Goldman Sachs of the world know that gov't won't let too big to fails fail. I'm sympathetic to that argument, but the FDIC's insurance on deposits?! RIDICULOUS!

Peter Schiff is not correct here. It's some of the most patently ridiculous things I've heard yet about the economy. If you've read my posts, I'm as pragmatic as one could possibly be, and I'm without a doubt a moderate. I don't give a crap whether specific gov't regulations work or not, but I don't attempt to blind myself with ideology, but this clown is going to great lengths to fundamentally rewrite historical record that's basic freaking fact about the US prior, during, and after the Great Depression that even a basic historical understanding would allow anyone to realize he's an idiot, or is at best making a disingenuous argument to trumpet free market economics for the sake of itself.

>> ^bobknight33:

Peter Schiff is correct. Cornell West foolishly wrong. He teaches African studies which teaches jack about how economies work.

Yeah, feel free to slap that video in the face of anyone who ever says Peter Schiff is awesome and/or infallible.

The Krugman predictions of stagnation and disinflation were right, crackpot predictions of Weimar/Zimbabwe-style hyperinflation were dead wrong.

I'm a bit curious how Schiff spins his utter fail.

In reply to this comment by dystopianfuturetoday:
Peter Schiff *Failboat.com.org

In reply to this comment by NetRunner:
Definitely one to mark down:

Schiff says we'll have a crash of our economy driven by hyperinflation by the end of the year, or maybe in 2010.

Krugman (who unlike Schiff is a Nobel prize winning economist) also predicted the problem we're having now, and says if we don't do something even bigger than an $800bn stimulus, we're in for a deflationary problem, just like the Great Depression.

Clearly, someone will be proven right, even if disaster ensues.

Flim-flam artists like Schiff should know better, if the problem now is because Greenspan made the interest rate too low in 2002 then the real problem is that our current 0% interest rate will cause a new asset bubble that will collapse, so he should allow for a much longer period of time for it to gestate, like say Obama's second term, 2014 or so.

But that wouldn't get him on the TeeVee machine to throw bricks at Democrats as often.

>> ^dystopianfuturetoday:

You didn't respond to main thrust of my comment. I'll take that to mean you have no coherent response. Instead you've given me a hodgepodge of political slogans.
(I know I shouldn't lavish you with undeserved attention, but I've got a debate jones to satisfy.)
"Tax the rich" All those record profits are doing the economy no good stagnating in corporate coffers. Take that money and pump it into the economy. Use it to create jobs, to repair our crumbling infrastructure, to provide health care. Tax revenue can create jobs when markets fail. It worked in the last great depression. It will work in this depression too.
"Socialism" Nice of you to put words in my mouth. I don't want extreme socialism anymore than I want extreme capitalism. A balanced system that takes advantage of the best of both systems is the wisest.
"Founding fathers" I find it funny that when conservatives come up short in the argument department, that they put words in the mouths of the founding fathers. If your argument cannot stand on it's own then don't make it. Putting words into the mouths of dead people is no more acceptable than putting them into the mouths of the living.
"Tyranny of the majority/Cover for oligarchs" These two stock arguments you've chosen to regurgitate contradict one another. Clearly oligarchs and the people can't both be in charge. You've got to pick one or the other. These types of contradictions reinforce my belief that you are unable to think things through for yourself.


Keep the personal attacks coming, it shows how pathetic your position really is. Debate jones, is that what this is? More like your satisfying your flaming jones, which makes me really question your psychological health.

Fraud and corruption caused the last depression, this depression, and future depressions if left to you. Instead of trying to fight and prevent the fraud, you try to present the problem as a partisan one. And offer solutions sponsored by Wall Street politicians.

You didn't respond to main thrust of my comment. I'll take that to mean you have no coherent response. Instead you've given me a hodgepodge of political slogans.

(I know I shouldn't lavish you with undeserved attention, but I've got a debate jones to satisfy.)

"Tax the rich" All those record profits are doing the economy no good stagnating in corporate coffers. Take that money and pump it into the economy. Use it to create jobs, to repair our crumbling infrastructure, to provide health care. Tax revenue can create jobs when markets fail. It worked in the last great depression. It will work in this depression too.

"Socialism" Nice of you to put words in my mouth. I don't want extreme socialism anymore than I want extreme capitalism. A balanced system that takes advantage of the best of both systems is the wisest.

"Founding fathers" I find it funny that when conservatives come up short in the argument department, that they put words in the mouths of the founding fathers. If your argument cannot stand on it's own then don't make it. Putting words into the mouths of dead people is no more acceptable than putting them into the mouths of the living.

"Tyranny of the majority/Cover for oligarchs" These two stock arguments you've chosen to regurgitate contradict one another. Clearly oligarchs and the people can't both be in charge. You've got to pick one or the other. These types of contradictions reinforce my belief that you are unable to think things through for yourself.

>> ^marbles:

>> ^dystopianfuturetoday:
I think my comment was pretty clear. I know further clarification is probably a waste of breath, but so be it. The 'job creator-trickle down' spiel goes like this: If you lower taxes for wealthy people, they make lots of money which they then pump back into the economy in the form of jobs (among other benefits to society).
Well, we've now lived under this assumption for 3 decades now, and while it is clear that cutting taxes does give the wealthy more money, it has failed to produce the promised jobs. On the contrary, it seems to actually have the effect of killing good jobs, either by automating them or sending them overseas to third world slaves. This is probably because the extra money is used to lobby the government, rather that create new jobs.
Another big problem with the 'job creator' argument is that from a business standpoint, you generally only hire as many employees as you need to maximize profits, regardless of how much money you have stagnating in their bank accounts. Hiring more or less help than you need makes little sense.
This is how 'we got here'. We've let business take control of our democracy. With this power, big business has taken us to war, filled it's coffers with public money, given itself all manner of no-bid contracts, subsidies, bail outs and trade deals, has eroded our civil rights, corrupted our courts, monopolized our media, among other horrors. They've deregulated and privatized the financial sector as to allow themselves the freedom to pollute, exploit and swindle.
Capiche?

>> ^marbles:
>> ^dystopianfuturetoday:
The problem with the 'job creators' stratagem is that, with record high wealth/corporate earnings, record low taxes and record high unemployment, it has no obvious basis in reality. It is also delightful to see these protesters dodge his obvious trap, forcing him to awkwardly offer up the payoff without an organic set up. His karma ran over his dogma.

You seem to be oblivious to how we got here. Your argument/position has no obvious basis in reality. Raising taxes doesn't fix anything. It doesn't break up the big banks, stop corporatism, or end the magic money tree called the federal reserve.
It's a delight to frame these serious problems into false partisan arguments?
Nice joke though. But the 90s called and want to know wtf you're talking about.


So let's raise taxes on the rich! That'll teach 'em! And our problems will be fixed.
The most most glaring error in your analysis is that "democracy" got us here.
Socialism is not a remedy. Socialism always has and always will always be a mechanism to consolidate the wealth of the people before looting it.
Our founders didn't set up a "democracy". They recognized the fundamental flaw to "group think". The minority is always at the tyranny of the majority. Protecting the rights of the minority is the only way to preserve the rule of law, and the smallest minority is the individual.
And just like socialism is used to deceive the people, so is democracy. It's political cover for oligarchs. It's not about taking "control of our democracy", for that's the entire point. Democracy is either a false perception or tyranny of the majority. The people lose either way.