John Maynard Keynes was half right.

I love this story. I have previously followed the rise through the ranks of the new AFC Wimbledon without being aware of John Green's involvement. But to add to the story, The Milton Keynes Dons (the old AFC Wimbledon) are being relegated to League One next year while the new AFC Wimbledon has qualified for a playoff for the last promotional spot in League Two. So next year they may be playing in the same league.

Via NC: Ignored for Years, a Radical Economic Theory Is Gaining Converts

That's Bloomberg reporting on Post-Keynesianism/MMT. On the front page, no less. They paint it as something radical, as if the works of Keynes, Kalecki and Minsky (or Knapp in Germany 100 years ago) never made it out of the dark corners of economic theory. Post-Keynesianism, at its core, is 80 years old, it has merely been pushed aside by monetarists and the likes.

Still, kudos to Bloomberg for shining some light on MMT.

I'd be ecstatic if only they acknowledged the work of Keynes, but even that seems too much to ask...

Keynes and others made the same argument against the Treaty of Versailles. You mentioned how that turned out.

Folks did in fact learn from that mistake, but after everything is said and done, it was the Soviet expansion that made the case. Germany was the frontier and to turn it into some shithole or even a failed state would have made it worthless in the struggle against Soviet expansion. Germany was expected to a) keep them in check, and b) serve as a prime example of how much better life is within the realm of capitalism. If it hadn't been for T-34s in Berlin, I'm not entirely sure we would have been treated as favourably as we were.

In any case, even after much of the debt was written off, the remaining payments were stretched out over decades, so as to not be too much of a drain on the economic development of the country.

Still, it's not the same with Greece. We only torched half the continent, but they dodged their taxes. That's a million times worse, it seems.

While we're on the subject of tax evasion: Luxembourg alone accounts for about €20b-€30b a year of lost tax revenue in Germany. Yap, the tax system implemented by none other than troika member Jean-Claude Juncker is more of a drain on the public budget in Germany than Greece could ever be.

@RedSky

Selling assets and, to a certain degree, the reduction of public employment is an unreasonable demand. There's too much controversy about the effects it has, with me being clearly biased to one side.

Privatisation of essential services (healthcare, public transport, electricity, water) is being opposed or even undone in significant parts of Europe, since it generally came with worse service at much higher costs and no accountability whatsoever. Therefore I see it as very reasonable for Syriza to stop the privatisation of their electricity grid and their railroad. There are, of course, unessentials that might be handed over to the private sector, but like Varoufakis said, not in the shape of a fire sale within a crisis. That'll only profit the usual scavengers, not the people.

Similarly, public employment. There's good public employment (essential services, administration) and "bad" public employment. Troika demands included the firing of cleaning personnel, who were replaced by a significantly more expensive private service. And a Greek court decision ruled the firing as flat out illegal. For Syriza to not hire them back would not only have been unreasonable financially as well as socially, it would have been a violation of a court order. Same for thousands of others who were fired illegally, according to a ruling by the Greek Supreme Court.

Troika demands are all too often against Greek or even European law, and while the previous governments were fine with being criminals, Syriza might actually be inclined to uphold the law.


On the issue of reforms, I would argue that the previous governments did bugger all to establish working institutions. Famously, the posts of department heads of the tax collection agency were auctioned for money, even under the last government. Everything is in shambles, with no intent of changing anything that would have undermined the nepotic rules of the five families. Syriza's program has been very clear about the changes they plan to institute, so if it really was the intent of the troika to see meaningful reform the way it is being advocated to their folks at home, they would be in support of Syriza.

Interventions by the troika have crashed the health care system, the educational system and the pension system. Public pension funds were practically wiped out during the first haircut in 2012, creating a hole of about 20 billion Euros in the next five years.

I would like to address the issue of taxation specifically. Luxembourg adopted as a business model to be an enabler of tax evasion, even worse than Switzerland. In charge at that time was none other than Jean-Claude Juncker, who was just elected President of the European Commission. He's directly involved in tax evasion on a scale of hundreds of billions of Euros every year. How is the troika to have any credibility in this matter with him in charge?

Similarly, German politicians are particularly vocal about corruption and bribery in Greece. Well, who are the biggest sources of bribery in Greece? German corporations. Just last week there was another report of a major German arms manufacturer who paid outrageous bribes to officials in Greece. As much as I support the fight against corruption and bribery, some humility would suit them well.


As for the GDP growth in Greece: I think it's a fluke. The deflation skewers the numbers to a point where I can't take them seriously until the complete dataset is available. Might be growth, might not be. Definatly not enough to fight off a humanitarian crisis.

Surpluses. If everyone was a zealous as Germany, the deficit would in fact be considerably narrower, which is a good thing. Unfortunatly, it would have been a race to the bottom. Germany could only suppress wage growth, and subsequently domestic demand, so radically, because the other members of the Eurozone were eager to expand. They ran higher-than-average growth, which allowed Germany to undercut them without going into deflation. Nowadays, Germany still has below-target wage growth, so the only way for Greece, Spain, Portugal and Italy to gain competetiveness against Germany is to go into deflation. That's where we are in Europe: half a continent in deflation. With all its side effects of mass unemployment (11%+ in Europe, after lots of trickery), falling demand, falling investment, etc. Not good. Keynes' idea of an International Clearing Union might work better, especially since we already use similar concepts within nations to balance regions.

Bond yields of Germany could not have spiked at the same time as those of the rest of the Eurozone. The legal requirements for pension funds, insurance funds, etc demand a high percentage of safe bonds, and when the peripheral countries were declared unsafe, they had nowhere to go but Germany. Also, a bet against France is quite a risk, but a bet against Germany is downright foolish. Still, supply of safe bonds is tight right now, given the cuts all over the place. French yields are at historic lows, German yield is negative. Even Italian and Spanish yields were in the green as soon as Draghi said the ECB would do whatever it takes.

The current spike in Greek yields strikes me as a bet that there will be a face-off between the troika and Greece, with very few positive outcomes for the Greek economy in the short run.

QE: 100% agreement. Fistful of cash to citizens would not have solved any of the core issues of the Eurozone (highly unequal ULCs, systemic tax evasion, tax competition/undercutting, no European institutions, etc), but it would have been infinitely better than anything they did. If they were to put it on the table right now as a means to combat deflation, I'd say go for it. Take the helicopters airborne, as long as it's bottom-up and not trickle-down. Though to reliably increase inflation there would have to be widescale increases in wages. Not going to happen. Maybe if Podemos wins in Spain later his year.

Same for the last paragraph. The ECB could have stuffed the EIB to the brim, which in return could have funded highly beneficial and much needed projects, like a proper European electricity grid. Won't happen though. Debt is bad, even monetised debt during a deflation used purely for investments.

As I'm reading today's articles about the situation in Greece/Europe, Keynes' "Economic Possibilities for our Grandchildren" came to mind:

We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value.

The love of money as a possession -as distinguished from the love of money as a means to the enjoyments and realities of life- will be recognised for what it is, a somewhat disgusting morbidity, one of those semicriminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.

Haha!

If everyone's a babysitter, well, that's not a genuine division of labor, is it? And if money can only buy babysitting, well, that's not really money, is it?

And free markets don't work by agreeing through contract how much a currency will buy. If you restrict currency to one "babysitting" unit only, then, of course you'll have problems. You don't need to "print" more of these tokens. Deflation will invariably take place instead in an actual market, not in one where you have to contractually "centrally control" the value of each token.

And of course, a prison camp is not a free market. No entrepreneur can simply start supplying the goods and services needed.

The prison camp does not represent a "free economy," but only a prison camp economy.

I don't think either of those two examples are useful in any real way, but what exactly did you think you'd learn from them?

This isn't "how an economy works," but it's maybe how a non-divisible "currency" works in a one product/service "market;" or how a food embargo works.

P.S. If you really want to understand how economies work, you should read Mises' "Human Action" (PDF) and stop being lazy, thinking you'll learn something from these short youtube videos. (Once you hear Krugman mentioned, it's enough to know that everything that follows is about as rooted in reality as a kindergartner's fingerpaintings.)

This video's always worth revisiting...

> "[Austerity] frees up resources for private investment" is a statement that
> does not match my perception of reality"

Well, far be it from me to try to introduce you to some basic epistemologies to which you may not be familiar: like rationalism, deduction, etc, in order to move you away from "authority" as the only path to knowledge you seem to use. Unfortunately, however, this "authority" method is inappropriate to the study of economics.

> "So, demand vs supply... we all know that discussion won't be resolved here,
> ever."

Keynes and Hayek were at it for a while. It's all in the two hip-hop videos.

> "It's utterly pointless."

Yes. There is nothing new not covered by Keynes vs. Hayek.

> "Shamelessness was my addition, my interpretation. "

Bad thymology (my interpretation).

> "He "weakens" society, economically, by suppressing aggregate demand.
> The more wealth you accumulate, the less of it, as a percentage, translates
> into demand."

I see. So, by this logic, any making of money is, in itself, a "weakening" of society. Unless I'm a socialist, like David Simon, then I cannot make money without also "weakening" society.

> "But since you apparently share the views of Hollenbeck, all of that was
> probably hogwash to you."

Yes, at best hogwash. Alas, I've no interest in going into this with you, especially since you've no have interest in actually looking at it. Had you any interest at all -- or studied the subject beyond deferring to the "authority" method of epistemology -- you could at least provide me with a concise explanation as to why you think the Austrian/Misean economic position falters. Rather than thinking for yourself, however, you dismiss it as "wrong," "right-wing," or "pointless" to debate or go into. "Here Be Monsters, period."

The Keynes/Hayek debates have the similar tones, with Keynes simply ignoring all of Hayek's points, evasions, and going off into something else. You clearly agree with the Keynesian approach/theory, which likely means you cannot really explain anything except through unfounded claims, that are "pointless" to argue, debate, or rationally defend.

As I have said before, one cannot have this sort of intellectual relationship with those either unwilling or unable to grasp basic economic principles, like for example those clearly explained by Hazlitt's "Economics in One Lesson." There's simply no common language through which to communicate. Confronted with these kinds of beliefs, one can either try to educate (but only those who ask for it, since attempting to educate those who do not want to be educated will likely fail, as any public school teacher can tell you) or one can pull out the snake oil and the cash register. The third option involves ignoring such ignorance altogether, and use what one knows for one's own financial and life benefit in ways that don't involve such people in the first place.

There are so many errors in the Keynesian 'demand' theory of economics (you can find much on that if you want to read up on it), but Keynesians tend to avoid any real debates. You're coming from the Keynesian fallacy of saving money as being bad for the economy (because spending it all/consumerism is supposedly what gets the economy going). And the even more absurd fallacy which presupposes (with no proof of it at all) that rich people keep most of their wealth stored somewhere outside of circulation. When in reality, rich people only save some and the richer they are the more they spend/invest. Of course, when the economy seem fragile, due to central banks meddling, bubbles, etc., investors get nervous and don't invest as much a they otherwise would. When they don't invest, it shrinks supply of things people would want to spend on. Demand does nothing, it doesn't exist, if there is nothing to supply that people want to buy.

In fact, I am starting to think that central bankers are not really Keynesian at all, in the sense that they don't really believe their own bullshit. They know better but also know how to exploit their positions as central bankers, making folks like @radx buy into it, the snake oil. For example, he may not care for gold, but bankers do. Whatever they say against it, folks will still buy it, both for themselves and the banks they run. And as @radx rightly says, he's a human. And apparently he can sell his 'charm' if push comes to shove.

Great video.

Not sure I agree about a return to the gold standard and their consumption based tax system, but it was definitely worth a watch.

Also, they spoke a lot about classical economists and even mentioned FDR, but not a mention of Keynes, or about how the most successful states (in terms of equality and citizen happiness) follow a more socialist stance

*related=http://videosift.com/video/Fight-of-the-Century-Keynes-vs-Hayek-Round-Two

"Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem has been added as a related post - related requested by Trancecoach on that post.

Fight of the Century: Keynes vs. Hayek Round Two has been added as a related post - related requested by Trancecoach.

Sorry for the delayed response. I got a bit busy this week, and didn't have the time/energy to dedicate that a response of this sort deserves. Thanks for your patience.

Your response suggests an adoption to Marxism which, in my opinion, is unmatched in the level of suffering it has caused, but leaving that aside...
In response to your bullet points:

#1. "ever wonder why there is an economics course and a business admin course? there is a reason for that.one is theory the other practical application. and economists get it wrong...and often."

This is the kind of thing Paul Krugman often says, and it's flat wrong. To the extent we have a free market, we have a successful exchange of goods and services at a fair and competitive price. To the extent to which we have socialism, with central planners, and governmental regulation, we have cronyism, plutocratic kleptocracy, and failure. The Austrian school of economics does a very good job of explaining -- step by step in a manner in which you can follow along using deductive logic, how such contradictions come about. Entrepreneurs are to Austrian economists as artists are to the best of art/literary critics. There's no discrepancy between theory and practice. They can clearly and accurately describe what entrepreneurs are doing. Unless you have studied Mises, you'll probably have little to no good idea as to what economics is or what it can or cannot do.

#2: fascism is, in fact, a type of socialism because it follows a socialist economic model.

#3: Yes, I've thought it through. Explain to me specifically how you arrived at your conclusions. Otherwise, you're just making assertions.

> "france is a democracy. they have capitalism AND
> socialism."

France has a mix of capitalism and socialism, not unlike the U.S. Again, to the degree that France has a free market, things work and to the degree that they have socialism, the problems arise and get worse, as they/we are seeing now. To the degree that they are socialist, they are a failure. Socialism is unsustainable because you have no economic calculation. (And the European Union, which includes France, is failing -- in case you haven't noticed. This video can provide you with the data you need to understand this.)

Socialism is planned chaos because the issue of economic calculation (and its absence) gets glossed over. The EU is partially socialist -- it's a mix -- so it can somewhat slow down the effects of socialist chaos, unlike full-blown socialist systems. But it is increasingly more socialist and the chaos increases.
To deal with this planned chaos, these mixed systems rely on Lord Keynes' theories and policies of credit expansion, which equates to basically "throwing money" at the problem.
But, (as the Keynes/Hayek rap video says) "there's a boom and bust cycle and good reason to fear it!"

(Quite honestly, I'm surprised that you're not for establishing stable rules for the banks. You know, so that they're no longer able to extend money/credit that they don't have without being charged with fraud.
Because if you were for such banking rules, then you would no longer support the Keynesian approaches upon which your ideology is resting. Personally, I think money and credit needs rules and, for this reason, I don't support socialism or central planning in the absence of economic calculation, which is only possible within a free market system.)

The credit expansion expands the circumference of the boom and bust cycle, slowing it down, extending the boom period, but setting things up for a worse bust. It's all very predictable. If some are still not convinced about Europe's failure, it is because even as bad as things are, the bust has not really hit. Yet, it will. Eventually.

Unlike the Dollar, the Euro is not the world's reserve currency, and there is no petro-euro like there is a petro-dollar. So Europe cannot delay the bust in the manner that the U.S. can. On the other hand, thanks to German objections, the credit expansion in Europe has not gone as high as in the U.S. so their bust may not be as disastrous as it can be for the U.S.

The boom and bust cycle cannot occur in an anarchy because you need a central bank with powers of credit expansion to make it happen.
The alternative explanation, the "animal spirits" (a la Lord Keynes) posits that all businesses suddenly make mistakes at the same time, and/or all consumers at the same time decide to stop buying, causing the bust. I doubt it. That's no explanation at all.

> "my point is that health care should be a collective project
> but i believe i also entertained a free market solution as well."

I think you need to define what you mean by "collective" because the free market is as collective as it gets. I don't think you grasp what the free market means (i.e., voluntary interactions that allow for economic calculation and involve zero violence, allowing for better service and cheaper prices). Unless you understand this, no further discussion will lead to very much.

You say some things should be done collectively. I say many things must be done collectively. That's the basic premise of Austrian economics, the division of labor. You cannot do everything yourself. That's one reason I say that the free market economy is as collective as it gets.

> "i am a dissident. an anarchist."

If you're an anarchist, then you don't believe in government, by definition. So you can't be a socialist, as socialism requires a government to manage things. Without government, the only thing left is voluntary exchanges, which is the definition of a free market, economic capitalism (not to be confused with sociological capitalism).

You shouldn't rely on economists to tell you how things are. See for yourself. Again, only the Austrian school (that I know of) enables you to follow deductively on your own and make rational sense of the market activity.

You say economists are "probably wrong." How do you know? Economics isn't mysterious heuristics and sociological prophesy. It's like mathematics. You don't need to "believe" me that 2 + 2 = 4. You can deduce it for yourself.

I think that if you can learn a few basic economic lessons (which you can easily verify for yourself), you'll understand better where I'm coming from. (Then you'll be a coherent anarchist and not sound so confused ).

If you are an "anarchist," then who do you want administering things if not the government?

Hayek was much more of an anarchist (again, the rap video:
"The question is who plans for whom? Do I plan for myself, or leave it to you? I want plans by the many, not by the few.")

An anarchist who thinks otherwise is not much of an anarchist, is he?

Hey @enoch,

> dude,
> i totally appreciate the time you took to respond.

Sure, not a problem. It's a complex issue, and requires the time to consider and understand the details.

> "for a free market to exist there also has to be absolute liberty.-
> adam smith we have neither.
> IF we did,i would not be against a free market system.
> at least not in totality."

Uh-oh, I hope this isn't a "lesser of two evils" argument.. That is, "since we cannot have a free market lets go for full-blown socialism because it is supposedly better than fascism." It's a false choice and not one I think any true humanitarian would be willing to entertain.

> "should EVERYTHING be subject to a free market? police?
> firefighters? roads?"

In short, yes. Aversion to socialism is based on reality, in contrast to what you're saying. Socialism is failure. Central planning inevitably fails. Central planners do not have the required knowledge to plan an economy. You need economic calculation and economic calculation is impossible to achieve in a socialist "economy."

> "to me health should be a basic part of civilized society,by your
> arguments you disagree. ok..we both have that right."

Are you trying to conflate "socialized healthcare" with health? Let's not confuse the facts with personal attacks. You seem to be saying, "if you are against socialism you are against health." That makes no sense. None.
I might as well say, "If you are against free markets you are against health."

> "my argument is that some things should be a basic for civilized
> society. in my opinion health care is one of them."

In no way did I ever say that I am against healthcare. So what are you talking about?

> "for a free market to exist there also has to be absolute liberty.-
> adam smith we have neither."

You cannot have a free market without liberty any more than you can have liberty without liberty. This is obvious, so?

> "IF we did,i would not be against a free market system.
> at least not in totality."

So, if we had a free market, you wouldn't be "against" a free market? Hmm.

> "the reason why i dont feel a free market is the way to go is
> mainly due to the fact that politics and corporations have merged
> into one giant behemoth (plutocracy)."

That's fine, but this is not a matter of "feeling" but a matter of economic reality and empirical evidence and deductive truth.

> "i never really understood americans aversion to "socialism""

Perhaps some economic education will clarify things. Understanding economic calculation, for example, might be a good place to start.

> "i deal with the very people that could NEVER afford you."

You're wrong. For one thing, while I do work at a significant fee for my primary clients, I do a significant amount of pro bono work, as a choice, and because I, like you, believe that health care is a human right. And that's a key point you need to understand. You seem to believe that, if the state doesn't take care of people, then no one will, and so we need to steal money from people in the form of taxes, under the auspices of "helping the poor," when in fact, the bureaucrats ensure that only a portion (if any) of those taxes actually arrive with their intended recipients while those who would willingly help those people themselves are deprived of the resources to do so, by depleting their income with said taxes. It's an unnecessary middleman, and faulty logic. The fact that people have, do, and will continue to care about people is the fundamental fact the needs to be understood. As a "man of faith," I would hope that you have enough faith in other people that they would care about and for others (even without being coerced by the government to do so, by force).

Furthermore, we have to apply the free market in toto, not half-assed. You can't have a Keynesian corporatists and an over-regulated system and expect that people will be be able to afford healthcare. The fact is that in a free market, the number of people who cannot afford my services would actually decrease considerably, because many more options would arise for those who still couldn't afford me would but need my services.

> "in a free market there will be losers.the one who always lose.
> the poor,the homeless,the mentally ill."

The free market has ways of dealing with all of these. And yes some win, some lose. But in a socialist system, everyone loses (except for maybe the rulers and their lackeys). This seems, again, to be coming from a place of fear, a sense of helplessness without the government. But alas, nothing contributes to poverty, homelessness, and mental illness more than government does. Fact.

> "the free market is still profit driven and the poor will have it no
> better,possibly worse in such a system."

So, what is your proof that the poor will have it worse? How do you know? Or is this what you "feel" would be the case?

> "the reason why i suggested medicare is because it is already in
> place."

So was slavery when the South decided they wanted to keep it.

> "two things would happen if this country went the medicare route:
> 1.health insurance industry would obsolete.
> 2.the pharmaceutical industry would find itself having to negotiate
> drug prices"

1. Yes, the government would have a monopoly on health coverage, and by extension all of healthcare. Economic calculation at this point becomes utterly impossible. Chaos follows. And healthcare quality and service plummets. I have research studies to support this if you're interested.

2. Why not nationalize pharmaceuticals while you are at it?

> "i may be a man of faith but i am a humanist at heart.for-profit
> health care will still have similar results as our current because
> the poor and working poor population is growing."

Without appealing to moral superiority, allow me to assure you that there is nothing -- not one thing -- that is moral or ethical about allowing the government coerce, aggress, commit violence, and violate individual's inalienable rights to self-ownership and property rights, as you proposing with such socialist "solutions." In my humble opinion, a true man of faith would not stand for such things, but would stand against them.

> "the poor and working poor population is growing."

Indeed we do, and we all have inflation, cronyism, Lord Keynes' bogus economic "system" and government's meddling to thank for this.

> "i am all for an actual free market but some things should be done
> collectively."

By "collectively," I assume you mean "by central authorities," yes? Because the free market is, in fact, collective. But there is nothing "collective" about central planning. Except for the fact that the "collective" is mandated to obey the dictates of the central planners.

> "its not only the right thing to so but the human thing to do."

1. Whatever your "feelings" are about it, there is an economic reality to deal with. Such a sentiment misses the point, and will result in hurting more people than it helps.

2. There is nothing "human" (or humane) in aggression, coercion, and violations of sovereignty, all of which underpins an implementation of a socialized system.

"The right thing to do" is to respect self-ownership and property rights. Doing anything else will eventually backfire. "People are not chessmen you move on a board at your whim."

Any one who is serious about contributing to solving and/or ameliorating the issues of poverty, homelessness, and/or mental illness and many of the other symptoms of our social detritus, needs to develop real, sustainable free market solutions to these. Otherwise, their efforts will be in vain (even if -- or perhaps especially if -- they are adopted by government for implementation). Anything else will not improve any of these but will only serve to make matters worse.

Going back to the basics, free market competition will always provide better goods/services at lower prices than the monopolies (fostered and engendered by the lack of economic calculations due to governmental intervention and regulations). Healthcare is no exception to this. Why would it be? Furthermore, why believe that the central planners/kleptocrats aren't profit-driven? Why believe that a "government" monopoly doesn't suffer from a lack of economic calculation? And what's wrong with being profit-driven, however you may individually define "profit?" Do you/I/we not act for what you/I/we consider the best? (Having faith is not a part-time job.)

Do you not act to achieve desired goals?

I'll give you the benefit of the doubt and say that you haven't fully thought things through. But as I'm sure you know, "It is easy to be conspicuously 'compassionate' if others are being forced to pay the cost."

> "thats my 2 cents anyways.i could probably ramble on for a few
> hours but i dont want to bore you. always a pleasure my friend.
> namaste"

It's not boring, but does take a bit of time to consider and understand all of the details. It's complex, and certainly a challenge to navigate your way through the morass of rhetoric, conditioning, and cultural misdirection that is pervasive in our society, especially when considering what passes for "news" and "facts." This is particularly true with regards to the economy, which is heavily politicized, despite being a rational science that can be understood if one takes the time to learn about its mechanism.

Since you signed off with "namaste," perhaps it would be worth reminding you that the first principle of yoga is "ahimsa para dharma" : non-violence is the highest duty.

Perhaps videosift isn't the best medium in which to educate people on non-violence and economics, but alas, it can be entertaining and, possibly have have some positive effect at some point.

Hope this helps.