Smug Prius owners

[Hauptman]

Except that it didn't work.



OK. But I still look askance at the "moderate" label.

I'm also not convinced that a leopard can change its spots. Personally I think it's just pragmatic realization that politics is the art of the possible, and he's realized that he's not going to be able to get the things he really wants with so many Democrats who actually are moderates in Congress. But as you say an argument can be made for it...




It also depends on the mix of policy issues. One can be a radical in one area and moderate in another. How do we compile completely different themes and average them for an overall left-middle-right score? If you're advocating government price controls on health insurers and "public options", and at the same time continuing some pretty conservative policies like continuing wireless wiretapping and the Cuban embargo---how can we decide which prevails in situating you on a simple spectrum?




In one sense I agree, but clearly words have power and names and labels are efficacious tools in politics, so in another sense...

There is no benchmark, as you observed. Do we label a politician based on their ideals? Or do we label them based on their actions? Or do we use a combination of the two?

And as you also stated, it depends on the context. You could be socially liberal and fiscally conservative, but there may contradictions within those breakdowns depending on the individual issues involved.

To me it's meaningless in the end because candidates will label themselves, and the opposition will label them something else if it is in their interest to do so.

[I_luv_saber]

To me it's meaningless in the end because candidates will label themselves, and the opposition will label them something else if it is in their interest to do so.

lol, almost a laissez-faire free-market style politics? That's awesome.

[jeff]

catching up...

But did it return to previous levels is the question? Or else your net is still expanding...

I've already shown that it's not a monotonically increasing function - the rest is an exercise for the reader... plus I don't know which time periods you mean in your "did it return to previous level".

Debatable.

And we're debating it, so that's fine!

That's funny - when you look at their works it seems (for the most part) Keynes tended to ignore human motivation and action far more than Friedman ever did. In fact Friedman and indeed most free marketeers tend to focus on that.

You see, the problem with Keynes is he got hung up on the macro while ignoring details.

We're focusing on different things. I was thinking of the notion that humans don't care about what happens in their lifetimes or their children's because the Free Market will Some Day Solve Their Problems.

Good points mostly. I would note Austrian free market economics doesn't seem to dictate (at least to me) that regulation is in and of itself a Bad Thing. It's their job to set the structure in which business operates. It's when government tries to steer things itself that things go wrong.

So, some regulations are okay and some aren't. We're in agreement at that level. I don't want the government to "run" the economy, I just want it to keep it from skiing off-piste (I've been watching the Vancouver Games), protecting the population from harm, but otherwise not trying to run the show.

do think that some of the "chasing" regulation is silly since it's a never-ending game of find and close the loopholes - but I agree some regulations is certainly needed.

I see that as a necessity rather than something silly. New risks emerge, and we have to deal with them or pay the consequences. There are rules to protect against certain classes of abuse and fraud in equities trading, but we got buried because a new class of instrument came out and we didn't provide regulatory oversight for them.

It all just comes down to what kind of regulation we enact. If it does not overly restrict the market's ability to operate efficiently, regulation is actually a good thing. There's confidence in all parties involved that there will be reasonably fair play (though the risk/reward must stay in place). I think we mostly agree here.

Yes, we in fact do agree.

It's rather important to the issue of government spending in relation to Keynes...

Government spending on things that are needed (and that government does efficiently) - great. We need that always, and that has nothing to do with stimulating the economy. But the idea that we simply must take money via taxes and spend it in order to get the economy moving again is where the fallacy lies. The spending of money means nothing by itself.

I agree to the first 2 sentences, but disagree that government spending is necessarily fallacious. Sometimes it's the thing to do. Not always, but sometimes. The mere existence of Keynesian economics is proof by example that economists are not in agreement that this is a fallacy.

Or, put it another way: economics != free market economics. The latter is only one school of thought of the former.

This certainly does not surprise me.

You know what pork is: it's money some other guy got. The money somebody got from govt for himself is always wonderful...

"We're all Keynesians now" was, unfortunately a fairly accurate statement. And no surprise it's the darling of government - it attempts to give rationalization to pork spending and involvement....

As I said to Inq a few weeks ago, we don't know (or at least I don't) if Nixon said that regretfully, gleefully, or in a spirit of vindication.

I simply used it to emphasize the fact that it is our money being spent. They are taking it from us, and spending it.

Right, but that's not theft, which I think presumes that it's wrong and lends an unhelpful emotional term.

Now, this is of course necessary. We need an army, police force, we need infrastructure, etc. But when we talk about government spending for the sake of stimulating the economy - why is it better for the government to take that and spend it on X when we can keep it and spend it on Y? That's the broken window fallacy. That saying spending money on X is good, when who's to say what we would have spent on Y? It's the government saying "money would better be spent here" rather than letting the market dictate what people want to spend their money on.

Government spending includes many things that private enterprise simply is not going to buy because there's no ROI. You listed a few of them. That is an entirely different subject from "what is needed".

The wiki article I posted notes however that the New Deal and other policies were a plethora of different policies. They were certainly not all Keynesian in nature. With this in mind, my point is how do you know it was those Keynesian policies that drove the economy to recover?

All I'm saying is, if you are making the assertion that the New Deal was an example of Keynesian economics at work, and that is what fixed the economy, you need to prove that assertion. Otherwise it's either cherry-picking which policies you say worked and which didn't work or simple correlation-causation.

As far as I have read, there is no where near a consensus about what "fixed" it.

Gee, even Inq said that it was only a minority that said it didn't!

When I was a wee lad, the story was the FDR deficit spending primed the pump and ended the Great Depression, with a dissenting story that it was the advent of WW II that did it. For my purposes in this discussion that's the same thing: deficit spending by the government that stimulated the economy. If you want to say that it's not entirely Keynesian all I can say is that it's not a distinction that I care about.

So you are going to decry economics as a "soft" science on the one hand, while demanding the evidence of a "hard" science on the other?

Certainly, so long as people try to assign economics the credibility and rigor that science deserves.

Actual calculation problem relies on logic and relates directly to price fixing. All it says is that the price mechanism is the most important tool in determining the value of any given good. If any entity (not necessarily just government) attempts to fix the price of something without the price the market dictates it, they will not be placing the price at the level of value since they have no other metric by which to measure it. It becomes all subjective to the entity doing the fixing.

Do you disagree this is the case? If so, what other metric IS there to determine a value for a given good aside from the market's price mechanism?

The idea is that the economy is so complex, and with the human factor is so nearly impossible to predict and calculate, that the government would be no better at trying to steer it than anyone else. They will invariably steer it at the wrong time or in the wrong way since they have no way of accurately calculating it. Which, I would point out, exactly coincides with your feeling of economics not being an exact science.

In which case I wonder - if you don't consider economics an exact science, how do you expect the government to be able to steer it accurately? What would they use to do this?

You ask me to defend a position I don't hold. I don't want a governmental planned economy. I don't want the government to fix prices. I just want the government to prevent it from going off the rails, pick it up and dust it off when it falls down (and try to prevent that), and make sure that participants play fair without defrauding one another or subjecting people to harm.

[jeff]

More catch up...

Returning to an old one again. ( Another two-parter, I'm afraid. )

Did I? I don't seem to remember that.

I'm afraid you did! It was a long time ago and far far away...

Well, duh! I am exceptional in all ways.

Of which there can be no doubt!

I take it that you will retract either your current point or the one you made previously that denies its validity.

1) Yet. It's only his first year, you know.

2) That he has been unable to accomplish those things does not mean that he does not favor doing them (snip)

You expressed humor at the idea that Obama is not on the left wing of his party, and is instead a moderate. Your proof that he is a lefty is that he just hasn't gotten around to doing things he hasn't made the least sign of wanting to do, and run counter to his statements and policy actions till now? Pull the other one...

I hereby proclaim that George W Bush was a monarchist planning to set his family up as the first Royal Family of Merika. He just hadn't gotten around to it.

And on THAT basis you are confidently asserting what he himself has denied: That "he knew/knows"?

And you think I'M making conclusions on slender evidence?!

He did not deny knowing it later, he just said he denied knowing it at the time. Read the quote. Besides, it's not my only source!.

[QUOTE=Inquartata;860012]I myself prefer not to try reading his mind(snip)/QUOTE]

good thing I had another source, isn't it.

So "believe" connotes certainty to you?!

Why not just say "I know" if in fact he does?

"Credo" is a reeeely old expression of certain belief - that's literally what it means.

For just what he said. I am not inclined to expand it beyond his actual words, and to assume that he "really meant" other or larger things...

He said "I believe". There's his actual words.

There is, on most of the thought about the way things work.(snip)

Look at the whole "Keynesian is bad. No it isn't!" trope we've had here. Let's not pretend that there's consensus on the Free Market Will Solve All Things If Damn Gummit Just Gets Out Of The Way. Do you think Krugman, Stiglitz, and Friedman all see eye to eye on this?

Yes. I never said that a pure market existed (snip).

Not only does it not exist, but it might also be a horror without the ability to restrain corporatist domination of every factor of life.

You claimed that free market was the proved way because of its durability compared to other systems. My retort is that systems with a social network are just as durable. Therefore the basis of your claim that unfettered free markets are best is not a distinguishing factor and the conclusion is not proved

Hey, you think solar power is the cat's pajamas, but---(snip).

Begging the question of how we prove that what we believe better is in fact better.

EDIT: the mistake here is assuming that one size fits all and that different approaches can't be complementary. There are cases where solar is the wrong answer, ditto coal, nuclear, gas. So it is with economic theory and government policy. Use each where they fit.

Very true

Does that also apply to statements like "We cannot afford to do nothing" from the President? To "A public option would not act to put private insurers out of business"? Etc.?

In a debate it is his obligation to prove it. I've seen him and others recite the facts and figures that substantiate that argument on a number of occasions, so I know that job has been done.

We have an informal debating club. Substantiation for some of the points you claim have never been presented. Some are far reaching and are really normative - eg: that it is a good thing overall for there to not be safety legislation and let people die because wonderful things will someday happen. That's too big a stretch to go without challenge.

I'm not teaching macroeconomics here, buddy! Pick up a textbook!

Hang on fella. I've read the textbook, thank y'all.

Punishment, in the form of increased costs and decreased profits?

Specifically how does a company secretly locking in customers by making its products more addictive increase costs and decrease profits? Adding nicotine costs nothing, keeping it secret cost nothing, keeping smokers addicted and needing more doses increased their revenue.

I'm sincerely trying to get you to explain a mechanism by which the future you project would come to pass.

The invisible hand works nicely when interests align. It fails when interests are in opposition. If I reduce my manufacturing costs by spewing pollutants into the Hudson, reduce mine safety at the cost of a few dozen more deaths per year, then I profit more by harming others, and that self-reinforces the behavior. if I bet against Greek debt while I package and sell it unsuspecting parties who don't know I've bet against their interests, I can make a killing.

Again this obsession with NOW. Aren't you the one who keeps quoting Keynes' "In the long run we are all dead" apothegm? Well, in the long run we are, and so are all of the ills you believe must be fixed right now..

.

I do believe you are misinterpreting what he said. The point is that what happens in the long run is meaningless because we're all dead by then, and we therefore should pay attention to it not.

Really, Inq - it's quite a tall order to expect people to happily die because the market will someday triumph and put dangerous practices out of business (something I don't believe it all) because of the power of the free market.

ecause in that good old long run, it's cheaper that way. "Do something" always has transaction costs, often huge ones; market solutions do not.

Cheaper for who? The manufacturer wins. The people who buy the lower cost goods win too. Yay for them. The people who live downwind of the heavy metal deposits they put in the air and water - they lose.

Be it noted, I refer only to things which are not in the accepted purview of government. Some are, and in those the present is as good a time as any, because they are market failures, and the system well may never self-correct those.

So, things work except when they fail. Got it!

Because I am not teaching macroeconomics. I can recommend some books if you'd like, but again, there's not much point given your low opinion of economics generally.

I have an open mind enough to read a book and see - so go and recommend. And I have taken economics classes, thank you. And surely you could recapitulate the actual arguments made in such a book rather than saying the wisdom lies elsewhere. And remember that not all economists agree on the inevitability of things you consider self-evident.

Perhaps it would be interesting if you applied your faith in economics to climatology, where the consensus is anthropogenic global warming that is dangerous and must be contained. Hm?

And "where there is" is well defined, and I have listed them for you often enough in the past. Yet you continue to pretend it's all just situational whimsy. Why?

Because the definitions you made were IMO not well defined and were frequently normative (a good matching a definition of "public good" is therefore something that SHOULD only be done by the private sector - that's a normative statement) and capricious. Shall I bring up the public school, fire station and police officer thread we were working on previously? There's a few rivalrous "public good".

Examples abound. Look at some stories on the actual results of this new credit card law:

http://www.smartmoney.com/Personal-F...h-Whats-Ahead/

That certainly was helpful, wasn't it? No unintended consequences, and no one has found ways to get around any of the new regulations. And it didn't harm anyone, the way I asserted that these things do, did it?

What you haven't proved is that consequences of doing something - unintended or not - are worse than the status quo ante.

Almost all drugs have side effects, sometimes serious ones. Yet we use drugs for their beneficial aspects anyway.

I disagree, but alas, this is the root problem: Without a basic understanding of economics and how its processes work, people prefer to operate on what their "common sense" or their "hearts" or their understanding of other sorts of processes work. I can never convince you that you are wrong on that, and you cannot find evidence to support it because none exists. So it's pointless to keep saying "Yes it would No it wouldn't" at each other.

Let's take that last paragraph and play it with global warming

I disagree that I lack basic understanding of economics.

Not yet. I suspect that it's going to be difficult---any examples are likely going to be very old, because government just doesn't wait for market forces to act any more. It leaps in and preempts them. And events before this became the norm may not have been recorded.

Or they may simply not exist.

Well, you may be right. At a minimum they sometimes convince themselves they do. In the end I think it's a distinction without a difference, but I shrug. ( smily )

this is where the root of the disagreement is IMO you present one view of economics as the only view. I believe otherwise.

[I_luv_saber]

I've already shown that it's not a monotonically increasing function - the rest is an exercise for the reader... plus I don't know which time periods you mean in your "did it return to previous level".

For example, the basis of Keynesian economics (or what it was supposed to be, rather) was that:

• Economy begins recession
• Government increases spending to stimulate economy
• Economy begins to recover
• Government spending recedes as economy picks up.

My question is, and what I am skeptical about, is: Is government spending returning to the levels it was at before the recession started? If spending does not return to that level than we have a net increase in government after every recession.

We're focusing on different things. I was thinking of the notion that humans don't care about what happens in their lifetimes or their children's because the Free Market will Some Day Solve Their Problems.

I think that's a little more long run than even the market is supposed to be .

So, some regulations are okay and some aren't. We're in agreement at that level. I don't want the government to "run" the economy, I just want it to keep it from skiing off-piste (I've been watching the Vancouver Games), protecting the population from harm, but otherwise not trying to run the show.

I'm not saying that you are wanting a sort of communist state, where the government runs everything. But rather, the heart of Keynesian economics - steering the economy via spending/interest rate changes/monetary policy/etc - is steering the economy and is where things don't work the way they are planned.

I see that as a necessity rather than something silly. New risks emerge, and we have to deal with them or pay the consequences. There are rules to protect against certain classes of abuse and fraud in equities trading, but we got buried because a new class of instrument came out and we didn't provide regulatory oversight for them.

I also agree that in some cases new regulation is simply needed. For example, with the development of the Internet, laws and regulations need to change in response to the vast change in how we do business.

However, I tend to agree with Inq's POV in that government informing people could go a lot further than trying to dictate an outcome. Especially with the speed at which information travels in this day and age, it could be quite effective in stopping problems quickly, at less cost, and with less direct intervention by the government. Basically, this infrastructure could inhibit (but not completely eliminate) the need for chasing regulation.

That said, I'm willing to drop this point as it's not a sticking point for me. I've nothing in principle against the right kind of regulations, I'm simply questioning if maybe what we are currently doing is not the most efficient way of accomplishing the same goal.

I agree to the first 2 sentences, but disagree that government spending is necessarily fallacious. Sometimes it's the thing to do. Not always, but sometimes. The mere existence of Keynesian economics is proof by example that economists are not in agreement that this is a fallacy.

Nonetheless, the point it makes is one to take note of, regardless of whether Keynesian economists like to ignore it because it doesn't fit with their theory. The question is: Why is it better for government to spend the money that I could have spent on something else?

Remember we aren't talking about whether taxation is necessary or not - I agree with that. But why increase spending past that which is normally needed? Why does Uncle Sam's spending stimulate the economy more than my spending? (And the better question: Is Uncle Sam's spending, which is taking away from what I would have spent the money on, going to do me more good when at these increased levels?)

Or, put it another way: economics != free market economics. The latter is only one school of thought of the former.

Agreed. I'm just saying I think the others are wrong! Followed by a big IMO, of course!

Right, but that's not theft, which I think presumes that it's wrong and lends an unhelpful emotional term.

It wasn't meant that way, but I certainly see your point. I just want to bring extra attention to the fact that government spending is simply someone else who represents us spending our money.

As such I sort of wonder - if people all participated in deficit spending, would we see the positive effects Keynesian economics is supposed to bring about? If not, I wonder why? (seriously just musing here, the thought just crossed my mind...)

Government spending includes many things that private enterprise simply is not going to buy because there's no ROI. You listed a few of them. That is an entirely different subject from "what is needed".

Well, the idea is though that if you start with government spending on necessary things such as what we've talked about, any increase for the sake of stimulating the economy would be more than what is needed, right?

Gee, even Inq said that it was only a minority that said it didn't!

I had posted a link to Wikipedia above that said explicitly there was no consensus...

I don't believe this was what I posted earlier, but here is something else from the Wikipedia article on the New Deal (section title prolonged/worsened the depression)

A small number of economists believe that the New Deal delayed economic recovery.[9] A 1995 survey of economic historians asked whether "Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression." Of those in economics departments 27% agreed, 22% agreed with provisos, and 51% disagreed. Of those in history departments, only 27% agreed and 73% disagreed [73]

So, we have a total of 49% of economists who at least somewhat think it may in some way have made the depression worse, opposed to 51% who disagree it made it worse at all. That's not even to mention those who may take the milder stance that it simply didn't help. That, to me, does not spell consensus. There does appear to be more consensus among historians.

When I was a wee lad, the story was the FDR deficit spending primed the pump and ended the Great Depression, with a dissenting story that it was the advent of WW II that did it. For my purposes in this discussion that's the same thing: deficit spending by the government that stimulated the economy. If you want to say that it's not entirely Keynesian all I can say is that it's not a distinction that I care about.

To be clear: I'm not saying none of his policies were Keynesian. In fact most of them were, especially later. But not all of his policies were Keynesian in nature, that's all I'm saying.

Certainly, so long as people try to assign economics the credibility and rigor that science deserves.

But I've not done so. In fact, that's exactly what the Austrians and their calculation problem say. That economics is not a hard science, and furthermore, is unable by it's very nature to be an exact science like Keynes' followers, or hell even some followers of the Chicago school, think it is.

You ask me to defend a position I don't hold. I don't want a governmental planned economy. I don't want the government to fix prices. I just want the government to prevent it from going off the rails, pick it up and dust it off when it falls down (and try to prevent that),

Here's where we disagree. My stance is simply that the government is in no better position than anyone else to be able to recover the economy. With no exact science by which to measure it, how are they supposed to know the proper times to act? To not act? How much to act? This need not be via direct control, but via monetary manipulation, interest manipulation, and you get the idea. This is the crux of Austrian economics, and my current argument here.

and make sure that participants play fair without defrauding one another or subjecting people to harm.

This is where we agree. There are laws in place to make sure people aren't actively harming other people in society, this should be no different in the business world.

[lindajdunn]

For example, the basis of Keynesian economics (or what it was supposed to be, rather) was that:

• Economy begins recession
• Government increases spending to stimulate economy
• Economy begins to recover
• Government spending recedes as economy picks up.

My question is, and what I am skeptical about, is: Is government spending returning to the levels it was at before the recession started? If spending does not return to that level than we have a net increase in government after every recession.

Here's a URL to answer that question:

http://www.usgovernmentspending.com/...ury_chart.html

[jeff]

ILS - you see which part was my bugbear (eg: safety, fairness and Some Day the Market Will Fix Everything mentality - stuff we don't seem to disagree on). We can agree to disagree on the rest. However, for fun I will later type in some quotes from Paul Krugman on the topics left open.