Keynesian economics ~~ Soviet Communism

[Buster]

Originally Posted by Winstonbiggs

The stimulus package was terrible not because of the spending but because of what it was spent on.

The weak job growth in June was due to the end of stimulus money keeping Teachers, Cops and Firemen in their jobs.

The Stimulus was too small

[Soberphobia]

I'm afraid to say it is Milton Friedman, not Keynes, who has led you to the economic situation you are in at the moment.

Professor Steve Keen - one of the only people to have predicted the GFC, talks on this topic back in 2009 (there is quite a bit of material here talking about Australia, but also quite a bit about the United States):

http://www.bearishnews.com/post/2730

[Soberphobia]

Originally Posted by quantum

Starting to look equivalent: completely discredited and waiting to be dumped on the ashpile of history....


Behind our worsening jobs picture

Last Updated: 2:37 AM, July 11, 2011

Posted: 10:16 PM, July 10, 2011

headshotRaymond J. Keating

Read more: http://www.nypost.com/p/news/opinion...#ixzz1RqAm6CqT


Anyone who buys into Keynesian eco nomics must be completely baffled by Friday's jobs numbers from the Bureau of Labor Statistics. After all, the government has been trying to juice up the economy through unprecedented boosts in spending and in the money supply for nearly three years now. It's been textbook fiscal and monetary expansion, fully in line with the liberal, Keynesian school of economic thought. (Actually, it's been Keynes on steroids.)

None of it has worked. And the numbers -- as jobs data from two recent government surveys shows -- are truly grim.

The "payroll survey," for example, which canvasses businesses, showed that total employment last month rose a mere 18,000, and May's job-growth figure was revised down to 25,000. Thus, employment effectively has been flat for two straight months. No headway is being made against the huge job losses from early 2008 through the beginning of last year -- about 7 million, according to this survey.

Nor can all this be blamed on the loss of government jobs -- including 39,000 in June and 48,000 in May. The fact is, lower government employment would actually be an economic positive if accompanied by robust private-sector growth. After all, shifting jobs from relatively unproductive government work to market-driven, productive private-sector endeavors would only help the economy.

Alas, private-sector payroll growth is anemic. Nongovernment payrolls expanded by only 57,000 last month and 73,000 in May. To make a real difference, the economy needs to crank out 200,000 to 250,000 jobs a month -- at the least.

The more important employment picture, however, is portrayed by the government's other key survey, which questions folks in their homes and better captures start-up and small-business activity. The numbers from this "household survey" were especially bad; for example, employment in June, the survey shows, tumbled by 445,000 jobs. Since its recent high in March of this year, the household survey points to total job losses of some 530,000.

Indeed, the nation's labor force itself is shrinking. After contracting for much of last year, the labor force expanded from January to May this year. But last month, it resumed its slide, falling by 272,000 jobs. This reflects a great degree of discouragement among workers, many of whom simply have given up on finding work.

The labor-force participation rate, another key indicator, ticked down to 64.1 percent in June. That's the lowest since March 1984. For good measure, the employment-population ratio also dipped: June's 58.2 percent figure matched last October's, which was an 18-year low. Overall, according to the household survey, job losses stand at 7.25 million since job levels peaked in November 2007.

Keynesians try to blame June's bad jobs numbers on the political wrestling over the federal debt cap. They say that uncertainty over whether the cap will be lifted -- and government spending concurrently slowed -- is driving job losses. Spending curbs (and fear of them) would be economically catastrophic, they believe.

That, of course, is absurd. Federal debt certainly has crept into the economic equation in recent years; how could it not, given its rapid jump? But the problem from entrepreneurs' point of view is the increased taxes that such government debt levels threaten to make inevitable.

Weak GDP and job growth is all about costs and uncertainties faced by entrepreneurs, businesses and investors. Those costs and uncertainties have to do with higher taxes, more regulation, stagnant trade policy, higher government spending and related debt and freewheeling monetary policy.

The right recipe for getting the economy back on track is not more government spending and jobs, as the Keynesians and their political followers desire. It's substantive and permanent tax and regulatory relief, reduced governmental barriers to trade, sound monetary policy focused on fighting inflation and reducing the size of government. Short of that, we face a continuing uneven, underperforming economic recovery, at best -- and slipping back into recession, at worst.

Raymond J. Keating is the chief economist for the Small Business & Entrepreneurship Council.

BTW - the irony of a "supply-side" answer to the economic ills that plague America when its exactly this type of approach that has led you to the spot you are in in the first place. Though maybe claiming this makes me a communist?

[quantum]

Originally Posted by Black Death

BTW - the irony of a "supply-side" answer to the economic ills that plague America when its exactly this type of approach that has led you to the spot you are in in the first place. Though maybe claiming this makes me a communist?

which spot? the original downturn with Bush, or the train wreck of Obama making it worse times 3?

[quantum]

Originally Posted by bitonti

it's a loose definition of "miserable failure" 1st world nations use Keynesian theories all the time and life is still relatively good. You are posting on the internet in what I assume to be air-conditioned freedom. 9% unemployment might be a tragedy in the cable news media but it's not all that bad, relatively speaking. Its no zombie Apocalypse.

and even if I grant the idea that they've failed, for the sake of argument, what do you suggest to replace Keynes? what is better?

some from columnA, some from columnB, etc.

Little govt intervention is best, but not full deregulation - Corp. America has proven many times they can't fully be trusted.

[Winstonbiggs]

Originally Posted by Buster

The weak job growth in June was due to the end of stimulus money keeping Teachers, Cops and Firemen in their jobs.

The Stimulus was too small

The stimulus was to small and it didn't build anything to increase long term productivity. It defended Union jobs many of which weren't worth defending instead of building infrastructure that would have a long term pay back. The only one to blame is the Democrats who controlled all three branches of government.

[Soberphobia]

Originally Posted by quantum

which spot? the original downturn with Bush, or the train wreck of Obama making it worse times 3?

The downturn started when Reagan was elected to office - it was he who first brought in supply-side economics and it was he who first started the massive escalation in your public debt. Under his watch, and at his prompting, the asset bubble cycle of recent decades started - the first of which resulted in the Stock Market Crash of 87. Obama has made it worse because he's listening to the same economist chumps who informed Bush 2, and yes, he has made it worse than what it should be.

If I was to blame anyone for your current economic predicament it would probably Reagan first (given it was he who annointed supply-side economics as the holy ideoloogy of the Republican Party); second, whatever snapperhead economists have informed people like Bush 2 (who wouldn't have an idea about economics and would rely on his advisors in that area hugely), and probably the US Fed third - which is actually peopled by the same types of dunderheads that were "advising" Bush 2 and are now doing the same for Obama.

[Winstonbiggs]

Originally Posted by Black Death

The downturn started when Reagan was elected to office - it was he who first brought in supply-side economics and it was he who first started the massive escalation in your public debt. Under his watch, and at his prompting, the asset bubble cycle of recent decades started - the first of which resulted in the Stock Market Crash of 87. Obama has made it worse because he's listening to the same economist chumps who informed Bush 2, and yes, he has made it worse than what it should be.

If I was to blame anyone for your current economic predicament it would probably Reagan first (given it was he who annointed supply-side economics as the holy ideoloogy of the Republican Party); second, whatever snapperhead economists have informed people like Bush 2 (who wouldn't have an idea about economics and would rely on his advisors in that area hugely), and probably the US Fed third - which is actually peopled by the same types of dunderheads that were "advising" Bush 2 and are now doing the same for Obama.

What happened to the Soviet Union during the debt buildup. It's not like it was pissed away. One of the largest, most represive regimes bent on world domination failed in large part because we not only could borrow to rebuild our military, we did.

I would call that a long term pay back on the debt.

[long island leprechaun]

Originally Posted by Winstonbiggs

What happened to the Soviet Union during the debt buildup. It's not like it was pissed away. One of the largest, most represive regimes bent on world domination failed in large part because we not only could borrow to rebuild our military, we did.

I would call that a long term pay back on the debt.

I agree with your main point, but it is ironic that the very build up that contributed to the fall of the Soviet Union (along with economic pressures, falling oil prices that dried up a source of Soviet currency) and the supply and support of the Mujahadin with stingers etc. (Bin Laden being a U.S. hero back then), not to mention the fact that the Soviets were ripe for collapse from internal disarray, was also a significant contributor to the 1987 market collapse. Also, give some credit to Richard Pipes, who formulated the aggressive approach to the Soviets. Reagan was nevertheless brilliantly intuitive in his stance. It was his greatest contribution as a President. He didn't cause the Kremlin to fall, but he managed to step on its last fingerhold to assist its plunge.

[Buster]

Originally Posted by Winstonbiggs

The stimulus was to small and it didn't build anything to increase long term productivity. It defended Union jobs many of which weren't worth defending instead of building infrastructure that would have a long term pay back. The only one to blame is the Democrats who controlled all three branches of government.

I disagree. I believe educating children, keeping the peace and fighting fires do serve long term productivity. It is just too subtle for some to notice.

[Soberphobia]

Originally Posted by Winstonbiggs

What happened to the Soviet Union during the debt buildup. It's not like it was pissed away. One of the largest, most represive regimes bent on world domination failed in large part because we not only could borrow to rebuild our military, we did.

I would call that a long term pay back on the debt.

The Soviets were always going to fail - just a matter of time. And I have to say I fail to see the improvement in places like Russia which are now basically mafia states - run by former Soviets who use the country like a personal fiefdom. Of course, then there is the fact that the largest communist country in the world (then and now) now has the world's second largest economy and is now buying up large swathes of the global economy through currency reserves largely given to it from the debt-driven avarice of the United States. Don't look now, but communism is alive and well and its name is China.

If that's the "success" the Reagan legacy can hang its hat on, it says a lot about the rest of his Presidency.

[Jungle Shift Jet]

Originally Posted by Black Death

The Soviets were always going to fail - just a matter of time.

Hindsight is 20/20, but this poster is like most of the good little comrades running around here who weren't even born yet who've made the same
foolish statement, no doubt fed this BS by their Commie teachers.

The Soviets were on the march and going from strength to strength - before Reagan took office, no one in their right mind was running around predicting the fall of the USSR. Our compliant Libs (Hatfield, Leahy) wanted to disarm / freeze our capabilities and spilled the beans about intelligence

No less than the arch-lib-freak Ted Kennedy was so panicked by Reagan's rise he attempted collaboration with Russia to undermine RR

But that's the hard left Comintern for ya - revising RR history whenever and wherever they can because they can't deal with the truth

[Soberphobia]

Originally Posted by Jungle Shift Jet

Hindsight is 20/20, but this poster is like most of the good little comrades running around here who weren't even born yet who've made the same
foolish statement, no doubt fed this BS by their Commie teachers.

The Soviets were on the march and going from strength to strength - before Reagan took office, no one in their right mind was running around predicting the fall of the USSR. Our compliant Libs (Hatfield, Leahy) wanted to disarm / freeze our capabilities and spilled the beans about intelligence

No less than the arch-lib-freak Ted Kennedy was so panicked by Reagan's rise he attempted collaboration with Russia to undermine RR

But that's the hard left Comintern for ya - revising RR history whenever and wherever they can because they can't deal with the truth

"Going from strength to strength", you mean the Brezhnev era from '64 onwards that Russian historians describe using a term that translates roughly as "standstill"? The cracks had appeared already at that stage, and it was only a matter of time - though if you want Reagan to claim responsibility for it he can also claim responsibility for where Russia is today - one of the most corrupt countries on the globe. He can also claim responsibility for the fact THE biggest communist country China is not only still with us but going from strength to strength, due largely to policies that HE (Reagan) inflicted on America (where would China be without all of that lovely debt money handed to them by American policy? Probably stuck in a paddy field somewhere reading Mao's Red book, rather than planning world domination using US $).

What a bizarre character you are - throwing out the "commie" label every second sentence - there seems to be communists everywhere in your strange little world. Yes, all of my teachers were hardened communists and that's why I'm a hardened communist, when I get home from a hard days work at the gulag I reflect on how the sun shines out of Ron Reagan's dead backside and how he saved mankind from us evil commies, destroying us utterly......though apparently not if you believe the content of the posts you put up where the commies seem to be rampant.

In actual fact Reagan did nothing of the sort - to my mind he is the worst President your country has had in my lifetime, and yes I've lived through Nixon, which makes Reagan on the wrong side of truly awful. If anyone is responsible for the economic pit you find yourselves in now it is Ronald Reagan - far from breaking the communist world he's actually assisted it to be the next world super-power. He sold America out to line the pockets of his mates with gold, then claimed all the glory for something he wasn't responsible for (ie the "fall" of communism). If there was no Ron Reagan, supply-side economics wouldn't have gotten grip as US policy and you would now not be going through a double-dip recession. Them's the facts and you calling anyone a communist aint going to change it.

[quantum]

Originally Posted by Black Death

"Going from strength to strength", you mean the Brezhnev era from '64 onwards that Russian historians describe using a term that translates roughly as "standstill"? The cracks had appeared already at that stage, and it was only a matter of time - though if you want Reagan to claim responsibility for it he can also claim responsibility for where Russia is today - one of the most corrupt countries on the globe. He can also claim responsibility for the fact THE biggest communist country China is not only still with us but going from strength to strength, due largely to policies that HE (Reagan) inflicted on America (where would China be without all of that lovely debt money handed to them by American policy? Probably stuck in a paddy field somewhere reading Mao's Red book, rather than planning world domination using US $).

What a bizarre character you are - throwing out the "commie" label every second sentence - there seems to be communists everywhere in your strange little world. Yes, all of my teachers were hardened communists and that's why I'm a hardened communist, when I get home from a hard days work at the gulag I reflect on how the sun shines out of Ron Reagan's dead backside and how he saved mankind from us evil commies, destroying us utterly......though apparently not if you believe the content of the posts you put up where the commies seem to be rampant.

In actual fact Reagan did nothing of the sort - to my mind he is the worst President your country has had in my lifetime, and yes I've lived through Nixon, which makes Reagan on the wrong side of truly awful. If anyone is responsible for the economic pit you find yourselves in now it is Ronald Reagan - far from breaking the communist world he's actually assisted it to be the next world super-power. He sold America out to line the pockets of his mates with gold, then claimed all the glory for something he wasn't responsible for (ie the "fall" of communism). If there was no Ron Reagan, supply-side economics wouldn't have gotten grip as US policy and you would now not be going through a double-dip recession. Them's the facts and you calling anyone a communist aint going to change it.

What's your country of origin? I could make an educated guess based on some of your statements, and your extremely authoritative tone, but I'd rather hear it from you.

[Soberphobia]

Originally Posted by quantum

What's your country of origin? I could make an educated guess based on some of your statements, and your extremely authoritative tone, but I'd rather hear it from you.

I'm from Australia - and I apologise if I am overly hurtful to the person a lot of people see as a hero around here. Obviously, as I've stated, I just don't see why Reagan is lionised as he is because the facts as I see it just don't paint him that way. As I see it Reagan is the root cause for your economic ills today, his policies and his economic approach started this entire debt-cycle that you are locked into today. Don't forget he escalated your public debt by a factor of almost 500% (when you count in the fiscal lag experienced by Bush 1) in 12 years what took your country almost 200 years to build. Reagan was awful for your country because your country is built on its well-earned economic might - during his time your country went from the largest creditor in the world to one of the worlds largest debtors - he whittled away centuries of good work of your previous leaders and citizens. The apologists for him claim he did this to "break communism", but if you can make a link between supply-side economics and the breaking of communism I'm a monkey's Uncle. The thing is I just can't understand why he's such a hero to certain people over there when he should be the exact opposite. Reagan had the leadership and economic skills of a poor Hollywood actor, funny that.

[doggin94it]

Originally Posted by Buster

I disagree. I believe educating children, keeping the peace and fighting fires do serve long term productivity. It is just too subtle for some to notice.

It doesn't have any real follow-on economic effect the way infrastructure projects do. The incremental benefits of throwing more money at public education (if any) don't come anywhere close to the economic (and even geopolitical) impact of, say, investing in a network of electric-car battery change stations

[freestater]

Originally Posted by Black Death

If anyone is responsible for the economic pit you find yourselves in now it is Ronald Reagan - far from breaking the communist world he's actually assisted it to be the next world super-power. He sold America out to line the pockets of his mates with gold, then claimed all the glory for something he wasn't responsible for (ie the "fall" of communism). If there was no Ron Reagan, supply-side economics wouldn't have gotten grip as US policy and you would now not be going through a double-dip recession. Them's the facts and you calling anyone a communist aint going to change it.

Right. Unfunded gargantuan entitlement programs with an ever-expanding recipient base had nothing to do with it.

Oh, and the guy in your avatar who you 'don't know who he is'... he was a murdering POS who enjoyed killing and did it often whenever he found somebody who disagreed with his politics.

[WestCoastOffensive]

Originally Posted by freestater

Right. Unfunded gargantuan entitlement programs with an ever-expanding recipient base had nothing to do with it.

Oh, and the guy in your avatar who you 'don't know who he is'... he was a murdering POS who enjoyed killing and did it often whenever he found somebody who disagreed with his politics.

What's up free? How are you? Hope you are well, and busy. It's a good season for outdoor weed, so there is that to look forward to at the end of the day. "He called for his pipe, and he called for his bowl...well I guess we all know about old King Cole."

Now...

That fact that Reagan overlooked those entitlement pressures when he created "supply-side" economics is telling.

[freestater]

Originally Posted by WestCoastOffensive

What's up free? How are you? Hope you are well, and busy. It's a good season for outdoor weed, so there is that to look forward to at the end of the day. "He called for his pipe, and he called for his bowl...well I guess we all know about old King Cole."

Now...

That fact that Reagan overlooked those entitlement pressures when he created "supply-side" economics is telling.

I'm not defending Reagan here, I'm just pointing out the multi-trillion dollar gorilla in the room.

[freestater]

... and I'm cool, WCO. Freestater abides.

Good to hear you good luck out there. It's been a dry summer here. I'm gonna go ahead and bet that late Oct. will be pretty disappointing in these parts.