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Thread: Keynesian economics ~~ Soviet Communism

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    Keynesian economics ~~ Soviet Communism

    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.

  2. #2
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    keynesians blame no jobs on supply side economics

    supply siders blame no jobs on keynesians

    here's the truth:

    the gov't doesn't create jobs. what happened in 2008 is way larger than Keynes and Milton Friedman or R vs D. it was a bust of multi-decade proportion and saying it's Bush's recession or it's Obama's recession is vast oversimplification.

    each side is scrambling to blame each other but don't forget it was a team of republicans lead by Paulson/Bush that installed the Keynesian bailout, because it was literally the only tool they had left in their tool box.

    blaming the politicians for the economy is like blaming the head coach for the performance of his players. Coaches require talent, Presidents require economic fundamentals, they can't just create these things out of thin air.

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    Weak job growth is about weak demand.

    The President is clearly trying to compromise on a rational plan to reduce the deficit as is the speaker. The Republicans are blocking with their idiotic no tax pledge when it's clear more revenue and tax reform is needed long term.

    Every sane Republican understands we need to raise the debt ceiling, no reason not to get a large deal that also gets more revenue along with real tax reform. The Tea party and the left are balking. Hopefully enough moderate republicans and democrats will work out a deal with the President.

    Republican candidate for President like Bachman who would play the economic terror card should be looked at as fools by the electorate. Lack of leadership and economic disaster for the markets is not going to create jobs or provide capital for jobs.

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

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    Quote Originally Posted by Winstonbiggs View Post
    Weak job growth is about weak demand.

    The President is clearly trying to compromise on a rational plan to reduce the deficit as is the speaker. The Republicans are blocking with their idiotic no tax pledge when it's clear more revenue and tax reform is needed long term.

    Every sane Republican understands we need to raise the debt ceiling, no reason not to get a large deal that also gets more revenue along with real tax reform. The Tea party and the left are balking. Hopefully enough moderate republicans and democrats will work out a deal with the President.

    Republican candidate for President like Bachman who would play the economic terror card should be looked at as fools by the electorate. Lack of leadership and economic disaster for the markets is not going to create jobs or provide capital for jobs.

    The stimulus package was terrible not because of the spending but because of what it was spent on.
    Seems like you're buying into the "stimulus saved 2 million jobs" crap. We can't afford the budget the way it currently is AND its preventing any kind of recovery. More taxes during a recession is ginormously stupid.

    You say its Republicans playing the economic terror card, I say its Obama: it was his foolish spending that got us here with the outrageous debt and higher unemployment.

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    Quote Originally Posted by quantum View Post
    You say its Republicans playing the economic terror card, I say its Obama: it was his foolish spending that got us here .
    If you want to blame Obama for not recovering fast enough maybe that makes sense. But rest assured there was a huge debt and 9.5% unemployment on the day he took office. Let's not play revisionist history and pretend that things were awesome until Obama took over.

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    Quote Originally Posted by bitonti View Post
    If you want to blame Obama for not recovering fast enough maybe that makes sense. But rest assured there was a huge debt and 9.5% unemployment on the day he took office. Let's not play revisionist history and pretend that things were awesome until Obama took over.
    No, it was 8.something percent, and he tripled the debt when he took over. He took a bad situation and made it horrendously worse, in his effort to remake America.

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    Quote Originally Posted by quantum View Post
    No, it was 8.something percent, and he tripled the debt when he took over. He took a bad situation and made it horrendously worse, in his effort to remake America.
    He promised change. He delivered.

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    Quote Originally Posted by Winstonbiggs View Post
    Weak job growth is about weak demand.

    The President is clearly trying to compromise on a rational plan to reduce the deficit as is the speaker. The Republicans are blocking with their idiotic no tax pledge when it's clear more revenue and tax reform is needed long term.

    Every sane Republican understands we need to raise the debt ceiling, no reason not to get a large deal that also gets more revenue along with real tax reform. The Tea party and the left are balking. Hopefully enough moderate republicans and democrats will work out a deal with the President.

    Republican candidate for President like Bachman who would play the economic terror card should be looked at as fools by the electorate. Lack of leadership and economic disaster for the markets is not going to create jobs or provide capital for jobs.

    The stimulus package was terrible not because of the spending but because of what it was spent on.
    This. What a missed opportunity

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    Quote Originally Posted by quantum View Post
    No, it was 8.something percent, and he tripled the debt when he took over. He took a bad situation and made it horrendously worse, in his effort to remake America.
    the rate was skyrockting when Obama took over. Only a pure partisan can look at this graph and say it was the events of 01/09 where everything went wrong.


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    Quote Originally Posted by bitonti View Post
    the rate was skyrockting when Obama took over. Only a pure partisan can look at this graph and say it was the events of 01/09 where everything went wrong.
    It took him longer than 10 days, bit, and him, Reid, and Pelosi screwed us good. And we didn't get a kiss goodnight either.

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    Quote Originally Posted by doggin94it View Post
    This. What a missed opportunity
    you mean buying all that union support (GM and public workers)?

    We won't know that until Nov 2012.

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    Quote Originally Posted by quantum View Post
    It took him longer than 10 days, bit, and him, Reid, and Pelosi screwed us good. And we didn't get a kiss goodnight either.
    dude you started a thread equating keynesian economics to soviet communism.

    read a history book, and then an economics book. and then start a thread.

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    Quote Originally Posted by bitonti View Post
    keynesians blame no jobs on supply side economics

    supply siders blame no jobs on keynesians

    here's the truth:

    the gov't doesn't create jobs. what happened in 2008 is way larger than Keynes and Milton Friedman or R vs D. it was a bust of multi-decade proportion and saying it's Bush's recession or it's Obama's recession is vast oversimplification.

    each side is scrambling to blame each other but don't forget it was a team of republicans lead by Paulson/Bush that installed the Keynesian bailout, because it was literally the only tool they had left in their tool box.

    blaming the politicians for the economy is like blaming the head coach for the performance of his players. Coaches require talent, Presidents require economic fundamentals, they can't just create these things out of thin air.
    I have to agree with Bit...by the way, do you think your military, homeland security (FBI, NSA, etc) might need to be 'revisited'? It might be time to actually cut some of these areas.

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    Quote Originally Posted by bitonti View Post
    dude you started a thread equating keynesian economics to soviet communism.

    read a history book, and then an economics book. and then start a thread.
    not equal, you doofus; equivalent in that they were given their chance and failed miserably. why do you think I used "~~"? tribute to kelly?

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    Quote Originally Posted by CanadaSteve View Post
    I have to agree with Bit...by the way, do you think your military, homeland security (FBI, NSA, etc) might need to be 'revisited'? It might be time to actually cut some of these areas.
    Yes, we should not be providing military while Europe tries the grand socialism experiment on our defense dime.

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    Quote Originally Posted by bitonti View Post
    keynesians blame no jobs on supply side economics

    supply siders blame no jobs on keynesians

    here's the truth:

    the gov't doesn't create jobs. what happened in 2008 is way larger than Keynes and Milton Friedman or R vs D. it was a bust of multi-decade proportion and saying it's Bush's recession or it's Obama's recession is vast oversimplification.
    each side is scrambling to blame each other but don't forget it was a team of republicans lead by Paulson/Bush that installed the Keynesian bailout, because it was literally the only tool they had left in their tool box.

    blaming the politicians for the economy is like blaming the head coach for the performance of his players. Coaches require talent, Presidents require economic fundamentals, they can't just create these things out of thin air.
    Amazing how differently one's tune changes when it is apparent that your guy isn't doing any better than the previous one.

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    Quote Originally Posted by quantum View Post
    not equal, you doofus; equivalent in that they were given their chance and failed miserably
    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?
    Last edited by bitonti; 07-12-2011 at 04:35 PM.

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    Quote Originally Posted by doggin94it View Post
    This. What a missed opportunity
    the PBS special "Too Big To Fail" (I think) had Paul Krugman in it's closing moments saying exactly this (quoted). His words and the look on his face scared the crap out of me. It was a face palm without the palm.

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    Quote Originally Posted by bitonti View Post
    keynesians blame no jobs on supply side economics

    supply siders blame no jobs on keynesians

    here's the truth:

    the gov't doesn't create jobs. what happened in 2008 is way larger than Keynes and Milton Friedman or R vs D. it was a bust of multi-decade proportion and saying it's Bush's recession or it's Obama's recession is vast oversimplification.

    each side is scrambling to blame each other but don't forget it was a team of republicans lead by Paulson/Bush that installed the Keynesian bailout, because it was literally the only tool they had left in their tool box.

    blaming the politicians for the economy is like blaming the head coach for the performance of his players. Coaches require talent, Presidents require economic fundamentals, they can't just create these things out of thin air.
    I can't believe I just read this on a football site. Coaches maximize talent by leading and instructing. Coaches are also responsible for ensuring their team, regardless of talent, is prepared to play. Without all of that, talent tends to come up short. At the very least the two are reliant upon each other to have a high degree of success.

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    Quote Originally Posted by quantum View Post
    Yes, we should not be providing military while Europe tries the grand socialism experiment on our defense dime.
    and yet many of these countries don't have half the issues that North America does....just sayin.

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