so let everyone fail, like lehman?
It was clear that stimulus was going to be a big pork barrel grab, since it had to be large and passed quickly. The only way to find enough things to spend it on and get broad support would be to have everybody throw in their pet projects. So, yeah, the stimulus was not ideally efficient, but it is in the nature of emergency situations. If you’re having a heart attack, it costs less to get to the hospital by bus, but you’re more likely to have to pay for an ambulance or at least a taxi instead. Afterwards, when the bill comes, you’ll say “gee, that was a lot of money, and for what?” But it still doesn’t mean it was the wrong decision. I don’t really see much alternative. If you get punched, it hurts, but you can usually still get up. If you get hit with a baseball bat, you may be down for the count. The stimulus made the difference between getting hurt badly, and getting totally knocked out. It had to be done quickly if it was going to have any chance of being effective. And while we get upset about how government allocates capital inefficiently… why don’t we ask where those mortgages came from, and where those CDSs and CDOs came from? More than government, the banks seem to have destroyed far more capital and allocated it inefficiently. Trillions of dollars of fictitious value sitting on TBTF balance sheets going up in smoke like poof! Not even government can destroy value as efficiently as they did.
You can’t be a free market capitalist, rail for deregulation, then expect the government to come save you when you F up. There have to be consequences or else it’ll happen again. Now, I wouldn’t have just thrown them to the wolves. It would have been amazingly difficult to do, but the government would have had to help them unwind their operations over a very long period of time. Ultimately though, yes, I would let them fail.
Feeling pain at the pump? Gas prices have doubled since Mr. Obama took office. According to the GasBuddy gasoline price tracking web site, the price of a gallon of regular gas was around $1.79 when Mr. Obama took office. Today the national average is $3.58. The lowest average price in the continental United States is $3.31 in Tulsa Oklahoma, the highest is $4.14 in Santa Barbara, CA. Four-dollar-a-gallon gas has arrived on average throughout California, and a number of other states are headed in that direction. This is the “change” intelligent people voted against in 2008.
Arial10 Wrote: ------------------------------------------------------- > Feeling pain at the pump? Gas prices have doubled > since Mr. Obama took office. According to the > GasBuddy gasoline price tracking web site, the > price of a gallon of regular gas was around $1.79 > when Mr. Obama took office. Today the national > average is $3.58. The lowest average price in the > continental United States is $3.31 in Tulsa > Oklahoma, the highest is $4.14 in Santa Barbara, > CA. Four-dollar-a-gallon gas has arrived on > average throughout California, and a number of > other states are headed in that direction. This is > the “change” intelligent people voted against in > 2008. My total comp is up 60% since Obama took office. Thanks, Prez! On the other hand my friend’s great grandmother passed away yesterday, thanks a lot Obama.
brain_wash_your_face Wrote: ------------------------------------------------------- > Arial10 Wrote: > -------------------------------------------------- > ----- > > Feeling pain at the pump? Gas prices have > doubled > > since Mr. Obama took office. According to the > > GasBuddy gasoline price tracking web site, the > > price of a gallon of regular gas was around > $1.79 > > when Mr. Obama took office. Today the national > > average is $3.58. The lowest average price in > the > > continental United States is $3.31 in Tulsa > > Oklahoma, the highest is $4.14 in Santa > Barbara, > > CA. Four-dollar-a-gallon gas has arrived on > > average throughout California, and a number of > > other states are headed in that direction. This > is > > the “change” intelligent people voted against > in > > 2008. > > My total comp is up 60% since Obama took office. > Thanks, Prez! On the other hand my friend’s great > grandmother passed away yesterday, thanks a lot > Obama. And the stock market is up about 55%! Booyah!
I really like this board. I think b/c it is primarily used for education it doesn’t get the typical internet trolls and bullshiters. I hope it doesn’t get overrun by Arial10’s.
And this is what the moonbats get for all their BS spending: .4% GDP growth in Q1. But let me guess, if it was only a bigger stimulus we would all be dancing in the streets by now under full employment, sipping cristal from a magic drinking fountain, next to a golden meadow, full of unicorns shimmering with pixie dust.
equity_analyst Wrote: ------------------------------------------------------- > And this is what the moonbats get for all their BS > spending: > > .4% GDP growth in Q1. > > But let me guess, if it was only a bigger stimulus > we would all be dancing in the streets by now > under full employment, sipping cristal from a > magic drinking fountain, next to a golden meadow, > full of unicorns shimmering with pixie dust. Yes. If there were a bigger stimulus the economy would be growing more strongly and not shrinking/stagnating. The weak GDP number was clearly a result of consumers saving rather than spending. It’s the paradox of thrift: no one entity can save without another running a deficit, therefore if we all try to save we will mathematically be unable to. From the BEA economic release this morning: “Real personal consumption expenditures increased 0.1 percent in the second quarter, compared with an increase of 2.1 percent in the first.” http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm This is an “animal spirits” problem. Do you really think a $700b stimulus package is enough to offset a 5% increase in the savings rates of the entire US population? It was clearly too small. If you think the stimulus plan was ineffective because stimulus does not work, I would be interested to hear your theory on how WW2 spending ended the Great Depression.
The perpetual Keynesian argument. “If only we spent more money it would have worked!” And that’s what a PhD in Econ will get you. Individuals are continuing to deleverage, and will be for at least a couple more years. Home prices falling hasn’t helped. We’re heading to stagflation thanks to academics trying to run monetary policy.
Sweep the Leg Wrote: ------------------------------------------------------- > The perpetual Keynesian argument. “If only we > spent more money it would have worked!” And > that’s what a PhD in Econ will get you. You can simply dismiss the Keynesian argument, or you could try providing an explanation why it is wrong and you are right. In order for individuals to deleverage the government (or foreign sector) must run a deficit. Austerity in the current environment would not lower the deficit, in fact it will increase it because the economy would inevitably contract. You can see real-time examples of this going on in the Euro Zone. Spain’s debt/GDP is only ~60% yet their deficits keep getting worse and interest rates are spiking. Austerity in Greece has dramatically worsened the situation. Take a look at the following graph for a visual depiction of this phenomenon. The spike in private sector savings is clearly directly offset by the increase in the fiscal deficit. This is plain and simple double-entry accounting at work, not ivory tower economic theory. http://greshams-law.com/wp-content/uploads/2011/03/Picture-142.png > Individuals are continuing to deleverage, and will > be for at least a couple more years. Home prices > falling hasn’t helped. I am glad we agree on this point. > We’re heading to stagflation thanks to academics > trying to run monetary policy. I personally feel that monetary policy is pretty ineffective in dealing with a crisis the magnitude of a recession, and am thus an advocate for more reliance on fiscal policy. I do not think the best approach is just to throw a century of academic research on economics out the window and just start determining policy by throwing darts. What exactly are you advocating?
Keynesism is just like a recently divorced dad that throws money at his child hoping to make everything better. Sure, maybe the kid is happy he can finally get that GI Joe with the Kung Fu grip, but the underlying problems are still there, the money eventually runs out, and things aren’t any better. I’m not throwing out a century of economic research. I just think it’s pretty clear the Austrians won.
Sweep the Leg Wrote: ------------------------------------------------------- > Keynesism is just like a recently divorced dad > that throws money at his child hoping to make > everything better. Sure, maybe the kid is happy > he can finally get that GI Joe with the Kung Fu > grip, but the underlying problems are still there, > the money eventually runs out, and things aren’t > any better. This is a fallacy of composition. People often assume that the government budget is identical to a household budget and that it must be balanced. The reason is they mentally group all households together and assume that the government is one “mega household” with identical characteristics to an individual household. Another fallacy of composition would be to say that since a single cell is invisible to the naked eye, if you add them all up to make a human, that human should be invisible as well. Another would be to assume that a sports team composed of all-star players will be the best sports team out there - false as they may not get along or have complimentary abilities, etc. These are examples of inappropriately assuming attributes of a part also apply to the whole. It is in a household’s best interest to “balance its budget” and actually run a surplus to accumulate savings for a rainy day. But to take that attribute and generalize it to the entire economy is a fallacy. Any single individual can save but spending = income so all together cannot. Imagine if at an extreme I were to start up a government today with a goal of always running a surplus (profit). So I go out and find some citizens and pay them $100 annually and tax them $120. Each year I would accumulate a “surplus” and these citizens would each owe me $20 more, going deeper and deeper into debt. Since the government exists to serve the people and not the other way around, deficits are a necessary and “good” thing. Optimal economic policy would be to have outstanding government debt at any level supported by the willingness of the private sector to save, and then deficits at about the level of nominal GDP growth in normal times and deeper in times of slowdowns. This is in stark contrast to what many would think - “the optimal situation would be for the government to have no debt or deficits right?” No because in that case there would also be no net savings for anyone… > I’m not throwing out a century of economic > research. I just think it’s pretty clear the > Austrians won. Why do you say Austrian theory has “won”? Because we are not in a booming recovery right now? Recoveries following financial crises are consistently slower and involve governments expanding their debt/gdp over a period of several years as the private sector deleverages. This is prove-able empirically just by looking at history. No rational economist would expect that a measly $700b spread out over years could have a large impact on a $14 trillion economy that is deleveraging. That does not mean it is not doing anything at all.
Unless that GI Joe helps the child build creativity and problem solving skills during playtime, giving him confidence and allowing him to develop appropriately despite the traumatic divorce.
Dwight, I agree with you, but I’d suggest avoiding saying “fallacy of composition” in these discussions. It’s an academic term that turns peoples brains off and makes them think that they don’t have to pay serious attention to you. If you say, “a government is not the same as a household or an individual, it has different tools, a different expected lifetime, control over the currency, etc.” people won’t disconnect. You can mention later on that economists call it “the fallacy of composition,” but if you lead with that term, most people’s brains will turn off (to the extent it was on in the first place). In political science, there is something similar called “reification,” which is when you start talking about a country or group as if it were an individual person. The usual problem with reification is that it ignores group dynamics, internal politics. Sometimes it can be a problem, sometimes it isn’t, but it’s similar to the fallacy of composition.
Haha good point. My brain just turned off when I hit the word “reification” too. Perfect demonstration of what you were trying to say.
So lets just print another $3T and spend that on “infrastructure,” that way, we’ll put a lot of people back to work and the economy will grow. How anyone can believe this crap is beyond me. The stimulus was a waste of money, period, any back office monkey can figure that out. So many people predicted this would happen its not even funny. Even Krugman is full of it, caught up in his own BS. First the moonbat meme was that the stimulus was too small, now, the excuse was that it was the wrong kind of spending. Of course, Krugman contradicts his own writings on this topic, but why let credbility get in the way of a hack economist that thinks bigger government is the answer. You guys want to see me destroy this fool?
Sure you do and here you go. This fool can’t even keep his own BS straight. What a hack: Paul Krugman now says that some kinds of Keynesian stimulus spending just aren’t as effective as other kinds. Specifically, he suggests, aid to state and local governments (to enable them to keep government workers in their jobs) is a sort of second-class stimulus: “So what happened to the stimulus? Much of it consisted of tax cuts, not spending. Most of the rest consisted either of aid to distressed families or aid to hard-pressed state and local governments. This aid may have mitigated the slump, but it wasn’t the kind of job-creation program we could and should have had.” Hmm. That’s not what I remember him saying back in 2009. In 2009, if I remember right, job-preserving aid to state and local governments was almost the most important thing in the world. Let’s see … searching … searching … Sorry I’m a little rusty … searching … whoops, hit the Times paywall … searching … ah, yes: “Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. [E.A.]” I can’t find the part where he says “but in two years if it doesn’t work I’ll say it just wasn’t the right kind.” … From the daily caller: http://politicalhardball.com/forums/showthread.php?101-Just-A-Reminder-Paul-Krugman-is-a-hack So, as you can see, Krugman and anyone putting forth his brand of “economics” is full of it, up to their eyeballs–no credibility whatsoever, period. First Krugman says state government aid is the best kind of spending, now he says its the wrong kind–oh really?? What a fool and a hack. And there you go, in print, in his own words, irrefutable contradictory statements from a loser hack economist that has been proven wrong over and over again.
@Dwight: While I appreciate how amazingly condescending you are, you’re not really making any useful points. I think most of us are ok on how fiscal policy works, this isn’t Reddit. The Keynesian camp is comprised of students or recently graduated students, professors, journalists, and bureaucrats. In short, people with little utility (ok, professors get a pass). Just like Communists, Keynesians can’t figure out how a theory that looks so good on paper just can’t be pratically applied. I call it the “fallacy of being an idiot.” I would love nothing more than to spend my Friday afternoon teaching you why free market capitalism is far superior to Keynesism, but I fear it would fall of deaf ears. As the years pass and the dollar becomes increasingly worthless, I’m sure you’ll come around on your own.