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The roots of economic chaos

Posted by $ sjatkins 9 years ago to Economics
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What Will Rogers said was once funny: "Thank God we don't get all the government we pay for!"

It isn't funny today. We get not only the government paid for by massive takings by force from all of us but even more government paid for by putting our children for generations in debt, massive borrowing and running the money printing presses like mad.

Worse this is supported by officially sanctioned economic doctrine. Keynes and latter day disciples like Krugman claim that spending and "demand" are the engines of wealth and that the only investment in production ta actually helps is from government. You couldn't make this crap up.


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    Posted by $ allosaur 9 years ago
    What? Me worry? Y'all take a chill pill and get in the groove.
    Let's all vote for Bernie so our kids can have a free education. Pot will be free too.
    Everything will be hunky dory. It's flower power, y'all.
    Who says we can eat our cake and have ti too?
    Excuse me. Time to contemplate my navel.

    http://www.usdebtclock.org/
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    • Posted by $ 9 years ago
      Flower power, as much as it sucked, was much better than this barely hidden extremely angry socialist running the country.
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      • Posted by blackswan 9 years ago
        Flower power laid the groundwork for this barely hidden extremely angry socialist running the country. So, no, it wasn't better.
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        • Posted by $ MichaelAarethun 9 years ago
          It was first laid prior to 1900 in the eastern Universities. The drug culture of the 60's who are now Secretaries of State and adviser theoreticians to the progressive movement turned it from peace to socialism to progressivism to the same place it always leads and has always led to a fascist totalitarian conclusion. Just what Soros said he wanted all along. The current phase exactly duplicating Germany in the late 20's to early 30's is preparing college level non-students for duty with the protective echelon. Not a pfennigs difference. The iron curtain goes down the economic curtain goes up using that springboard and another of the lefts old strategies cycle or circle of repression this time economic repression. Right wing of left or left wing of left it's still the same ending. Seig Heil Comrade I serve the party.

          So much for the flower children....where have all their lineage gone? Gone to jackboots everyone. Looks like they'll never learn.
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          • Posted by samrigel 9 years ago
            Thanks for saying it, now I don't need to. Sex, drugs and rock n roll --- great slogan. It is total insanity as the totalitarian minded keep doing the same thing expecting different results.
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  • Posted by Herb7734 9 years ago
    Keynes and Krugman - now there is a pair. Add my high school economics teacher and you'd have the three stooges. The trouble is that the first two are given credence and the third controls your grade. Her definition of socialism was "That's when the top and bottom of the economic ladder is cut off." When I tried to tell her that her definition was incomplete and had the temerity to argue, I was sent to the principal, but I got instead the Administrative Assistant. We called him Admiral Ass. When he asked me why I was there, I told him Miss Whatever said I was being smart. Then I crossed my eyes and let my tongue loll out and said "But I'm all right now." He called my parents to come down for a little get-together. He didn't serve tea.
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    • Posted by johnpe1 9 years ago
      I got a C instead of the A I deserved from an ORNL economist
      who was teaching grad school on the side. . I begged to
      differ with him about Keynes. . he was not amused. -- j
      .
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  • Posted by Solver 9 years ago
    I'm not a mystically brilliant person like Krugman. but I would disagree that my spending and my credit card are engines of wealth. That disagreement expands to any level.
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    • Posted by $ 9 years ago
      I don't see that Krugman is brilliant. Oh he is great at deep arcane math. But his fundamentals are quite wrong. Being brilliant he does a brilliant job of rationalizing them. Sad really.
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      • Posted by Solver 9 years ago
        Krugman is extremely clever at convincing people that his esoteric illusions are real. Many "mystically brilliant" people had or have had many followers.
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        • Posted by $ MichaelAarethun 9 years ago
          He has four standard $9;95 books on Kindle. Each with different titles depicting his version of specific areas of time. Part of the publish or perish crowd I should think. I can go with the last one or one of the others What I'm looking for is Krugman in a nut shell pun intended. What do you recommend....in the category of gathering intelligence on the ....dark side?
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        • Posted by $ MichaelAarethun 9 years ago
          Well Lakoff was easy to blow out of the water I wonder how Krugman would fare. If he's like Lakoff he wouldn't even show up for the debate. I guess it's time to see if he's got an Elephant book and unlimber the old .600 Nitro or the 585 Gehringer. Nahhh...If it's as easy as George 'Yoda' Lakoff a .22 will do nicely. Verbally speaking.
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  • Posted by straightlinelogic 9 years ago
    If it's economic sanity you're looking for, may I suggest the Debtonomics Archive tab at my website, Straight Line Logic, which is my own articles, and many of the articles I've featured from other writers, especially David Stockman (accessed by entering "David Stockman" in the search field).
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  • Posted by fosterj717 9 years ago
    Once again, those who subscribe to Keynes and his economics are making a massive mistake (again).

    Just how many times do these socialists have to burn themselves before they realize the stove is hot and that thei9r policies are a dead-end for us all no matter how much Crony-capitalism you throw into the mix?!

    Keynes was wrong then and he and Krugman are still wrong today! They have engineered what will be the worst economic collapse in the history of the human race......
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    • Posted by Solver 9 years ago
      As long as there are smart working producers that are producing and innovating, the statists will be able to profess to their faithful masses, "see, government spending is what creates prosperity. Vote for more!"
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  • Posted by johnpe1 9 years ago
    and it is criminal what they're doing to the kids. . nothing but
    sh!t for education, and punishment for having a thought. -- j
    .
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    • Posted by fosterj717 9 years ago
      Welcome to Hegelian inspired, public education system (implemented under Kennedy administration). Now children are not taught how to think (I.e., Critical Thinking), but rather, what to think (Progressive Dogma)!!!

      Remember, the Hegelian model was adopted by Nazis Germany and Stalinist Russia for their respective national educational systems. Out of the Frankfort School, reading, writing, arithmetic gave way to doctrinaire ideologies such as; Arbor day, Political Correctness and a host of anti-American/anti-Constitutional doctrines. Don't believe me? Check it out!
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      • Posted by plusaf 9 years ago
        Thank you! I'll look into that as a possible Root Cause for the Death of Critical Thinking in the US.
        Really!

        Would someone please ask Krugman about the profitability of the last few companies HE ran?
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  • Posted by dwlievert 9 years ago
    SJATKINS: Just what is it that you think said consumers are using with which to "demand?"

    Are the demands of an American millionaire or a poor filth-laden slob in one of the hell-holes of the world somehow different? I think not.

    Ideally, (certainly NOT what is at work in the current economic environment wherein it is taught - and you have apparently accepted, that we can "demand" our way to prosperity) the former has REAL money that represents past production that is "unconsumed," with which to demand current and future production. On the other hand the poor wretch wishes he might be able to "demand" same, though owing to not having been able to first produce more than he has consumed, has little or nothing with which to "demand."

    "Demanding" or consuming your way to prosperity is much like f...ing on behalf of virginity.
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    • Posted by $ HeroWorship 9 years ago
      And, I will take semantic issue with the idea that a millionaire (American or not) has the same demands as a poor person. (also, that wealth is associated with slobbery :-) )

      The more wealth you have, the more likely you are to think from an investment mentality. The less wealth you have, the more likely you are to think with a consumption mentality.

      It is the people who think investment that produce things, vs. consuming them.

      The demands are different. Teaching people to invest, even when they are poor, is the road to wealth, the American Dream. Not consumption.
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    • Posted by $ 9 years ago
      It is so far worse than that. It is not free people seeking what they value. It is the government claiming that it can demand and demand and thus make the people rich. Claiming it can demand on their behalf and better than they can after stealing their wealth and economic vote away wholesale. They despise retained profits. They are not their control.
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      • Posted by fosterj717 9 years ago
        The fallacy of the Keynesian model is that they believe that by printing money and the government priming the pump, they will create Demand side spending by we schlubs and that in their theory creates wealth and success.

        This stupidity has been tried again and again and the only time it seemed to work as designed was when Ronald Reagan developed his "Spend Bold" strategy of priming the pump by the DoD infusing massive amounts of Federal dollars into purchasing hardware and related services, rebuilding the US military.

        This actually did create jobs and "trickled" down throughout the economy. The difference between Obama federal spending and Reagan's was hard goods being purchased that translated into thousands of manufacturing jobs. Obama on the other hand spend billions hiring people to work for the government, producing nothing of value.

        That my friends is the difference between a successful president and a presidential wannabe.
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      • Posted by $ jlc 9 years ago
        The underlying assumption that you do not state is that the gov thinks it knows 'what to demand' on behalf of the poor. Climate Change is a good example of that: whilst the Paris talks are going on, surveys are showing that <20% of the people in third world countries consider it to be important, and <50% in most developed countries. Long concatenation of several articles -(http://www.rationaloptimist.com/blog/....

        The paternalistic assumption that the gov 'knows what is right for us' is upstream from its assertion that 'therefore it can take the money from whomever it wants to make that happen'.

        Jan
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    • Posted by $ 9 years ago
      Last I checked consumers are spending about 1.25 of earnings. That is they are taking on more debt of various kinds, again. And they are encouraged to do so "for the good of the economy". How sick is that?

      I have accepted no such thing. I believe in production as the engine of prosperity - producing more value than was consumed in producing it.
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  • Posted by term2 9 years ago
    I think government by force is basically evil. We put up with it because of the failure of us citizens to have a proper philosophical base. If we all respected human rights I don't think we would need or want government
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    • Posted by $ HeroWorship 9 years ago
      If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. - Madison, Fed #51
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    • Posted by $ blarman 9 years ago
      Well said. I think Adams said essentially the same thing when he noted that government was for a moral people.

      Rand echoed that statement via the caricature of Floyd Ferris: "The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them...you create a nation of lawbreakers – and then you cash in on guilt. Now that's the system, Mr. Rearden."
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  • Posted by DrZarkov99 9 years ago
    Keynes gets a lot of blame, but he didn't espouse making a habit of runaway spending and excessive debt. His suggested TEMPORARY injection of cash as a stimulus was intended to kick start a stalled economy, not become an addiction.
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    • Posted by CircuitGuy 9 years ago
      This is why I say we need two words, one for the theory and the other for the strawman representation of it. We have been in a tepid expansion for years and should be moving toward running a surplus.
      People supporting the continued borrowing aren't doing it because of a mis-application of Keynes. They're doing it for the same reason people run up credit cards unintentionally.
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  • Posted by fosterj717 9 years ago
    It is obvious that Krugman never subscribed to the Laffer Curve! If he did, he and Keynes would be out of business and the country would be much better off for it!

    Back to school Mr. Krugman!!!
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  • Posted by $ Abaco 9 years ago
    See "The Story of Your Enslavement", by stefbot on youtube for my take on this. There are a couple versions. See the one most viewed...
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  • Posted by CircuitGuy 9 years ago
    "Keynes and latter day disciples like Krugman claim that spending and "demand" are the engines of wealth and that the only investment in production ta actually helps is from government. "
    We really need two different words for what they teach Keynesianism means in school and what it means here. I haven't read the primary soruces. I just know the two are nothing alike. If it means gov't spending results in growth, I disagree. If it means paying off debt or going into debt affects aggregate demand, which affects the economic cycle, I agree with it strongly. We need two words.
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    • Posted by $ 9 years ago
      If you produce X more aggregate demand but consume more than >X in aggregate debt then what have you gained? Or if the spending is actually in an error where it makes it appear there is real demand and need for Y when in reality Y (like some types of solar power compared to say natural gas) is inferior. So there are secondary losses from misallocation of wealth. Not to mention the obvious that that "wealth" was taken by force from the productive in case of government spending and all the manifold costs that that causes.
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      • Posted by CircuitGuy 9 years ago
        "If you produce X more aggregate demand but consume more than >X in aggregate debt then what have you gained?"
        You gain the output of factors of production that would have gone unused and wasted.
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  • Posted by $ MichaelAarethun 9 years ago
    Worse the current people in charge went further than Keynes himself allowed. "This will work until you can no longer pay the interest." Having reached that point it of course failed but instead of admitting to bankruptcy they just did the deer in the head line huuuh! routine and refused to pay the bills So they no longer have the cover Keynes gave them and are standing naked. Along with those who support them. Couch potato rhetoric which requires no balls at all especially when you feathered you nest elsewhere on the planet earth.

    As for your comment on demand driven back it up with facts and prove the use of 'never' same as before couch potato rhetoric with no proofs offered.

    Nyet nyet no change the subject. Back up your statement with something besides .....nothing.
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    • Posted by $ 9 years ago
      Read almost anything by Krugman if you do not believe me. I didn't make it up.
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      • Posted by $ MichaelAarethun 9 years ago
        his name came up in a polling group I was asked to join. The question do you read articles by any of the following and another was news source. BLOGs were listed for the first time as they also ask if the poll is one sided or slanted or missing viewpoints etc.

        Kinda like asking who are the number one shyster businesses and not mentioning Cingular ATT. Some of us , me included took them to task for not recognizing the disenfranchised 35% to 50% nor the existence of undervoting and None of the Above. Some of that is starting to work. Interesting work covers a wide category of poltiical and consumer oriented questions. They also were leaving out purchasing by internet and that's been added.

        I also kicked them about using wrong definitions etc. just like I do here. Why? Why not? The one's we've been spoon fed for years do not work....my personal system does.
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    • Posted by $ 9 years ago
      “AS AN ECONOMIC HISTORIAN who has been studying American capitalism for 35 years, I’m going to let you in on the best-kept secret of the last century,” James Livingston wrote in a May 2011 column for the New York Times. The secret was this: “Private investment— that is, using business profits to increase productivity and output— doesn’t actually drive economic growth. Consumer debt and government spending do.” 1

      Gilder, George (2013-06-10). Knowledge and Power: The Information Theory of Capitalism and How it is Revolutionizing our World (p. 65). Regnery Publishing. Kindle Edition.
      1 James Livingston, Against Thrift: Why Consumer Culture Is Good for the Economy, the Environment, and Your Soul (New York: Basic Books, 2011).

      More from Livingston..
      "Between 1900 and 2000, real gross domestic product per capita (the output of goods and services per person) grew more than 600 percent. Meanwhile, net business investment declined 70 percent as a share of GDP. What’s more, in 1900, almost all investment came from the private sector— from companies, not from government— whereas in 2000, most investment was either from government spending (out of tax revenues) or “residential investment,” which means consumer spending on housing, rather than business expenditure on plants, equipment and labor. 5 Business investment is, meanwhile, an actual hazard: So corporate profits do not drive economic growth— they’re just restless sums of surplus capital, ready to flood speculative markets at home and abroad. In the 1920s, they inflated the stock market bubble, and then caused the Great Crash. Since the Reagan revolution, these superfluous profits have fed corporate mergers and takeovers, driven the dot-com craze, financed the “shadow banking” system of hedge funds and securitized investment vehicles, fueled monetary meltdowns in every hemisphere and inflated the housing bubble…. Consumer spending is not only the key to economic recovery in the short term; it’s also necessary for balanced growth in the long term…. [W] e consumers need to save less and spend more in the name of a better future. 6"
      6 Livinston, “It’s Consumer Spending, Stupid!”

      Gilder, George (2013-06-10). Knowledge and Power: The Information Theory of Capitalism and How it is Revolutionizing our World (p. 305). Regnery Publishing. Kindle Edition.
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      • Posted by fosterj717 9 years ago
        Pardon me, I am not an "Economic Historian" however I can smell the smoke even if I can't see the flames!

        Quoting "statistics" is a little on the bogus side because a skilled "craftsperson" can manipulate the outcome just about any way they want.

        reading between the lines of your post, it seems to be embracing a more Keynesian model and implies that private capital gives way to some form of government stimulus. Excuse me if I have mistaken your post.

        Your take on the use of private capital to inflate the post 1929 stock market really sounds more like the fact that government by "encouraging" people who cannot afford mortgages to get them with ease, thus inflating the real estate market with a irrational demand for housing. That, in turn caused the great collapse of a couple of years ago. Now they have reinstated the same stupid stimulation making easy (I.e., recently printed) money available to people who cannot afford what they wish to buy.

        As I am sure you are aware, another massive bubble is now in scope with these Keynesian/Krugman "fixes". I for one will gladly take my chance with a Free Market approach and to hell with government intervention!
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      • Posted by $ MichaelAarethun 9 years ago
        Ditto it's all about greed. Their greed has more sucking power than your greed. precisely because you pass control every time you vote...and wait for a miracles ....and fairy tales...

        Stop Enabling
        Take Control
        Make Change

        Or if you like the way things are going vote Democrat or Republican. Doesn't matter which. It's the same party and come to think of it they are the only ones allowed to have candidates on the ballot.

        Thanks to you.
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        • Posted by $ 9 years ago
          It is not "thanks to me". My one vote in a the huge number of zombies that have not escaped their conditioning barely registers. It is unfortunately very difficult to get a 3rd party with real traction. The Libertarian Party? I lost all belief they would or were even aiming at making the right kind of difference ages ago.
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          • Posted by $ MichaelAarethun 9 years ago
            Then the only answer left is the only way to win is don't play their game. That's automatic enabling.

            Not voting on that particular line is 'undervote' = No Confidence vote in parliamentary systems and for us translates to "None of the Above."

            Currently runs 35 or so percent in Presidential cycles and right at 50 percent in non Prez elections.

            Unless they start counting all those who didn't vote and those who didn't register as winner take all. A step I wouldn't put past the left for half second.

            That 35 to 50 percent is a source of real power but there is no one or no one entity to lead that sort of cooperation. Still the rule remains

            First - cease enabling.
            Second - regain control
            Third - Make changes of common ground agreed areas
            Fourth - then deal with the rest of it....

            The other option is learn to say We Serve The Party!
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      • Posted by $ MichaelAarethun 9 years ago
        Finish the equation. If there is Gross Domestic Product what is Net Domestic Product and where did the difference go? I always hate to get to the half way point and then find someone decided to tear out the final pages...
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        • Posted by $ 9 years ago
          How incredible is it that it is claimed that 70% of GDP is consumer buying and 23% is government spending. Which part of that has anything to with production? I guess it is hidden somewher in the other 7%.

          With GDP computed this way they have to push for more and more consumer and government spending to improve GDP. Total madness.
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