Interesting point.
But how can we be sure that intervention motive is to overthrown economic system (or constitutional rights) and not a bona fide althrough stupid move, as you seems to imply?
BTW your final question is inspiring.
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Keynesian report card 2007-09 - at what point do they admit it's not working?
- Thread starter Cutten
- Start date
Interesting point.
But how can we be sure that intervention motive is to overthrown economic system (or constitutional rights) and not a bona fide althrough stupid move, as you seems to imply?
BTW your final question is inspiring.
Quote from Lucrum:
Falsify the approach according to who?
Isn't it a subjective question?
At the risk of sounding "political" imo NOTHING will invalidate the intervention approach for the proponents of intervention. My reasoning is simple, they are not the type who generally admit to being wrong in the first place.
Of course, it is a subjective question. That is why I think it is best if people on either side of the debate give their success or criteria failure *now*. Then at least we can judge if they succeeded or failed *on their own criteria*.
This is far more useful than waiting until after the fact, because we all know everyone will just try to twist their explanation to suit what they already know happened. Using forward-looking criteria means you have to actually stand by your convictions and give a testable set of conditions for your convictions - you need to actually put your views on the line and risk being proven wrong. A bit like in trading.
Anyone can justify their theory after the fact by using 20/20 hindsight.
Quote from Daal:
Success of monetary policy needs to be measured in a relative basis. Ben Bernanke has run the numbers, in a sample of TWENTY SIX countries in the 1930's, the ones that were off the gold standard and printed currency had better employment, industrial production, more inflation plus dozens of other indicators perform better than the ones the ones in the gold standard. When they got out they usally improved performance
The modern equivalent to this is quantitative easing, a more extreme version is QE plus trash talking the currency to induce inflation expectations, which the fed has not engaged in because the core CPI and core PCE havent plummeted yet. Perhaps a way to measure if QE works is looking at the performance of euro countries with other european nations AFTER this is over. Of course I'm assuming Trichet will not go into QE, which is not a good assumption since he very well might
As far as fiscal stimulus is concerned, one can complain it creates fiscal problems for the long-run but not as a short-term boost in a deflationary enviroment since it raises velocity of money, increases aggregate demand and helps to reflate.
Bottom line is, it all comes down to whether you believe massive deflation is good like Rothbard or if it feeds the collapse like Soros/Fisher
Again, check the first post - I am simply asking for the conditions that would falsify the belief that the current Keynesian/interventionist policies are the right ones. That is a pretty simple question yet so far no one has given an answer to it.
In this thread I am not interested in hearing anyone's views on theory or past experience, there are plenty of other thread's for that. I just want to know, at what point should the current policies be viewed as a failure, and at what point a success? Then in 2-3 years we can look at the results and see if they passed or failed according to these results. And instead of fruitless theoretical debate, we can allow reality to tell us whether interventionism worked or not.
"Bottom line is, it all comes down to whether you believe massive deflation is good like Rothbard or if it feeds the collapse like Soros/Fisher"
No - it all comes down to *what is demonstrated to succeed or fail*. Reality is the test, not theory or opinion.
Quote from lrm21:
To Continue to debate the cons of Keynesian interventionism and the statism it is as fruitless and as dated as a progressive in 1924 soviet union pushing for an American style democratic republic..
" hey at what point do we say central plan communism is not working?" asks the commentator in the local soviet paper.
You are asking the wrong question in the wrong place. They elites have moved on and we need to see the conclusion of this transformation to its inevitable end.
A better question is what politically needs to be done to undo these changes..if it all possible.
Sorry to burst your bubble.
I'm well aware of these issues but I am seeking knowledge not political office, so they are of no real interest to me. How does it help to know that political elites are seeking to expand state power, when that is practically a tautology since the beginning of time?
Being able to predict the economic performance of policies, on the other hand, could directly benefit my bottom line via speculation and investment, so I am quite interested in knowing whether Keynesian policies will boost the economy, make it worse, or do nothing at all.
I don't think they ever will.They know it's nonsense but I don't think Austrian Economics can succeed in a Democracy.Too many people would have to admit they were stupid or lazy.Altruism is too well drummed into us.Anatole Kaletsky made the point in Monday's 'Times' (UK). It's not good for Humanity to be mislead in such a manner but the truth and reality of living under true Capitalism would be like living looking in a mirror for Billions of us.Most couldn't stand it.
Quote from Cutten:
I'm well aware of these issues but I am seeking knowledge not political office, so they are of no real interest to me. How does it help to know that political elites are seeking to expand state power, when that is practically a tautology since the beginning of time?
Being able to predict the economic performance of policies, on the other hand, could directly benefit my bottom line via speculation and investment, so I am quite interested in knowing whether Keynesian policies will boost the economy, make it worse, or do nothing at all.
You can't try to understand the economic directions and not understand the political decisions that are directly impacting the economy.
The greater the political influence the more important it becomes to watch DC than NYC.
LOL. You actually think these jabronis in DC care about you or your family?
"Economics" is as fairytale as Peter Pan. The idea was created to divide the people and to give them something to talk about, so, a few gentlemen can go spend $100-$250k to get an "education" so they can wear a suit to work. It's all strictly business!
There's a new group in DC who will create, bend, or implode laws to get their nut.
The Gov't just came in and changed the rules. They are keeping failed business models running-they are essentially "God" of the "economy." They aren't allowing "Darwin" to do his thing.
They'll never admit that what they are doing (or have done) isn't working. They will always lean against the ideal that it's better than doing nothing.
"Economics" is as fairytale as Peter Pan. The idea was created to divide the people and to give them something to talk about, so, a few gentlemen can go spend $100-$250k to get an "education" so they can wear a suit to work. It's all strictly business!
There's a new group in DC who will create, bend, or implode laws to get their nut.
The Gov't just came in and changed the rules. They are keeping failed business models running-they are essentially "God" of the "economy." They aren't allowing "Darwin" to do his thing.
They'll never admit that what they are doing (or have done) isn't working. They will always lean against the ideal that it's better than doing nothing.
I think the only way to determine if Keynesian Economics is successful or not is to compare the results of this approach with the results of a "do nothing" approach <b>OVER THE SAME TIME PERIOD UNDER THE EXACT SAME CONDITIONS</B>.
Since it is not possible to employ both economic models at the same time under the same conditions, the answer to the question "when do we admit Keynesian Economics has failed?" will <b>never</b> be answered.
If we don't come out of the recession until 2015 some will say Keynesian Economics was a failure. But how do they know that doing nothing would have produced better results? For all we know if the "do nothing" approach was implemented, the recession might not have ended until 2020.
Since it is not possible to employ both economic models at the same time under the same conditions, the answer to the question "when do we admit Keynesian Economics has failed?" will <b>never</b> be answered.
If we don't come out of the recession until 2015 some will say Keynesian Economics was a failure. But how do they know that doing nothing would have produced better results? For all we know if the "do nothing" approach was implemented, the recession might not have ended until 2020.
A lawyer will never, under any circumstance, admit he is/was wrong.
www.mises.org
Halfway down: 1819:america's first housing bubble. (text article)
Caused by Banks printing unbacked notes.Everyone knew back then that 'doing nothing' was the answer.
Then,further down under 'Media'.All the current audio files are good.(They've been 'up' for 3 days so may be replaced soon). Why has no-one heard of the crash of 1921?.Because Everyone knew it was caused by the Inflation for ww1 and the only cure was belt-tightening.The 'FED' didn't conduct open market operations until 1922. Keynesianism can't answer the swift recovery.
Also on Youtube,Robert Higgs Ph.D shows that all prominent Keynesians thought the contraction in Government spending in 1945 and afterwards would plunge the World back into depression.It didn't happen but they and the current Keynesians didn't/don't address why not. - First link gives the quick verbal answer,second gives it with evidence.
http://www.youtube.com/watch?v=-kbnrqf8JUA&NR=1
http://www.youtube.com/watch?v=D62xXzTXQH8
Halfway down: 1819:america's first housing bubble. (text article)
Caused by Banks printing unbacked notes.Everyone knew back then that 'doing nothing' was the answer.
Then,further down under 'Media'.All the current audio files are good.(They've been 'up' for 3 days so may be replaced soon). Why has no-one heard of the crash of 1921?.Because Everyone knew it was caused by the Inflation for ww1 and the only cure was belt-tightening.The 'FED' didn't conduct open market operations until 1922. Keynesianism can't answer the swift recovery.
Also on Youtube,Robert Higgs Ph.D shows that all prominent Keynesians thought the contraction in Government spending in 1945 and afterwards would plunge the World back into depression.It didn't happen but they and the current Keynesians didn't/don't address why not. - First link gives the quick verbal answer,second gives it with evidence.
http://www.youtube.com/watch?v=-kbnrqf8JUA&NR=1
http://www.youtube.com/watch?v=D62xXzTXQH8