Quote :

"MBSs were just a way for banks to package in the good with the bad. It was a chain reaction. The banks didn't care who they were loaning to, because they knew they'd just be selling MBS on a secondary market as soon as the loan was approved."

Christ, you're admitting right here that the lax regulations on finance instruments destroyed all incentive whatsoever for banks to make reasonable loans, which quite obviously spells out a textbook market failure in the making. Yet you still insist that this takes a backseat to your fanciful narrative where the government was somehow responsible for any reason aside from not regulating heavily enough.

[Edited on August 25, 2011 at 3:45 PM. Reason : .]

8/25/2011 3:44:28 PM

Quote :

"Tell me, what happens when the police bust a party? Who gets a ticket, assuming no one is underage?"

The owner of the house gets a ticket. But the drug dealers and prostitutes that my friends invited without my consent get hauled off to jail. This is a really fun analogy by the way.

8/25/2011 3:49:33 PM

Quote :

"Christ, you're admitting right here that the lax regulations on finance instruments destroyed all incentive whatsoever for banks to make reasonable loans, which quite obviously spells out a textbook market failure in the making. Yet you still insist that this takes a backseat to your fanciful narrative where the government was somehow responsible for any reason aside from not regulating heavily enough."

You dummy. Are you paid by the Federal Reserve or something? Why are you sticking up for them?

Quote :

"The owner of the house gets a ticket. But the drug dealers and prostitutes that my friends invited without my consent get hauled off to jail. This is a really fun analogy by the way."

Right - the person that provided the alcohol and fueled/facilitated the party gets in trouble. In this analogy, that is the Federal Reserve, which you guys want to ignore so badly, and I don't know why.

8/25/2011 3:57:23 PM

Just curious: why do you think we developed the idea of a central bank/Federal Reserve in the first place?
http://www.amazon.com/Panic-1907-Lessons-Learned-Markets/dp/047015263X

Even if we've found the limits of its power vis a vis bubble creation, how do you fix that? I mean, I know what you'd propose, but aside from an extensive audit, you open up the possibility of chaotically micromanaged institution at the mercy of the whims of some congresspeople. Is that any better?

Wait, I know the answer to that, too.

[Edited on August 25, 2011 at 4:03 PM. Reason : .]

8/25/2011 4:00:31 PM

Quote :

"Just curious: why do you think we developed the idea of a central bank/Federal Reserve in the first place? http://www.amazon.com/Panic-1907-Lessons-Learned-Markets/dp/047015263X"

Bankers wanted a way to protect themselves from losses. They wanted bailouts guaranteed by the system, and that's what they got - a "lender of last resort." Without a central bank, banks actually had to hold reserves and were liable for losses. Now, they got to offload those problems onto the Fed.

Of course, Congress was scared into believing that the fabric of society would evaporate without a central bank. That's how virtually all terrible policy is passed. In 1913 (and even in 1907) the concept of a central bank was not new. It had been on the table for a long time, and was rightly resisted by leaders that saw the folly of such a system. We had no central bank for a while, and we never had any true depressions. It was only a couple decades later, after loose monetary policy, that we had the Great Depression.

1913 marks the cartelization of the banks - the same banks that you guys bitch about not being regulated enough.

Quote :

"Even if we've found the limits of its power vis a vis bubble creation, how do you fix that? I mean, I know what you'd propose, but aside from an extensive audit, you open up the possibility of chaotically micromanaged institution at the mercy of the whims of some congresspeople. Is that any better?"

I'm actually not convinced that it is fixable. I think that U.S. hegemony will end in disaster, just like it has for every other empire, and we will be faced with draconian cuts with severe consequences. Things are too tightly wound up, as you seem to suggest, and the unwinding process is going to be shitty.

I do think we need to have hard currency, at least in the sense that currency is backed by real labor/goods. This doesn't necessarily mean gold or silver, though gold I believe is poised to become the reserve currency.

[Edited on August 25, 2011 at 4:18 PM. Reason : ]

8/25/2011 4:11:29 PM

Quote :

"We had no central bank for a while, and we never had any true depressions."

I don't know of any historians who believe that we didn't have any "true" depressions throughout the 19th century. Did you forget about the Long Depression? Or the other depression in the 1830s?

Not to mention, the panics.

I know you think peer-review is all a conspiracy against your sort of views, but I don't know of any literature out there, right or left, that acts like none of this was that significant.

Quote :

"Bankers wanted a way to protect themselves from losses. They wanted bailouts guaranteed by the system, and that's what they got - a "lender of last resort." Without a central bank, banks actually had to hold reserves and were liable for losses. Now, they got to offload those problems onto the Fed."

And in return we got more stability in the banking system, the end of the panic cycles of the 20th century, so on and soforth. I mean, I know you don't agree, so why continue...if it didn't come out of Murray Rothbard's insane head, you think it's akin to communism.

I'm guessing you disagree with even this assessment of the Great Depression being a reaction to monetary contraction? That's been the conservative view for a long time.

Quote :

"I do think we need to have hard currency, at least in the sense that currency is backed by real labor/goods. This doesn't necessarily mean gold or silver, though gold I believe is poised to become the reserve currency."

Why people continue to point to a commodity with such limited uses I'll never know.

Here's a question out of curiosity: do you think the labor theory of value makes more sense than the current system?

[Edited on August 25, 2011 at 4:24 PM. Reason : x]

8/25/2011 4:22:25 PM

I'd like to point out at this time that my attempts to rationalize the federal reserve system in no way should be interpreted as an endorsement of all of its policies, but rather as an attempt to rationalize its existence in order to prevent the inevitable takeover of the monetary supply by large, private, unaccountable banks should the money supply be privatized as some would like, or the return of the gold standard, which was extremely harmful to farmers and laborers in the late 19th century.

I reserve the right to defend institutions I don't necessarily love in order to prevent the only likely alternative at this point: chaos.

If you want my true preference, that's another thread.

8/25/2011 5:43:20 PM

I'm glad a large, private, unaccountable bank is protecting us from that.

8/25/2011 5:47:10 PM

Quote :

"or give me a specific place in Keynes to support this"

Quote :

"“Organized public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organisation (and above all cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle.” ( Collected Writings, volume XXVII, p.122 )."

8/25/2011 5:58:43 PM

That doesn't sound like "advocating against" it.

8/25/2011 6:06:18 PM

In the context of shifting the demand curve to avoid the fall in the business cycle it absolutely does.

8/25/2011 6:12:04 PM

Quote :

"Right - the person that provided the alcohol and fueled/facilitated the party gets in trouble. In this analogy, that is the Federal Reserve, which you guys want to ignore so badly, and I don't know why."

Because there is nothing inherently wrong with throwing parties. Parties only get out of control because of lax rules that get broken or ignored by the attendees. They break the rules because they aren't concerned about the consequences. They aren't concerned about the consequences because they are having too much fun and the police are no where to be found.

In the case of the subprime mortgage crisis, it was a combination of all those things. The rules were already lax before the party ever started (http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act and http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000 ) because strict rules were viewed as being anti-fun (capitalism). The rules were easily broken because the usual snitches (credit rating agencies) were in on it. No one cared about the consequences because there was too much fun (money) to be had. They knew the police (the SEC) were never going to show up because their bosses (the Bush administration) either didn't care, didn't know, didn't want to know, or were too busy doing other things (Iraq). So by the time the black man with the funny sounding name showed up with the fire department to put an end to the party, the house was already a wreck.

So you can't blame the Fed for the entire crisis just because they "fueled/facilitated the party". It wasn't their job to create the rules or enforce them. And they certainly weren't the ones breaking them.

[Edited on August 25, 2011 at 6:31 PM. Reason : :]

8/25/2011 6:26:32 PM

So Chance do you actually care what the man meant in the context of his own thought, or do you only care about what you want him to mean in the context of this incredibly petty argument?

8/25/2011 11:44:32 PM

Seriously I guess it's time that the right "be acquainted" with Keynes and Krugman -- thus the deluge of cherrypicked, out of context quotes that are interpreted in ways that don't fit their systems of thought

These kinds of people spend the bulk of their lives' work writing and explicating their thoughts. Rather than read and engage it, you search, take things out of context to support whatever claim-of-the-moment you're on, and claim victory because the words appear to work out. This is a really troubling trend.

Anyway it's clear you have no fucking idea you're talking about but that's not exactly new. I know you're in the whole "I don't read and nobody else does either" stage, but realize that every once in a while you come across somebody with a measure of familiarity with the things you casually spout off about.

8/25/2011 11:50:24 PM

Quote :

"Rather than read and engage it, you search, take things out of context to support whatever claim-of-the-moment you're on, and claim victory because the words appear to work out. This is a really troubling trend. "

Now you know how I feel.

8/26/2011 10:41:11 AM

With respect to what?

8/26/2011 10:48:11 AM

Quote :

"So Chance do you actually care what the man meant in the context of his own thought, or do you only care about what you want him to mean in the context of this incredibly petty argument?"

Is what he wrote not the context of his own thought? Furthermore, what he wrote is so black and white that it's really sad that you're getting all blustery and pulling the "I've read more works than you" card again.

Quote :

"take things out of context to support whatever claim-of-the-moment you're on, and claim victory because the words appear to work out."

It's simply stupid as shit for me to become a studied expert in Keynes and Mises so that I can destroy clowns on a message board. Tell me, what are the benefits to your life of having studied Keynes so intently? So that you can sit in hookah shops with other academics and do what you guys do...but not actually do anything to change the world with the information you have?

8/26/2011 10:55:59 AM

Quote :

"Is what he wrote not the context of his own thought? Furthermore, what he wrote is so black and white that it's really sad that you're getting all blustery and pulling the "I've read more works than you" card again. "

The way you want to read that quote doesn't work. Sorry. I know you don't care why, so I'll save the text.

Quote :

"It's simply stupid as shit for me to become a studied expert in Keynes and Mises so that I can destroy clowns on a message board. Tell me, what are the benefits to your life of having studied Keynes so intently? So that you can sit in hookah shops with other academics and do what you guys do...but not actually do anything to change the world with the information you have?"

LOL Let me get this straight: You're demanding that I justify learning.

It's also funny that you assume you could actually study any of these issues and retain your current positions and beliefs. You couldn't.

8/26/2011 11:05:43 AM

Quote :

"The way you want to read that quote doesn't work. Sorry. I know you don't care why, so I'll save the text. "

No please, contort yourself into whatever position necessary to do the same thing you're accusing me of.

Quote :

"LOL Let me get this straight: You're demanding that I justify learning. "

At this point just basically comprehending what we're posting here would be a start. I said no such thing but you're so ready for an iFight over some bullshit that I can see why you'd post that.

Quote :

"It's also funny that you assume you could actually study any of these issues and retain your current positions and beliefs. You couldn't."

Dude, I've got threads on here with some pure rage for the banks believing full fledge that they needed to have massive regulations slapped on them. I've spilled many a word here battling 1337 b4k4 and Snark about free markets. I voted for Obama for fucks sake. I'm fully capable of changing my position.

8/26/2011 1:06:18 PM

Quote :

"No please, contort yourself into whatever position necessary to do the same thing you're accusing me of. "

lol. Please tell me what you imagine the consequences of the above passage to Keynes' general economic thought. Do you honestly think Keynes would oppose infrastructure spending in this environment? You might, of course, not knowing what the man thought about anything

Quote :

"Dude, I've got threads on here with some pure rage for the banks believing full fledge that they needed to have massive regulations slapped on them. I've spilled many a word here battling 1337 b4k4 and Snark about free markets. I voted for Obama for fucks sake. I'm fully capable of changing my position."

I'm claiming that if you read some of these things you couldn't help but change your position. What you said seemed to assume you wouldn't. If anything I'm giving you some credit

8/26/2011 1:35:34 PM

Quote :

" Do you honestly think Keynes would oppose infrastructure spending in this environment? "

How nuanced do you want to be about this? He is clearly implying there is a better method than public works. Why would he advocate an inferior method? Also note this comment came in 1942, well after the General Theory.

8/26/2011 2:39:06 PM

Yes and well before automation, computing, and insane leaps in communication

8/26/2011 3:58:49 PM

the fuck?

8/26/2011 4:18:04 PM

btt, read the initial post of this thread if you are ready to learn why our economy continues to fail.

9/21/2011 8:19:39 PM

No thanks, I'd rather read the wiki articles on Keynesian and Austrian economics, and make my own mind.

But this thread is very entertaining in trying to figure out who is arguing against who after a couple of pages (because to read this for any form of objectivity would be a severely moot point).

9/21/2011 8:40:23 PM

9/21/2011 8:42:08 PM

Dang...WAS JUST GOING TO POST THAT YOU WERE GOING TO POST THAT!!!

9/21/2011 11:39:19 PM

Don't bother with Keynes. Any serious economist can tell you that it's a school of thought you don't want to follow.

9/22/2011 7:10:42 AM

Economists are right more than half the time, they are people who know what's going on, have a lot of credibility, and are generally useful.

9/22/2011 7:51:05 AM

Quote :

"Don't bother with Keynes. Any serious economist can tell you that it's a school of thought you don't want to follow."

Yes, self-labeled economists and our corporate-funded friends at U Chicago

9/22/2011 8:15:36 AM

Yeah, Keynesian's don't know anything. It's not like Nouriel Roubini, a Keynesian economist, called the whole economic crisis as early as 2004 (before the libertarian god Ron Paul, or anyone else for that matter). That definitely didn't happen.

[Edited on September 22, 2011 at 11:43 AM. Reason : :]

9/22/2011 11:41:52 AM

Before Ron Paul????

Did you really just say that hahaha Ron Paul only has 30 years head start on roubini.

Chicago school of economic thought is actually the only useful economics taught in this country so I'm not surprised mcdanger despises it since he only likes things from the dark ages

9/22/2011 12:20:11 PM

Quote :

"Chicago school of economic thought is actually the only useful economics taught in this country so I'm not surprised mcdanger despises it since he only likes things from the dark ages"

lol chicago school is essentially hegelian formalism plastered to conservative economic prejudices, explicitly to serve the elites that fund it, and yet i'm the one that advocates "things from the dark ages" (innovations in scientific thought unique to the 20th century). HMMERY

[Edited on September 22, 2011 at 12:30 PM. Reason : .]

9/22/2011 12:30:00 PM

Quote :

"Go for growth The immediate priority should be supporting demand—or at least not doing harm to it. The left is right on one thing: the main cause of the current high joblessness is the severity of the last recession and the weakness of the subsequent recovery. Yet the West’s economies have embarked on contractionary policies. In some cases the fault lies with monetary policy: the European Central Bank should reverse its recent rate rises. But the main culprit is a collective, premature shift to fiscal austerity by governments. As this newspaper has repeatedly argued, politicians need to strike a bargain with the bond markets: combine policies that cushion growth now with measures that will bring deficits under control in the medium term. Raise the retirement age, for instance, and that leaves more room to stimulate growth in the short term. A minimal test of Mr Obama’s jobs agenda will be whether it is big enough to counter the fiscal tightening, equivalent to 2% of GDP, that is slated for next year."

http://www.economist.com/node/21528630

9/22/2011 12:35:42 PM

Vive la escuela de Chicago!!!

9/22/2011 1:29:35 PM

Quote :

"Before Ron Paul???? Did you really just say that hahaha Ron Paul only has 30 years head start on roubini."

That's retarded. That's like saying that when the sun finally explodes a few million years from now, it means Nostradamus was right.

9/22/2011 1:59:12 PM

You really are clueless.

9/22/2011 2:09:40 PM

Destroyer's "non-clueless" guide to "explaining" the failure of the US economy

Well ya see it's not a free market and free markets always work by definition. We just had a crisis, therefore it was caused by the only cause of bad things I acknowledge. It's a problem with regulation always has been, always will be, and the problem is that we need LESS of it across the board on every issue, and right away (except for the regulation of private property which must be strictly and violently stipulated because these are my interests)

9/22/2011 3:32:17 PM

You're someone that frequently accuses people of refusing to learn or engage intellectually. When you start spouting off this kind of senseless bullshit, does it ever cross your mind that you are one of those people? You bitch about nuance, then boil someone's position down to a sentence that doesn't come close to capturing the real debate.

[Edited on September 22, 2011 at 3:50 PM. Reason : ]

9/22/2011 3:45:55 PM

I'm repeating my impression of the same spiel you reduce every topic to: tyranny (shit you don't like) versus liberty (shit you like), and how we need to get rid of one and not the other.

Forgive me for treating you and the others here with the respect I'm normally handed. If you're not going to ever take anything seriously (by showing genuine effort and interest) then why the fuck should I respect you one iota, or treat you like a rational person who's having an intellectual conversation? You're practically incapable of one unless you set the terms, and it's clear you've barely progressed beyond that annoying shit at the middle/high-school lunch table who pontificated on a slim foundation of mostly ignorant misconceptions.

Sorry but you are practically impossible to respect as a thinker. Does that hurt your feelings? I don't fucking care.

9/22/2011 3:49:53 PM

It doesn't hurt my feelings; I've made my case many times. I don't need or want your respect. You, on the other hand, back down when you have to explain your beliefs. It's predictable. You get backed into a corner and proclaim that you're smarter than everyone in the room.

All this talk about positive versus negative liberty is irrelevant to the discussion. We're talking about the cause of the crisis. I don't get why you have such a hard time admitting that the state plays a huge role in creating financial bubbles.

[Edited on September 22, 2011 at 3:57 PM. Reason : ]

9/22/2011 3:56:06 PM

^^ Your ego is out of control for some kid that doesn't know shit.

I hope you starve to death in the depression

[Edited on September 22, 2011 at 3:59 PM. Reason : a]

9/22/2011 3:58:22 PM

Quote :

"It doesn't hurt my feelings; I've made my case many times. I don't need or want your respect. You, on the other hand, back down when you have to explain your beliefs. It's predictable. You get backed into a corner and proclaim that you're smarter than everyone in the room. "

This is a funny bit of psychological projection from the hilariously fragile egos of TWWers who are secretly (and on some level) fully aware of the state of their own foolishness and ignorance. I've never come here talking about "how smart" I am and about how I'm "so much smarter than everybody else", except perhaps being facetious on an MSpaint here or there (mostly making fun of the misconception you're participating in).

Just because I call you out as the know-nothing you are doesn't mean:
(1) I think I'm a genius
(2) I think I'm 100% right
(3) I think I'm intrinsically better than you

So when I call you out for not thinking something through, not reasoning properly, relying on misconceptions, or simply not knowing the basic facts (historical or otherwise) of the situation, I am not tooting MY OWN HORN. I know this may be hard for you to understand, but I am not criticizing you to draw a distinction/contrast to myself, but rather to alert you to the fact that you need to check back over your work a bit. Do you honestly think you've ever said a novel, interesting thing to me? I read every single one of your positions years ago, and they themselves were written decades and hundreds of years ago. Many have been refuted so many times it would honestly be humiliating and patronizing to step you through it: and that's often why it is.

So honestly, fuck off you bratty little kid. There's a reason nobody (in a professional capacity) gives a fuck what you think (or ever has).

Quote :

"I hope you starve to death in the depression"

Not likely seeing as how I have a lot of useful, marketable skills that I could put to use if I so happened to fall out of the position of doing exactly what I want all day, every day, with little to no oversight

[Edited on September 22, 2011 at 4:01 PM. Reason : .]

9/22/2011 4:01:17 PM

I still hope you do.


It's only fair since you spread dangerous information and seek to prevent others from protecting themselves.

9/22/2011 4:05:01 PM

McDanger just mopped the SB floor with face and d357r0y3r

9/22/2011 4:12:32 PM

He didn't have a point. He launched into a lengthy diatribe, which I'm sure counts as a powerful argument to you, but it's the same shit. He could have said what he just said much more succinctly, but he fluffs it up with words to make it seem like he's saying something of substance. Yeah, he can successfully peddle that shit to you, but I see right through it.

The guy has consistently demonstrated anti-social behavior. While my posts here are usually topical, my demeanor is congruent with my behavior in real life. I don't tell people to fuck off. I'm capable of having civil, constructive discussions with what could be considered "ideological enemies". He accuses me of acting like a child, but he seems incapable of behaving like a man.

To stay on topic, Ron Paul got into politics when we went off the gold standard in 1971. He predicted that the government would enter a period of unrestrained spending if they were not bound by sound money. He predicted that the central bank would devalue the currency to enable Congress to run deficits. He predicted that we would go to war and ruin our economy. He predicted the housing bubble.

This isn't a case of a broken clock being right twice a day. Austrian economics does have predictive power, not because it utilizes models or econometrics, but because it recognizes that people (the market) will respond when moral hazard is on the table. Blaming every problem on regulation is like blaming cancer on lack of chemotherapy. Sure, chemo might be one possible way to treat the cancer, but it doesn't tell us why the cancer formed to begin with.

[Edited on September 22, 2011 at 4:49 PM. Reason : ]

9/22/2011 4:38:19 PM

Which nation is an example of Austrian economics?

9/22/2011 4:45:41 PM

It wouldn't make sense for there to be a country that strictly adhered to Austrian economics. There are countries that make fewer mistakes, or at least have learned from their past mistakes.

Argentina is a great example of a country that has made many of the mistakes we make, but eventually came to their senses and started adopting constructive policies. Argentina experienced pretty bad stagflation from the 1970s until ~1990 until it started having growth. There were still plenty of problems, though, and Argentina defaulted on their debt and had a true "crash" in the early 2000s. Since they allowed that reset, they have resumed growth throughout the past decade.

We have to let the same reset happen here, and it will mean a really tough transition period.

9/22/2011 5:00:48 PM

You know, I've always thought you guys were kinda crazy, but after listening to Ahmadinejad basically tow the libertarian line as to the cause of the economic crisis, I'm 100% sure of it.

[Edited on September 22, 2011 at 5:04 PM. Reason : crazy dude, crazy name]

9/22/2011 5:02:39 PM

Argentina, eh?

Quote :

"Argentine economic plan: Raise spending, salaries By MICHAEL WARREN, Associated Press – 4 hours ago BUENOS AIRES, Argentina (AP) — While the U.S. and Europe struggle to revive their economies by imposing austerity measures, South American leaders have generally done the opposite, spending their way to growth and the voters' acclaim. Few have gone farther afield from the economic doctrines of Washington and Brussels than Argentina's President Cristina Fernandez, who proudly says that her government is doing more than any other in Latin America to improve the buying power of her citizens. She raised what was already the highest minimum wage south of the U.S. border by another 25 percent this month. Then she increased welfare payments by 23 percent. Fernandez also has raised retiree pensions, brokered steep pay hikes for union workers and poured huge subsidies into energy and transportation. "We are one of the countries with the best social protections for our children and for all of our population, which makes me very proud," Fernandez said as she decreed a $520 million expansion in direct child subsidies ahead of her expected re-election on Oct. 23. The stimulus has goosed an economy already benefiting from soaring commodity prices. Argentine data released by the International Monetary Fund this week indicate that its gross domestic product is rising 8 percent this year, second only to China in a world where many leading economies have become stagnant. "

http://www.google.com/hostednews/ap/article/ALeqM5hXdDiqUk8JK736WaVlbsLBCSWpQA?docId=dcf3b79be881419ebb275317e5036fd5

Austerity during times of high unemployment is a disaster. We're repeating 1937.

9/22/2011 5:05:56 PM