the experiment ended with hyperinflation. There are a lot of economic theories out there but typically there is one theory is dominate or most influential. From the Great Depression through the 1970's a weaker version of Keynesian economic theory of full employment through use of gov't fiscal policy was dominate then Reagan ushered in more conservative economics such monetarism, supply-side & Non-Accelerating Inflation Rate of Unemployment (NAIRU). Inflation was the focus and quasi-full employment fiscal policies were abandoned.
To a certain extent this more conservative, what I call neoliberal, economic policy is still dominate.
I would be surprised if Stiglitz, a Keynesian, would say such a thing about debt. Now, he may have said that deficit should not be a concern right with unemployment very high and economy not operating at full capacity.
Here is a theory for you (and what I believe): government deficits lead to private sector savings and government surpluses lead to private sector dissaving - meaning in order to operate private sector has to borrow (sound familiar). This theory is Post-Keynesian.
No theory gets fully implemented - politics usually prevents that. I know, I know so many theories. But that's it in a nutshell. What works? Look at history.
Uh, no, sorry that's not how econ works, unless of course you failed the course you took? You don't get to "make up" graphs and charts, if you do not believe me, I suggest taking a course or two and trying that one.
one could design a parallel circuit to do the same thing as a series circuit, the voltage and amps is identical.
One is structural, architectural and efficiencies, the other is I/O. statistics are equivalent to I/O. General theories such as monetary vs. Keynes are architectural design or your VLIW vs. parallel processing cores if you will get that analogy.
If you are as technical as you claim then you should be aware that Econ is a school major, a soft science and if one bothered to take econ 101/102 even watered down as an elective not for the undergrad majors, one would be aware by the tests that you had a series of formulas, graphs and equations. it is not a philosophy major, even when trying to claim it's a logic class.
You would also know that Thomas Friedman is not an economist, he has zero background in econ at all. If you are referring to Milton Friedman, most of his "theories" have proven economic disasters frankly. His monetary theories have better results.
I'll assume you mean Stiglitz instead of whatever that was typed and I do not recall Stiglitz ever claiming one can run infinite deficits.
In future, comments based on facts are always useful and welcome on EP, inaccuracies not so much.
You have been taught a method and others are taught differently so your charts are designed to back your view and others show other views.
There is no shortage of charts and graphs that can show other viewpoints. It is comical when someone points to a chart or graph as prima facie evidence of their view.
I work in an engineering discipline which has but one absolute correct answer versus 10 (thats a guess) competing and unproven philosophies of economics. To my knowledge the only economist ever granted carte blanche for their views was Friedman in Argentina with a dictatorship backing them.
It seems to have worked if for no other reason than because it was in essence a laboratory experiment on a large scale.
Anyone here an ardent Friedman (sp?) economist?
I could just as easily cite anecdotal trends which have as much weight as competing statistical viewpoints since sooner or later the rubber meets the road in the real world. The trend is now and has been for some time that we are spending more than we contribute to our budget. Stidlitz states we can go into near infinite debt with no problem and others say that we will have serious issues before we get to that point.
I wonder if a patient needs to cut their wrists and nearly die to prove to themselves what the outcome will be rather than live within theory.
Just increase all the benefits, no more pay checks and we just all live off the gov dole. Just kidding but Rebel you also need to realize that if the doctor (worker) dies there won't be anyone remaining to help the patient (people on the dole). So it is a keen balancing act. Personally when 48% of my State budget goes toward welfare, my eyebrow does go up.
But seriously throwing more and more and more toward the raft, isn't going to keep the raft from sinking. It is just prolonging it.
Jobs...jobs......jobs.....jobs. The four letter word that will keep everyone happy.
Greece is the tip of the iceberg for Europe's coming fiscal problems. I would lay $100 on the table that in 5 years the Euro will be dead or mortality wounded. Worker Union unrest will be increasing to a point of war.
There is one big cat sitting and smiling while all this goes on and that is China.
The current system is unsustainable and I am a lot closer to the bottom than I am the top.
When I was a kid my dad made $70 a week in the 60's. Baseball players made 20-30k a year before free agency. CEO's made a 100k or whatever but proportionally a lot less than today.
Most people had jobs and there was no welfare or food stamps etc etc. People had make busy jobs like elevator operators that do not exist today BUT they had jobs none the less and supported families. Tax rates were at 90% for the wealthy and we built the national highway system which now we can't afford to maintain. People that are on welfare their whole lives do not have a work ethic because they don't know what one is. Thats not their fault but my own observations from people I know say thats true. People want jobs not a check in the mail. Welfare and such were embraced to avoid civil unrest and such and yes I believe that drugs were or are being used as part of a control of the masses also.
I honestly do not see how we can continue long term the way we are. I'd rather see a social system in place of this rather than a move the other way.
population, but maybe a good objective look at the stats is in order. I personally hate the resulting reactions to even bring it up, but I sure am seeing a pattern and Las Vegas, Phoenix as well as Georgia all of them this is a pattern in these states.
I think it has more to do with urban vs. rural.
The bubbles states tended to be more urban and populated. The non-bubble states were more rural and less populated.
There are exceptions to that rule. For instance, Nevada had one of the largest bubbles and one of the worst meltdowns, yet is both a red state, and is not populated.
Florida had one of the largest bubbles, which was first to pop, and is somewhat a red state. Arizona is in the same boat.
I hate to say this but.....how many states are going under which are red vs. blue? Have you noticed this? Our most red states have the least mobility and seem to have the lowest unemployment rates, were not hit with the housing bubble as severely (except Georgia!) and we're not seeing these horror story headlines.
I'm obviously not endorsing "Red state politics" just noticing something and what is it about these states which are ok, vs. these Armageddons that they are doing differently?
Just from a budget/management situation or is there particular policies that are causing some of these states to implode worst than others?
The wealthy of Greece aren't waiting for the hammer to fall. They are getting their money out now.
Wealthy Greeks are pulling their money out of local banks and sending it abroad, fearing increased government scrutiny on assets and a run on the banks if Athens is forced to turn to the International Monetary Fund, according to private bankers and other people with knowledge of the situation.
...
"Some of our clients are concerned about a run on the banks if the IMF gets involved," said another private banker, this one from a foreign bank. "They believe the situation in Greece will get worse before it gets better. There is also very little clarity from the government about its intentions on new tax measures."
"We estimate that €8 billion has moved out of Greece to accounts abroad since December. It's money from bank accounts, stock sales, property sales and other sources," he said, adding that that represented a substantial chunk of the €30 billion under management in Greek's private banks.
Wealthy individuals may have good reasons to be concerned, however. Finance Minister George Papaconstantinou earlier this month urged Greeks with accounts abroad to repatriate their money and said the capital will be taxed at a 5% rate. He said those who choose to keep their money abroad should declare their deposits and pay a tax of 8% for the first six months.
Eight billion euros may now sound like much, but there are only 30 billion euros in deposits in the Greek banking system.
The Freddie/Fannie thing is one of the reasons a while ago I posted a warning about the housing market collapse as if it was 2006.
Freddie/Fannie is worth at least another Instapopulist, this entire thing, did I enter economic fantasy land, or did I enter a time warp because all I see is the gov. took on all of the housing private risk, now owns the housing market and it's imploding further still and now it's completely on the taxpayer....
AND....as RC has promoted, they won't do a "bottom up" housing market save, say reduce the principle on the loans.
So absurd, when the real cause for a lot of Greek woes is ...our pal derivatives.
It's this insane global finance, currency swaps, selling off public assets which don't show up on the books as loans...
I do not know how much of this is Greece's woe cause so that would be a hellish post, to see what percentage of their current debt is due to derivatives and "creative" finance.
Yeah, the entire global agenda makes me feel very CT, but it seems to be all about destroying any worker security, send all middle classes to serfdom and return to some sort of 1800's uber rich and the proletariat class.
Freddie Mac said on Wednesday that its fourth-quarter loss lessened to $6.47 billion, compared to a loss of $23.85 billion a year ago.
You see! No big deal! Only another 6 and a half billion dollars of losses in a quarter.
Dontcha' just love that spin?
The mortgage giant said that after paying a $1.3 billion dividend to the U.S. Treasury, its loss per share for the period was $2.39 a share, compared with a loss of $7.37 a year ago.
You know, I read somewhere that if a company is losing money hand over fist that it shouldn't be giving out dividends. Must have been before this New Economy thing happened.
The "O" word is the one that needs to be mentioned in terms of productivity, offshore outsourcing, the use of foreign guest workers, temporary workers....
Technology (I'm sorry it just has not) advanced this much to account for those soaring productivity rates.
Yeah, it's anything but provide Americans with stable good paying jobs coming from business....it's almost like some sort of culture club to try to get even work for free it's so bad.
Well chime in on DOL analysis because I spend HOURS looking at those stats and deriving, digging around.....and you can see that's where all of the people looking at those numbers, esp. on the econ blogs, it goes haywire, we're all having to extrapolate out the true state of unemployment!
On IP I make a point to differentiate between the slope, which looks very good to the absolute levels, which is so below even the start of this recession. I should do a few graphs next time to show the slow steady decline over 30 years for U.S. manufacturing...that really drives it home.
This recession officially started on 12/07 as marked by NBER. Right now the recession graphs call it over (those are the gray blocks), but a lot of economists are questioning that call. We'll see because it takes months to really call an end date, but right now we're at 25 months.
What's really bad about this data is there are tax credits in place, 8k for 1st time homebuyers and 6500 for existing home buyers.
Housing sales data wasn't supposed to tank until those are over, starting around April 2010.
still doesn't mean the employment situation will improve. Most manufacturing and service sector companies have learned to make due with less employees. Add in technology, and the need for more employees diminishes relative to the rate of productivity one can get out of both capital and technological upgrades. One need look at the changes in unit labor costs and compare that to the productivity output figures. Sadly, what's needed is new employers, new entrapaneurs to pick up the slack labor supply.
That isn't so to say you won't see U3 (or even U6, though I doubt this one) change. RO, I can't shake the feeling that they will once more change the forumula/definition of these unemployment figures. Massaging the numbers to get their favored outcome.
The Refinance Index decreased 8.9 percent from the previous week. The seasonally adjusted Purchase Index decreased 7.3 percent from one week earlier, putting the index at its lowest level since May 1997. ...
Fine it was Chile, you have me.
Where has economic theory proven itself without contradiction?
If it had anywhere all economists would flock to the proven theory - well that is except the ones that have agendas to prove through economics.
Stiglitz has been advising Greece for some time now and recommends more government spending there and in the UK.
Lets see what happens there. Of course an outside bailout would prove him correct right?
How can competing charts espousing pure theory all be
'correct'?
The result of the circuit is based on hard facts that create the results not soft science so you make my point apparently without realizing it.
Your assertion that charts cannot be made up while at the same time stating that economics is a soft science is well, funny.
the experiment ended with hyperinflation. There are a lot of economic theories out there but typically there is one theory is dominate or most influential. From the Great Depression through the 1970's a weaker version of Keynesian economic theory of full employment through use of gov't fiscal policy was dominate then Reagan ushered in more conservative economics such monetarism, supply-side & Non-Accelerating Inflation Rate of Unemployment (NAIRU). Inflation was the focus and quasi-full employment fiscal policies were abandoned.
To a certain extent this more conservative, what I call neoliberal, economic policy is still dominate.
I would be surprised if Stiglitz, a Keynesian, would say such a thing about debt. Now, he may have said that deficit should not be a concern right with unemployment very high and economy not operating at full capacity.
Here is a theory for you (and what I believe): government deficits lead to private sector savings and government surpluses lead to private sector dissaving - meaning in order to operate private sector has to borrow (sound familiar). This theory is Post-Keynesian.
No theory gets fully implemented - politics usually prevents that. I know, I know so many theories. But that's it in a nutshell. What works? Look at history.
RebelCapitalist.com - Financial Information for the Rest of Us.
Uh, no, sorry that's not how econ works, unless of course you failed the course you took? You don't get to "make up" graphs and charts, if you do not believe me, I suggest taking a course or two and trying that one.
one could design a parallel circuit to do the same thing as a series circuit, the voltage and amps is identical.
One is structural, architectural and efficiencies, the other is I/O. statistics are equivalent to I/O. General theories such as monetary vs. Keynes are architectural design or your VLIW vs. parallel processing cores if you will get that analogy.
If you are as technical as you claim then you should be aware that Econ is a school major, a soft science and if one bothered to take econ 101/102 even watered down as an elective not for the undergrad majors, one would be aware by the tests that you had a series of formulas, graphs and equations. it is not a philosophy major, even when trying to claim it's a logic class.
You would also know that Thomas Friedman is not an economist, he has zero background in econ at all. If you are referring to Milton Friedman, most of his "theories" have proven economic disasters frankly. His monetary theories have better results.
I'll assume you mean Stiglitz instead of whatever that was typed and I do not recall Stiglitz ever claiming one can run infinite deficits.
In future, comments based on facts are always useful and welcome on EP, inaccuracies not so much.
You have been taught a method and others are taught differently so your charts are designed to back your view and others show other views.
There is no shortage of charts and graphs that can show other viewpoints. It is comical when someone points to a chart or graph as prima facie evidence of their view.
I work in an engineering discipline which has but one absolute correct answer versus 10 (thats a guess) competing and unproven philosophies of economics. To my knowledge the only economist ever granted carte blanche for their views was Friedman in Argentina with a dictatorship backing them.
It seems to have worked if for no other reason than because it was in essence a laboratory experiment on a large scale.
Anyone here an ardent Friedman (sp?) economist?
I could just as easily cite anecdotal trends which have as much weight as competing statistical viewpoints since sooner or later the rubber meets the road in the real world. The trend is now and has been for some time that we are spending more than we contribute to our budget. Stidlitz states we can go into near infinite debt with no problem and others say that we will have serious issues before we get to that point.
I wonder if a patient needs to cut their wrists and nearly die to prove to themselves what the outcome will be rather than live within theory.
Just increase all the benefits, no more pay checks and we just all live off the gov dole. Just kidding but Rebel you also need to realize that if the doctor (worker) dies there won't be anyone remaining to help the patient (people on the dole). So it is a keen balancing act. Personally when 48% of my State budget goes toward welfare, my eyebrow does go up.
But seriously throwing more and more and more toward the raft, isn't going to keep the raft from sinking. It is just prolonging it.
Jobs...jobs......jobs.....jobs. The four letter word that will keep everyone happy.
Greece is the tip of the iceberg for Europe's coming fiscal problems. I would lay $100 on the table that in 5 years the Euro will be dead or mortality wounded. Worker Union unrest will be increasing to a point of war.
There is one big cat sitting and smiling while all this goes on and that is China.
The current system is unsustainable and I am a lot closer to the bottom than I am the top.
When I was a kid my dad made $70 a week in the 60's. Baseball players made 20-30k a year before free agency. CEO's made a 100k or whatever but proportionally a lot less than today.
Most people had jobs and there was no welfare or food stamps etc etc. People had make busy jobs like elevator operators that do not exist today BUT they had jobs none the less and supported families. Tax rates were at 90% for the wealthy and we built the national highway system which now we can't afford to maintain. People that are on welfare their whole lives do not have a work ethic because they don't know what one is. Thats not their fault but my own observations from people I know say thats true. People want jobs not a check in the mail. Welfare and such were embraced to avoid civil unrest and such and yes I believe that drugs were or are being used as part of a control of the masses also.
I honestly do not see how we can continue long term the way we are. I'd rather see a social system in place of this rather than a move the other way.
population, but maybe a good objective look at the stats is in order. I personally hate the resulting reactions to even bring it up, but I sure am seeing a pattern and Las Vegas, Phoenix as well as Georgia all of them this is a pattern in these states.
I think it has more to do with urban vs. rural.
The bubbles states tended to be more urban and populated. The non-bubble states were more rural and less populated.
There are exceptions to that rule. For instance, Nevada had one of the largest bubbles and one of the worst meltdowns, yet is both a red state, and is not populated.
Florida had one of the largest bubbles, which was first to pop, and is somewhat a red state. Arizona is in the same boat.
I hate to say this but.....how many states are going under which are red vs. blue? Have you noticed this? Our most red states have the least mobility and seem to have the lowest unemployment rates, were not hit with the housing bubble as severely (except Georgia!) and we're not seeing these horror story headlines.
I'm obviously not endorsing "Red state politics" just noticing something and what is it about these states which are ok, vs. these Armageddons that they are doing differently?
Just from a budget/management situation or is there particular policies that are causing some of these states to implode worst than others?
The wealthy of Greece aren't waiting for the hammer to fall. They are getting their money out now.
Eight billion euros may now sound like much, but there are only 30 billion euros in deposits in the Greek banking system.
"Potential Large Wave of Foreclosures".
The Freddie/Fannie thing is one of the reasons a while ago I posted a warning about the housing market collapse as if it was 2006.
Freddie/Fannie is worth at least another Instapopulist, this entire thing, did I enter economic fantasy land, or did I enter a time warp because all I see is the gov. took on all of the housing private risk, now owns the housing market and it's imploding further still and now it's completely on the taxpayer....
AND....as RC has promoted, they won't do a "bottom up" housing market save, say reduce the principle on the loans.
So absurd, when the real cause for a lot of Greek woes is ...our pal derivatives.
It's this insane global finance, currency swaps, selling off public assets which don't show up on the books as loans...
I do not know how much of this is Greece's woe cause so that would be a hellish post, to see what percentage of their current debt is due to derivatives and "creative" finance.
Yeah, the entire global agenda makes me feel very CT, but it seems to be all about destroying any worker security, send all middle classes to serfdom and return to some sort of 1800's uber rich and the proletariat class.
They only lost $6.47 Billion last quarter.
You see! No big deal! Only another 6 and a half billion dollars of losses in a quarter.
Dontcha' just love that spin?
You know, I read somewhere that if a company is losing money hand over fist that it shouldn't be giving out dividends. Must have been before this New Economy thing happened.
The "O" word is the one that needs to be mentioned in terms of productivity, offshore outsourcing, the use of foreign guest workers, temporary workers....
Technology (I'm sorry it just has not) advanced this much to account for those soaring productivity rates.
Yeah, it's anything but provide Americans with stable good paying jobs coming from business....it's almost like some sort of culture club to try to get even work for free it's so bad.
Well chime in on DOL analysis because I spend HOURS looking at those stats and deriving, digging around.....and you can see that's where all of the people looking at those numbers, esp. on the econ blogs, it goes haywire, we're all having to extrapolate out the true state of unemployment!
On IP I make a point to differentiate between the slope, which looks very good to the absolute levels, which is so below even the start of this recession. I should do a few graphs next time to show the slow steady decline over 30 years for U.S. manufacturing...that really drives it home.
This recession officially started on 12/07 as marked by NBER. Right now the recession graphs call it over (those are the gray blocks), but a lot of economists are questioning that call. We'll see because it takes months to really call an end date, but right now we're at 25 months.
What's really bad about this data is there are tax credits in place, 8k for 1st time homebuyers and 6500 for existing home buyers.
Housing sales data wasn't supposed to tank until those are over, starting around April 2010.
still doesn't mean the employment situation will improve. Most manufacturing and service sector companies have learned to make due with less employees. Add in technology, and the need for more employees diminishes relative to the rate of productivity one can get out of both capital and technological upgrades. One need look at the changes in unit labor costs and compare that to the productivity output figures. Sadly, what's needed is new employers, new entrapaneurs to pick up the slack labor supply.
That isn't so to say you won't see U3 (or even U6, though I doubt this one) change. RO, I can't shake the feeling that they will once more change the forumula/definition of these unemployment figures. Massaging the numbers to get their favored outcome.
There is another sign that the housing market is tanking: a 13-year low in mortgage applications.
and not believe slope somehow means an absolute number.
They also need to realize things that are cyclical are not always so and there are different cycles and sizes, that would help.
When I say theory, I mean towards the mathematics of it.
Well, add to this news this report Underwater Mortgages Hit 11.3 Million: http://247wallst.com/2010/02/23/underwater-mortgages-hit-11-3-million/
The recovering is swimming along.... but does anybody see land in sight?
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