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  1. #1

    Default Keynesian Economics and other core economic issues

    I'm sick of all these off-the-cuff debates between know-nothings.

    Some one please explain things clearly.

    What got us into and out of the Gread Depression?

    What got us into and will get us out of this current economic situation?

    Quote Originally Posted by Risen View Post
    Yes, because Keynesian economic is so so good at extending depressions and making them GREAT depressions. We just love our GREAT depressions, the ones that last longer and harder than just regular useless depressions. Jeez, I can just TASTE the air of 1930, with plenty of Keynesian economics piled on top for extra freaking flavor !
    Quote Originally Posted by ajblaise View Post
    Even most on the Right will admit that government spending got us out of the Great Depression. Whether it was WWII spending or New Deal spending.

    Keynesian economics got its start during the Great Depression and saw us through much economic success. In fact, almost every successful industrial economy is a mixed market to some degree, with most leaning closer to the Left.
    It would be great to have an intelligent, data-driven, and comprehensive debate about this particular issue. It seems to be at the core of all the contreversy regarding the bail-outs.

    All I know is a lot of money is being spent on stuff.

    Ground rules:
    1. If you post an argument, it must be backed by data from a reputable, non-biased source. (Or from multiple sources that obviously share no connection)
    2. The argument itself, if about past events, should explain in simple, yet detailed terms, how actual events occured link-by-link. No vauge references to sub-prime lenders, or government pressure, depression extension, or getting out of the depression. I want, names, dates, etc.
    3. The argument itself, if about future events, should site principles with complete references to further understanding and synopsis of the actual theory espoused. I personally would like to see the equations, but if you can explain fully without them, it is probably better for the wider audience (another reason math education ought to be better)


    OK, all you people with strong opinons on these matters. It's time to back up your position with data.

    I will be doing my own investigations and posting what I find as well.

    Accept the past. Live for the present. Look forward to the future.
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    "[A] scientist looking at nonscientific problems is just as dumb as the next guy." Richard Feynman
    "[P]etabytes of [] data is not the same thing as understanding emergent mechanisms and structures." Jim Crutchfield

  2. #2
    Minister of Propagandhi ajblaise's Avatar
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    To understand the debate it helps to know the two main schools of economic thought people are coming from. Here is a short outline of Keynesian economics and the Austrian School:

    Keynesian economics: Followers tend to be liberals and Democrats. Got popular after WWII. Based on macroeconomics. Criticism from the Austrian School is that it leans too close to collectivism and central planning. Favors mixed markets that allow for some government oversight, intervention, and regulation. Keynesian economics - Wikipedia, the free encyclopedia

    Austrian School: Followers tend to be conservative, libertarians, and Republicans. It rejects empirical observation and mathematical/statistical methods and for that reason critics say it lacks scientific legitimacy. It follows "verbal Logic". Fell out of some favor after WWII. Free-market. Laissez-faire. Austrian School - Wikipedia, the free encyclopedia

  3. #3
    Order Now! pure_mercury's Avatar
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    There are many more schools of thought at play than just Keynesian and Austrian.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

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    Oh man, this is my thesis. I'll get back to you in three months when I get it published.
    "Beware Those Who Are ALWAYS READING BOOKS" - Bukowski

  5. #5
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by ajblaise View Post
    To understand the debate it helps to know the two main schools of economic thought people are coming from. Here is a short outline of Keynesian economics and the Austrian School:

    Keynesian economics: Followers tend to be liberals and Democrats. Got popular after WWII. Based on macroeconomics. Criticism from the Austrian School is that it leans too close to collectivism and central planning. Favors mixed markets that allow for some government oversight, intervention, and regulation. Keynesian economics - Wikipedia, the free encyclopedia

    Austrian School: Followers tend to be conservative, libertarians, and Republicans. It rejects empirical observation and mathematical/statistical methods and for that reason critics say it lacks scientific legitimacy. It follows "verbal Logic". Fell out of some favor after WWII. Free-market. Laissez-faire. Austrian School - Wikipedia, the free encyclopedia
    Ajblaise is correct in one sense. The current economic condition of the country is due to Keynesian economic philosophy, which has been the preeminent philosophy in the US since the Great Depression. Also, the Federal Reserve is a Keynesian-styled institution, with its interest rate manipulations. The bailouts represent Keynesian philosophy in practice.

    I don't follow the Austrian school. I don't actually follow any particular school, but the Chicago school is probably what I believe to be the most correct (although Milton Friedman was wrong about the velocity of money).
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  6. #6
    pathwise dependent FDG's Avatar
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    Of course, everything carried out over its initial aims (keynes' notions on public spending were not meant to be applied continously, but exclusively whenever a crisis/economic problem was due to lack of willingness to consume of the population, due to excessive uncertainty about the future - the latter part of the reasoning being essential, given that often the population lacks willingness to purchase for very reasonable motivations) will end up in a disaster. I'm not a keynesian (I believe that the government is excessively self-interested and tends too much to short-term thinking to be able to direct an economy successfully), but saying that the bailouts are keynesian philosophy in practice is a complete absurdity: it's not the demand-side but the supply-side of the market that is being helped, and supply-side economics is one of the main opposers of keynesian thought!!

    Oh, and ygolo, I am sorry but replying in the way you want would really take me one entire day
    ENTj 7-3-8 sx/sp

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    Senior Member Lateralus's Avatar
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    Thank you for correcting me. I misspoke. The stimulus package (where everyone got a $600-$2400 check in the mail) is what I meant to point out.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  8. #8
    Glowy Goopy Goodness The_Liquid_Laser's Avatar
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    This is what wikipedia has to say.
    Great Depression - Wikipedia, the free encyclopedia

    What turns a usually mild and short recession or "ordinary" business cycle into a great depression is a subject of debate and concern. Scholars have not agreed on the exact causes and their relative importance. The search for causes is closely connected to the question of how to avoid a future depression, and so the political and policy viewpoints of scholars are mixed into the analysis of historic events eight decades ago.
    Basically no one can agree on "the cause" or "the solution" (if such things exist). What we know is that a lot of bad things really happened to make a very toxic economic cocktail: stock market crash, banks failing, famine in mid-Western states, etc.... And that is just stuff in the US. From what I understand Germany wasn't doing so hot during those times either.
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  9. #9
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    This was written in May of 1939 by FDR's own treasury secretary, Henry Morgenthau Jr. His TREASURY SECRETARY testified before the House Ways and Means Committee in May of 1939. Listen to what he had to say.


    We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and now if I am wrong somebody else can have my job. I want to see this country prosper. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started. And enormous debt to boot.
    People often argue that Hoover started the depression. If he did then FDR did not help, for as his most trusted economics adviser Tugwell said in 1974,

    "Practically the whole New

    Deal was extrapolated from programs Hoover

    started."

  10. #10
    Minister of Propagandhi ajblaise's Avatar
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    Historians usually rank FDR as the first, second, or third best President in American history. In this survey of polls, no one even ranks him below third best. Historical rankings of United States Presidents - Wikipedia, the free encyclopedia

    Even conservatives give him very high marks: Historical rankings of United States Presidents - Wikipedia, the free encyclopedia

    If Obama could become the next FDR, that'd be great. It would, as in FDR's case, cause Keynesian and liberal policies to become even more popular for years and years.

    And if we have a Civil War over this, and Obama sees the Union to another victory over the Rebs, he could be the next Abraham Lincoln.

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