So it begins: Boeing Announces Big Layoffs in Defense Division

You must spread some Reputation around before giving it to Rashmon again.

 

basso, you're slipping. You need to work in a reference to The Once.

Still haven't recovered from the curdled titty milk Tuesday night?

 

agreed

 

A real conservative would understand the idea of creative destruction. Resources being released from one sector of the economy (defense) to other more productive sectors is a good thing for the economy as a whole. The hypocrisy of conservatives regarding defense spending is sickening....

 

small businesses will be laying off workers to get under the employer mandate requirement for companies with over 50 employees that's part of Obamacare

 

You went out and talked to a majority of small business owners in America?? That's incredible!

 

Nobody is going to take anything you say seriously again. You were wrong in almost every single post you made regarding the election. You have no credibility now. It's questionable if you had it before, but there is no way anybody takes anything you say on these boards seriously.

Keep trying though.

 

Foremost, Bernanke and his neoclassical todd-wash got their asses kicked in by strands of thought that have always been present in post-Keynesian economics. Read Minsky, if you want to trade literature none of us will read. Post-Keynesians are kind of a unique school that alternates between love and hate of math. I myself have a slight aversion to too much mathematics in the field, but the complete rejection of the method? Forget about it.

In either case, if logical principles of human behavior are your thing, post-Keynesian thought fits the bill much better, as the school has moved beyond the dawn of financial derivatives to defining proper methods of curtailing risk in bubble-up, bubble-down scenarios (instead of proposing risk-on, risk-off cycles of credit, and endogenous money creation, which duh.)

Economics became positivistic because of Samuelson, and the neo-classical synthesis, the latter which I don't like, and the former, well, at least the guy had a good heart. Applying thermodynamics models to economics might not be your cup of tea. It in fact, isn't even customarily mine. I hesitated on quoting Barro because him and his merry band of neoclassicals are not my ideal cup of tea, and that has to do partly with the over-usage of static market clearing equilibrium models (and Barro's abandonment of Keynesian principles, and looking at more dynamic disequilibrium models)

However, with all that said, a complete rejection of math and methodology is very extreme. Studies that can track changes in isolation may not be perfect, but can be statistically significant and indicate economic hypotheses at the very least that "gut feel" will not give you.

Example: Government spending creates more value than tax cuts. OK, fine, government spending in isolation through a selected natural experiment that may not account for all dynamic factors can be seen as more statistically significant in terms of correlation with economic growth than tax cuts. you can adjust for this somewhat but not all the way. Try to get that through your logical principles.

Austrian economics is old hat, completely goes to the extreme in many situations, and focuses way too much on central banking as the key determinant in credit cycles, and not the banks and the capitalist system itself (lord knows the Panic of 1907 came after the Federal Reserve Act of 1913). It offers nothing more in terms of solutions than the deluded belief that things were better in the disorganized past.

 

Obama has increased military spending over his term and spent more on it then Bush did. If you loved the military budget under Bush then you should love Obama's military budget even more so right?

 

I'm familiar with Minsky, though I have not read his work in depth. He's not half bad, but the cause for the cyclical nature of modern economies is exogenous and not endogenous. More on ATBC later.

I don't know where you got "gut feel" from. You keep quoting that as if I've said it or as though it's some law of Austrian economics. Please stop.

I never said a rejection of methodology. And if I said or implied before (I don't feel like reading back) that one should completely reject math, that's not right either. Math has good illustrative purposes in economics, but that's all.

I'm going to go out on a limb here and guess that you've never sought out the arguments of those who reject econometric models. I don't blame you. You have nothing to gain from it, opportunity costs, etc. But for that reason (and because I'm probably less than crystal clear on what I'm saying here) I'll quote Ludwig von Mises, Murray Rothbard and Hans Hoppe here at length, so that you may better understand it (if not agree with it):

Mises:

Spoiler

Later on, he wrote:

Rothbard:

Spoiler

Hoppe:

Spoiler

As for Austrian Theory of the Business Cycle being entirely about the Fed, I'll refer you to Douglas French's Early Speculative Bubbles and Increases in the Supply of Money which talks about Tulipmania and the Mississippi Bubble and the South Sea Bubble. Also Murray Rothbard's Panic of 1819, which is the definitive book on that event.

 

I don't think Schumpater's Creative Destruction was about government allocating resources to different areas but more about how the competitive market creates new disruptive models that destroy older ones. As Sears destroyed the country store, Walmart is destroying Sears and how Amazon is taking away market share from Walmart etc.

I'm more for an efficient smaller military and think the military should be for defensive purposes only btw.

 

How much of the blame, roughly, do you place on the Fed for our current economic situation? 100%? 50%? 25%?

Do you think any other factors contributed to the crisis?

 

I don't know about a percentage. I'm unaware of the proper formula to dole out blame. If I had to throw a number out there, I'd say... I don't know... 70%? But this is arbitrary and meaningless. I don't what you're trying to get at.

Yes. See here, here, and here.

 

Let me get this clear here. I know you don't like econometrics, but are you putting the vast majority of the blame of the credit crisis, the search for yield, and the housing bubble on the Federal Reserve?

Like I said, "gut feeling". I can play that game too---something tells me there ought to be a good 50%+ on derivative markets, synthetic CDOs and credit-default swaps, as well as market making "riskless" cash flows.

 

Your first point is not very well argued. I suggest you read Galbraith, before you argue that exogenous government intervention or other factors are the main reasons why there are cyclical variations in the capitalist market.

Start with A Short History Of Financial Euphoria.

"Gut feel" is exactly what I see you doing. The Fed is about 70% responsible because---Mises says econometrics are bad?

FYI, a lot of the issues you are referring to are being tackled with dynamic disequillibrium models. Steve Keen is doing excellent work modelling things like the monetary circuit theory with differential equations, and dynamic moving economies rather than static equilibrium models.

"The quantities we observe in the field of human action... are manifestly variable. Changes occurring in them plainly affect the result of our actions. "---yes, thus the move away from static models, and towards models such as post-Keynesian effective demand.

 

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Yes, I am. And it has nothing to do with gut feeling. How many times do I need to say that? That you continue to use that phrase rather than argue against the actual business cycle theory is telling.

That sentence about Minsky is indeed not an argument against his theory. Here is something on Minsky. I wasn't trying to formulate an argument on him in the previous post. I just said I was somewhat familiar with him. I probably should have just left that alone.

I've read Galbraith's Affluent Society (not my idea) and more than a few articles of his articles. There is nothing there of substance. Nothing. I'd hesitate to even call him an economist.

"Gut feel" is not what I'm doing. Christ, you are thick. That seems to be your go-to phrase when you encounter a concept you don't understand. Rather than understand it, you assume it just must be wrong because you have been ignoring it all along.

I side with Mises because his argument on methodolgy is right. That's all. The counter-arguments are weak (or in your case, non-existent).

Until you actual formulate an argument against the Austrian Theory of the Business Cycle or the methodology used by Austrians, please just stop. Don't reply. Although I'm sure you will reply, and in your reply will be no actual argument. You will however use the phrase "gut feel." Let's see if my prediction holds true...