tag:blogger.com,1999:blog-9430835.post8507439820547454461..comments2024-03-19T02:31:02.140-07:00Comments on Steve Sailer: iSteve: "Was Milton Friedman a Secret Admirer of Keynes?"Unknownnoreply@blogger.comBlogger87125tag:blogger.com,1999:blog-9430835.post-52100543003946633272012-08-07T09:08:57.641-07:002012-08-07T09:08:57.641-07:00"Both were pure maths drop-outs in a sense. K..."Both were pure maths drop-outs in a sense. Keynes had to give up on pure mathematics because he wasn't good enough, and Russell failed to become Senior Wrangler at Cambridge."<br /><br />There were students ranked worse than Keynes and Russell who went on to do very impressive mathematics. This claim should be taken with a lot of salt.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-68704728515891271912012-08-06T22:44:17.544-07:002012-08-06T22:44:17.544-07:00His whole idea was to have an impotent government ...<i>His whole idea was to have an impotent government that would do nothing but, through tax and spending policies, maintain the equilibrium of the free market.</i><br /><br />Yes, Keynes basically wanted the gov't to be like a plumber that unclogs the backed up economic flows.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-85134152998586560962012-08-06T20:28:53.324-07:002012-08-06T20:28:53.324-07:00Peter Drucker, a conservative admirer of Keynes, v...<i>Peter Drucker, a conservative admirer of Keynes, viewed him as not merely conservative, but ultraconservative. "He had two basic motivations," Drucker explained in a 1991 interview with Forbes. "One was to destroy the labor unions and the other was to maintain the free market. Keynes despised the American Keynesians. His whole idea was to have an impotent government that would do nothing but, through tax and spending policies, maintain the equilibrium of the free market. Keynes was the real father of neoconservatism, far more than [economist F.A.] Hayek!"</i><br />http://www.forbes.com/2009/08/13/john-maynard-keynes-conservative-opinions-columnists-bruce-bartlett.htmlbeowulfhttps://www.blogger.com/profile/14987548132065830204noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-68803319894058735022012-08-06T19:56:36.582-07:002012-08-06T19:56:36.582-07:00"You could buy 2,443 gallons of milk with an ..."You could buy 2,443 gallons of milk with an average year's salary back then.<br /><br />The average salary today is around $40,000 and milk averages around $4 per gallon. <br /><br />An average year's salary today buys you about 10,000 gallons of milk."<br /><br />The use of milking machines alone could probably account for this, not to mention mechanized processing plants, refrigeration and sophisticated distribution.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-87694505273445314262012-08-06T19:37:14.145-07:002012-08-06T19:37:14.145-07:00Whenever spending falls short of sustaining our ou...Whenever spending falls short of sustaining our output and employment, when we don’t have enough spending power to buy what’s for sale in the economy, government can act to make sure that our own output is sold by either cutting taxes or increasing government spending.<br /><br />Taxes function to regulate our spending power and the economy in general. If people want to work and earn money but don’t want to spend it, fine. Government can either keep cutting taxes until we decide to spend and buy our own output, and/or buy the output itself.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-18458525196919654722012-08-06T19:29:31.315-07:002012-08-06T19:29:31.315-07:00For those who will undoubtedly soon comment that t...<i>For those who will undoubtedly soon comment that the failure of the stimulus to return the country to full employment shows Keynesianism has failed, the most prominent Keynesianisms (Krugman, Stiglitz) were arguing at the time that it was too small to come close to filling the trillions in demand lost from the collapse of the housing bubble.</i><br /><br />Yes, in the same way a faith healer will argue you aren't healed because your faith wasn't strong enough.<br /><br />The question Krugman and Stiglitz can't answer is "How could we possibly pay that back?" We can't retire the debt we already have. Is it smart to buy ourselves some temporary relief from the recession if it means in two decades or so people are starving in the streets?Erichttps://www.blogger.com/profile/10330712047609650184noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-48148615097850053762012-08-06T16:38:18.728-07:002012-08-06T16:38:18.728-07:00In the modern economy, money is created by deficit...<i>In the modern economy, money is created by deficit spending by the government. When the government runs a surplus, it takes money away from the private sector, forcing it either into private debt or bankruptcy from more taxes being demanded from the economy than are returned as spending. The last three bouts of "surplus spending" resulted in the Great Depression, the economic malaise of the 1953-1960 period that began the economic disloction of the rust belt, and the financial wrecks of 2000-2008. When the debt was paid off in 1835, it resulted in an almost immediate panic and depression. One can track back other periods of surplus with similar economic results.</i><br /><br />Yes. In order for the non-government sector (i.e. everyone else except for the gov't) to save, the gov't has to run a deficit. The deficit equals the net savings of the non-gov sector. It's an accounting identity. Gov surpluses drain savings out of the non-gov i.e. everyone else and the entire economy. The last six periods of surplus in our more than two hundred-year history have been followed by the only six depressions in our history. These depressions only turn around once the deficit gets high enough to add back our lost income and savings and deliver the aggregate demand needed to restore output and employment. Right now, for the current level of gov spending, we're being over-taxed and we don’t have enough after-tax income to buy what’s for sale the <br />economy. Taxes need to be slashed and we need a bigger deficit to recover.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-68237791740137146672012-08-06T16:17:34.858-07:002012-08-06T16:17:34.858-07:00In the 1930s, average salary was $1,368 and milk w...In the 1930s, average salary was $1,368 and milk was 56 cents per gallon:<br /><br />http://kclibrary.lonestar.edu/decade30.html<br /><br />You could buy 2,443 gallons of milk with an average year's salary back then.<br /><br />The average salary today is around $40,000 and milk averages around $4 per gallon. <br /><br />An average year's salary today buys you about 10,000 gallons of milk.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-82768557329457051812012-08-06T10:46:11.078-07:002012-08-06T10:46:11.078-07:00The Nationl Debt is money. People who want less d...The Nationl Debt is money. People who want less debt by identity want less money. When they also say they want the same level of standard of living, this means they also want deflation. Deflation favors creditors and burdens debtors. In a capitalist economy built on debt finanace, this is a recipe for disaster. Its why the 1800's was not really a time of price stability, but a time of relentless deflation punctuated by inflationary periods of war and massive precious metal finds, with the times of war being the times of prosperity, and the deflation being periods of depression like the Long Depression of 1872 and the panics of 1835, 1857, 1893, etc.<br /><br />Wealth increases by the government providing the money needed for investment and employment. In the 1800's we attempted to do this by free coinge of any precious metal brought to the Treasury. The results of this are obvious enough to any student of economic history, and were harmful enough to be set aside during the Civil War and other periods. In the modern economy, money is created by deficit spending by the government. When the government runs a surplus, it takes money away from the private sector, forcing it either into private debt or bankruptcy from more taxes being demanded from the economy than are returned as spending. The last three bouts of "surplus spending" resulted in the Great Depression, the economic malaise of the 1953-1960 period that began the economic disloction of the rust belt, and the financial wrecks of 2000-2008. When the debt was paid off in 1835, it resulted in an almost immediate panic and depression. One can track back other periods of surplus with similar economic results. Its amazing people can still getaway with proposing these economics as beneficial to anyone besides creditors.<br /><br />it should always keep in mind that National Debt can be exchanged for money at any time and in any quantity without causing inflation because the debt is already a form of money. The formal legal means of this presently in the US is for the Fed to purchase debt securities with keystroke entries.Andrewnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-26001795354125122642012-08-06T10:15:30.612-07:002012-08-06T10:15:30.612-07:00"I pledge myself to turn the clock back to 18..."I pledge myself to turn the clock back to 1899 when a silver dollar bought a steak dinner and a good piece of ass."<br /><br />The economic policy of the Purple-Assed Babboon President, as written by William S. BurroughsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-38083700194127809712012-08-06T07:47:41.241-07:002012-08-06T07:47:41.241-07:00Dan:
Sure, it does. Comparing prices across very...Dan:<br /><br />Sure, it does. Comparing prices across very different times and places can be tricky, because different things are on offer. Knowing this means, not that there's no meaning to pointing out that a dollar in 1900 means something very different than a dollar today, but rather that it's tricky interpreting that difference in terms that are meaningful. <br /><br />It's a lot like trying to interpret different daily wages in different countries--the average daily wage in Haity is like $2 or something. That leads you to the correct understanding that Haiti is a desperately poor place, but it's not as simple as mapping that to what a $2/day wage would buy you in the US. Prices are lower there, the situation is very different, and comparing that figure with $2 here is really hard to do. That's true even though that figure does tell you the direction and smething about the magnitude of the difference between Haiti and the US. <br /><br />Inflation works like compound interest, so that a low consistent rate of inflation over a century can erode a huge amount of value from your currency. However, it's not too clear to me that a 1-2% continuous rate of inflation has much of an impact on day to day life. It makes for interesting historical reading, when you see where someone is eagerly taking a hard job on the railroad that will pay him $1/day, but it seems way less damaging than unexpected high inflation, which can seriously screw people over who have fixed-income investments or retirement.NOTAnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-50490867111463833782012-08-06T02:10:27.253-07:002012-08-06T02:10:27.253-07:00"If you're going to rationally compare &q..."If you're going to rationally compare "purchasing power" then it makes perfect sense to consider that a perfect comparison isn't possible, that there are different goods and services, and that incomes are different, so that the fact that hamburgers cost a nickel so many years ago doesn't really tell us anything by itself"<br /><br />I'm not grasping this. If I got to the supermarket on Monday and my daily groceries cost $20.00 and I return on Tuesday and the same groceries cost $180.00, the last thing I should presume is that something funny is going on in the economy?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-38509821687995340322012-08-05T23:18:03.475-07:002012-08-05T23:18:03.475-07:00old geezer: Non sequitur: a non sequitur is a stat...old geezer: <i>Non sequitur: a non sequitur is a statement in which the final part is totally unrelated to the first part. First part: Items exist today that didn't exist at an earlier time. Second part: The value of the US Dollar has declined since the earlier time. The First part has no logical bearing as to the truth of a supposed negative change in the US Dollar's value.</i><br /><br />Obviously the two parts are related. The dollar can purchase new and different valuable things that didn't exist in the past. This constitutes its value today. You can't just cherry pick what you want. If a plague wiped out all the cows tomorrow making milk extremely expensive, and some dirt cheap beverage people like was invented, you can't then assert that the dollar has lost value just because you're just looking at milk.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-10798664193707532132012-08-05T22:17:39.341-07:002012-08-05T22:17:39.341-07:00Keynes on Marx:
"How can I accept a doctrine...Keynes on Marx:<br /><br />"How can I accept a doctrine which sets up as its bible, above and beyond criticism, an obsolete text-book which I know to be not only scientifically erroneous but without interest or application for the modern world? How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and the intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement? Even if we need a religion, how can we find it in the turbid rubbish of the red bookshop? It is hard for an educated, decent, intelligent son of Western Europe to find his ideals here, unless he has first suffered some strange and horrid process of conversion which has changed all his values." -- John Maynard Keynes, "A Short View of Russia" (1925) in <i>Essays in Persuasion</i>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-21411351183543104922012-08-05T21:23:40.604-07:002012-08-05T21:23:40.604-07:00--vis-a-vis Whiskey's point: I would add that,...--vis-a-vis Whiskey's point: I would add that, by most guestimates I've seen, the money and manhours put into one Bismarck-class battleship would've added 1500 or 1600 Stukas to the Luftwaffe, or a comparable number of Pzkw IVs for the Panzergruppen.<br /><br />The Bismarck was a work of art, but 1600 extra Stukas/Mark IVs in 1941 (and HMS Hood still afloat, natch) would've put a big extra thumb on the scales of Barbarossa.Luciushttps://www.blogger.com/profile/03938166025093103574noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-16548242726794825922012-08-05T21:17:43.372-07:002012-08-05T21:17:43.372-07:00Wittgenstein isn't hurt by being a two-fer, wh...Wittgenstein isn't hurt by being a two-fer, which gives him the edge of seeming a disinterested seeker of truth who could risk unmaking his reputation.<br /><br />I'm sure he did seek truth. But then, he suffers some Anxiety of Influence issues, in his attempts at aping Nietzschean aphorisms, his bitchy dismissal of Mahler's music (a visitor in the childhood home), and of Schopenhauer. Like Thomas Mann, he may be a figure of decadence, learned to the nines but slipping off the shoulders of giants.<br /><br />Then again, Russell-- you have to have your head buried pretty deep in Common Language to think he's pushing more weight than Wittgenstein. Plus, when Descarteses become Diderots, they can work a world of mischief: and Russell was one dumb, long-lived Diderot.<br /><br />G.E.Moore, I would argue, was better than Russell or Wittgenstein.<br /><br />Keynes is a decent guy, and a genius. Take from him what you can.Luciushttps://www.blogger.com/profile/03938166025093103574noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-45586438229724788582012-08-05T20:54:58.273-07:002012-08-05T20:54:58.273-07:00re: "Actually it* isn't a non sequitur.&q...re: "Actually it* isn't a non sequitur."Anonymous Coward @ 8/5/12 3:42 PM<br />*To attempt to refute that the purchasing power of the US Dollar has evaporated over the course of two thirds of a century by bringing up the truism that there are different things to buy with dollars today.<br /><br />Non sequitur. "You keep using that word. I do not think it means what you think it means." Inigo Montoya (Character) <br />from The Princess Bride (1987)<br /><br />Non sequitur: a non sequitur is a statement in which the final part is totally unrelated to the first part. First part: Items exist today that didn't exist at an earlier time. Second part: The value of the US Dollar has declined since the earlier time. The First part has no logical bearing as to the truth of a supposed negative change in the US Dollar's value.<br /><br />Dan KurtDan Kurthttps://www.blogger.com/profile/08252444956956894276noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-77581414660724270542012-08-05T19:47:44.084-07:002012-08-05T19:47:44.084-07:00ever since the government has been allowed to pick...<i>ever since the government has been allowed to pick the citizens' pockets by the stealth route.</i><br /><br />The gain to the government and loss to the holders of currency and government securities is limited to the reduction in the value in real terms of non-interest-bearing currency, (equivalent to the increase in the interest rate saving on the no-interest loan, as compared to what it would have been with no inflation), plus the gain from the increment of inflation over what was anticipated at the time the interest rate on the outstanding debt was established. On the other hand, a reduction in the rate of inflation below that previously anticipated would result in a windfall subsidy to holders of long-term government debt.<br /><br />In previous monetary regimes, where regulations forbade the crediting of interest on demand deposits, the seigniorage profit on these balances, reflecting the loss to depositors in purchasing power, that would be enhanced by inflation would accrue to banks, with competition inducing some pass-through to customers in terms of uncharged for services. In an economy where most transactions are in terms of credit cards and bank accounts with respect to which interest may be charged or credited, the burden is trivial for most individuals, limited to loss of interest on currency outstanding. Most of the gain to the government is derived from those using large quantities of currency for tax evasion or illicit activity or those who keep cash under the mattress or in cookie jars.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-52409598103076454412012-08-05T19:42:39.752-07:002012-08-05T19:42:39.752-07:00The hell you can't compare- there's a plet...<i>The hell you can't compare- there's a plethora of things that you could by then that you can by now- a gallon of milk, a loaf of bread, etc. By any way you want to measure it, there has been a massive drop in the value of the dollar</i><br /><br />You can't make perfect comparisons. Goods are new, different. You can buy things at any time of day, at huge quantities. Nominal incomes are different. Etc.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-57935717484110709612012-08-05T19:40:06.359-07:002012-08-05T19:40:06.359-07:00Using the Government’s own data ( which is questio...<i>Using the Government’s own data ( which is questionable I believe ) one can track the falling buying power of the dollar from 1913 to the present here:</i><br /><br />The gov't's own data includes things like "hedonics" to try to account for the fact that different time periods can't be perfectly compared due to new, different goods.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-23498104391922735972012-08-05T19:34:53.229-07:002012-08-05T19:34:53.229-07:00This is a perfect example of a Non sequitur. To at...<i>This is a perfect example of a Non sequitur. To attempt to refute that the purchasing power of the US Dollar has evaporated over the course of two thirds of a century by bringing up the truism that there are different things to buy with dollars today than there were back in the 1930s is silly. People still have to eat, be housed and pay for multitudes of items all of the years since then in spite of brilliant inventions and progress so economists have devoted careers in trying to establish a reasonable cost of living index to try and measure the phenomenon.</i><br /><br />Actually it isn't a non sequitur. <br /><br />If you're going to rationally compare "purchasing power" then it makes perfect sense to consider that a perfect comparison isn't possible, that there are different goods and services, and that incomes are different, so that the fact that hamburgers cost a nickel so many years ago doesn't really tell us anything by itself.<br /><br /><i>So far the debt bomb has not detonated but fiscal promises made at all levels of US governments commit to spending in the hundreds of trillions so I suspect that your "low" debt/gdp ratio will change to a point where even a Pollyanna as you will awaken to the threat of economic collapse.</i><br /><br />Debt is a stock, spending is a flow. GDP is a flow.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-25729464865630463482012-08-05T19:11:04.693-07:002012-08-05T19:11:04.693-07:00"'the Dollar is now worth less than 5 cen..."'the Dollar is now worth less than 5 cents compared to a pre-depression Dollar'<br /><br />Of course you can't really perfectly compare a dollar today with a dollar from 70+ years ago. Since you can buy things with dollars today (contemporary medicine, computers, jet airline tickets, etc.) that you couldn't with dollars back then."<br /><br /><br />The hell you can't compare- there's a plethora of things that you could by then that you can by now- a gallon of milk, a loaf of bread, etc. By any way you want to measure it, there has been a massive drop in the value of the dollar, ever since the government has been allowed to pick the citizens' pockets by the stealth route.Mendiannoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-17619083368905067792012-08-05T18:01:38.152-07:002012-08-05T18:01:38.152-07:00re: "Of course you can't really perfectly...re: "Of course you can't really perfectly compare a dollar today with a dollar from 70+ years ago. Since you can buy things with dollars today (contemporary medicine, computers, jet airline tickets, etc.) that you couldn't with dollars back then." Anonymous Coward @ 8/5/12 3:42 PM<br /><br />This is a perfect example of a Non sequitur. To attempt to refute that the purchasing power of the US Dollar has evaporated over the course of two thirds of a century by bringing up the truism that there are different things to buy with dollars today than there were back in the 1930s is silly. People still have to eat, be housed and pay for multitudes of items all of the years since then in spite of brilliant inventions and progress so economists have devoted careers in trying to establish a reasonable cost of living index to try and measure the phenomenon. Using the Government’s own data ( which is questionable I believe ) one can track the falling buying power of the dollar from 1913 to the present here: http://www.usinflationcalculator.com. Read a History of Interest Rates by Sidney Homer to see that price stability existed in the USA for about a century despite a Civil War and other travails during which the economy grew at a rate circa 2% year by year. <br /><br /><br />re: "'Cash basis' by itself is meaningless. You need context, a ratio. Debt as a % of GDP is lower today than it was in the 40s." Anonymous Coward @ 8/5/12 3:42 PM<br /><br />Yes, I hear you "we owe it to ourselves," a famous line espoused by Keynesians. So far the debt bomb has not detonated but fiscal promises made at all levels of US governments commit to spending in the hundreds of trillions so I suspect that your "low" debt/gdp ratio will change to a point where even a Pollyanna as you will awaken to the threat of economic collapse.<br /><br />Dan KurtDan Kurthttps://www.blogger.com/profile/08252444956956894276noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-24330762578713642412012-08-05T15:51:30.762-07:002012-08-05T15:51:30.762-07:00Anonymous writes: "And counter to Crawfurdmui...Anonymous writes: "And counter to Crawfurdmuir's claim (and claims of many businessmen and non-Keynesian economists in 1945) that this was due to reductions in the labor supply rather than government spending increasing aggregate demand, full employment remained after the nation demobilized and conscripted soldiers returned to the labor force."<br /><br />WWII permanently reduced the labor supply. FDR did not quite, as Sen. Burton K. Wheeler predicted, "plough every fourth boy under," but enough were ploughed under that it made a difference.<br /><br />Whether this alone accounts for the postwar recovery is debatable. There were no additional New Deal policies, the OPA was allowed to expire, and capital had more breathing room under Truman than it would have done under Roosevelt or - thank God he didn't succeed -Henry A. Wallace, the true progenitor of today's self-styled "progressives," who took over the Democrat party in 1972 under the banner of George McGovern, a Wallace backer in 1948.Crawfurdmuirnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-71482430716637197502012-08-05T15:42:07.473-07:002012-08-05T15:42:07.473-07:00the Dollar is now worth less than 5 cents compared...<i>the Dollar is now worth less than 5 cents compared to a pre-depression Dollar</i><br /><br />Of course you can't really perfectly compare a dollar today with a dollar from 70+ years ago. Since you can buy things with dollars today (contemporary medicine, computers, jet airline tickets, etc.) that you couldn't with dollars back then.<br /><br /><i>the US debt is on a cash basis is approaching 20 trillion and on an accrual basis probably 9 or 10 times more.</i><br /><br />"Cash basis" by itself is meaningless. You need context, a ratio. Debt as a % of GDP is lower today than it was in the 40s.Anonymousnoreply@blogger.com