"Prices fell because there was no demand for anything."
I was taught that lie in high school. The actual cause of the depression was protectionist trade policies and goverment intervention following a mild recession.
@NikovK And who taught you THAT lie?? Murray Rothbard? The Mises Institute? Or did you just watch a bunch of YouTube videos hawking Austrian economics, produced by other confused individuals who convinced you that they knew what they were talking about?
Hahahaha -_- *government fairy*! That's perfect! That's quite accurate though; keynesians have this view of the state as a mystical, omnipotent entity...as though its not full of the same kind of creatures they complain about running wall street.
I'm reading all this nonsense about speculation on this thread and just had to say something further. An economy consists of many individual members acting independently on one or more of many potential market incentives. This diversity makes a decentralized economy very stable. Speculation is only dangerous when it is based on centralized motives, such as a change in law or federal reserve action, that triggers everyone to make similar bad decisions at roughly the same time.
Only an idiot thinks the social programs made during the great depresssion helped. If you just look at the time lines, any idiot can see the economy fixed itslf inspite of the programs, not because of it. Thanks to WWII. We started mass producing weapons and selling them to the world.
Let's put it simply: government creates the instability; no one realizes it; they ask government to intervene further. Keynesian economic policies are logically indefensible and cannot be proven to work. It is actually far more likely that economies under the burden of Keynes policies recover in spite of them. Please refer to any book by Rand, Hayek, von Mises or Rothbard for further information.
@shaverbh Whats fun about keynes biased math is thats where you look to start disproving them. This should have died with the Soviets. I thought it did with Malthus
@davehoe3000 I believe the economy cannot gradually correct, when it finds itself in a systemic market error, all it can do is shut down and reboot.You say this self correction would occur quicker, if we did not try to help it along? I agree. however I would add that the volatility of that self correction depends upon the amount of speculation in the system. Curb excess speculation and you can curb market volatility so the self correction is not as devastating. Thus Kensafeguards.
@MrCollusion The new deal might have prolonged the great depression, but the rules and regulations curbed the volatility of markets and strengthened the system as a whole for a long period. Growth is curbed, but you get less volatility. It was then necessarily to separate speculative (short term) banking from normal (long term) banking.
Keynesian economics inhibits markets, because it constrains capital choices to work to the advantage of a system (long term) rather than self or individual interest (short term).
@MrCollusion When the government steps in it because enough bad actors, were over-speculating on some issue, degrading system functionality. Yet we as individuals will do it, and justify doing it, maybe because we cant see the big picture, or we like vice. Education is the next big bubble, its institutions are becoming too corrupt and not providing enough value for the money they charge. Corporate world too is not investing enough in the communities it serves--nor building ethical cultures.
@MrCollusion Every individual's self interest wants to leverage the current system to greatest advantage, even if the root of that advantage degrades the current system's functionality. Its irrational, because if I degrade or destroy the system functionality I will be hurting something which I rest upon to support me, my community, and protect my nation. In addition the instability and chaos generated could meet me at other systemic levels--crime rates, unemployment rates, regulations.
@MrCollusion Markets are illogical, in the short term they are often driven by rumor and excessive speculation based on fear and vice. All it takes is a rave of speculation, and self delusion, to throw a global economy off balance. Self interest and excessive speculation often occur after systemic de-regulation, everyone's self interest wants to push the limits of a system to their greatest advantage even if the root of that advantage degrades the systems functionality. Its irrational.
@MrCollusion Ayn Rand made an important point about government interference, and cronyism; but she over emphasized the role of abilities of individuals in the free market. She assumed all individuals were well informed and made rational, logical, choices based on reason--this extends to corporate leaders and firms.
There is hard factual evidence that keynesian economics is destructive to the economy. The new deal did not end the great depression, it prolonged it.
Monetarism dominated the 80s and 90s and now we're back to Keynesianism. The British Prime Minister (from the left wing party) Jim Callagahan in the 1970s said before leaving office that "We used to think we could spend our way out of recession, we now know that's not true". How surprised he would be to see today the economic policy of Barack Obama and nearly every other developed country
Another wrinkle is that in Roosevelt day, America made all it's own stuff with American labor.
Now US jobs are outsourced and it sucks in imports. Ipso facto, use all the Keynesian tricks you can, but there is no jump in jobs and productivity, since the Jobs are gone, already.
Everybody must go to read Barro and Redlick (2011), in The Quarterly Journal of Economics. It is the last scientific study published in econometrics about keynesianism aggregating near one hundred years of data about USA governement spending and effects on GDP. Guess what it shows? Keynesianism does not work.
There is so much ignorance in this video. Keynesian economics did not end the Great Depression because the Great Depression did not end until 1947 or 1948. watch?v=7QLoeehMw0w WWII only delayed the effects of the Great Depression which service men & women came right back to in 1945. In 1946, America threw Democrats out of control of both houses of congress and the Republican majority in both houses of the 80th U.S. Congress over-rode POTUS Truman's vetoes of tax cuts & removal of price controls.
Great. Let's base economic policy on faith in the unseen rather than adherence to the demonstrable. It's the religion of money rather than the actual classic study of commerce.
Good job wasting your time. Hope you got an A+ from your fucktard teacher...keynesian theory is wrong. No? Ask Bush, Obama, Clinton, FDR, etc. and see if they think differently now thanks to an inflated economy due to keynesian "lets spend like morons" economics.
The US never went off Keynesian economics. Keynes is Marx Light, which means that he was a bigger buffoon.
Plain-and-simple, the government does a bad job of investing. Government spending means waste. Look at Obama's stimulus. It is pure waste and adds to the debt.
1929 and 2008 have two things in common: the Fed and excessive leverage in the monetary system. You don't need to know anything more than that. The Fed is a scam. It was never intended to stabilize the economy.
@666sigma What about teh fact that income inequality was at all time highest at both points, or the fact that regulations of finance where at all time lows at both points? Yes the Fed has been making mistakes for the past 30 years since Friedmans cronies took over, but the difference between 1929 and 2008 is that one turned into a depression because of inaction, the other turned into a recesseion which is over and the economy is, overall, starting to return to normal, but with dept.
@666sigma I am not waying the Fed had no part in it, but to blame it all on teh Fed is to ignore most of the problem. The Fed as well as income inequality and the government letting the banking industry do whatever it wanted all contributed to the problem.
Do you think China has income equality and their economy is sizzling. Go look at every single developing country that has "made it" economically and you will see the same ingredient for growth and it ain't oil or natural resources. Europe is a basket case and we pay for their defense.
The collapse in both cases was due to excessive leverage. Leverage creates bubbles and it is a bitch when markets move against you. We are overleveraged.
@666sigma China sizzling? Are you joking, their economy is a bubble based on export and infrustucture projects that have plunged the munisiple governments of China into dept far worst then that of the US. You wont be talking about how Chinas economy is so great in 5 years, 10 at the most. Remember what people where saying about the US economy in 2007.
Do you mean a bubble like the internet, housing and derivatives bubbles or the Obama print money and spend bubble?
I will take China's economic growth over ours any day of the year. They have savings and capital investment. Yeah, their economy will crash and grow at 4% while ours is actually declining. You want to see a bubble - look at the US from 1995 until now. And it is going to pop.
@666sigma 4% is not where it is going to stop, China has a real throught of economic collapse as well as a political one such as the one that the Soviet Union went through. Have you ever heard of the South China Mall? Look it up, its the worlds biggest mall, but only 12 stors are open and all are strugling. China is a bigger bobble then any ever seen, and when it pops the idea of a Superpower China will die for good as reality sets in.
I find it amusing that the presenters claim that the period between 1970 and 2010 was a period of "Classical" economics. During the 2000s, President Bush, Congress, and the Fed were practicing Keynesianism on steroids - huge federal deficits and Greenspan's ultra-low interest rates. And the federal deficits and inflationism of the Nixon, Ford, and Carter administrations would not been approved of by "Classical" economists.
This video shouldn't have as many dislikes as it does. They did a good job of explaining Keynesian economics at face value. For that they should be commended. The fact that Keynesian economics is a failure shouldn't be a factoring in liking/disliking this video. We just need to help educate everyone about the dangers of Keynesianism.
@peon17 You're living in a complete paranoid fantasy if you think Keynesian economics is a 'failure'. You're joking, right? What do you see when you go outside? Some sort of science fiction dystopia? Funny thats not what I see. I see the same old first-rate, first-world country that I was born in and that I'll in all likelihood die in. The Austrians have been promising 'Collapse' for fifty years, and every time the economy contracts we hear the same old song. They are never proven right.
@jumpoutatree I don't really care to discuss this with you as I'm tired and you're unlikely to really listen, but your argument isn't completely sound. I never said that Keynesianism was going to throw us into the depths of hell. It is possible for government spending to do well. The auto industry is a good example. It wasn't ethical, but it worked. My point was that the theory isn't accurate. Again, I don't care to discuss it here, nor do I have the space.
@jumpoutatree Moreover, claiming there has been no proof of Austrian thought is also inaccurate. The simplest example is the housing market. The bubble and the burst were both predicted beforehand, but the mainstream didn't want to listen. Only after the fact did they accept the arguments that the burst was imminent.
This pisses me off. I'm 18 interested in economics and have researched Austrian Economics and to me it makes so much more sense. What pisses me off is I want to major in Econ and I would love to go somewhere where the curriculum isn't based off a Liberal bias. There are so many people like this that go into college completely ignorant of economics and therefore are easily susceptible to liberal brainwashing. This video make my blood boil a bit.
My favorite part is when they say the economy remained classical until 1936 and was also classical again from the 90s onward. Because every year the government doesn't pass a trillion dollar stimulus must be a classical year!
what a crock of crap, mate austrian economis lost the battle as government lost to the banking system hence adopted keynesian system, here in aust they teach that crap and discontinued my studies after discovering this fact. Sad that kids are been feed wrong ways to go into the world with flawed systems. Research Austrian economics. The head of lecture of economics had no idea that the Fed was Privatised, Privately owned, he asked me to refer to my books after calling him over the phone.
WOW! You have got to be kidding me. Tomorrow I'm going to the local public schools to see if this is really what our young citizens are being taught. This is bad....
Staci, Maddison you have been sold quite a bill of goods. It was proto-Keynesian measures that caused the Great Depression, and absolutely Keynesian measures that extended the Great Depression. You've been taught that Hoover was laissez-faire (he wasn't), and that government interference saved the economy (it did a great deal of damage). Read something other than a government textbook. Try Hazlitt's Economics in One Lesson.
The "classical" economists were correct when they stated that the economy self-corrects, provided that there are no obstacles to this, such as the existence of a central bank manipulating the currency and interest rate, legislated barriers to existing trade relationships, legislated barriers to wage rate adjustments and company restructuring, legislated barriers to profit-making through tax hikes, the legislated cartelization of industry, etc - all of which occurred after 1929.
"The "classical" economists were correct when they stated that the economy self-corrects, provided that there are no obstacles to this"
This is nothing but an assertion lacking any credible evidence. While most of what you list DOES interfere both negatively & positively within a capitalistic economy, nothing about Smith theories work 'correctly' outside ideological models
Mainly, control of finite resources in markets (eg-labor) with a permanent abundance lead to monopolies
This is a bold-faced lie! It was Keynesian economic policies that caused the great depression, as well as the current recession. The Federal Reserve encourages mal-investment through credit expansion resulting in artificial booms followed by a bust. We never had true classical economic policy since the late 1800s, and there probably were always impurities.
@UltraConservative298 The great depression started around 1929, John Keynes General Theory wasn't published until 1936 and even the it wasn't implemented until the 1940's. Keynesian economics didn't cause the Great Depression YOU FUCKING IDIOT.
@UltraConservative298 I don't care when his book was published! It was the same philosophy as his which caused the Great Depression! Now screw off because I don't have time for you collectivist MORONS!
@UltraConservative298 Keynes theory was that continued investment was the driving force behind employment. Why would a company invest in capital assets that would sit around and depreciate in a recession/depression? There is a need to restore investor confidence, and government spending is simply a means to that end, but not a summary of his theory. Conservatives and liberals misaligned his theory for political purposes.
@radix3d Investment is certainly the driving force behind employment, and it is taxation that depletes capital investment. Reduction or elimination of taxes is the best way to restore investor confidence. Increased spending equals increased taxation and therefore will damage the economy.
@UltraConservative298 Reducing taxation is a stimulus, unless a corresponding decrease in gov. employment follows. One of the thing Keynes points out in his book is that it's not just investment that is important, but the type of investment. Keynes talks about the housing market, and how each house built marginally decreases the value of other houses on the market. However, some investments do not. For example, military expansion under Ronald Reagan because the military isn't market susceptible.
@radix3d That is a fundamental economic fallacy. Government jobs are a drain on the economy and most of them should not have existed in the first place. When taxes are reduced, there will be a corresponding increase in job opportunities in the private sector, therefore the government jobs that were lost would be transferred to the private sector.
@UltraConservative298 What economic fallacy are you talking about? Keynes stated the government should do things the private sector can't which is an echo of what you're saying. Have you actually read anything Keynes wrote or even studied economics? Or is this conservative propaganda you're spewing?
@radix3d Which the private sector can't do? Oh really? The only reason the private sector can't do something is because the government prevents it. Please don't try to deny that government spending crowds out the private sector. Everything that the government spends results in resources lost in the private sector. I have read works by Henry Hazlitt and Ludwig von Mises, in which Keynes's theories are debunked. Conservative propaganda? As though you're not spouting statist propaganda.
@UltraConservative298 Austrian economists educated you on Keynesian economics, which shows your fundamental ignorance of Keynes's ideas. General Theory put big holes in laissez-faire economics. You haven''t read Keynes's book so you're talking out of your ass going off what other biased people told you. That's why you blamed the great depression on Keynes, without realizing Keynes published his theory DURING the Great Depression, not before.
@radix3d Did you know that Keynes already exerted much influence before 1936? He was a British economic advisor long before that, and General Theory is not the first book he wrote. If you study the truth behind the Great Depression, the Federal Reserve caused it, and Hoover and Roosevelt prolonged it through wage control, deficit spending, and a myriad of schemes.
@UltraConservative298 Keynes was an influential economist in England, but definitely not popular in the U.S. before WW2. Keynes suggested in General Theory certain government spending such as a war could neutralize unemployment and restore investor confidence. WW2 breaks out and Keynes's theory is demonstrated and he became popular in the U.S. The issue isn't what caused the Depression, but what delivered us from it: Keynesian Economics. I never said the theory was without some flaws however.
@radix3d Ever heard of the broken window fallacy? The war certainly did not get us out of the Great Depression. That is like saying breaking a window is good for the economy because it creates jobs. There is a finite amount of resources, and resources dedicated to war come at an opportunity cost to other industries. There are many reasons why investor confidence was lacking before the end of WWII. The Federal Reserve created a bubble in the 20s by keeping interest rates artificially low
@UltraConservative298 You're balancing a smaller waste against the larger waste of mass unemployment. Keynes talked at length about the marginal disutility in the housing market, in modern terms a stimulus to the housing market would create an unsustainable bubble. Whereas war spending or preferably more productive spending that lacked marginal disutility would not have the same limitations. The real limitation to Keynesian economics is inflation and a debt pileup, not waste.
@UltraConservative298 In General Theory, I think in the second chapter Keynes said Classical economics was still a valid theory but it was only under the special case of full employment. He was aware and critical of his "big government" disciples that were advocating inflationary policies. You've failed to point out Keynesian economics true limitation: inflation.
Sounds good except we aren't employing Keynesian Economics we're feeding sharks at the shark tank as corporate billionaires buy up our politicians and make them puppets to their financial interests.
Ladies, it was government intervention/regulation starting with the anti-trust laws of the late 1890's along with many other government controls and policies that lead up to and ultimately caused the depression in 1929. Your presentation is interestingly ironic and possibly moronic considering it was Keynesian economics or his type of thinking that caused the depression. You should read Ayn Rand's book, Capitalism, The Unknown Ideal.
@MrCollusion You don't know history very well sir. Although I admire Ayn Rand's atheism, she was a sociopath. The markets do regulate themselves, but it is a slow process. Keynesian policies work. How many "great depressions" had we had between the 1930s and the 2010s? One. The economy was so unstable throughout the Progressive era that there had to be a way of balancing it out. Even investors rely on the government to keep the economy from collapsing. To do nothing creates great harm to our $.
@MrCollusion hahaha. Should read the law of supply and demand first. But of course the Keynesian math is great to make yourself look right. I like how the "invisible hand" haters dont recognize the "government fairy" of Keynes horrible idea.
“To sum up Keynes: Arrogant, sadistic, power-besotted bully. Deliberate and systemic liar. Intellectually irresponsible – an opponent of principle. In favor of short tem hedonism and nihilistic opponent of bourgeois morality in all of its areas. A hater of thrift and savings - saying he wanted to liquidate the creditor class, exterminate the creditor class. An imperialist and anti-Semite and a Fascist. Outside of that, I guess he was a great guy!” - Murray Rothbard, 1989
It's all because of the FED we have these problems. What they fail to realize is that in the 1970's the reason we had problems is because of the collaspe of the bretton woods system. The derpession in the 1930's was caused by terrible FED policies and herbert hoover's actions of trying to keep prices sticky. Keynesian economics only works when you are in the deepest of depressions and all fields of business are in a rut, it has no reason to be used outside those times
@moneytrendsresearch I think if governments only do deficit spending without paying back the debt in a boom period they are only doing half of the job. Intervention itself is not the problem
If the Fed can use inflation to tax the public any time it likes, then there's no reason why corporations favored by the US government cannot use that fact to continue to make profit hand over fist and using a portion to completely control the political process. Further, any time one of these corporations completely screws up, they can just pass their losses on to the public and skip out of their responsibility, never learning anything from it.
Ok guys obviously these are two students, who are making a presentation, trying to please their econ teacher so they can get a good grade. it's not fair to attribute the flaws in their presentation to naivete, as truth incorporated in the presentation may NOT get them a good grade.
the fallacy in this video, besides thinking that Keynesian economics will lead us out of this problem, is the claim that after the great depression we no longer looked to the keynesian model
So, even though we had the semblances of 'government interference" with high tariffs and government support between the Civil War and WW1 under the American School, it was apparently "classical". Hmm. Oh, and that was when America became a major industrial world power. Coincidence?
yea, keynesian economics providing a "stable" economy. A stable devaluation of a fiat currency. Nice steady expansion of Government. Nice and stable increasing debt... Anyone ever ask themselves what MONEY is? If you are alive now, you were born and raised thinking it was magical. You had no reason to question its power. But when price inflation occurs through inflation at more dramatic rates, people will have to eventually question its real value - residual trust - and its fading every day.
Sad that this is what they still teach kids.. Keynes theory is no longer relevant, and probably never was. First of all, it is safe to say that we've never had a 'classical' economy since 1913; the date the Federal Reserve took control of our money supply. Interest rates were no longer controlled by supply and demand, but by central bankers. Gov't intervention has proven to NOT increase aggregate demand, it simply redistributes the wealth and inflation because of runaway borrowing. hence reality
@moneytrendsresearch don't think you understand the basic theory of keynesian economics. If your real problem is money supply you would probably be better served intellectually looking into the history of monetization. The debate goes back to the days of Jefferson, Madison, and Hamilton. Fiat currency itself is not the problem, the problem is the degree to which the right to monetize debt is abused.
@moneytrendsresearch probably never was? Proven NOT to increase aggregate demand?? Oh teach us great one!! Teach us the ways in which Keynes has fallen before you. Tell us the truth!!! YES REALITY -- THAT IS WHAT I WANT!!! YES!!!
@moneytrendsresearch I enjoy your analysis, but I find it be completely lacking and unfounded. I would argue that our current monetary polices are a derivative of Keynesian economic theory. The basic tools of the Fed are the buying and selling of bonds, (OMP) discount loans, and reserve rates; these are all tools that run off of Keynesian economic theory. Inflation and government manipulation of the dollar, which ultimately leads to the manipulation of the economy is without a doubt Keynesian.
@moneytrendsresearch Though I know it would seem that my time frame is off, for the shear reality that Keynesian economic theory didn't come about, until nearly 30 years after another Federal Reserve (central banking system) started. Thus, I could just as easily say that Inflation is the father of the FED as well as Keynesian economic theory. A CSB and Keynesian economic theory are like brother's.
@moneytrendsresearch well keynes theory did elevate the great depression and America is going to slide off to extinction due to neo classical economics. In fact government intervention in Korea, Japan and China have been remarkably successful; the same with the Truman plan. Neo classical 0 Keynes 5
you're wrong about the 70-00 era. That was a seaming classical era and it is hard to discus in a classical vs. keynesian terms because Keynes never considered economies on a global scale. In the 70s the US government started planning for a global economy and continued it's Keynesian economic policy on an international level. The country's internal economics were being offset by the international policy and then around 2000 a government which lacked the understanding of the delicate balance came
Because the 70s were so classical. Yeah. Bullshit. Keynesian economics are wrong. Keynesianism and big government are just fancy bullshit code for corporatism and a kleptocracy at this point.
The role of government is not to prop up and save anyone, but to just make sure that NO ONE has an unfair advantage. That'd be bullshit loopholes that some locales make new businesses and start ups go through, usually from established corps who don't want the competition and have paid off key officials..
@PaganMars Thanks for doing such a fine job showing that you have not been to college. If you did, the surely your major was not in the study of economics. Try reading a bit about microeconomics and macroeconomics and about economic indicators please before you make unwarranted comments. It will do a lot to clear you head of garbage.
@calliopeamore Been there. Giving government economic intervention makes it a much more enticing offer for corruption and graft. We're not a machine, the economy is people. The only role of government is to enforce the rules: no bailing out losers, no unfair advantages, no loopholes to jump through.
And yes, my major is not economics. Why that keeps me from learning through other means and studying all dem dere olden economists from Marx to Mises and Smith is beyond me...
@PaganMars Sad u've no inclination 2 learn frm history & economics. Wat u pikup frm streets r garbled info frm intuitive thinkers w/ no scientific investigative knwhow. Guys like Stiglits & Krugman won Nobel prize in economics 4 a reason. Go 2 school guy & ur world will open up via scientific study & investigation. U like world w/o gov't regulations - so U want 2 repeat stock market debacle 1800s nearly killed France, great world depression 1929, world recession 1990 & 2007. Vote Ron Paul then!
Keynesian Economics has, at this point, proven to be an utter failure. Government interference in the marketplace prolonged the Great Depression, and as we see today, has prolonged the economic malaise following the 2008 crash.
Because governments have limited knowledge (like people), government interference will cause market distortions and prolong mal-investment. Solyndra is a great example--$585m investment in a business with an unsustainable business model, now collapsed.
Did you guys read this straight from your government issued textbooks? This would be hilarious if you guys werent serious. If classical economics is a failure, why dont you study the "depression" of 1920? Oh yeah, its not worth mentioning because Keynsianism didnt prolong it into a decade long government manipulated catastrophe like they did in the 30's. I'm glad I didn't waste the money to go to college now.
I believe you did a fine job of describing how politicians will react to short term problems, which disables the free market (invisible hand). Furthermore, the negative comments you received were from people who cannot listen well enough to understand your clearly described points.
they're like sheep being lead to the slaughter by their professors. talk about liberal university brainwashing at it's best. the great depression was CAUSED by government intervention of a sort via the federal reserve. they're the ones who created the market fluctuation when they began devaluing the dollar instead of keeping it equal with gold. our nations currency is gold not the dollar. the dollar is merely a piece of paper that's an IOU. the real money is the gold you can no longer demand.
@cadehalada FDR didn't actually increased gov spending after new deal, WW2 did and by massive spending, economy actually rose (same thing you could say about nazi germany before war) and after WW2 USA was strongest economy in the world and after war, every president until almighty reagan balanced budget and lowered USA debt
Classical is an umbrella for Hayak, Say, Friedmann and a few other aka those who believe markets regulate themselves more or less. Keynes and a few others belived boosting agregate demand you could stimulate the economy. When speaking in broad terms they are right.
Most economists today belive in a little of everything, so you can´t really tell what is what.
You said 1970-2010 was Classical, what a great joke. First of all, it's called Austrian economics, not Classical. Austrian economics ended in 1913 when the Federal Reserve was instituted. Second, 1970-2010 had 1) deficit spending 2) SEC, FDIC, and more regulators 3) the federal reserve loose monetary policy. Look at 2000-2001, Bush increased the size of government and reduced taxes, aka Keynesian economics. You're lack of knowledge about the topic is embarrassing for a college student.
@kjshins keynes would raise taxes under increasment of goverment, what a bullshit you just wrote! 1980-2011 are monetary policies inspired by works of milton friedman (deregulation, tax cuts etc) , Nixon was keynesian, Carter I assume too. USa was never under austrian economics, but classical (yes that is completely different thing, have similar values, but it's not same...) You lack basic knowledge history....
@Lius525 I'm not sure what deregulation you speak of. The SEC (You know, the thing that regulates the market) was never abolished and oversaw everything. You should really read up on the Community Reinvestment Act, which forced banks to make the bad loans in the first place. You should also research the history of interest rates and the direct correlation which shows that lowering interest rates creates bubbles (1920's, 2000's for some examples). You need to read up on history, not me.
@kjshins housing market were only catalyzator, not the actual cause of crisis (not to meantion, bankers actually knew about toxic assets, they bought it, sold it and bet against it for short term gain), same thing will happen again until laws are fixed (like germany did after crisis). And having balanced budget isn't something that only austrian economy does - Eisenhower recordly lowered debt and he was still using keynesian model. And by deregulation I mean like repealing Glass–Steagall
@kjshins Second from 80s deficit spending was mainly because usa lowered taxes acrossed the board, mainly on corporations and highest income, yet they kept everything same in the goverment (like very big military force), Clinton for a brief time raised taxes and balanced the budget. more about deregulation in 80s: go to - bit *dot* ly *slash* oQKXwH - BTW Obama and Clinton are almost as bad for me as republicans, they are doing same thing and have "former" bankers run economy (Geitner, Summers)
@kjshins BTW one more thing about "socialist" obama, they are now lending banks money with such a low interest, that banks actually don't lend it to the people, they instead buy USA tresury bonds, so they are making virtually making free money and guess who will pay for that.... yeah such a big socialist. Please read up about monetarism and you could watch "inside job" about financial crisis. - Hey I watched many interviews with Milton Friedman, so why should only I suffer. :D
@kjshins You meant to say Bush monetary policy right? Not to be confused with Keynesian.
Bush era was one of deregulation which was not Keynesian. The only thing Bush did that even resembled Keynesian economics would be the stimulus package, but yet when you look at the stimulus package from Bush you realize it is not a stimulus since there were too many tax cuts in there and not enough money to be a stimulus. Obama's stimulus package was the same deal, too much tax cuts, not enough money.
@Neosaigo Where do you suppose we get this money from? You have to take it from people or businesses that were safe with their money and did not invest from the bubble. You are punishing good businesses to save the bad or dig a ditch and refill it.
@Neosaigo Ok but by running up such large fiscal deicits, to stimulate the economy, that is the core concept of keynesianism, if bush was monteraist, then he would slash public spending lower business and high income tax rates to try stimulate growth, its obvious that bush did revert back to a keynesianism approach to try keep the economy driving. And further if he was monterist then he wouldnt put money into the economy as when the economy slows and unemployment rises this is the monterist way
@Neosaigo to control inflation, this in turn would remove stress from the usa dollar and is how monterasim would work if bush used it properly, but he fucked up and did either way half assed, which fucked the global markets
This is a weird kitchen.
jsquad31 6 days ago 2
Fuck they're really hot
BIoodrunk 2 weeks ago
I want too see u bitchy haters doin it better :D
TheRealBlackRefleX 3 weeks ago
I am tryin to decide who is a bigger idiot????? Tough decision....
djk28161 3 weeks ago
U R both bimbos .....go back to porn
djk28161 3 weeks ago
"Prices fell because there was no demand for anything."
I was taught that lie in high school. The actual cause of the depression was protectionist trade policies and goverment intervention following a mild recession.
NikovK 4 weeks ago
@NikovK And who taught you THAT lie?? Murray Rothbard? The Mises Institute? Or did you just watch a bunch of YouTube videos hawking Austrian economics, produced by other confused individuals who convinced you that they knew what they were talking about?
jumpoutatree 2 weeks ago
It's like I'm in highschool!
shoney 1 month ago
@batcivic
Hahahaha -_- *government fairy*! That's perfect! That's quite accurate though; keynesians have this view of the state as a mystical, omnipotent entity...as though its not full of the same kind of creatures they complain about running wall street.
shaverbh 1 month ago
I'm reading all this nonsense about speculation on this thread and just had to say something further. An economy consists of many individual members acting independently on one or more of many potential market incentives. This diversity makes a decentralized economy very stable. Speculation is only dangerous when it is based on centralized motives, such as a change in law or federal reserve action, that triggers everyone to make similar bad decisions at roughly the same time.
shaverbh 1 month ago
Only an idiot thinks the social programs made during the great depresssion helped. If you just look at the time lines, any idiot can see the economy fixed itslf inspite of the programs, not because of it. Thanks to WWII. We started mass producing weapons and selling them to the world.
pcgamernum1 1 month ago
Let's put it simply: government creates the instability; no one realizes it; they ask government to intervene further. Keynesian economic policies are logically indefensible and cannot be proven to work. It is actually far more likely that economies under the burden of Keynes policies recover in spite of them. Please refer to any book by Rand, Hayek, von Mises or Rothbard for further information.
shaverbh 1 month ago
@shaverbh Whats fun about keynes biased math is thats where you look to start disproving them. This should have died with the Soviets. I thought it did with Malthus
batcivic 1 month ago
@davehoe3000 I believe the economy cannot gradually correct, when it finds itself in a systemic market error, all it can do is shut down and reboot.You say this self correction would occur quicker, if we did not try to help it along? I agree. however I would add that the volatility of that self correction depends upon the amount of speculation in the system. Curb excess speculation and you can curb market volatility so the self correction is not as devastating. Thus Kensafeguards.
BrentSaulic 1 month ago
@MrCollusion The new deal might have prolonged the great depression, but the rules and regulations curbed the volatility of markets and strengthened the system as a whole for a long period. Growth is curbed, but you get less volatility. It was then necessarily to separate speculative (short term) banking from normal (long term) banking.
BrentSaulic 1 month ago
Keynesian economics inhibits markets, because it constrains capital choices to work to the advantage of a system (long term) rather than self or individual interest (short term).
BrentSaulic 1 month ago
@MrCollusion When the government steps in it because enough bad actors, were over-speculating on some issue, degrading system functionality. Yet we as individuals will do it, and justify doing it, maybe because we cant see the big picture, or we like vice. Education is the next big bubble, its institutions are becoming too corrupt and not providing enough value for the money they charge. Corporate world too is not investing enough in the communities it serves--nor building ethical cultures.
BrentSaulic 1 month ago
@MrCollusion Every individual's self interest wants to leverage the current system to greatest advantage, even if the root of that advantage degrades the current system's functionality. Its irrational, because if I degrade or destroy the system functionality I will be hurting something which I rest upon to support me, my community, and protect my nation. In addition the instability and chaos generated could meet me at other systemic levels--crime rates, unemployment rates, regulations.
BrentSaulic 1 month ago
@MrCollusion Markets are illogical, in the short term they are often driven by rumor and excessive speculation based on fear and vice. All it takes is a rave of speculation, and self delusion, to throw a global economy off balance. Self interest and excessive speculation often occur after systemic de-regulation, everyone's self interest wants to push the limits of a system to their greatest advantage even if the root of that advantage degrades the systems functionality. Its irrational.
BrentSaulic 1 month ago
@MrCollusion Ayn Rand made an important point about government interference, and cronyism; but she over emphasized the role of abilities of individuals in the free market. She assumed all individuals were well informed and made rational, logical, choices based on reason--this extends to corporate leaders and firms.
BrentSaulic 1 month ago
There is hard factual evidence that keynesian economics is destructive to the economy. The new deal did not end the great depression, it prolonged it.
th3lunchb0x 1 month ago
Propaganda for Keynesians and Socialists. Not a comparison of the two theories.
hulsey1976 1 month ago
Monetarism dominated the 80s and 90s and now we're back to Keynesianism. The British Prime Minister (from the left wing party) Jim Callagahan in the 1970s said before leaving office that "We used to think we could spend our way out of recession, we now know that's not true". How surprised he would be to see today the economic policy of Barack Obama and nearly every other developed country
benehan 2 months ago
This history lesson sounds like it's been paraphrased from the lying mouthes of John Maynard Keynes, and his liar bulldog Paul Samuelson.
gunsandbullhorns 2 months ago
Another wrinkle is that in Roosevelt day, America made all it's own stuff with American labor.
Now US jobs are outsourced and it sucks in imports. Ipso facto, use all the Keynesian tricks you can, but there is no jump in jobs and productivity, since the Jobs are gone, already.
OzzyPatriot 2 months ago
<<<<<<< this one is hot
dlousmane 2 months ago
Everybody must go to read Barro and Redlick (2011), in The Quarterly Journal of Economics. It is the last scientific study published in econometrics about keynesianism aggregating near one hundred years of data about USA governement spending and effects on GDP. Guess what it shows? Keynesianism does not work.
andyoupretendtoknow 2 months ago
Nice reading off the paper...
Torro321 2 months ago
There is so much ignorance in this video. Keynesian economics did not end the Great Depression because the Great Depression did not end until 1947 or 1948. watch?v=7QLoeehMw0w WWII only delayed the effects of the Great Depression which service men & women came right back to in 1945. In 1946, America threw Democrats out of control of both houses of congress and the Republican majority in both houses of the 80th U.S. Congress over-rode POTUS Truman's vetoes of tax cuts & removal of price controls.
MrConservative608 2 months ago
"The Invisible Hand?"
Great. Let's base economic policy on faith in the unseen rather than adherence to the demonstrable. It's the religion of money rather than the actual classic study of commerce.
vcdaniels 2 months ago
@vcdaniels The invisible hand is the pricing mechanism. Prices are demonstrable.
Thatmakessense356 2 months ago
Good job wasting your time. Hope you got an A+ from your fucktard teacher...keynesian theory is wrong. No? Ask Bush, Obama, Clinton, FDR, etc. and see if they think differently now thanks to an inflated economy due to keynesian "lets spend like morons" economics.
DeviantFormula 2 months ago
Keynes was a socialist. He told Hayek if inflation ever becomes a problem he'd find a solution to it... he died two weeks later.
djcatron11 2 months ago
The US never went off Keynesian economics. Keynes is Marx Light, which means that he was a bigger buffoon.
Plain-and-simple, the government does a bad job of investing. Government spending means waste. Look at Obama's stimulus. It is pure waste and adds to the debt.
1929 and 2008 have two things in common: the Fed and excessive leverage in the monetary system. You don't need to know anything more than that. The Fed is a scam. It was never intended to stabilize the economy.
666sigma 2 months ago
@666sigma What about teh fact that income inequality was at all time highest at both points, or the fact that regulations of finance where at all time lows at both points? Yes the Fed has been making mistakes for the past 30 years since Friedmans cronies took over, but the difference between 1929 and 2008 is that one turned into a depression because of inaction, the other turned into a recesseion which is over and the economy is, overall, starting to return to normal, but with dept.
dave19941000 2 months ago
@dave19941000
You are clearly not very educated. Stick to real facts and not misguided talking points.
666sigma 2 months ago
@666sigma I am not waying the Fed had no part in it, but to blame it all on teh Fed is to ignore most of the problem. The Fed as well as income inequality and the government letting the banking industry do whatever it wanted all contributed to the problem.
dave19941000 2 months ago
@dave19941000
Do you think China has income equality and their economy is sizzling. Go look at every single developing country that has "made it" economically and you will see the same ingredient for growth and it ain't oil or natural resources. Europe is a basket case and we pay for their defense.
The collapse in both cases was due to excessive leverage. Leverage creates bubbles and it is a bitch when markets move against you. We are overleveraged.
666sigma 2 months ago
@666sigma China sizzling? Are you joking, their economy is a bubble based on export and infrustucture projects that have plunged the munisiple governments of China into dept far worst then that of the US. You wont be talking about how Chinas economy is so great in 5 years, 10 at the most. Remember what people where saying about the US economy in 2007.
dave19941000 2 months ago
@dave19941000
Do you mean a bubble like the internet, housing and derivatives bubbles or the Obama print money and spend bubble?
I will take China's economic growth over ours any day of the year. They have savings and capital investment. Yeah, their economy will crash and grow at 4% while ours is actually declining. You want to see a bubble - look at the US from 1995 until now. And it is going to pop.
666sigma 2 months ago
@666sigma 4% is not where it is going to stop, China has a real throught of economic collapse as well as a political one such as the one that the Soviet Union went through. Have you ever heard of the South China Mall? Look it up, its the worlds biggest mall, but only 12 stors are open and all are strugling. China is a bigger bobble then any ever seen, and when it pops the idea of a Superpower China will die for good as reality sets in.
dave19941000 2 months ago
@dave19941000
Kind of like the stimulus or Detroit.
666sigma 2 months ago
I find it amusing that the presenters claim that the period between 1970 and 2010 was a period of "Classical" economics. During the 2000s, President Bush, Congress, and the Fed were practicing Keynesianism on steroids - huge federal deficits and Greenspan's ultra-low interest rates. And the federal deficits and inflationism of the Nixon, Ford, and Carter administrations would not been approved of by "Classical" economists.
davehoe3000 2 months ago
This video shouldn't have as many dislikes as it does. They did a good job of explaining Keynesian economics at face value. For that they should be commended. The fact that Keynesian economics is a failure shouldn't be a factoring in liking/disliking this video. We just need to help educate everyone about the dangers of Keynesianism.
peon17 2 months ago 6
@peon17 You're living in a complete paranoid fantasy if you think Keynesian economics is a 'failure'. You're joking, right? What do you see when you go outside? Some sort of science fiction dystopia? Funny thats not what I see. I see the same old first-rate, first-world country that I was born in and that I'll in all likelihood die in. The Austrians have been promising 'Collapse' for fifty years, and every time the economy contracts we hear the same old song. They are never proven right.
jumpoutatree 2 weeks ago
@jumpoutatree I don't really care to discuss this with you as I'm tired and you're unlikely to really listen, but your argument isn't completely sound. I never said that Keynesianism was going to throw us into the depths of hell. It is possible for government spending to do well. The auto industry is a good example. It wasn't ethical, but it worked. My point was that the theory isn't accurate. Again, I don't care to discuss it here, nor do I have the space.
peon17 2 weeks ago
@jumpoutatree Moreover, claiming there has been no proof of Austrian thought is also inaccurate. The simplest example is the housing market. The bubble and the burst were both predicted beforehand, but the mainstream didn't want to listen. Only after the fact did they accept the arguments that the burst was imminent.
peon17 2 weeks ago
This pisses me off. I'm 18 interested in economics and have researched Austrian Economics and to me it makes so much more sense. What pisses me off is I want to major in Econ and I would love to go somewhere where the curriculum isn't based off a Liberal bias. There are so many people like this that go into college completely ignorant of economics and therefore are easily susceptible to liberal brainwashing. This video make my blood boil a bit.
thumm99 2 months ago
My favorite part is when they say the economy remained classical until 1936 and was also classical again from the 90s onward. Because every year the government doesn't pass a trillion dollar stimulus must be a classical year!
rockon6191 2 months ago
what a crock of crap, mate austrian economis lost the battle as government lost to the banking system hence adopted keynesian system, here in aust they teach that crap and discontinued my studies after discovering this fact. Sad that kids are been feed wrong ways to go into the world with flawed systems. Research Austrian economics. The head of lecture of economics had no idea that the Fed was Privatised, Privately owned, he asked me to refer to my books after calling him over the phone.
peace33783 2 months ago
WOW! You have got to be kidding me. Tomorrow I'm going to the local public schools to see if this is really what our young citizens are being taught. This is bad....
jhhdfvbhsdh 2 months ago
Keynesianism is just a clever way to extort money from the people
clintcastle 3 months ago
Was this video produced in an alternate dimension where Keynesian econimics actually work?
eduardkhilify 3 months ago
/facepalm
daPlumber702 3 months ago
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classiclibertarian 3 months ago
Staci, Maddison you have been sold quite a bill of goods. It was proto-Keynesian measures that caused the Great Depression, and absolutely Keynesian measures that extended the Great Depression. You've been taught that Hoover was laissez-faire (he wasn't), and that government interference saved the economy (it did a great deal of damage). Read something other than a government textbook. Try Hazlitt's Economics in One Lesson.
mpc91 3 months ago 4
The "classical" economists were correct when they stated that the economy self-corrects, provided that there are no obstacles to this, such as the existence of a central bank manipulating the currency and interest rate, legislated barriers to existing trade relationships, legislated barriers to wage rate adjustments and company restructuring, legislated barriers to profit-making through tax hikes, the legislated cartelization of industry, etc - all of which occurred after 1929.
davehoe3000 3 months ago 7
@davehoe3000 Actually much of this already occurred before 1929. The IRS and Federal Reserve were established in 1913.
UltraConservative298 2 months ago
@davehoe3000
"The "classical" economists were correct when they stated that the economy self-corrects, provided that there are no obstacles to this"
This is nothing but an assertion lacking any credible evidence. While most of what you list DOES interfere both negatively & positively within a capitalistic economy, nothing about Smith theories work 'correctly' outside ideological models
Mainly, control of finite resources in markets (eg-labor) with a permanent abundance lead to monopolies
Hopeful71 1 month ago
This is a bold-faced lie! It was Keynesian economic policies that caused the great depression, as well as the current recession. The Federal Reserve encourages mal-investment through credit expansion resulting in artificial booms followed by a bust. We never had true classical economic policy since the late 1800s, and there probably were always impurities.
UltraConservative298 4 months ago
@UltraConservative298 The great depression started around 1929, John Keynes General Theory wasn't published until 1936 and even the it wasn't implemented until the 1940's. Keynesian economics didn't cause the Great Depression YOU FUCKING IDIOT.
radix3d 4 months ago
@UltraConservative298 I don't care when his book was published! It was the same philosophy as his which caused the Great Depression! Now screw off because I don't have time for you collectivist MORONS!
UltraConservative298 4 months ago
@UltraConservative298 Keynes theory was that continued investment was the driving force behind employment. Why would a company invest in capital assets that would sit around and depreciate in a recession/depression? There is a need to restore investor confidence, and government spending is simply a means to that end, but not a summary of his theory. Conservatives and liberals misaligned his theory for political purposes.
radix3d 4 months ago
@radix3d Investment is certainly the driving force behind employment, and it is taxation that depletes capital investment. Reduction or elimination of taxes is the best way to restore investor confidence. Increased spending equals increased taxation and therefore will damage the economy.
UltraConservative298 4 months ago
@UltraConservative298 Reducing taxation is a stimulus, unless a corresponding decrease in gov. employment follows. One of the thing Keynes points out in his book is that it's not just investment that is important, but the type of investment. Keynes talks about the housing market, and how each house built marginally decreases the value of other houses on the market. However, some investments do not. For example, military expansion under Ronald Reagan because the military isn't market susceptible.
radix3d 4 months ago
@radix3d That is a fundamental economic fallacy. Government jobs are a drain on the economy and most of them should not have existed in the first place. When taxes are reduced, there will be a corresponding increase in job opportunities in the private sector, therefore the government jobs that were lost would be transferred to the private sector.
UltraConservative298 2 months ago
@UltraConservative298 What economic fallacy are you talking about? Keynes stated the government should do things the private sector can't which is an echo of what you're saying. Have you actually read anything Keynes wrote or even studied economics? Or is this conservative propaganda you're spewing?
radix3d 2 months ago
@radix3d Which the private sector can't do? Oh really? The only reason the private sector can't do something is because the government prevents it. Please don't try to deny that government spending crowds out the private sector. Everything that the government spends results in resources lost in the private sector. I have read works by Henry Hazlitt and Ludwig von Mises, in which Keynes's theories are debunked. Conservative propaganda? As though you're not spouting statist propaganda.
UltraConservative298 2 months ago
@UltraConservative298 Austrian economists educated you on Keynesian economics, which shows your fundamental ignorance of Keynes's ideas. General Theory put big holes in laissez-faire economics. You haven''t read Keynes's book so you're talking out of your ass going off what other biased people told you. That's why you blamed the great depression on Keynes, without realizing Keynes published his theory DURING the Great Depression, not before.
radix3d 2 months ago
@radix3d Did you know that Keynes already exerted much influence before 1936? He was a British economic advisor long before that, and General Theory is not the first book he wrote. If you study the truth behind the Great Depression, the Federal Reserve caused it, and Hoover and Roosevelt prolonged it through wage control, deficit spending, and a myriad of schemes.
UltraConservative298 2 months ago
@UltraConservative298 Keynes was an influential economist in England, but definitely not popular in the U.S. before WW2. Keynes suggested in General Theory certain government spending such as a war could neutralize unemployment and restore investor confidence. WW2 breaks out and Keynes's theory is demonstrated and he became popular in the U.S. The issue isn't what caused the Depression, but what delivered us from it: Keynesian Economics. I never said the theory was without some flaws however.
radix3d 2 months ago
@radix3d Ever heard of the broken window fallacy? The war certainly did not get us out of the Great Depression. That is like saying breaking a window is good for the economy because it creates jobs. There is a finite amount of resources, and resources dedicated to war come at an opportunity cost to other industries. There are many reasons why investor confidence was lacking before the end of WWII. The Federal Reserve created a bubble in the 20s by keeping interest rates artificially low
UltraConservative298 2 months ago
@UltraConservative298 You're balancing a smaller waste against the larger waste of mass unemployment. Keynes talked at length about the marginal disutility in the housing market, in modern terms a stimulus to the housing market would create an unsustainable bubble. Whereas war spending or preferably more productive spending that lacked marginal disutility would not have the same limitations. The real limitation to Keynesian economics is inflation and a debt pileup, not waste.
radix3d 2 months ago
@UltraConservative298 In General Theory, I think in the second chapter Keynes said Classical economics was still a valid theory but it was only under the special case of full employment. He was aware and critical of his "big government" disciples that were advocating inflationary policies. You've failed to point out Keynesian economics true limitation: inflation.
radix3d 2 months ago
@UltraConservative298 And I'm not a statist, neither was Keynes. Old conservative retreat... make anyone you disagree with sound like Karl Marx.
radix3d 2 months ago
Sounds good except we aren't employing Keynesian Economics we're feeding sharks at the shark tank as corporate billionaires buy up our politicians and make them puppets to their financial interests.
FreeTheWorker 4 months ago
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It's really a shame when people think that over 50 million people have to die to bring back jobs and get the economy going again.
MrCollusion 4 months ago
Ladies, it was government intervention/regulation starting with the anti-trust laws of the late 1890's along with many other government controls and policies that lead up to and ultimately caused the depression in 1929. Your presentation is interestingly ironic and possibly moronic considering it was Keynesian economics or his type of thinking that caused the depression. You should read Ayn Rand's book, Capitalism, The Unknown Ideal.
MrCollusion 4 months ago 12
@MrCollusion You don't know history very well sir. Although I admire Ayn Rand's atheism, she was a sociopath. The markets do regulate themselves, but it is a slow process. Keynesian policies work. How many "great depressions" had we had between the 1930s and the 2010s? One. The economy was so unstable throughout the Progressive era that there had to be a way of balancing it out. Even investors rely on the government to keep the economy from collapsing. To do nothing creates great harm to our $.
TigerghostPictures 1 month ago
@MrCollusion hahaha. Should read the law of supply and demand first. But of course the Keynesian math is great to make yourself look right. I like how the "invisible hand" haters dont recognize the "government fairy" of Keynes horrible idea.
batcivic 1 month ago
That's a weird looking kitchen...
capnfooDRIVEin 4 months ago
Odd, how the first depression after the FED was a "GREAT" one.
trick29420 4 months ago
"I can read from a piece of paper. I am smart"
trick29420 4 months ago
The suppliers of this video are economic illiterates, and its consumers want to attend, University of Pink.
firmitas68 4 months ago
The brunette on the left is a total cutey-pop. That is all... :-))
jontycampbell 4 months ago
@jontycampbell I didn't catch her name, Alison, I think? Well Alison, you have lovely teeth, you should show them more often. What a schmoo.
jontycampbell 4 months ago
“To sum up Keynes: Arrogant, sadistic, power-besotted bully. Deliberate and systemic liar. Intellectually irresponsible – an opponent of principle. In favor of short tem hedonism and nihilistic opponent of bourgeois morality in all of its areas. A hater of thrift and savings - saying he wanted to liquidate the creditor class, exterminate the creditor class. An imperialist and anti-Semite and a Fascist. Outside of that, I guess he was a great guy!” - Murray Rothbard, 1989
Bazzito52 4 months ago
why cant I concentrate on what she is saying
morklind 4 months ago
It's all because of the FED we have these problems. What they fail to realize is that in the 1970's the reason we had problems is because of the collaspe of the bretton woods system. The derpession in the 1930's was caused by terrible FED policies and herbert hoover's actions of trying to keep prices sticky. Keynesian economics only works when you are in the deepest of depressions and all fields of business are in a rut, it has no reason to be used outside those times
batman93oo 4 months ago
@moneytrendsresearch I think if governments only do deficit spending without paying back the debt in a boom period they are only doing half of the job. Intervention itself is not the problem
lessiv 4 months ago
If the Fed can use inflation to tax the public any time it likes, then there's no reason why corporations favored by the US government cannot use that fact to continue to make profit hand over fist and using a portion to completely control the political process. Further, any time one of these corporations completely screws up, they can just pass their losses on to the public and skip out of their responsibility, never learning anything from it.
diginess78 4 months ago
The Depression occurred because of government interference. How do we fix it? asked Keynes. MORE INTERFERENCE! Lol no.
apell711 4 months ago
Ok guys obviously these are two students, who are making a presentation, trying to please their econ teacher so they can get a good grade. it's not fair to attribute the flaws in their presentation to naivete, as truth incorporated in the presentation may NOT get them a good grade.
Good job girls.
dabum2005 4 months ago
the fallacy in this video, besides thinking that Keynesian economics will lead us out of this problem, is the claim that after the great depression we no longer looked to the keynesian model
Rhabavvi 4 months ago
So, even though we had the semblances of 'government interference" with high tariffs and government support between the Civil War and WW1 under the American School, it was apparently "classical". Hmm. Oh, and that was when America became a major industrial world power. Coincidence?
andrewvegas11 4 months ago
yea, keynesian economics providing a "stable" economy. A stable devaluation of a fiat currency. Nice steady expansion of Government. Nice and stable increasing debt... Anyone ever ask themselves what MONEY is? If you are alive now, you were born and raised thinking it was magical. You had no reason to question its power. But when price inflation occurs through inflation at more dramatic rates, people will have to eventually question its real value - residual trust - and its fading every day.
margoliesmedia 4 months ago
Sad that this is what they still teach kids.. Keynes theory is no longer relevant, and probably never was. First of all, it is safe to say that we've never had a 'classical' economy since 1913; the date the Federal Reserve took control of our money supply. Interest rates were no longer controlled by supply and demand, but by central bankers. Gov't intervention has proven to NOT increase aggregate demand, it simply redistributes the wealth and inflation because of runaway borrowing. hence reality
moneytrendsresearch 4 months ago 47
@moneytrendsresearch don't think you understand the basic theory of keynesian economics. If your real problem is money supply you would probably be better served intellectually looking into the history of monetization. The debate goes back to the days of Jefferson, Madison, and Hamilton. Fiat currency itself is not the problem, the problem is the degree to which the right to monetize debt is abused.
makeithappen42zx 4 months ago
@moneytrendsresearch Where is this "proof" you have?
radix3d 4 months ago
@radix3d check a text book.
Phoenix5555522 3 months ago
@moneytrendsresearch
Even classical economists are ok with playing with the interest rate, they just stop short of any actual stimulus.
and your last point
"Gov't intervention has proven...because of runaway borrowing. hence reality"
Is most certainly up for debate, personally I believe that the stimulus prevented the economy from going into an all out depression.
Counterfactuals are always difficult to stand behind however. Advocates of stimulus can really only say "it would be worse"
cwooley89 3 months ago
@moneytrendsresearch probably never was? Proven NOT to increase aggregate demand?? Oh teach us great one!! Teach us the ways in which Keynes has fallen before you. Tell us the truth!!! YES REALITY -- THAT IS WHAT I WANT!!! YES!!!
PotentialEn3rgy 2 months ago
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arenor 2 months ago
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@moneytrendsresearch I enjoy your analysis, but I find it be completely lacking and unfounded. I would argue that our current monetary polices are a derivative of Keynesian economic theory. The basic tools of the Fed are the buying and selling of bonds, (OMP) discount loans, and reserve rates; these are all tools that run off of Keynesian economic theory. Inflation and government manipulation of the dollar, which ultimately leads to the manipulation of the economy is without a doubt Keynesian.
arenor 2 months ago
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arenor 2 months ago
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@moneytrendsresearch Though I know it would seem that my time frame is off, for the shear reality that Keynesian economic theory didn't come about, until nearly 30 years after another Federal Reserve (central banking system) started. Thus, I could just as easily say that Inflation is the father of the FED as well as Keynesian economic theory. A CSB and Keynesian economic theory are like brother's.
arenor 2 months ago
@moneytrendsresearch well keynes theory did elevate the great depression and America is going to slide off to extinction due to neo classical economics. In fact government intervention in Korea, Japan and China have been remarkably successful; the same with the Truman plan. Neo classical 0 Keynes 5
dancthegr 2 months ago
But she has nice breasts...
alsh2010 4 months ago 18
you're wrong about the 70-00 era. That was a seaming classical era and it is hard to discus in a classical vs. keynesian terms because Keynes never considered economies on a global scale. In the 70s the US government started planning for a global economy and continued it's Keynesian economic policy on an international level. The country's internal economics were being offset by the international policy and then around 2000 a government which lacked the understanding of the delicate balance came
cg0def 4 months ago
Because the 70s were so classical. Yeah. Bullshit. Keynesian economics are wrong. Keynesianism and big government are just fancy bullshit code for corporatism and a kleptocracy at this point.
The role of government is not to prop up and save anyone, but to just make sure that NO ONE has an unfair advantage. That'd be bullshit loopholes that some locales make new businesses and start ups go through, usually from established corps who don't want the competition and have paid off key officials..
PaganMars 4 months ago
@PaganMars Thanks for doing such a fine job showing that you have not been to college. If you did, the surely your major was not in the study of economics. Try reading a bit about microeconomics and macroeconomics and about economic indicators please before you make unwarranted comments. It will do a lot to clear you head of garbage.
calliopeamore 4 months ago
@calliopeamore Been there. Giving government economic intervention makes it a much more enticing offer for corruption and graft. We're not a machine, the economy is people. The only role of government is to enforce the rules: no bailing out losers, no unfair advantages, no loopholes to jump through.
And yes, my major is not economics. Why that keeps me from learning through other means and studying all dem dere olden economists from Marx to Mises and Smith is beyond me...
PaganMars 4 months ago
@PaganMars Sad u've no inclination 2 learn frm history & economics. Wat u pikup frm streets r garbled info frm intuitive thinkers w/ no scientific investigative knwhow. Guys like Stiglits & Krugman won Nobel prize in economics 4 a reason. Go 2 school guy & ur world will open up via scientific study & investigation. U like world w/o gov't regulations - so U want 2 repeat stock market debacle 1800s nearly killed France, great world depression 1929, world recession 1990 & 2007. Vote Ron Paul then!
calliopeamore 4 months ago
@PaganMars
Way for the government to grab more and more power....Ron Paul 2012
lostcauze88 4 months ago
Assertion that 1970's thru' 2000's was "classical economics" in the same vein as Adam Smith is false.
Ishpeck 5 months ago
Keynesian Economics has, at this point, proven to be an utter failure. Government interference in the marketplace prolonged the Great Depression, and as we see today, has prolonged the economic malaise following the 2008 crash.
Because governments have limited knowledge (like people), government interference will cause market distortions and prolong mal-investment. Solyndra is a great example--$585m investment in a business with an unsustainable business model, now collapsed.
nrpahcandrasya 5 months ago
Did you guys read this straight from your government issued textbooks? This would be hilarious if you guys werent serious. If classical economics is a failure, why dont you study the "depression" of 1920? Oh yeah, its not worth mentioning because Keynsianism didnt prolong it into a decade long government manipulated catastrophe like they did in the 30's. I'm glad I didn't waste the money to go to college now.
jdm43 5 months ago 2
@jdm43 thanks for bringing that up. it's kinda sad though.
selymak 4 months ago
Nice job ladies,
I believe you did a fine job of describing how politicians will react to short term problems, which disables the free market (invisible hand). Furthermore, the negative comments you received were from people who cannot listen well enough to understand your clearly described points.
kevinisaprince 4 months ago
they're like sheep being lead to the slaughter by their professors. talk about liberal university brainwashing at it's best. the great depression was CAUSED by government intervention of a sort via the federal reserve. they're the ones who created the market fluctuation when they began devaluing the dollar instead of keeping it equal with gold. our nations currency is gold not the dollar. the dollar is merely a piece of paper that's an IOU. the real money is the gold you can no longer demand.
KingofComputing 5 months ago
Keynesian economics lead to stabilization?!! Good grief, talk about getting brain-washed. The New Deal made things worse.
cadehalada 6 months ago 2
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@cadehalada FDR didn't actually increased gov spending after new deal, WW2 did and by massive spending, economy actually rose (same thing you could say about nazi germany before war) and after WW2 USA was strongest economy in the world and after war, every president until almighty reagan balanced budget and lowered USA debt
Lius525 5 months ago
The "invisible hand" is always in the friggin cookie jar
sunandmoon111 6 months ago
Classical is an umbrella for Hayak, Say, Friedmann and a few other aka those who believe markets regulate themselves more or less. Keynes and a few others belived boosting agregate demand you could stimulate the economy. When speaking in broad terms they are right.
Most economists today belive in a little of everything, so you can´t really tell what is what.
MortenDanPedersen 6 months ago
@MortenDanPedersen Actually what Lius525 writes is true.
ToxinalX 6 months ago
You said 1970-2010 was Classical, what a great joke. First of all, it's called Austrian economics, not Classical. Austrian economics ended in 1913 when the Federal Reserve was instituted. Second, 1970-2010 had 1) deficit spending 2) SEC, FDIC, and more regulators 3) the federal reserve loose monetary policy. Look at 2000-2001, Bush increased the size of government and reduced taxes, aka Keynesian economics. You're lack of knowledge about the topic is embarrassing for a college student.
kjshins 7 months ago
@kjshins keynes would raise taxes under increasment of goverment, what a bullshit you just wrote! 1980-2011 are monetary policies inspired by works of milton friedman (deregulation, tax cuts etc) , Nixon was keynesian, Carter I assume too. USa was never under austrian economics, but classical (yes that is completely different thing, have similar values, but it's not same...) You lack basic knowledge history....
Lius525 6 months ago
@Lius525 I'm not sure what deregulation you speak of. The SEC (You know, the thing that regulates the market) was never abolished and oversaw everything. You should really read up on the Community Reinvestment Act, which forced banks to make the bad loans in the first place. You should also research the history of interest rates and the direct correlation which shows that lowering interest rates creates bubbles (1920's, 2000's for some examples). You need to read up on history, not me.
kjshins 5 months ago
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@kjshins housing market were only catalyzator, not the actual cause of crisis (not to meantion, bankers actually knew about toxic assets, they bought it, sold it and bet against it for short term gain), same thing will happen again until laws are fixed (like germany did after crisis). And having balanced budget isn't something that only austrian economy does - Eisenhower recordly lowered debt and he was still using keynesian model. And by deregulation I mean like repealing Glass–Steagall
Lius525 5 months ago
@kjshins Second from 80s deficit spending was mainly because usa lowered taxes acrossed the board, mainly on corporations and highest income, yet they kept everything same in the goverment (like very big military force), Clinton for a brief time raised taxes and balanced the budget. more about deregulation in 80s: go to - bit *dot* ly *slash* oQKXwH - BTW Obama and Clinton are almost as bad for me as republicans, they are doing same thing and have "former" bankers run economy (Geitner, Summers)
Lius525 5 months ago
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@kjshins BTW one more thing about "socialist" obama, they are now lending banks money with such a low interest, that banks actually don't lend it to the people, they instead buy USA tresury bonds, so they are making virtually making free money and guess who will pay for that.... yeah such a big socialist. Please read up about monetarism and you could watch "inside job" about financial crisis. - Hey I watched many interviews with Milton Friedman, so why should only I suffer. :D
Lius525 5 months ago
@Lius525 Uhhh can you site where I said Obama was a socialist? He's a Keynesian but no socialist.
kjshins 5 months ago
@kjshins if you let the government grow it won't stop growing.
selymak 4 months ago
It's not even correlation (between tampering with interest rates and bubbles)- it's causation!
Goodatconnect4 5 months ago
@kjshins IT IS called classical economics. But no worries, it's an easy error to make.
ToxinalX 6 months ago
@kjshins You meant to say Bush monetary policy right? Not to be confused with Keynesian.
Bush era was one of deregulation which was not Keynesian. The only thing Bush did that even resembled Keynesian economics would be the stimulus package, but yet when you look at the stimulus package from Bush you realize it is not a stimulus since there were too many tax cuts in there and not enough money to be a stimulus. Obama's stimulus package was the same deal, too much tax cuts, not enough money.
Neosaigo 5 months ago
@Neosaigo Where do you suppose we get this money from? You have to take it from people or businesses that were safe with their money and did not invest from the bubble. You are punishing good businesses to save the bad or dig a ditch and refill it.
kjshins 5 months ago
@Neosaigo Ok but by running up such large fiscal deicits, to stimulate the economy, that is the core concept of keynesianism, if bush was monteraist, then he would slash public spending lower business and high income tax rates to try stimulate growth, its obvious that bush did revert back to a keynesianism approach to try keep the economy driving. And further if he was monterist then he wouldnt put money into the economy as when the economy slows and unemployment rises this is the monterist way
ryanthomasmccallum 5 months ago
@Neosaigo to control inflation, this in turn would remove stress from the usa dollar and is how monterasim would work if bush used it properly, but he fucked up and did either way half assed, which fucked the global markets
ryanthomasmccallum 5 months ago
also the first bailouts started under bush, not in 2010
Terje1337 7 months ago
yup the stabilizing sure helped you guys "over there"
lmao!
Terje1337 7 months ago