First you need to understand that the Great Depression was well on the mend prior to Government intervention and that the massive unemployment was casued by this intervention. Second is that Keynes only applies the business cycle to govenment. Third, since gonernments never retract as times get good, the Keynesian model must be tossed.
The System today encourages global enslavement or neglect...
The only competition that Corporations have today is - What country will work for the cheapest...
The System has re rigged itself so much that is almost purely consumption based, Leaving Unbalance. Little production, and great demand...keeps prices high too.
FREE MARKET, FREE CURRENCY, FREE COUNTRY.
Free to work, free not to. No Entitlements, except God given constitutional Birth Rights.
Capital is generated from savings. First you must live below your means and save. Then you invest, consume, lend, leverage debt etc.... Say someone wanted to store their savings in a vault instead of investing in the banking sector (via savings account). What form of "money" do you suppose would succeed at protecting savings best?? Can you please explain?? Thank you
So you are saying that just because ppl don't have a degree in keynes economics they would not be able to understand economics? There is no magic behind how the economy works. It's simple laws of nature. If you over spend there will be less to spend in the future, and if you save you will be better of when things turn for the worse.
What strike me most is that in the begining of 2008, most keynesianists did not see all the problems that were so easily spotted in the market at that time allready.
There was never a great depression during the Gilded Age
Also the Great Depression in Britain happened under Labour's watch!!! Hahaha
Keynes never talked about tackling inflation like that you dunce. That sounds like a stupid idea regardless. High taxes in 70s Britain didn't help stagflation getting to 25%, did it?
Actually Stagflation and Japan completely discredit Keynes.
You claim to have an economics degree but I find that very hard to believe given this video.
@bonfirejovi I Work with My Hands...I Labor in Work, I enjoy it. I HATE TAXES.
Workers should Acquire things with their labor not be taxed on their work.
Can people equate Americas same situation comparatively- If currency did not exist.
Americas situation today is equal to- a tormented king and his henchmen, taking the last bushels of wheat from family's, and telling businesses to leave.
Dear Mike.I read the comments below and see that some in your audience don´t
have spent time to see your video.Neither do they read my short comment that
Philips Curve is a creation that not have anything to do with Keynes.It´s in the Neo-classical tradition,and first version was from work of Irving Fischer before Keynes
General Theory,and after that by a australian Neo-Classical economist
named Alban Philips,and later adopted by Neo-classical syntesis of Solow and Samuelson 1960.
@zsylvana What the fuck are you on about? Paul Samuelson developed the interpretation of the Phillips Curve that includes unemployment and prices and he was a MASSIVE keynesian. Please stop lying. The Phillips curve is Neo Keynesian lie and I am sorry that Keynes died before he can stop his loony followers who bastardized his ideas.
Friedman did agree that Phillips curve can be true in the short term though.
The Phillips curve has been dis proven throughout time, and is irrelevant. I do not understand why main stream economists still teach the Phillips curve? Maybe it is due to the fact they have to live in the glory days when they were able to make the argument that government spending and money printing was productive, and people were so ignorant about economics that they bought it? History and economic trends will tell you the Phillips curve is BS, no matter what formulas you try to use.
It would depend on where "no where" is. In America savings rates have always been low (> 5%). In the 1980's & 90's there were periods of negative savings (borrowing more then saving).
In Asia folks routinely save 15% to 30% of their income.
Wealth is a function of ones ability to generate income and save. There is no income (i.e no good jobs) in the middle of "no where" in America. One is lucky to merely survive.
See my video: The Attack On Labor, based on a book The Big Squeeze.
@radiohogan So wealth is both one's savings and the ability to create more income?
Would that mean that someone who was rich beyond measure (more savings than they could spend in their life) but was unable to generate more, would not be considered wealthy?
Wealth is your assets, minus your liabilities - plain and simple. It has nothing to do with ones prospects.
However, your original question was about how to increase wealth in an area where prospects for increasing income are low. Certainly, anywhere in Post Modern America the increasing ones prospects for creating wealth are limited.
You fail to understand that Keynesian economics is not based on Keynes work but the work of his followers. Keynes never addressed inflation because it was never a problem during his lifetime. Before his death as it was beginning to be a problem, he promised to "turn public opinion" on it's head as he dealt with economics on a crisis-by-crisis short-run basis. He died before he was able to do so. Phillips curve was a Keynesian idea because it was formulated by his followers who have sway today.
Capitalism is the historic evolution of private property relationship of alienation,exploitation and suffering of humanity in a modality of production for profit in a world market of ARTIFICIAL SCARCITY and manipulation to perpetuate the conditions of exploitation in the interest of the Owning/Ruling elite. Capitalism is the monetary web of deception and suppresssion of humanity for the abstract process of capital accumulation and concentration . A system of dehumanisation and devaluation
I'm not saying whether the Philips curve actually rebutts Keynes or not, but saying that the Philips curve is a straw man because Keynes wasn't alive to respond to it, is like saying that Quantum Theory is a straw man rebuttle to classical physics because Isaac newton wasn't alive to respond to Einstein. Please repost this video using an argument that actually addresses the theories.
orbenn is absolutely right. Yes, Keynes may not have been around but there are quite a few formidable Keynesians. Keynesians who Friedman, Hayek, Rothbard, and the like, have had to contend with.
I never heard of the Phillips curve, but it seems to deal with monetary policy. Keynes' theory focused on fiscal policy. Two seperate things. Keynes would not have an answer. And I have a Bachelor's in Economics. Friedman was brilliant. Watching his videos on youtube can give you the same education minus the piece of paper.
Where did you go to college? Did you read all three (3) of Friedman's books?
The Phillips Curve is an observation that in the 1970's there was both a recession and Inflation (stagflation) at the same time. Some seek to use this observation to refute Keynes.
Stagflation can be controlled by either fiscal or monetary policy. Keynes' answer would depend on his genius - he was an expert in monetary policy long before he invented fiscal policy.
ok because i don't understand economics tell me where im wrong Y = C + I + E + G so according to this if I is down there should be more unemployment and keynes says increasing C will fix that problem, but too much G will decrease I right? and so here we are again decreasing I causing unemployment, unless the G just increases (printing money+ multiplier effects) which if you believe in math, inevitably creates nominal inflation, hence unemployment, phillips curve
So why don't all the keynsians, and new keynsians, have a responce to why the phillips curve does not disprove the theory? maybe how government spending got us out of the Great Depression, oh wait that lasted 10 years and had 30% unemployment at one time hmmmm come to think of it when has keynsian economics acutally reduced unemployment. I challenge the author to find one. Oh maybe i'm just one of those people without an advanced degrees unable to grasp the complexity of the theory.
Here is the problem with this video and the keynesian "apologists" and defenders. They have no response to the phillips curve, the author of the videos essentially says because keynes wasn't able to respond to the criticism and because keyns is god no one can understand the infinite wisdom of his theory, the phillips curves proof that all keynsians are wrong is invalid.
The Philips Curve has nothing to do with Keynes. It has to do with the failure of politicians to follow Keynes' prescriptions. Our man Zac does not understand economics. So much is counter intuitive.
Today is my first foray into your vids other than econ102 one, and it appears you already know some of the things I have argued there. So why are we arguing about them?
Anyway. Lets get this straight. Keynesianism is just a label. The fact that it has 'Keynes' in it doesn't necessarily align it with JMK. pajholden gives a good account in his video of how the 'Keynesian' stance was modified in the light of the Phillips curve. It may have put their noses out of joint but it didnt discredit Keynes
Keynes and people that think like him remond me of Michael Jackson's "doctor". He gives his patient what the patient asks for rather than what he needs. Pretty soon, he needs pill to wake up, pills to go to sleep, pills to do everything. If he doesn't feel himself, its because he isn't taking enough medicine and a new therapy is invented. One night he goes to bed with an IV to knock him out, and his heart stops.
I often use analogies to put conditions in abstract systems in a context that people lay people will understand. The point is that the central bank is trying to do manually, and doing it poorly, what a healthy system does on its own. And that the unintended side effects of earlier missteps are used as rationalizations for doing even more because the real causes are either not understood, but politically impossible to admit to.
And yes I have stidied economics at a major university but I'd have to admit that my real understanding came much later in life when I was able to develop some perspective.
You don't need the Philips curve to discredit Keynes theories, they discredit themselves if you read what he's said and really understand economics.
The only people that agree with him are politicians and liberals. He provided convenient academic cover to excessive borrowing and spending and general intervention in what would have otherwise been self correcting economic processes.
He shows no apreciation for the natural processes of free markets and seems to enjoy inventing new interventions to counter the effects of previous interventions. He often mistakes the cure for problem.
There a different academic communties but many of them are mistaken. People seems to subscribe to the academic school of thought that supports a prejudice they already posses. People that like Keynes see the natural world as cruel and unruley and in need of a master to rein it in.
You make vague generalizations, rather then offer proofs or sources. You fail to specifically mention a single Keynesian theory you consider incorrect. You display no knowledge of economics. Don't be shy. Let us know exactly what's wrong with Lord Keynes.
One of his ideas was to make money have an expiration date. This was so that citizens couldn't save any money and would have to spend it. You hear these kinds of ideas even today about trying to encourage people to spend money and go further into debt. It shows a lack of understanding between the difference between consumption and investment.
It misses the whole idea that capital is formed from savings. No savings, no capital,. No capital and we all work with our hands instead of tools.
People that attack Keynes without a knowledge of economics are elitists who hate the poor, working class ans lower middle class. People who don't understand that 30% unemployment is cruel, are without empathy or compassion. This would encompass Libertarians, Austrian School & Friedmanite Groupies, Conservatives & Fascists.
Didn't Milton Friedman write we are all Keynesians now?
But you only can get 30% unemployment rates by interventionist type economic policies like Keynes. Look at all the economic state of the country today. We're suffering from the hangover of a debt fueled paty created by artificial and low interest rates set by the central bank and politicians. By preventing the smaller dislocations of resources from being liquidated they allow larger imbalances to accumulate to the point that even the central bank cannot control them (can't go below 0% rates).
Keynes' "interventionist policies" began well after the publication of the General Theory" in 1936. The Great Depression began in the 1920's in England and lasted until the early 1960's. The Gilded Age (1870-90) was a 30 year Depression well before 1936.
Rather then Keynesian fiscal policy, your argument is with monetary policy advocates, like Milton Friedman.
Rothbard teaches at a very small college near where I live. Allow me to recommend a Princeton University professor's book on the Great Depression - Professor Ben Bernanke.
I'm not sure if we're talking about the same man because the author of this book passed on more than a decade ago.
I've read some of Mr. Bernanke's stuff and can't say I agree with all of it. People like to say he was a student of our first great depression, he must have gotten an F. Summing up his thesis, his opinion is that the way you avoid a hang over is to never stop drinking. The school of thought I subscribe to says that the way you avoid a hangover is to never have the party.
How long am I willing to wait? As long as it takes, there is no alternative. This kind of thinking "In the long run, we're all dead" is such utter nonesense. Sure an individual might only live 75 years, but a society hopefully goes on much longer than that. Screwing your kids future to have some comfort now is morally corrupt.
So, according to your way of thinking, it is good for a child to have an unemployed dad. The corollary to your way of thinking the child benefits from lower household income. You seem to see poverty as a romantic morality play. The Robber Barons enjoyed workers in poverty and either unemployed or on the edge of unemployment. Marx wrote of how capitalists enjoy the "Reserve Army of the Unemployed" to keep labor costs low. You are rooting for the new Robber Barons in our New Gilded Age.
It almost like a father sells his children into slavery for some money so he can say his children don't have a poor father.
Anyway, the conditions you're describing don't occur naturally. They require coordinated central control to cause this level of disallocation of resources which creates the loss of producivity and resulting poverty.
The elitists are the central planners that feel that they are superior to the population of indepenent arbiters for allocating resources.
Are you a fan of Marx? I thought this video was defending Kenyes.
Those robber barons fronted the capital to build the railroads that opened the west.
Capitalists aren't good or bad. They just seek to match capital with willing labor to take profits. Everyday we enjoy the producst they produce by this very process. Workers discount their labor in return for immediate payment. The capitalist must wait untill products are finished and sold before he gets his money.
See my video about Marx. I consider Marx the last of the classical economists, a father of sociology, a philosopher, a revolutionary, a newspaper publisher and a man in the midst of a mitzvah. How can one not admire such an intellectual giant?
The railroads were built by Robber Barons who had no capital, but were eager to bribe government officials to secure free land right of ways. The Robber Barons then sold bonds to Europeans.
Capitalism and capitalists are evil from the pencils up.
He might have have thought he was helping people but like the saying goes "The road to ruin is paved with good intentions." A lot of his ideas smell of populism such as his labor theory of value. They're more popular than accurate, kind of like religion.
I'd recommend reading someone that's had the actual experience of living under a government trying to follow his theories. Start with some Ayn Rand.
Marx is considered the last of the classical economists. All economists before Marx held a belief similar to the Labor Theory of Value. Some say, international trade & competition are making the Labor Theory of Value meaningful once again.
I lived under Reform Socialism in Holland and loved it.
So you're saying that everyone who is dead is inherently correct (because its impossible to criticize them because they aren't around to defend themselves)? Very logical.
Keynes did argue that, because of sticky wages, inflation is necessary to push real wages down and reduce unemployment. The Phillips curve illustrates this proposed negative relationship between inflation and unemployment. The coincidence of inflation and unemployment in the 70s (stagflation) contradicts the idea.
I would describe your debating style as cute or disingenuous. Rather then put words in my mouth, allow me to reiterate my view.
The Phillips Curve critique is not a criticism of Keynes. Rather, it is a critique of politicians who were economic illiterates who failed to understand Keynes. Keynes advocated high interest rates & lower spending, when inflation is high. This is what Paul Volker did at the end of the 1970's.
1)Once again 100 101.Let´s set the record straight.Keynes have no theories in the direction to a Philips Curve.His idees was not of the kind of Neo-Classical Economist A.Phillips
wrote about 1958.History in brief is that Alban W. Phillips 1958 diagram empirically relating money wage growth and unemployment .The searchers for a "Neo-Classical-Keynesian Syntezis" realized immediately that this was what was necessary to "close" the Keynesian model.
2)They asked how is one to justify holding money wages rigid?The simplest solution was to appeal,as many did, to labor market imperfections,money illusions, etc. All these thoughts were pretty scattered until they stumbled across Phillips simple diagram infamous "Phillips Curve".Richard Lipsey (1960) and Paul Samuelson and Robert Solow (1960) integrated the "Phillips Curve" into the Neo-Keynesian edifice.
Keynes General Theory,1936 concentrated of natural reasons on,unemployment.
3)However, Keynes's ruminations on inflation in his "How to Pay for the War", 1940 gave clear indications of how to integrate inflationary pressures into his theory, but he died before he had a chance to set these down more systematically.
4)As originally expressed by John Maynard Keynes 1940 and Arthur Smithies 1942, "demand-pull" (or "inflationary gap") inflation is generated by the pressures of excess demand as an economy approaches and exceeds the full employment level of output. Output, recall, is generated by aggregate demand for goods - thus, whatever aggregate demand happens to be, aggregate supply will follow by the multiplier.
5) However,at full employment output, if aggregate demand rises, output cannot follow because of full employment constraints. Consequently, with the multiplier disabled, the only way to clear the goods market, then, is by raising the money prices for goods. However, this is only a one-time increase in prices; inflation implies a sustained recurrent increase in prices. Keynes and Smithies explained inflation proper by appealing to distributional effects.
1)Kruzer.Uncle Milty had a pretty open mind when it comes to prove Liberalism or what so ever.Probably all scientists have political biases they would like to see proven,but a persistent theme among Friedman's critics is that he is unusually willing to cut corners to prove his points.Paul Krugman writes:"I think it is fair to say that up until the late 1960s Friedman and followers,while influential, were regarded by many of their colleagues as faintly disreputable."P.Krugman Peddling Prosperity
2)KruZer.Economist Edward Herman writes: "Friedman's methodology in attempting to prove his models have set a new standard in opportunism, manipulation, and the abuse of scientific method."Edwards .S. Herman, Open market .1995
KruZer.With all respect,you don´t see the big picture.Friedman admired Keynes,as the "the greatest in 2000 century economy" especially Keynes early monetary work.But he had other sides Milton.F,with no doubt a great economist,was also a propagandist and policymaker.Here he uses his reputation to introduce the "Natural Rate of Employment",to fight inflation,something Keynes never accepted,by using Philips purely Neo-Classical work,invented after Keynes death to dishonestly attac Keynes
"5. If no plausible adjustment suggests itself, reject the data as unreliable
6.If data adjustment or rejection are not feasible, express puzzlement. 'I have not been able to construct any plausible explanation for the discrepancy'"Paul Diesing,Prof.Chicago University Philosophy Science of Methods in Economics &Socialscienses "Hypothesis Testing and Data Interpretation: The Case of Milton Friedman," Research in the History of Economic Thought and Methodology, vol. 3, pp. 61-69.
3) Edward Herman, Triumph of the Market (Boston: South End Press, 1995),p.36.
4.)Paul Diesing, "Hypothesis Testing and Data Interpretation: The Case of Milton Friedman," Research in the History of Economic Thought and Methodology, vol. 3,pp. 61-69.
5.)Peter Pugh and Chris Garratt Introducing Keynes (Cambridge, UK: Icon Books Ltd.,1994), p.152.
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Where do you get this notion that I like Friedman? I have never liked Friedman.
I used to be an Anarcho-Capitalist, and then I had a fallout with Austrianism about 2 months ago, and now I completely reject Austrian Economics. Retrospectively, it seems I was in a 'rabbithole' of a priori ism. I also reject Neoclassical econ (and its subsets of Neokeynesian/Monetarist schools) and Marxian econ (upon basis of the Transformation Problem.)
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I do not really declare allegiance to any singular school of economics simply because I do not know enough of any other school to do so. So fare I have been reading some of Ian Steedman's stuff on Sraffian econ, but I think I would like to delve into the foundations of Post-Keynesian econ. IDK, I do not really know enough about either of these schools. Also, New-Keynesianism appeal to me, because I mostly agree with them upon realms of monetary policy and gov. intervention.
OK!LOL!I never heard anybody goin throw the whole bunch of schools,and rejected them all!!LOL!It must been a hard road!!Are there any school left to go in and out to?But i am glad you don´t like that bloody Friedman.He also runned in out! But from one dictator to the other as advicer!Made some bucks on it don´t you think?But all the best to you in your Economic-School research:D !Tell me if you find a good one!
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Well, really, I only ascribed to one school while simultaneously understanding and rejecting the other two (Neoclassical & Marxian.)
"I never heard anybody goin throw the whole bunch of schools,and rejected them all"
It seems to be a pretty common phenomena. You must have not met many economists. Actually, most economists understand and borrow from multiple schools. Simultaneously, they understand and reject multiple schools . So I do not really know what you are talking about.
Thank you a lot for the advice about Mr Keen´s book.And sorry if i am sounded rude,about "schools".It wasn´t my intention.I think it´s good you have a open mind.
You quasi-socialists just lie and lie, hoping that the people you're talking to don't know enough to call you on it. Keynes died in the 40s, his theories were proven wrong in the 70s. Now it's time for Friedman to go away, so that we can actually return to REAL economics. The time for Mises/Bohm-Bwerk/Hayek/Rothbard is coming. Thank God for Obama, he's going to make it undeniably true.
2)Though it´s interesting that the founder of the term NAIRU,(Non-Accelerating Inflation Rate of Unemployment referred to as the "natural rate of unemployment" about 6-8%),Phelps and his follower in this question,Friedman,make this connection to J.M Keynes.Keynes did not invented Philips Curve for sure,but Phelps is with no doubt father to the cruel NAIRU concept,that is critisized today as one of the worst work in Neo-Classical mathematical tradition.
1)Phelps critiuque of Philips Curve is dishonest in my opinion.Of course he and Friedman know it was
William Phillips,that wrote a paper in 1958 titled "The Relationship between Unemployment and the Rate of Change of Money Wages in the United Kingdom 18611957",in the quarterly journal Economica,1958,and 1960 Phelps own teachers,Paul Samuelson and Robert Solow devolopted Phillips work.And as early as 1920-tees, American economist Irving Fisher noted this kind of relationship.
A straw man is a false presentation of someone else's argument. Whether they are dead or not is irrelevant. I haven't heard you say how anyone misrepresented Keynes.
Anyone who understands Keynsianism should be able to respond to the phillip's curve argument if there is a good response. I'm waiting to hear what it is.
Also, it is not true that having a degree in a particular subject is necessary for discussing it.
Keynes called for higher interest rates and/or lower government spending when there is inflation. This is what Fed Chairman Paul Volker did. He followed Keynes' advice.
While it is unnecessary to have a degree in a subject to discuss the subject, it helps. This is especially true of economics.
The Phillips Curve observations are about how politicians act and not about what Keynes wrote about and and recommended. When Paul Volker became Fed Chairman, he used Keynes' theories (recommendations) to raise interest rates and cut off inflation.
You're such a useless fool. Keynes said fighting off recessions means governments must increase spending and flood the markets with liquidity; that is, to create inflation in order to lower interest rates, and stimulate "aggregate demand." During inflationary periods the government should increase taxes and LOWER interest rates. But what happens when both occur simultaneously? Don't ask Keynes, he thought it was impossible to have both; recessions always meant deflation! or under full capacity.
"Thus the remedy for the boom is not a higher rate of interest but a lower rate of interest! For that may enable the so-called boom to last. The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom." (General Theory, p. 322; emphasis added, but the exclamation point is Keynes's own.)
Keynes was concerned with solving the problem of a depression, deflation and massive unemployment. Friedman was concerned with solving rapidly rising inflation and Stagflation and expanding Government and Unions impact on free markets. Two great men facing two different sets of economic and social problems. But CHINA and INDIA have solved the worry over To much money chasing to few goods and services =Inflation Friedman's worry.
Yes, real income (i.e. income adjusted for inflation) in the USA has been declining for 31 years, while rising in other countries. But, what does it mean? What perspectives occur to you? What does it prove?
While we know what Keynes was concerned with because he wrote many books that were seminal works, Friedman is principally known for three books: (1) "A Monetary History of the US" [written with Anna Schwartz], (2) "The Consumption Function" {the actual title is longer} (3) "Capitalism & Freedom." It's hard to say what were Friedman's concerns based on his professional work. While Keynes was an economist, Friedman was (and is) a TV / YT personality.
Its common knowledge what both men where most concerned with and what books they wrote. Friedman and Hayek both won Nobel Prizes in Economics. Surely youre old enough to remember why they became popular in the late 70s early 80s. And why Thatcher and Regan both embraced their views. Im not against socialism but todays Friedman or Hayek bashing is as misplaced as Keynesian bashing. Times are always changing and so should solutions.
The difference between Keynes and Friedman lies in the pragmatic consequences of their therothical work.While Keynes "General Theory" succeded to do was is was meant to do,defeat a depression.Friedmans 2 Original contributions to Neo-Classic Theory,Money Supply and Permant Income(for that he was Nobel Rewarded),was 2 gigantic failulures.The Money Supply was only implemented for a short while in US and U.K,and nearly bancrupted those countries.About PI se Mike Hogans "Friedmans Overcleverness"
Naomi Klein is the self-proclaimed self-promoting "Economic Expert" (drip-under-pressure) who is the made for TV 30 second sound bite Friedman basher. She was not even born until 1970. She is publicity hound who knows how to jump on a bashing bandwagon to make her famous and money! She is a FOR PROFIT AND FAME ACTIVIST.
Klein spent her teenage years as a mall rat, obsessed by designer logos. ( her own admission) As a child and teenager, she found it "very oppressive to have a very public feminist mother" and she rejected politics, instead embracing "full-on consumerism". So while were dying in Vietnam and layed off with stagflation Naomi is a shop-ahalic hanging out in malls.
While I have no respect for Ms. Klein you'll be please to know I was againest the invasion of IRAQ from the moment the Bush adm. started the BS about WMS talk. And I like Jimmy Carter and Jack Kemp who long before Ms. Klien spoke againest the war with out looking for a book deal.
"The Money Supply was only implemented for a short while in US and U.K,and nearly bancrupted those countries" ????? So your saying they stopped the flow of money? What did we replace money with clam shells?
1)What happened? Monetarism was tried in Great Britain during the 80s, under Margaret Thatcher, and it proved to be a disaster. For almost seven years, the Bank of England tried its best to make it work. According to monetarist theory, the British economy should have enjoyed low inflation and high stability. But in fact, it went berserk. The economy sank into a deep recession, while lead economic indicators zigged and zagged.
2)Unemployment,soared from 5.4 to 11.8 percent. Between 1979 and 1984, manufacturing output fell 10 percent, and manufacturing investment fell 30 percent. Production recovered to a respectable 2.8 percent growth,but it became clear that high unemployment was a feature of the British economy. Eventually, the Bank of England came under overwhelming pressure to abandon monetarism, which it did in 1986. The experiment was such a failure that not even conservatives abroad wish to repeat it.
3)U.S. Federal Reserve announced in 1979 that it, too, would follow a monetarist policy.Many thought that monetarism would restore some responsibility and stability at the Fed. Chairman Paul Volcker apparently agreed, and under the name of monetarism contracted the money supply down to a steady level. This produced a deep recession.
4)In 1982, the Fed suddenly abandoned monetarism and reverted to a Keynesian policy. In that summer it sharply increased the money supply, and a few months later the economy roared to life, in a recovery that would last seven years. Milton Friedman was furious at the betrayal, but he got little sympathy from his fellow economists, who were witnessing a monetarist disaster unfold in Great Britain.
I'm not trying to pick at you I'm sorry, but I do think you have sold yourself short in the study of economics if you see the two side as Keynes vs. Milton. Free markets are the only road to a free society. You seem like the kind of guy that likes to feed his brain, I think I can suggest some great food for thought. Read the "The Austrian School Theroy of the Tread Cycle" it is a collection of essays from Hayek, Haberler, Mises, and Rothbard, you will see a new light turn on!
I think Friedman was an idiot and we can all thank him for our federal withholding on our paychecks. He was the one in the Treasury that turned every payroll department into a unpaid tax collector. The withholding helps mask to lower income people how much the government takes. If we had to write a check for the full amount at the end of the year, I think we would see much lower taxes and less of a wellfare state. Read "Milton Friedman Unraveled" by Rothbard for the free market view of Milton.
Focus on Milton as the arguement for the free markets and individual iberty shows sloth in your understanding of economics. Why do you not mention Mises, Hayek, or Rothbard? Kenynes is flawed ans the above noted prove it! Why focus on the Chicago School watered down statist monetrist view when you speak of free markets? You must know very little to not speak of Hayek. Study the Austrian School sometime buddy and them tell me how you think Keynes is still right.
Does this mean you are going to read some Hayek or Mises to gain an understanding of the theroy that proves Keynesian theroy is flawed? Keynes has no regard to the value of capital by means of producing and saving. Keynesians say that spending represents a good economy no matter if the spending is because of lax policies of a central bank. Keynes knew nothing about asset bubbles, Mises at the sametime as Keynes knew about asset bubbles and how the actions of a central bank affect an economy.
What a nonsens! Keynes could not reply to Friedman or Phelps because he was dead by then??? What a joke!
Science is about explaining the world. Helping us to understand the real world, maybe a bit of causality but.... That is different. Keynes had an answer, in the long run we are all dead! Gov't demand increase will lead to inflation and inflation will lead subsequently to price and wage adjustment. The Philips Curve, PC, just states that fact. Nobody can be fooled. Gov't spendg doesn't work!
Just because someone doesn't agree with the Philips curve doesn't mean they are uneducated in economics. History has pretty much disproven the Philips curve. Within the near future, we will be experiencing a trend of unemployment increasing as well as an increas in inflation.
The analytic framework was very convincing, but this feeling they had, that they could press the right buttons and manage the economy pretty exactly, for some reason it turned me off.
Paul Volcker was not a Keynesian.... The ECB before 1980 was not for controling inflation.
Keynes was for price controls (if he wasn't he didn't speak out against it... I would suggest that you do as Keynes suggests
When the facts change, I change my mind. What do you do, sir?
Your work is appreciated. As you know, American propaganda has made him into an iconic figure. You have totally destroyed my respect for Paul Volcker. In their effort to control inflation, Central Bankers literally work for the rich. Inflation destroys the wealth of the rich while it helps the working class, poor & lower middle class stay employed in that it helps avoid recessions.
Inflation doesn't help the middle/lower class Mr. Hogan, it only helps the middle class that are deep into debt. The sound investing middle class that actually saves their money are hit by inflation the hardest, you should be able to see that. Employment vs. real job growth is not the same. Yes Obama can create jobs by having people put green meters on your house, but when that project is complete, who will profit from it? How is the allocation of capital good for the future? It's not!
The rich prefer deflation (today's reality) because it increases wealth, while it causes chaos, depression, poverty & unemployment. The Fed was created by wealthy bankers and they continue to control appointments to the boards of the different reserve districts.
I also appreciate your presenting the perspective of John Kenneth Gailbraith. I did not fully appreciate him before your work. Keynesians remain in solidarity with the poor, working class & lower middle class.
INTERVIEWER: When did you begin to have doubts? How early did you begin to become skeptical about things? (The keynesian Dogma at Harvard)
PAUL VOLCKER: I was already skeptical. I guess I'm skeptical about everything. I've gotten worse in my old age, but I was a little bit turned off by the precision and certainty that these people attached to the doctrine.
"That attitude changed in the 1970s, and what happened in the United States, similar to what happened in Britain, had a big influence on others."
What Paul Volcker did in the 1970's change the role of the central banker. Before 1980's the accepted Keynesian dogma was that inflation was not something that should be worried about according to Volcker.
Those priorities changed after 1980. "The Anguish of Central Banking," and it was a long plea to understand the difficulties of central banking and the difficulties, and even impossibilities, of dealing with inflation in the modern economy when there were so many other points of pressure and pressure groups that went in the other direction, leaving the Federal Reserve -- [and] by implication central banks generally -- rather impotent.
PAUL VOLCKER: To the extent they were rooted in unfortunate interpretations of Keynesian doctrine, including this idea that inflation wasn't so bad and [that it was] better not try too hard to get rid of it, it had a common cause with the British problem, which was essentially deeper than ours was. We had the Vietnam complication, which they didn't have, but structurally they had gone much further down the road of government control and socialism than we had.
PAUL VOLCKER: I was a great admirer of hers. She was taking a tough stand, trying to change the direction of Britain. They had had a lot of the problems that we had in the 1970s, so I had enormous respect for what she was trying to do. I thought she was much tougher than I ever would have been [in] non-monetary areas. I may have been reasonably tough, but in other areas she was much more driven than I was.
but she was certainly looking for reinforcement of her own ideas about the importance of dealing with inflation in the UK. She probably thought she was giving me moral support, which she was.
So to sum up Volcker said that he was part of a change in policy that viewed inflation was bad. Which many Keynesian disagreed with.
Volcker though that a recession was inevitable. But Keynes thought that the recessions and the business cycle could be avoided through correct fiscal and economic policy.
Prominent Keynesians JK Galbraith disagreed with Volcker policies. Therefore Volcker is not a Keynesian. What Volcker did was a break with Keynesians ideology and not continue it.
INTERVIEWER: Did you approve of or disapprove of the Volcker recession?
JOHN KENNETH GALBRAITH No, I have never been approving of recession. That puts an economic burden on the people that lose their jobs, the people that lose their wage increases, and the people that are cut as to other income, and anybody that prescribes that is a little bit too cruel to my taste. Paul Volcker's an old friend of mine. but that doesn't mean we agree on everything
What Volcker said is that he was apart of a change away from the Keynesian idea that a little inflation is a good thing... "Inflation] came to be considered part of Keynesian doctrine"
But during the 1980's he was part of a policy change that said that inflation was bad for the economy.
That's taken for granted. The great ideology these days is that the central banks ought to be independent; they ought to have an inflation target, and an inflation target ought to be close to zero. That's a very different environment then the '50s and '60s and into the '70s.
I was not part of. I was in the Federal Reserve, Treasury, a conservative guy who's always against inflation. The general tenor of the times was inflation was the least of evils, if it's an evil at all. What changed drastically in the 1980s and running through today is the presumption that inflation is bad [and that] the primary job of a central bank is to prevent inflation.
I remember one particularly, one of my professors at Harvard [lecturing] about [how] in the postwar period people were worried about sluggishness and that a little bit of inflation is a good thing. Of course, what happens then [is] you get a little bit of inflation, and then you need a little more because it props up the economy. People get used to it, and it loses its effectiveness. Like an antibiotic, you need a new one; [then] you need a new one plus. That was a world...
Inflation] came to be considered part of Keynesian doctrine, although I don't think it was Keynes himself -- there's some debate about this -- [who said] that a little bit of inflation was a good thing. I was strongly lectured on that.
When we'd launched so much, invested so much credibility, so much policy, so much hardship in changing the direction, not having been successful would have been the big tragedy.
Volcker admitted his policies were a change in direction from the keynesian consensus.
inflation is dependent upon inflationary monetary growth, too much money growth, too much credit growth, and we set out to make that point and say that we've just got to stop this and draw some kind of a line in the sand about how much money and credit growth was appropriate. In doing so, the effect was to push interest rates up in the short run, because people were expecting inflation; they were perfectly willing to borrow.
Your paraphrase of Volker does not mention Keynes. In any case, according to Friedman, Keynes' "Tract On Monetary Reform" was his best book. Friedman wrote this in a volume of commentaries accompanying the German translation and edition of the General Theory published in 1989.
So, it seems Keynes was such a fine monetarist, he enjoyed the admiration of Friedman in this regard.
I don't know where you are getting your facts. You provide little evidence to support your claims...Non-military spending declined greatly... Declines 42% in energy 32% in community and regional development. 32% in community. What are you basing your facts on?
I was referring to your comment that Reagan spent more money than any other President... Which is wrong... Reagan cut non-defense discretionary spending...
But what do you mean by spending.. Inflation adjusted spending non inflation adjusted spending..???
I just wrote it... Volcker said.. Keynes had a serious failing he was willing to sustain higher levels of inflation than the mere levels required to trigger unrealistic expectations of future inflation within the public.
Yes, yes, but where did Volker say it. The overwhelming majority of economists believe some inflation is needed - including Friedman. #5 is often mentioned. This is because deflation is deemed to be wose then inflation.
So how can you say that what Volcker did was Keynesian when he disagreed with him on inflation?
What Keynesian during the 1970's were calling for is expansive government stimulus spending and priming the pump.
What Volcker and Reagan prescribed is the opposite of Keynesian it was raising interest rates and a contraction of the money supply. A contraction of government spending by Reagan and a contraction of the money supply by Volcker which lead to a stronger dollar.
However, labor 'is' c-u-r-r-e-n-c-y, and therefore if you destabilize the currency, you also destabilize the basis for its exchange, labor, and thus you destroy labor's capacity to store the 'wealth' some of you have been speaking about.
This was because he felt that stationary capital was self-sustaining and that placing a cost on it was necessary to make it invest itself... He liked the notion of capital destruction in order that capital creation would result. I suppose it came from his leftist tendencies to favor labor over capital.
Volcker disagreed with Keynes in terms of inflation.
Keynes, genius that he was, in my opinion had one serious failing... he had the notion that currency should have a quite substantial carrying cost, and, consequently, he was willing to sustain higher levels of inflation than the mere levels required to trigger unrealistic expectations of future inflation within the public.
You spent 6 minutes to say that attacking a dead economists works was a straw man argument. Now your attacking Milton Friedman's works is that a straw man argument?
You failed to note that Friedman and Phelps did accurately predict the conditions in which high unemployment and high inflation did occur.
Wage and price controls failed in the post war Germany under Adeneur. The failed under Nixon. They failed in Roman times. They are failing under Chavez which has a 30 percent inflation rate.
You failed to note that Keynes had a prescription for high inflation as part of his fiscal policies.
As to wage & price controls, I did not mention them in this video, I don't advocate them. Rather I recommend the Keynesian fiscal policies used by Fed Chairman Paul Volker to control 15% to 20% inflation in the late 1970's - raising interest rates &/or taxes.
Keynesian economics is an inevitable step towards socialism. I have to disagree about Keynes looking at "permanent" solutions. When the General Theory was empirically proven to be full of holes insofar as long-run growth was concerned, he responded, "In the long run, we're all dead."
The easiest way to put all of this to rest includes two words: "Keynesian multiplier"
The current crisis is compounded by the Hamiltonian idea that Keynes indirectly perpetuated on federal deficits.
Context is everything. When Keynes said : "In the long run we are all dead," he was responding to folks like yourself; Neoclassical, Austrian & Monetarist economists and Libertarian thinkers who would do nothing in the face of depressions waiting for the problem to solve itself by waiting for the economy to find a new "equilibrium," in the long run.
Please identify the "-- holes ---" in Keynes' work. Don't be shy. Speak up. If you wish to paint Keyes black, be specific and substantive.
You don't understand Keynes' work. Keynes' General Theory was also directed at inflation, where he recommended raising taxes and reducing government spending to control inflation.
Please don't be a mystery wrapped in an enigma. What do you mean by your cryptic reference to the "Keynesian Multiplier?"
Your blaming the current crisis on Keynes is laughable.
So any rebuttal to a theory is discredited if the rebuttal is made after the original theorist has died? Isn't it suppose to be the theory which is important and what holds up and if said theory were logical and plausible wouldn't someone else be able to provide a rebuttal?
I guess the five element theory by Aristotle hasn't been discredited either because he died before someone could offer a better explanation thus negating him of his deserved rebuttal.
1. The Phillips Curve theory is not Keynes' theory. He never made an iron link between inflation & unemployment. Therefore, attacking the Phillips Curve theory and claiming it refutes Keynes is creating a strawman and attacking the strawman.
2. Keynes did not have an opportunity to reply, rebut or debate the Phillips Curve theory of those who used it to attack Keynes.
Keynes argued for greater deficit spending in 'The General Theory' in order to stave off unemployment. Then in his later work 'How to Pay for the War' he suggested funded the war through higher taxes, not deficit spending, because deficits were inflationary.
So he suggest deficits are the proper remedy for unemployment, while the consequences are
First you need to understand that the Great Depression was well on the mend prior to Government intervention and that the massive unemployment was casued by this intervention. Second is that Keynes only applies the business cycle to govenment. Third, since gonernments never retract as times get good, the Keynesian model must be tossed.
Robbob9933 9 months ago
silver spoon liberal crap...
The System today encourages global enslavement or neglect...
The only competition that Corporations have today is - What country will work for the cheapest...
The System has re rigged itself so much that is almost purely consumption based, Leaving Unbalance. Little production, and great demand...keeps prices high too.
FREE MARKET, FREE CURRENCY, FREE COUNTRY.
Free to work, free not to. No Entitlements, except God given constitutional Birth Rights.
DamnYourReallyUgly 1 year ago
FIAT CURRENCY FAILS.
DamnYourReallyUgly 1 year ago
Capital is generated from savings. First you must live below your means and save. Then you invest, consume, lend, leverage debt etc.... Say someone wanted to store their savings in a vault instead of investing in the banking sector (via savings account). What form of "money" do you suppose would succeed at protecting savings best?? Can you please explain?? Thank you
66chevyo 1 year ago
@66chevyo GOLD and Silver.
DamnYourReallyUgly 1 year ago
So you are saying that just because ppl don't have a degree in keynes economics they would not be able to understand economics? There is no magic behind how the economy works. It's simple laws of nature. If you over spend there will be less to spend in the future, and if you save you will be better of when things turn for the worse.
What strike me most is that in the begining of 2008, most keynesianists did not see all the problems that were so easily spotted in the market at that time allready.
Warzoooooo 1 year ago
Well, I disagree with you. But it was a good video.
ebeatworld 1 year ago
There was never a great depression during the Gilded Age
Also the Great Depression in Britain happened under Labour's watch!!! Hahaha
Keynes never talked about tackling inflation like that you dunce. That sounds like a stupid idea regardless. High taxes in 70s Britain didn't help stagflation getting to 25%, did it?
Actually Stagflation and Japan completely discredit Keynes.
You claim to have an economics degree but I find that very hard to believe given this video.
bonfirejovi 1 year ago
@bonfirejovi I Work with My Hands...I Labor in Work, I enjoy it. I HATE TAXES.
Workers should Acquire things with their labor not be taxed on their work.
Can people equate Americas same situation comparatively- If currency did not exist.
Americas situation today is equal to- a tormented king and his henchmen, taking the last bushels of wheat from family's, and telling businesses to leave.
DamnYourReallyUgly 1 year ago
Dear Mike.I read the comments below and see that some in your audience don´t
have spent time to see your video.Neither do they read my short comment that
Philips Curve is a creation that not have anything to do with Keynes.It´s in the Neo-classical tradition,and first version was from work of Irving Fischer before Keynes
General Theory,and after that by a australian Neo-Classical economist
named Alban Philips,and later adopted by Neo-classical syntesis of Solow and Samuelson 1960.
zsylvana 1 year ago 9
@zsylvana What the fuck are you on about? Paul Samuelson developed the interpretation of the Phillips Curve that includes unemployment and prices and he was a MASSIVE keynesian. Please stop lying. The Phillips curve is Neo Keynesian lie and I am sorry that Keynes died before he can stop his loony followers who bastardized his ideas.
Friedman did agree that Phillips curve can be true in the short term though.
bonfirejovi 1 year ago
The Phillips curve has been dis proven throughout time, and is irrelevant. I do not understand why main stream economists still teach the Phillips curve? Maybe it is due to the fact they have to live in the glory days when they were able to make the argument that government spending and money printing was productive, and people were so ignorant about economics that they bought it? History and economic trends will tell you the Phillips curve is BS, no matter what formulas you try to use.
LibertyMike1 1 year ago
I'm curious as to what your definition of "wealth" is. That is, how would one or more people off in the middle of no where create "wealth".
sirellyn 1 year ago
@sirellyn
It would depend on where "no where" is. In America savings rates have always been low (> 5%). In the 1980's & 90's there were periods of negative savings (borrowing more then saving).
In Asia folks routinely save 15% to 30% of their income.
Wealth is a function of ones ability to generate income and save. There is no income (i.e no good jobs) in the middle of "no where" in America. One is lucky to merely survive.
See my video: The Attack On Labor, based on a book The Big Squeeze.
radiohogan 1 year ago
@radiohogan So wealth is both one's savings and the ability to create more income?
Would that mean that someone who was rich beyond measure (more savings than they could spend in their life) but was unable to generate more, would not be considered wealthy?
sirellyn 1 year ago
@sirellyn
Wealth is your assets, minus your liabilities - plain and simple. It has nothing to do with ones prospects.
However, your original question was about how to increase wealth in an area where prospects for increasing income are low. Certainly, anywhere in Post Modern America the increasing ones prospects for creating wealth are limited.
Wealth is static - assets minus liabilities.
radiohogan 1 year ago
@radiohogan Labor are scumbags. Fucking parasites.
I can't wait until the economy collapses and you pieces of shit get extremly fucking confused.
BrettDunbar 1 year ago
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@radiohogan Labor are scumbags. Fucking parasites.
I can't wait until the economy collapses and you pieces of shit get extremely fucking confused.
BrettDunbar 1 year ago
You fail to understand that Keynesian economics is not based on Keynes work but the work of his followers. Keynes never addressed inflation because it was never a problem during his lifetime. Before his death as it was beginning to be a problem, he promised to "turn public opinion" on it's head as he dealt with economics on a crisis-by-crisis short-run basis. He died before he was able to do so. Phillips curve was a Keynesian idea because it was formulated by his followers who have sway today.
publicanimal 1 year ago
Broadcasting from downtown New Jersey?
That has to be the worst place in New Jersey!
endgammer 1 year ago
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Capitalism is the historic evolution of private property relationship of alienation,exploitation and suffering of humanity in a modality of production for profit in a world market of ARTIFICIAL SCARCITY and manipulation to perpetuate the conditions of exploitation in the interest of the Owning/Ruling elite. Capitalism is the monetary web of deception and suppresssion of humanity for the abstract process of capital accumulation and concentration . A system of dehumanisation and devaluation
arzoyan 1 year ago
I'm not saying whether the Philips curve actually rebutts Keynes or not, but saying that the Philips curve is a straw man because Keynes wasn't alive to respond to it, is like saying that Quantum Theory is a straw man rebuttle to classical physics because Isaac newton wasn't alive to respond to Einstein. Please repost this video using an argument that actually addresses the theories.
orbenn 1 year ago 2
@orbenn
I am simply saying it would be interesting to hear Keynes rebuttal.
radiohogan 1 year ago
orbenn is absolutely right. Yes, Keynes may not have been around but there are quite a few formidable Keynesians. Keynesians who Friedman, Hayek, Rothbard, and the like, have had to contend with.
KoWgeKKo 2 months ago
@radiohogan
Cut taxes, increase spending, expand money supply for depression.
Cut spending, Raise taxes, Raise Interest rates for inflation.
Translates to-
Cure depression with inflation
Cure inflation with depression.
Salvysahagun 1 week ago
I never heard of the Phillips curve, but it seems to deal with monetary policy. Keynes' theory focused on fiscal policy. Two seperate things. Keynes would not have an answer. And I have a Bachelor's in Economics. Friedman was brilliant. Watching his videos on youtube can give you the same education minus the piece of paper.
goddy12786 1 year ago
@goddy12786
Where did you go to college? Did you read all three (3) of Friedman's books?
The Phillips Curve is an observation that in the 1970's there was both a recession and Inflation (stagflation) at the same time. Some seek to use this observation to refute Keynes.
Stagflation can be controlled by either fiscal or monetary policy. Keynes' answer would depend on his genius - he was an expert in monetary policy long before he invented fiscal policy.
radiohogan 1 year ago
Comment removed
mintoo2cool 1 year ago
is it true that keynes hated jews and black people?
bonfirejovi 1 year ago
ok because i don't understand economics tell me where im wrong Y = C + I + E + G so according to this if I is down there should be more unemployment and keynes says increasing C will fix that problem, but too much G will decrease I right? and so here we are again decreasing I causing unemployment, unless the G just increases (printing money+ multiplier effects) which if you believe in math, inevitably creates nominal inflation, hence unemployment, phillips curve
zac1bar83 1 year ago
@zac1bar83
Yo, Zac: You like equations, therefore, you will love Friedman's "The Consumption Function. Check it out.
radiohogan 1 year ago
So why don't all the keynsians, and new keynsians, have a responce to why the phillips curve does not disprove the theory? maybe how government spending got us out of the Great Depression, oh wait that lasted 10 years and had 30% unemployment at one time hmmmm come to think of it when has keynsian economics acutally reduced unemployment. I challenge the author to find one. Oh maybe i'm just one of those people without an advanced degrees unable to grasp the complexity of the theory.
zac1bar83 1 year ago
Here is the problem with this video and the keynesian "apologists" and defenders. They have no response to the phillips curve, the author of the videos essentially says because keynes wasn't able to respond to the criticism and because keyns is god no one can understand the infinite wisdom of his theory, the phillips curves proof that all keynsians are wrong is invalid.
zac1bar83 1 year ago
@zac1bar83
The Philips Curve has nothing to do with Keynes. It has to do with the failure of politicians to follow Keynes' prescriptions. Our man Zac does not understand economics. So much is counter intuitive.
radiohogan 1 year ago
Today is my first foray into your vids other than econ102 one, and it appears you already know some of the things I have argued there. So why are we arguing about them?
Anyway. Lets get this straight. Keynesianism is just a label. The fact that it has 'Keynes' in it doesn't necessarily align it with JMK. pajholden gives a good account in his video of how the 'Keynesian' stance was modified in the light of the Phillips curve. It may have put their noses out of joint but it didnt discredit Keynes
maddi62 2 years ago
You are an economic illiterate.
radiohogan 2 years ago
Keynes and people that think like him remond me of Michael Jackson's "doctor". He gives his patient what the patient asks for rather than what he needs. Pretty soon, he needs pill to wake up, pills to go to sleep, pills to do everything. If he doesn't feel himself, its because he isn't taking enough medicine and a new therapy is invented. One night he goes to bed with an IV to knock him out, and his heart stops.
GaryVolts 2 years ago
While your nonsense is silly & simplistic, it has nothing to do with economics. Have you studied economics as a major in a university?
radiohogan 2 years ago
I often use analogies to put conditions in abstract systems in a context that people lay people will understand. The point is that the central bank is trying to do manually, and doing it poorly, what a healthy system does on its own. And that the unintended side effects of earlier missteps are used as rationalizations for doing even more because the real causes are either not understood, but politically impossible to admit to.
GaryVolts 2 years ago
Please give me an example of a "healthy system."
radiohogan 2 years ago
And yes I have stidied economics at a major university but I'd have to admit that my real understanding came much later in life when I was able to develop some perspective.
GaryVolts 2 years ago
Did you major in economics? That was the question.
radiohogan 2 years ago
You don't need the Philips curve to discredit Keynes theories, they discredit themselves if you read what he's said and really understand economics.
The only people that agree with him are politicians and liberals. He provided convenient academic cover to excessive borrowing and spending and general intervention in what would have otherwise been self correcting economic processes.
GaryVolts 2 years ago
Questions:
1. How do Keynes' theories discreit themselves?
2. Are you saying the cademic community does not value Keynes' work?
3. How long are you personally willing to wait for the economy self corrects with 30% unemployment? 10 , 20 or 30 years?
radiohogan 2 years ago
He shows no apreciation for the natural processes of free markets and seems to enjoy inventing new interventions to counter the effects of previous interventions. He often mistakes the cure for problem.
There a different academic communties but many of them are mistaken. People seems to subscribe to the academic school of thought that supports a prejudice they already posses. People that like Keynes see the natural world as cruel and unruley and in need of a master to rein it in.
GaryVolts 2 years ago
You make vague generalizations, rather then offer proofs or sources. You fail to specifically mention a single Keynesian theory you consider incorrect. You display no knowledge of economics. Don't be shy. Let us know exactly what's wrong with Lord Keynes.
See part II
radiohogan 2 years ago
One of his ideas was to make money have an expiration date. This was so that citizens couldn't save any money and would have to spend it. You hear these kinds of ideas even today about trying to encourage people to spend money and go further into debt. It shows a lack of understanding between the difference between consumption and investment.
It misses the whole idea that capital is formed from savings. No savings, no capital,. No capital and we all work with our hands instead of tools.
GaryVolts 2 years ago
Where can I read about Keynes' money expiration idea?
radiohogan 2 years ago
It's mentioned in his writings: General Theory of Employment, Money, and Interest
GaryVolts 2 years ago
Can you offer us context? What pages or chapter can I read about it?
radiohogan 2 years ago
I'd read it somehwre and couldn't remember where. I used google to find the book, you're going to have to take it from there.
GaryVolts 2 years ago
Part II:
People that attack Keynes without a knowledge of economics are elitists who hate the poor, working class ans lower middle class. People who don't understand that 30% unemployment is cruel, are without empathy or compassion. This would encompass Libertarians, Austrian School & Friedmanite Groupies, Conservatives & Fascists.
Didn't Milton Friedman write we are all Keynesians now?
radiohogan 2 years ago
But you only can get 30% unemployment rates by interventionist type economic policies like Keynes. Look at all the economic state of the country today. We're suffering from the hangover of a debt fueled paty created by artificial and low interest rates set by the central bank and politicians. By preventing the smaller dislocations of resources from being liquidated they allow larger imbalances to accumulate to the point that even the central bank cannot control them (can't go below 0% rates).
GaryVolts 2 years ago
Keynes' "interventionist policies" began well after the publication of the General Theory" in 1936. The Great Depression began in the 1920's in England and lasted until the early 1960's. The Gilded Age (1870-90) was a 30 year Depression well before 1936.
Rather then Keynesian fiscal policy, your argument is with monetary policy advocates, like Milton Friedman.
radiohogan 2 years ago
If you wnt to read someone that really understood the causes of our first great depression, try Murray Rothbard's "America's Great Depression"
GaryVolts 2 years ago
Rothbard teaches at a very small college near where I live. Allow me to recommend a Princeton University professor's book on the Great Depression - Professor Ben Bernanke.
radiohogan 2 years ago
I'm not sure if we're talking about the same man because the author of this book passed on more than a decade ago.
I've read some of Mr. Bernanke's stuff and can't say I agree with all of it. People like to say he was a student of our first great depression, he must have gotten an F. Summing up his thesis, his opinion is that the way you avoid a hang over is to never stop drinking. The school of thought I subscribe to says that the way you avoid a hangover is to never have the party.
GaryVolts 2 years ago
How long am I willing to wait? As long as it takes, there is no alternative. This kind of thinking "In the long run, we're all dead" is such utter nonesense. Sure an individual might only live 75 years, but a society hopefully goes on much longer than that. Screwing your kids future to have some comfort now is morally corrupt.
GaryVolts 2 years ago
So, according to your way of thinking, it is good for a child to have an unemployed dad. The corollary to your way of thinking the child benefits from lower household income. You seem to see poverty as a romantic morality play. The Robber Barons enjoyed workers in poverty and either unemployed or on the edge of unemployment. Marx wrote of how capitalists enjoy the "Reserve Army of the Unemployed" to keep labor costs low. You are rooting for the new Robber Barons in our New Gilded Age.
radiohogan 2 years ago
It almost like a father sells his children into slavery for some money so he can say his children don't have a poor father.
Anyway, the conditions you're describing don't occur naturally. They require coordinated central control to cause this level of disallocation of resources which creates the loss of producivity and resulting poverty.
The elitists are the central planners that feel that they are superior to the population of indepenent arbiters for allocating resources.
GaryVolts 2 years ago
The father who is unemployed and unable to provide food, clothing and shelter has sold his children into slavery by robbing them of opportunities.
There was little "central control in the 1870 to 1890's or the 1930's. Free markets cause poverty.
The central planners are the Power Elite or Mandarins of corporate capitalism.
radiohogan 2 years ago
Are you a fan of Marx? I thought this video was defending Kenyes.
Those robber barons fronted the capital to build the railroads that opened the west.
Capitalists aren't good or bad. They just seek to match capital with willing labor to take profits. Everyday we enjoy the producst they produce by this very process. Workers discount their labor in return for immediate payment. The capitalist must wait untill products are finished and sold before he gets his money.
GaryVolts 2 years ago
See my video about Marx. I consider Marx the last of the classical economists, a father of sociology, a philosopher, a revolutionary, a newspaper publisher and a man in the midst of a mitzvah. How can one not admire such an intellectual giant?
The railroads were built by Robber Barons who had no capital, but were eager to bribe government officials to secure free land right of ways. The Robber Barons then sold bonds to Europeans.
Capitalism and capitalists are evil from the pencils up.
radiohogan 2 years ago
He might have have thought he was helping people but like the saying goes "The road to ruin is paved with good intentions." A lot of his ideas smell of populism such as his labor theory of value. They're more popular than accurate, kind of like religion.
I'd recommend reading someone that's had the actual experience of living under a government trying to follow his theories. Start with some Ayn Rand.
GaryVolts 2 years ago
Marx is considered the last of the classical economists. All economists before Marx held a belief similar to the Labor Theory of Value. Some say, international trade & competition are making the Labor Theory of Value meaningful once again.
I lived under Reform Socialism in Holland and loved it.
radiohogan 2 years ago
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So you're saying that everyone who is dead is inherently correct (because its impossible to criticize them because they aren't around to defend themselves)? Very logical.
Keynes did argue that, because of sticky wages, inflation is necessary to push real wages down and reduce unemployment. The Phillips curve illustrates this proposed negative relationship between inflation and unemployment. The coincidence of inflation and unemployment in the 70s (stagflation) contradicts the idea.
1000101er 2 years ago
Hello:
I would describe your debating style as cute or disingenuous. Rather then put words in my mouth, allow me to reiterate my view.
The Phillips Curve critique is not a criticism of Keynes. Rather, it is a critique of politicians who were economic illiterates who failed to understand Keynes. Keynes advocated high interest rates & lower spending, when inflation is high. This is what Paul Volker did at the end of the 1970's.
radiohogan 2 years ago
1)Once again 100 101.Let´s set the record straight.Keynes have no theories in the direction to a Philips Curve.His idees was not of the kind of Neo-Classical Economist A.Phillips
wrote about 1958.History in brief is that Alban W. Phillips 1958 diagram empirically relating money wage growth and unemployment .The searchers for a "Neo-Classical-Keynesian Syntezis" realized immediately that this was what was necessary to "close" the Keynesian model.
zsylvana 2 years ago 4
2)They asked how is one to justify holding money wages rigid?The simplest solution was to appeal,as many did, to labor market imperfections,money illusions, etc. All these thoughts were pretty scattered until they stumbled across Phillips simple diagram infamous "Phillips Curve".Richard Lipsey (1960) and Paul Samuelson and Robert Solow (1960) integrated the "Phillips Curve" into the Neo-Keynesian edifice.
Keynes General Theory,1936 concentrated of natural reasons on,unemployment.
zsylvana 2 years ago 4
3)However, Keynes's ruminations on inflation in his "How to Pay for the War", 1940 gave clear indications of how to integrate inflationary pressures into his theory, but he died before he had a chance to set these down more systematically.
zsylvana 2 years ago 4
4)As originally expressed by John Maynard Keynes 1940 and Arthur Smithies 1942, "demand-pull" (or "inflationary gap") inflation is generated by the pressures of excess demand as an economy approaches and exceeds the full employment level of output. Output, recall, is generated by aggregate demand for goods - thus, whatever aggregate demand happens to be, aggregate supply will follow by the multiplier.
zsylvana 2 years ago 5
5) However,at full employment output, if aggregate demand rises, output cannot follow because of full employment constraints. Consequently, with the multiplier disabled, the only way to clear the goods market, then, is by raising the money prices for goods. However, this is only a one-time increase in prices; inflation implies a sustained recurrent increase in prices. Keynes and Smithies explained inflation proper by appealing to distributional effects.
zsylvana 2 years ago 4
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KruZer7 2 years ago
1)Kruzer.Uncle Milty had a pretty open mind when it comes to prove Liberalism or what so ever.Probably all scientists have political biases they would like to see proven,but a persistent theme among Friedman's critics is that he is unusually willing to cut corners to prove his points.Paul Krugman writes:"I think it is fair to say that up until the late 1960s Friedman and followers,while influential, were regarded by many of their colleagues as faintly disreputable."P.Krugman Peddling Prosperity
zsylvana 2 years ago 11
2)KruZer.Economist Edward Herman writes: "Friedman's methodology in attempting to prove his models have set a new standard in opportunism, manipulation, and the abuse of scientific method."Edwards .S. Herman, Open market .1995
zsylvana 2 years ago 10
3)KruZer.Paul Diesing lists six tactics Friedman uses to support a pet hypothesis called "Permanent Income" (or PI). These are:
"1.If raw or adjusted data are consistent with PI, he reports them as confirmation of PI
2.If the fit with expectations is moderate, he exaggerates the fit
3.If particular data points or groups differ from the predicted regression, he invents ad hoc explanations for the divergence
4.If a whole set of data disagree with predictions,adjust them until they do agree
zsylvana 2 years ago 10
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KruZer7 2 years ago
KruZer.With all respect,you don´t see the big picture.Friedman admired Keynes,as the "the greatest in 2000 century economy" especially Keynes early monetary work.But he had other sides Milton.F,with no doubt a great economist,was also a propagandist and policymaker.Here he uses his reputation to introduce the "Natural Rate of Employment",to fight inflation,something Keynes never accepted,by using Philips purely Neo-Classical work,invented after Keynes death to dishonestly attac Keynes
zsylvana 2 years ago 10
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KruZer7 2 years ago
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KruZer7 2 years ago
4)KruZer.
"5. If no plausible adjustment suggests itself, reject the data as unreliable
6.If data adjustment or rejection are not feasible, express puzzlement. 'I have not been able to construct any plausible explanation for the discrepancy'"Paul Diesing,Prof.Chicago University Philosophy Science of Methods in Economics &Socialscienses "Hypothesis Testing and Data Interpretation: The Case of Milton Friedman," Research in the History of Economic Thought and Methodology, vol. 3, pp. 61-69.
zsylvana 2 years ago 11
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KruZer7 2 years ago
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KruZer7 2 years ago
1)In Steven Kangas,Essay on Monetarism,
2)Paul Krugman, Peddling Prosperity(New York: W.W. Norton & Company,1994), pp. 34-40, 172-178.p.40
3) Edward Herman, Triumph of the Market (Boston: South End Press, 1995),p.36.
4.)Paul Diesing, "Hypothesis Testing and Data Interpretation: The Case of Milton Friedman," Research in the History of Economic Thought and Methodology, vol. 3,pp. 61-69.
5.)Peter Pugh and Chris Garratt Introducing Keynes (Cambridge, UK: Icon Books Ltd.,1994), p.152.
zsylvana 2 years ago 11
What are your own view?Neo-Liberal?Anarco-Capitalism?You seem to like Friedman a lot!Pinochet also liked him.
cjanne9 2 years ago 13
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Where do you get this notion that I like Friedman? I have never liked Friedman.
I used to be an Anarcho-Capitalist, and then I had a fallout with Austrianism about 2 months ago, and now I completely reject Austrian Economics. Retrospectively, it seems I was in a 'rabbithole' of a priori ism. I also reject Neoclassical econ (and its subsets of Neokeynesian/Monetarist schools) and Marxian econ (upon basis of the Transformation Problem.)
I do no
KruZer7 2 years ago
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I do not really declare allegiance to any singular school of economics simply because I do not know enough of any other school to do so. So fare I have been reading some of Ian Steedman's stuff on Sraffian econ, but I think I would like to delve into the foundations of Post-Keynesian econ. IDK, I do not really know enough about either of these schools. Also, New-Keynesianism appeal to me, because I mostly agree with them upon realms of monetary policy and gov. intervention.
KruZer7 2 years ago
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**So far
**appeals to me
KruZer7 2 years ago
OK!LOL!I never heard anybody goin throw the whole bunch of schools,and rejected them all!!LOL!It must been a hard road!!Are there any school left to go in and out to?But i am glad you don´t like that bloody Friedman.He also runned in out! But from one dictator to the other as advicer!Made some bucks on it don´t you think?But all the best to you in your Economic-School research:D !Tell me if you find a good one!
cjanne9 2 years ago 7
This comment has received too many negative votes show
Well, really, I only ascribed to one school while simultaneously understanding and rejecting the other two (Neoclassical & Marxian.)
"I never heard anybody goin throw the whole bunch of schools,and rejected them all"
It seems to be a pretty common phenomena. You must have not met many economists. Actually, most economists understand and borrow from multiple schools. Simultaneously, they understand and reject multiple schools . So I do not really know what you are talking about.
KruZer7 2 years ago
I highly recommend Steve Keen's "Debunking Economics." Keen thoroughly refutes the Neoclassicals and discredits the Marxian Labor Theory of Value.
KruZer7 2 years ago 3
Thank you a lot for the advice about Mr Keen´s book.And sorry if i am sounded rude,about "schools".It wasn´t my intention.I think it´s good you have a open mind.
cjanne9 2 years ago 14
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Oh no! zslyana's censoring machine proves useful once again!
Questfortruth86 2 years ago
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You quasi-socialists just lie and lie, hoping that the people you're talking to don't know enough to call you on it. Keynes died in the 40s, his theories were proven wrong in the 70s. Now it's time for Friedman to go away, so that we can actually return to REAL economics. The time for Mises/Bohm-Bwerk/Hayek/Rothbard is coming. Thank God for Obama, he's going to make it undeniably true.
Questfortruth86 2 years ago
2)Though it´s interesting that the founder of the term NAIRU,(Non-Accelerating Inflation Rate of Unemployment referred to as the "natural rate of unemployment" about 6-8%),Phelps and his follower in this question,Friedman,make this connection to J.M Keynes.Keynes did not invented Philips Curve for sure,but Phelps is with no doubt father to the cruel NAIRU concept,that is critisized today as one of the worst work in Neo-Classical mathematical tradition.
zsylvana 2 years ago 28
1)Phelps critiuque of Philips Curve is dishonest in my opinion.Of course he and Friedman know it was
William Phillips,that wrote a paper in 1958 titled "The Relationship between Unemployment and the Rate of Change of Money Wages in the United Kingdom 18611957",in the quarterly journal Economica,1958,and 1960 Phelps own teachers,Paul Samuelson and Robert Solow devolopted Phillips work.And as early as 1920-tees, American economist Irving Fisher noted this kind of relationship.
zsylvana 2 years ago 32
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A straw man is a false presentation of someone else's argument. Whether they are dead or not is irrelevant. I haven't heard you say how anyone misrepresented Keynes.
Anyone who understands Keynsianism should be able to respond to the phillip's curve argument if there is a good response. I'm waiting to hear what it is.
Also, it is not true that having a degree in a particular subject is necessary for discussing it.
kwalk30 2 years ago
Keynes called for higher interest rates and/or lower government spending when there is inflation. This is what Fed Chairman Paul Volker did. He followed Keynes' advice.
While it is unnecessary to have a degree in a subject to discuss the subject, it helps. This is especially true of economics.
radiohogan 2 years ago
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How does the first paragraph of your response even remotely address my points?
kwalk30 2 years ago
The Phillips Curve observations are about how politicians act and not about what Keynes wrote about and and recommended. When Paul Volker became Fed Chairman, he used Keynes' theories (recommendations) to raise interest rates and cut off inflation.
radiohogan 2 years ago
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You're such a useless fool. Keynes said fighting off recessions means governments must increase spending and flood the markets with liquidity; that is, to create inflation in order to lower interest rates, and stimulate "aggregate demand." During inflationary periods the government should increase taxes and LOWER interest rates. But what happens when both occur simultaneously? Don't ask Keynes, he thought it was impossible to have both; recessions always meant deflation! or under full capacity.
Questfortruth86 2 years ago
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"Thus the remedy for the boom is not a higher rate of interest but a lower rate of interest! For that may enable the so-called boom to last. The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom." (General Theory, p. 322; emphasis added, but the exclamation point is Keynes's own.)
Questfortruth86 2 years ago
Keynes was concerned with solving the problem of a depression, deflation and massive unemployment. Friedman was concerned with solving rapidly rising inflation and Stagflation and expanding Government and Unions impact on free markets. Two great men facing two different sets of economic and social problems. But CHINA and INDIA have solved the worry over To much money chasing to few goods and services =Inflation Friedman's worry.
investortownhall 2 years ago
Bottom line: The Average Americans standard of living has been declining for 20 years while in China and India it has been risinig.
investortownhall 2 years ago
Hi ITH:
Yes, real income (i.e. income adjusted for inflation) in the USA has been declining for 31 years, while rising in other countries. But, what does it mean? What perspectives occur to you? What does it prove?
All the Best / MH
radiohogan 2 years ago
Hello ITH:
While we know what Keynes was concerned with because he wrote many books that were seminal works, Friedman is principally known for three books: (1) "A Monetary History of the US" [written with Anna Schwartz], (2) "The Consumption Function" {the actual title is longer} (3) "Capitalism & Freedom." It's hard to say what were Friedman's concerns based on his professional work. While Keynes was an economist, Friedman was (and is) a TV / YT personality.
Thanks / MH
radiohogan 2 years ago
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Its common knowledge what both men where most concerned with and what books they wrote. Friedman and Hayek both won Nobel Prizes in Economics. Surely youre old enough to remember why they became popular in the late 70s early 80s. And why Thatcher and Regan both embraced their views. Im not against socialism but todays Friedman or Hayek bashing is as misplaced as Keynesian bashing. Times are always changing and so should solutions.
investortownhall 2 years ago
The difference between Keynes and Friedman lies in the pragmatic consequences of their therothical work.While Keynes "General Theory" succeded to do was is was meant to do,defeat a depression.Friedmans 2 Original contributions to Neo-Classic Theory,Money Supply and Permant Income(for that he was Nobel Rewarded),was 2 gigantic failulures.The Money Supply was only implemented for a short while in US and U.K,and nearly bancrupted those countries.About PI se Mike Hogans "Friedmans Overcleverness"
zsylvana 2 years ago 9
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Naomi Klein is the self-proclaimed self-promoting "Economic Expert" (drip-under-pressure) who is the made for TV 30 second sound bite Friedman basher. She was not even born until 1970. She is publicity hound who knows how to jump on a bashing bandwagon to make her famous and money! She is a FOR PROFIT AND FAME ACTIVIST.
investortownhall 2 years ago
H ITH:
We disagree as to the worthiness of Ms Klein's work. Isn't America great?
All the Best / Mike Hogan
radiohogan 2 years ago
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Klein spent her teenage years as a mall rat, obsessed by designer logos. ( her own admission) As a child and teenager, she found it "very oppressive to have a very public feminist mother" and she rejected politics, instead embracing "full-on consumerism". So while were dying in Vietnam and layed off with stagflation Naomi is a shop-ahalic hanging out in malls.
investortownhall 2 years ago
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While I have no respect for Ms. Klein you'll be please to know I was againest the invasion of IRAQ from the moment the Bush adm. started the BS about WMS talk. And I like Jimmy Carter and Jack Kemp who long before Ms. Klien spoke againest the war with out looking for a book deal.
investortownhall 2 years ago
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"The Money Supply was only implemented for a short while in US and U.K,and nearly bancrupted those countries" ????? So your saying they stopped the flow of money? What did we replace money with clam shells?
investortownhall 2 years ago
1)What happened? Monetarism was tried in Great Britain during the 80s, under Margaret Thatcher, and it proved to be a disaster. For almost seven years, the Bank of England tried its best to make it work. According to monetarist theory, the British economy should have enjoyed low inflation and high stability. But in fact, it went berserk. The economy sank into a deep recession, while lead economic indicators zigged and zagged.
zsylvana 2 years ago 11
2)Unemployment,soared from 5.4 to 11.8 percent. Between 1979 and 1984, manufacturing output fell 10 percent, and manufacturing investment fell 30 percent. Production recovered to a respectable 2.8 percent growth,but it became clear that high unemployment was a feature of the British economy. Eventually, the Bank of England came under overwhelming pressure to abandon monetarism, which it did in 1986. The experiment was such a failure that not even conservatives abroad wish to repeat it.
zsylvana 2 years ago 8
3)U.S. Federal Reserve announced in 1979 that it, too, would follow a monetarist policy.Many thought that monetarism would restore some responsibility and stability at the Fed. Chairman Paul Volcker apparently agreed, and under the name of monetarism contracted the money supply down to a steady level. This produced a deep recession.
zsylvana 2 years ago 9
4)In 1982, the Fed suddenly abandoned monetarism and reverted to a Keynesian policy. In that summer it sharply increased the money supply, and a few months later the economy roared to life, in a recovery that would last seven years. Milton Friedman was furious at the betrayal, but he got little sympathy from his fellow economists, who were witnessing a monetarist disaster unfold in Great Britain.
zsylvana 2 years ago 12
I'm not trying to pick at you I'm sorry, but I do think you have sold yourself short in the study of economics if you see the two side as Keynes vs. Milton. Free markets are the only road to a free society. You seem like the kind of guy that likes to feed his brain, I think I can suggest some great food for thought. Read the "The Austrian School Theroy of the Tread Cycle" it is a collection of essays from Hayek, Haberler, Mises, and Rothbard, you will see a new light turn on!
soundmoneyfan 2 years ago
I think Friedman was an idiot and we can all thank him for our federal withholding on our paychecks. He was the one in the Treasury that turned every payroll department into a unpaid tax collector. The withholding helps mask to lower income people how much the government takes. If we had to write a check for the full amount at the end of the year, I think we would see much lower taxes and less of a wellfare state. Read "Milton Friedman Unraveled" by Rothbard for the free market view of Milton.
soundmoneyfan 2 years ago 2
Focus on Milton as the arguement for the free markets and individual iberty shows sloth in your understanding of economics. Why do you not mention Mises, Hayek, or Rothbard? Kenynes is flawed ans the above noted prove it! Why focus on the Chicago School watered down statist monetrist view when you speak of free markets? You must know very little to not speak of Hayek. Study the Austrian School sometime buddy and them tell me how you think Keynes is still right.
soundmoneyfan 2 years ago
Dear SoundMoneyFan:
Your comment is appreciated.
All the Best / Mike Hogan
radiohogan 2 years ago
Does this mean you are going to read some Hayek or Mises to gain an understanding of the theroy that proves Keynesian theroy is flawed? Keynes has no regard to the value of capital by means of producing and saving. Keynesians say that spending represents a good economy no matter if the spending is because of lax policies of a central bank. Keynes knew nothing about asset bubbles, Mises at the sametime as Keynes knew about asset bubbles and how the actions of a central bank affect an economy.
soundmoneyfan 2 years ago
What a nonsens! Keynes could not reply to Friedman or Phelps because he was dead by then??? What a joke!
Science is about explaining the world. Helping us to understand the real world, maybe a bit of causality but.... That is different. Keynes had an answer, in the long run we are all dead! Gov't demand increase will lead to inflation and inflation will lead subsequently to price and wage adjustment. The Philips Curve, PC, just states that fact. Nobody can be fooled. Gov't spendg doesn't work!
AEckermann 2 years ago
Just because someone doesn't agree with the Philips curve doesn't mean they are uneducated in economics. History has pretty much disproven the Philips curve. Within the near future, we will be experiencing a trend of unemployment increasing as well as an increas in inflation.
Thrice13 2 years ago 2
Hello Thrice13:
I agree with all three of your sentences.
All the Best / Mike Hogan
radiohogan 2 years ago
Thanks Hogan, I enjoy your videos. Keep up the good work!
Thrice13 2 years ago
Hi Thrice13:
It is my pleasure.
Live and be Well / Mike Hogan
radiohogan 2 years ago
Volcker
The analytic framework was very convincing, but this feeling they had, that they could press the right buttons and manage the economy pretty exactly, for some reason it turned me off.
Paul Volcker was not a Keynesian.... The ECB before 1980 was not for controling inflation.
Keynes was for price controls (if he wasn't he didn't speak out against it... I would suggest that you do as Keynes suggests
When the facts change, I change my mind. What do you do, sir?
davidmesaaz 2 years ago
Dear David:
Part I:
Your work is appreciated. As you know, American propaganda has made him into an iconic figure. You have totally destroyed my respect for Paul Volcker. In their effort to control inflation, Central Bankers literally work for the rich. Inflation destroys the wealth of the rich while it helps the working class, poor & lower middle class stay employed in that it helps avoid recessions.
See Part II
Live and Be Well / Mike Hogan
radiohogan 2 years ago
Inflation doesn't help the middle/lower class Mr. Hogan, it only helps the middle class that are deep into debt. The sound investing middle class that actually saves their money are hit by inflation the hardest, you should be able to see that. Employment vs. real job growth is not the same. Yes Obama can create jobs by having people put green meters on your house, but when that project is complete, who will profit from it? How is the allocation of capital good for the future? It's not!
soundmoneyfan 2 years ago
Part II:
The rich prefer deflation (today's reality) because it increases wealth, while it causes chaos, depression, poverty & unemployment. The Fed was created by wealthy bankers and they continue to control appointments to the boards of the different reserve districts.
I also appreciate your presenting the perspective of John Kenneth Gailbraith. I did not fully appreciate him before your work. Keynesians remain in solidarity with the poor, working class & lower middle class.
All the Best
radiohogan 2 years ago
INTERVIEWER: When did you begin to have doubts? How early did you begin to become skeptical about things? (The keynesian Dogma at Harvard)
PAUL VOLCKER: I was already skeptical. I guess I'm skeptical about everything. I've gotten worse in my old age, but I was a little bit turned off by the precision and certainty that these people attached to the doctrine.
davidmesaaz 2 years ago
Paul Volcker Continued...
"That attitude changed in the 1970s, and what happened in the United States, similar to what happened in Britain, had a big influence on others."
What Paul Volcker did in the 1970's change the role of the central banker. Before 1980's the accepted Keynesian dogma was that inflation was not something that should be worried about according to Volcker.
davidmesaaz 2 years ago
The role of central bankers changed world wide...
Those priorities changed after 1980. "The Anguish of Central Banking," and it was a long plea to understand the difficulties of central banking and the difficulties, and even impossibilities, of dealing with inflation in the modern economy when there were so many other points of pressure and pressure groups that went in the other direction, leaving the Federal Reserve -- [and] by implication central banks generally -- rather impotent.
davidmesaaz 2 years ago
PAUL VOLCKER: To the extent they were rooted in unfortunate interpretations of Keynesian doctrine, including this idea that inflation wasn't so bad and [that it was] better not try too hard to get rid of it, it had a common cause with the British problem, which was essentially deeper than ours was. We had the Vietnam complication, which they didn't have, but structurally they had gone much further down the road of government control and socialism than we had.
davidmesaaz 2 years ago
PAUL VOLCKER: I was a great admirer of hers. She was taking a tough stand, trying to change the direction of Britain. They had had a lot of the problems that we had in the 1970s, so I had enormous respect for what she was trying to do. I thought she was much tougher than I ever would have been [in] non-monetary areas. I may have been reasonably tough, but in other areas she was much more driven than I was.
davidmesaaz 2 years ago
but she was certainly looking for reinforcement of her own ideas about the importance of dealing with inflation in the UK. She probably thought she was giving me moral support, which she was.
davidmesaaz 2 years ago
So to sum up Volcker said that he was part of a change in policy that viewed inflation was bad. Which many Keynesian disagreed with.
Volcker though that a recession was inevitable. But Keynes thought that the recessions and the business cycle could be avoided through correct fiscal and economic policy.
Prominent Keynesians JK Galbraith disagreed with Volcker policies. Therefore Volcker is not a Keynesian. What Volcker did was a break with Keynesians ideology and not continue it.
davidmesaaz 2 years ago
INTERVIEWER: Did you approve of or disapprove of the Volcker recession?
JOHN KENNETH GALBRAITH No, I have never been approving of recession. That puts an economic burden on the people that lose their jobs, the people that lose their wage increases, and the people that are cut as to other income, and anybody that prescribes that is a little bit too cruel to my taste. Paul Volcker's an old friend of mine. but that doesn't mean we agree on everything
davidmesaaz 2 years ago
What Volcker said is that he was apart of a change away from the Keynesian idea that a little inflation is a good thing... "Inflation] came to be considered part of Keynesian doctrine"
But during the 1980's he was part of a policy change that said that inflation was bad for the economy.
davidmesaaz 2 years ago
Continued...
That's taken for granted. The great ideology these days is that the central banks ought to be independent; they ought to have an inflation target, and an inflation target ought to be close to zero. That's a very different environment then the '50s and '60s and into the '70s.
davidmesaaz 2 years ago
Paul Volcker Commanding Heights interview.
I was not part of. I was in the Federal Reserve, Treasury, a conservative guy who's always against inflation. The general tenor of the times was inflation was the least of evils, if it's an evil at all. What changed drastically in the 1980s and running through today is the presumption that inflation is bad [and that] the primary job of a central bank is to prevent inflation.
davidmesaaz 2 years ago
continued
I remember one particularly, one of my professors at Harvard [lecturing] about [how] in the postwar period people were worried about sluggishness and that a little bit of inflation is a good thing. Of course, what happens then [is] you get a little bit of inflation, and then you need a little more because it props up the economy. People get used to it, and it loses its effectiveness. Like an antibiotic, you need a new one; [then] you need a new one plus. That was a world...
davidmesaaz 2 years ago
Commanding heights cont.
Inflation] came to be considered part of Keynesian doctrine, although I don't think it was Keynes himself -- there's some debate about this -- [who said] that a little bit of inflation was a good thing. I was strongly lectured on that.
davidmesaaz 2 years ago
Volcker Commanding heights...
When we'd launched so much, invested so much credibility, so much policy, so much hardship in changing the direction, not having been successful would have been the big tragedy.
Volcker admitted his policies were a change in direction from the keynesian consensus.
davidmesaaz 2 years ago
Commanding Heights interview with Paul Volcker.
inflation is dependent upon inflationary monetary growth, too much money growth, too much credit growth, and we set out to make that point and say that we've just got to stop this and draw some kind of a line in the sand about how much money and credit growth was appropriate. In doing so, the effect was to push interest rates up in the short run, because people were expecting inflation; they were perfectly willing to borrow.
davidmesaaz 2 years ago
Milton Friedman said... inflation has always been a monetary phenomena. Or to use Volcker's words too many dollars chasing too few goods.
This runs contrary to the prime the pump stimulus government spending...
davidmesaaz 2 years ago 2
Your paraphrase of Volker does not mention Keynes. In any case, according to Friedman, Keynes' "Tract On Monetary Reform" was his best book. Friedman wrote this in a volume of commentaries accompanying the German translation and edition of the General Theory published in 1989.
So, it seems Keynes was such a fine monetarist, he enjoyed the admiration of Friedman in this regard.
radiohogan 2 years ago
I don't know where you are getting your facts. You provide little evidence to support your claims...Non-military spending declined greatly... Declines 42% in energy 32% in community and regional development. 32% in community. What are you basing your facts on?
davidmesaaz 2 years ago
What are you referring to? What facts? What context?
radiohogan 2 years ago
I was referring to your comment that Reagan spent more money than any other President... Which is wrong... Reagan cut non-defense discretionary spending...
But what do you mean by spending.. Inflation adjusted spending non inflation adjusted spending..???
davidmesaaz 2 years ago
I just wrote it... Volcker said.. Keynes had a serious failing he was willing to sustain higher levels of inflation than the mere levels required to trigger unrealistic expectations of future inflation within the public.
davidmesaaz 2 years ago
Yes, yes, but where did Volker say it. The overwhelming majority of economists believe some inflation is needed - including Friedman. #5 is often mentioned. This is because deflation is deemed to be wose then inflation.
radiohogan 2 years ago
So how can you say that what Volcker did was Keynesian when he disagreed with him on inflation?
What Keynesian during the 1970's were calling for is expansive government stimulus spending and priming the pump.
What Volcker and Reagan prescribed is the opposite of Keynesian it was raising interest rates and a contraction of the money supply. A contraction of government spending by Reagan and a contraction of the money supply by Volcker which lead to a stronger dollar.
davidmesaaz 2 years ago
While your rant is obscure, obtuse & oblique, I would be interested to know when and where Volker disagreed with Keynes on inflation?
Reagan was the biggest spending president before Bush II.
radiohogan 2 years ago
Continued...
However, labor 'is' c-u-r-r-e-n-c-y, and therefore if you destabilize the currency, you also destabilize the basis for its exchange, labor, and thus you destroy labor's capacity to store the 'wealth' some of you have been speaking about.
davidmesaaz 2 years ago
Continued...
This was because he felt that stationary capital was self-sustaining and that placing a cost on it was necessary to make it invest itself... He liked the notion of capital destruction in order that capital creation would result. I suppose it came from his leftist tendencies to favor labor over capital.
davidmesaaz 2 years ago
Volcker disagreed with Keynes in terms of inflation.
Keynes, genius that he was, in my opinion had one serious failing... he had the notion that currency should have a quite substantial carrying cost, and, consequently, he was willing to sustain higher levels of inflation than the mere levels required to trigger unrealistic expectations of future inflation within the public.
davidmesaaz 2 years ago
You spent 6 minutes to say that attacking a dead economists works was a straw man argument. Now your attacking Milton Friedman's works is that a straw man argument?
You failed to note that Friedman and Phelps did accurately predict the conditions in which high unemployment and high inflation did occur.
Wage and price controls failed in the post war Germany under Adeneur. The failed under Nixon. They failed in Roman times. They are failing under Chavez which has a 30 percent inflation rate.
davidmesaaz 2 years ago 2
Is that all I said? I thought there was more.
You failed to note that Keynes had a prescription for high inflation as part of his fiscal policies.
As to wage & price controls, I did not mention them in this video, I don't advocate them. Rather I recommend the Keynesian fiscal policies used by Fed Chairman Paul Volker to control 15% to 20% inflation in the late 1970's - raising interest rates &/or taxes.
radiohogan 2 years ago
Keynesian economics is an inevitable step towards socialism. I have to disagree about Keynes looking at "permanent" solutions. When the General Theory was empirically proven to be full of holes insofar as long-run growth was concerned, he responded, "In the long run, we're all dead."
The easiest way to put all of this to rest includes two words: "Keynesian multiplier"
The current crisis is compounded by the Hamiltonian idea that Keynes indirectly perpetuated on federal deficits.
Ooftyman 3 years ago
Part I:
Context is everything. When Keynes said : "In the long run we are all dead," he was responding to folks like yourself; Neoclassical, Austrian & Monetarist economists and Libertarian thinkers who would do nothing in the face of depressions waiting for the problem to solve itself by waiting for the economy to find a new "equilibrium," in the long run.
Please identify the "-- holes ---" in Keynes' work. Don't be shy. Speak up. If you wish to paint Keyes black, be specific and substantive.
radiohogan 3 years ago
Part II:
You don't understand Keynes' work. Keynes' General Theory was also directed at inflation, where he recommended raising taxes and reducing government spending to control inflation.
Please don't be a mystery wrapped in an enigma. What do you mean by your cryptic reference to the "Keynesian Multiplier?"
Your blaming the current crisis on Keynes is laughable.
radiohogan 3 years ago
Thank you for posting this!
lavedon 3 years ago
So any rebuttal to a theory is discredited if the rebuttal is made after the original theorist has died? Isn't it suppose to be the theory which is important and what holds up and if said theory were logical and plausible wouldn't someone else be able to provide a rebuttal?
I guess the five element theory by Aristotle hasn't been discredited either because he died before someone could offer a better explanation thus negating him of his deserved rebuttal.
adam516 3 years ago
1. The Phillips Curve theory is not Keynes' theory. He never made an iron link between inflation & unemployment. Therefore, attacking the Phillips Curve theory and claiming it refutes Keynes is creating a strawman and attacking the strawman.
2. Keynes did not have an opportunity to reply, rebut or debate the Phillips Curve theory of those who used it to attack Keynes.
radiohogan 3 years ago
Keynes argued for greater deficit spending in 'The General Theory' in order to stave off unemployment. Then in his later work 'How to Pay for the War' he suggested funded the war through higher taxes, not deficit spending, because deficits were inflationary.
So he suggest deficits are the proper remedy for unemployment, while the consequences are