if national debts are just symbolic how come my student loan debts are real? Can someone tell me where I can get my debt ceiling raised, I wanna but a new SUV. Thanx.
Because you don't control the currency. Our government does. They do not go to a credit market, They create the credit market. They used to go to the gold credit market but no longer. Its now a command credit system.
@gwynedd1 the federal reserve controls currency, the treasury borrows it from the fed.
the FED is a seperate entity privatly owned and above from the government. Look up the federal reserve online pamphlet, and read their mission statement!
It just isn't true. Just like the merchantilsm of the British empire, there is no real distinction between the Fed, big business and government. I keep telling people the simple fact that profits are rebated to the treasury, and they keep ignoring it. I have been exposed to all the Fed Internet conspiracy material, but unlike many who keep ignoring the facts, I have also exposed myself to economic theory, how it really works and where it is going wrong.
@bluehorse888 your debts are as real as the money you borrowed, if you "trust the value of currency" than your loan is real, and so is its debt. but if you cant pay for it you can reset your personal debt clock......OH thats rite, you took a student loan thats government backed you can never bankrupt out of it. College loans are gonna be the next and one of the biggest bubble you have ever seen.
No it won't because its only a trillion dollar sink hole. Nothing can absorb debt like real estate which is why its always the biggest bubble. Like I said, Henry George more or less adapted Ricardo's theory on rent to the land speculation problem two depressions ago. Adam Smith, Ricardo , Henry George....that is where you can begin to find the truth. The 20th century is full of robber baron mythologies. Can't make sense of it without that foundation.
Yes. What is owed? More debt, that's what. If you can pay off IOUs with more IOUs, what is it? 1971 was kind of an important year. It was the year the US went to a fully chartalist monetary system.
@TrainingStream Are you high? The US Gov owes $14 tr to its bond holders. That debt servicing is funded by US taxpayers ($500 billion per year or whatever).
@TrainingStream All I'm hearing is increasingly incoherent noise. Do you actually have anything to say?
There is a US govt debt. That debt needs to be serviced. The burden for such falls upon US taxpayers. If you're saying, don't be a taxpayer, fine. But do you dispute the transparently obvious? If so, how?
The debt does not need to be serviced. Its the money supply. All the interest bearing form of the debt means is future inflation(all money and coin is basically debt, symbolic of value) . If you keep treating this like your checkbook and your own debts you will just get everything wrong. Debt is meaningless without context and there are hundreds of them. Seriously, read and understand MMT and understand it. Then you will know whats really wrong.
All money is debt. Money is generally not interest bearing but a treasury to its maturity is nothing more than moving from a saving account to a checking account. Where do you think a dollar comes from? How do you think dollars come into existence? Most money/credit is lent into existence from banks. Yet it originally starts with a government deficit which creates money. No national debt, no money.
@gwynedd1 No. Not all money is debt. In fact, the currency derived from credit systems like the Federal reserve barely counts as money, in that the three functions of money are very much impaired.
UK taxpayers paid almost $80 billion last year to UK gilt holders. You don't seem to have a clue what you're talking about. Watch The Money Masters.
@thespacialone I have no clue? I have seen Money Masters . All money quantifies credit and is symbolic for a debt of real goods and services. Money is inherently debt based. You are confusing lending money into existence against a fixed supply used to quantify debt. But then again I didn't just watch a video created by a new reporter and studied economics which is why I have a clue and you don't. Not to say MM does not make good points just like Rothbard.
@thespacialone The intrest the fedralral reserve charges on the fiat currency it issues doesnt exsit. Its a ponzi scheme where the bankers end up with everything of real value in the end, you dont know this? Study monetary thoery and fractional reserve banking.
Profits are rebated to the treasury. I have said it a hundred times. What's the problem? Why don't you look into it before spreading disinformation? You are correct that fractional reserve banking lent out for rent seeking and ponzi is a fundamental problem. It is the problem.
@JamesAlan051 We dont print, We borrow from the Internatinal Bankers that own all the shares in the Central Bank (the Fedral Reserve). When you print new money where do you think it gets its value from? It takes vaule from the money that is already out there, it takes vaule away from your money, my money and your neighbors money, its called inflation and its a hidden tax.
@TrainingStream The Federal Reserve is a money printing scam on the country.
You better know we are in the printing business. why do you think the dollar has been losing value? WE dont borrow from ourselves ! Haven't you been listening?
The profits of the Fed are rebated to the treasury, so that is not really where the problem is. Its the fractional reserve system and private banks creating unproductive credit that control the Fed.
Most of that is from commercial banks and the mortgage industry. In theory this would not be a problem if they monetized things of value. Since they monetize ponzi schemes, you are absolutely correct.
@gwynedd1 There is a couple really good documentaries on Youtube anyone can watch. 1. Money as Debt - Full 2 hrs 2. Money Masters - Full 3 hrs. Their is also a really short cartoon 29 min Called 3. The American Dream - Full 29 mins, since you and I know about Monetary Theory I suggest The American Dream - Full 29 min it will make you laugh my freind, nice conversating with you.
Yes I have seen them. Its instructive if not entirely accurate. As I said, the profits of the Fed are rebated to the treasury so its just not where the action is. If I may suggest Henry George to you, which tied to the modern finance ponzi gives you a better picture of the scam. But then again M. Hudson explains it quite well also.
Whatever the GOP wants, do the opposite. They want to cut SEC, bolster it. They want to end social programs, add more. The want less regulation, do more.
Got me. Treasuries are just interest bearing ( now at 2%) notes payable in non interest bearing notes, all debt since that is what a note is. Trouble is securities don't secure anything anymore like gold so its all fictitious just like he said. Then you have the twits come on here talking about China which he clearly stated is a problem that we are not talking about. What did he say that was wrong?
This guy should probably take a visit and talk with the people at the nonpartisan Government Accountability Office. The debt ceiling is just a gimmick anyway, being as how they keep raising the thing. The real danger with the national debt is the future interest payments the government will have to make. At some point in the not distant future, the interest payments will take up most of the federal budget. That's going to leave very little for all the other things the government provides.
@josephc28 Its all debt, every last bit of it. If bank credit declines to nothing, then interest rates would be zero. If the economy picks up, along with banks credit, then it will increase "revenue" to balance the budget. As MH said, its fictitiousness since the national debt is the money supply. Can't pay off debt when debt has been monetized to exclusivity. Only the foreign debt matters.
Besides, Philips curve are just one of many things, initially purported by "insights" or "intuition", which makes little incentive sense. My main point relating to Philips curve is that incentives matter in economic studies. And approaches to economics, not accounting people's incentives, should be viewed with suspicion. This is often why quite considerable number of heterodox schools are unable to work with mainstream - some of the stuff they talk about makes no incentive sense.
@gwynedd1. Understanding incentives and not sticking to Keynesian dogma is why classical economists would have seen it. In current mainstream approach, stagflation is not a mystery because it takes people's incentives seriously like the classical economists did (which is partially why people call mainstream the neoclassical fields). If you look at old Keynesian models, many relations just came out of thing without good incentive reasoning (though not to say Keynesian insights are wrong).
@gwynedd1. For instance, the Philips Curve ignoring how people can adapt to their expectation and information led to policy disaster with US experiencing the stagflation. So it may be very well to dismiss need for rigor once you have seen the proof etc but instances like above says otherwise.
The failure of the Philips curve is exactly the case of the failure of that "old, outdated" economics being discarded. The classical economists could have seen the problem, in the words of JS Mill, "in their sleep". Stagflation was a mystery only to a modern, dismal economist.
@gwynedd1. I would agree if we have sufficient evidence to show a phenomena is correct then we should focus on the intuition behind this problem. That is something many economists do. In ex-post of proving a phenomena is correct, the problem may seem to trivial to have warranted focus. But in ex-ante of proving a phenomena is correct, loose ends may well be the killer of the theory.
@gwynedd1. Your intuition partially captures the issue argued by the models. However, have you thought about if fund managers knows this group think is unstable, surely they can do better off by betting against the group think at some point? This arguement implies this group think itself is unstable for co-operation which may lead to many groups pitting against each other. These are little loose ends which an economist need to tie up to ensure the argument, in the model, is sound.
Again the loose ends are interesting, but the fundamentals of economy and democracy are more important. The monetary system in a democracy must be intuitive, not counter intuitive. This is basically a derivative that only an educated democracy can function. What also can happen is the addition of complexity to effectively accomplish the same ends. This is a fundamental gap between economic thought and the hazards of the applied theory. This thread is a perfect example.
@gwynedd1. Economists have constructed model to show that herding can actually be a rational behaviour for fund/investment managers which may be stable despite investors may well know the problem. Theory, like this, justifies regulation as the effects aren't temporary.
@gwynedd1. Of course, if people just herd and not process information individually then we don't necessarily have efficient market. But here is another similar question to asymmetric information problem. Is herding a rational behaviour or it will disappear over time as people learn? These have different implications. If we are in the latter case then people will eventually learn their way out. If we are in the former case then we would rarely have efficient market outcome where herding happens.
@gwynedd1. All these question you ask can be evaluated with current economic tools - the beauty of economic tools is its applicability to so many interesting questions. However, by its specific applied nature you would likely find these type questions answered in public policy journal than in economic journal.
@gwynedd1. Let's think of Philip's curve for instance.It was a pattern that observed in data for a long time so people started to take it for guaranteed without providing a rigorious foundation for it.And something impossible in the Philip's curve happened, Stagflation. Without rigorious foundation, people struggled to understand why this was happening.There are many other examples to why adherent prescription to a "theory" without rigorious foundation fell on its face with confusion.
@gwynedd1. It may sound intuitive to you. But how can you be sure that such result, with asymmetric information, in different settings. In other words, it is not easy to prove this result rigoriously. You may wonder why you need to prove it rigoriously? Look how market fundamentalists ended up when they blindly apply free market's intuition to every problem. Rigor disciplines your intuition to ensure you don't carelessly over-state results etc.
I always thought asymmetric information was obvious. What we have is group think which appears as an efficient market because adopting it does not put anyone at a disadvantage against the market. These are inherently unstable especially when the beliefs are serialized instead of experienced. Doesn't fashion and prestige pricing completely obliterate an efficient market theory? No one has the same information at the same time and its always digested differently.
@gwynedd1. The ground breaking part is that you can show a rational individual, knowing this problem, would still go along with the program. However, it would lead to more costly and inefficient outcome. Most importantly, it rigoriously show that market mechanisms, partially because a market of information is not feasible, won't be able to efficiently correct these problems which market fundementalists preach.
If you want something ground breaking how about something at the core like converting to a market based land value tax with a nationalized mortgage industry and ending all other taxes? How about a public currency with publicly accessible accounts that all balance out to the national money supply? Need privacy? private commodity currencies creating alternatives and serving different markets. That's post office, UPS and Fed-ex applied to money. That deals with issues known for 100 years.
@gwynedd1. Curbing this demand is what I think this is a public policy issue. People should vote more responsibly by becoming more aware of what the consequences are to economic policies supported by their politicians.
@gwynedd1. Moral hazard problem, agents cheating out its principals, has been known back in the 1960s. Again, politicians choose the "right" theory to govern and run the US. With the cold war going on, anything with "too big state" was bad politics - US gov wouldn't want to imitate its worst enemy USSR. By the key principle of suppy and demand, you will always find economists who will sponsor biased theory to support their politicians. Hence, curbing this demand is more practical.
@gwynedd1. I am not sure how you interpret what you mean by "good faith". If you mean blind faith as blindly following models then that is not true. That is why we have experiment done on fields and econometrics method to test out the relevant assumptions or predictions. If by good faith you mean we trust people to always do what it is right then that is also inaccurate. Asymmetric information literature shows how financial managers can cheat out its customers and invest in more risky shocks.
@gwunedd1. You will find only two mentionable journal, in economics, done by Hudson, according to his CV. And they are barely constructive on building economic knowledge. However, he has written so many books instead. It tells me he is more interested on building a public image and earn money off his readers than doing academic research and debate.
Which is why I applaud him. I have no idea what could possibly be accomplished in academic research at this point. Are we going to take a soil sample when we cannot even get to the right state? The old term "political economy" is more appropriate and emphasize political.
@gwyendd1. If you prefer then I will call them mainstream instead of neoclassical. But the key point is that credible research, be it based on rational expectation assumption or new keynesian thoughts, are able to make it way to mainstream's top journal. Look at how much many journals Stigilitz and Akerlof have published in top journals like American Economic Review, Quaterly Journal of Economics, Econometrica etc and compare that volume to what Hudson has done.
"Salt water" schools form a large chunk of good institutions like MIT and Harvard etc. They are both named neoclassical or mainstream because they differ on assumptions but not techniques in analysing problems. Both school approach theoretical problems by analysing incentives and use econometric methods to support their theory. This is why Stigilitz is considered mainstream. He analysed results by showing incentives problem rather than relying on wild intuitions which heterodox tend to use.
I think were we differ is you approach is based upon economic theory on the behavior of the masses based on good faith. I share Hudson's opinion that actually wanting to fix this mess is the wrong assumption. We are not wrong with a misplaced policy. We are dealing with a policy of corruption primarily. Junk economics is being used to conceal this as much as possible.
@gwynedd1. Good! I think we may have found our misunderstanding:) Neoclassical or mainstream economics is not equivalent to the so-called "Chicago School" as wrongly characterized by the media, non-academical books and some left leaning heterodox schools. In macroeconomics, there are two divisions of approach: "salt water" and "fresh water" schools. The so-called "Chicago Schools" thought are mainly held by fresh water schools.
Chicago school was what Hudson specifically mentioned. Its mainstream enough to completely infest the Fed, government and out universities. Salt water economics is not typically associated with neo-liberalism in my estimation. Hudson is not engaging the field as an academic. He is trying to reach the populous.
@gwynedd1. Ever since the fall of Soviet Union, politicians, who were in power, became ever and ever more feverent supporters of blind free market doctrine. And the public kept voting in these type of governments. "Fault Lines:
How Hidden Fractures Still Threaten the World Economy" is a well-researched but very readable book outlining this political problem. That is why I said it was a public policy problem. The policies were designed by those who were in power, not by those who are knowledgable
@gwynedd1. The failure to regulate the financial system was a fault with those who are in power and choose to blindly flavoured free-market doctrine and to ignore literature outlining problems leaded by blindly following it. Neoclassical economists who went public to challenge this policy behaviour were ridiculed and dismissed by free-market supporters due to their unquestioned support by politicians, like Clinton and Bush administration.
@gwynedd1. I don't understand why do you hold onto an inaccurate view of all neoclassical economists misrepresented by cash-cow books and the media? I am constantly showing you with references to counter these inaccuracies.
I don't know why you do since nothing you have said is remotely correct. You have not correctly described neoclassical theory and have misidentified their representatives. Akerlof and Stigiliz are New Keynesian economists opposed to the neoclassical school.
@gwynedd1. What makes you think all neoclassical economists believe in efficient markets? Prof Joseph Stigiliz and Akerlof had won The Memorial Nobel Prize of Economics for their work on information deficiency which can lead to inefficient markets. If neoclassical macroeconomists believe efficient market always hold then there wouldn't be any literature on co ordination failure or sticky price leading to recessions or depressions.
Why should I believe you when you classify Stigiliz as a neoclassical?
"The End of Neo-liberalism?" Written in 2008-07-07 by Stigiliz. You can't just define a theory any way you like. What you are describing isn't Chicago school. Its "rational expectations".
@gwynedd1. I am attacking Hudson's claims because they lack credibility, logic and simply trying to cry wolf to get public attention. There are problems in public policy etc. But he is making up some claims and exaggerating others.
You call this problems in public policy? A multi-trillion dollar ponzi real estate rip off with out right frau,d and you call this a policy problem? No one went to jail in the largest heist in the history of the world. The problem is you are incredibly naive, and he is not. We are at the level of Russian oligarchy, only worse because we don't know it. That you prefer those who are more polite does not reveal why. Quesnay had to be polite too, in the presence of the Royals
@gwynedd1. What I am saying is that mainstream economists aren't homogeneous in thoughts. There are mainstream economists who have done good work on the issue. All this is not hidden in some ivory towers. Most of them allow readers to access their recent publications and working paper on their websites. Admittingly, it is not easy to read modern research economics, without higher training, compared to books written by heterodox schools. But it can be really rewarding to understand them.
@gwynedd1. Wealth of Nations have great economic intuition and insights. But not all of its intuition carries across. The intuition fails badly when there is asymmetric information. I like said constantly, studies in asymmetric information are a huge modern achievement in economics. Adam Smith shows the benefits of free market; modern economics complements it with showing failures of market.
@gwynedd1. You would be surprised to how policy makers and politicians often implement economic policies which distort incentives and exasberate problem they initially intend to solve. Mainstream economists do research work on them and show why such policies don't work. However, somehow there seems to be significant barrier to some issues on these research ideas getting onto political spectrum. Why? As I mentioned before, politicians only mention economic idea when it support his initial idea.
You can read that in the Wealth of Nations. Nothing is new under the sun. The general theory of economics was solved 150 years ago. That includes effective demand which is just another term for sentiment, as if fear of wolves, real or not, will not discourage sheep herding. All that is left is the applicable case studies, cultural differences and legal frame works which alter the landscapes requiring they be mapped to basic formulas.
@gwynedd1. You are talking policy problems. These aren't problems Economists would have the power to solve. But as I have argued, thus far, there is sufficient economic tools to analyze these problems clearly and critically. Inefficient allocation of resources due to credit constraint is a widely research topic in economics. In fact, I am writing a paper related to this at the moment. But whether all these research results can get used all depends on who you vote into power:)
OK you keep telling me mainstream economists have it right. Yet in their ivory towers, no one knows. So here is Hudson trying to dispel some of these destructive myths like having a national debt problem instead of foreign debt, private debt problem, and regulatory failure and you attack him for it. Its not "Credit constraint" , its a completely corrupt system meant to hide in unintuitive complexity. Unless the system operates at the 7th grade level, who we vote matters not.
@gwynedd1. I also having trouble to see what you mentioned is in conflict to what neoclassical economists do. Neoclassical economists do experiments to test their assumptions to model. For instance, there is a large debate to whether moral hazard or adverse selection is main cause to credit constraint. Prof Karlman and Zinman respond to this problem with doing controlled experiment. Read Observing the Unobservavbles if you are interested in this matter.
@TKKTism The main problem is the surplus is going to credit managers who will become our chief economic planners. What experiment do you need? Take a look at Donald Trump. He has the buying power and therefore is an economic planner. The money needs to go to Tesla with less need to depend on the good judgment of Westinghouse. Economics is a deathly ill "science". We cannot even implement Ricardo's law of rent so what progress is going to be made tweaking an environment?
Have you ever seen a landscape or observe how best to cross a river? The data is everywhere yet our culture insists on putting it on a spread sheet as if that now makes it valid.
And mathematical rigor doesn't cause Economists unable to study issues like slavery etc. It is possible to define all these concepts rigoriously with mathematics. However, it forces people to think seriously to what constitue these issues rather than using vague definitions borrowed from political rhetoric.
In fact, Economics' method is closer to Behavioural method than methods used by any other psychological schools. They both focus on incentives and response.
Yes, you can model them with mathematics. You can try to create predictive engines or points of view. However its the validity of it where most of the sweat is. Other than that its all about human psychology based on imperfect information. We know how people might react to a siege and supply shortage, but we don't know is the siege will happen or if the Lake Ladoga ice bridge will be discovered. in due time. Indeed economics is operant conditioning.
@gwynedd1. Making it more rigorious is not a major issue. By making it more rigorious it makes sure Economists know what they are talking about. It makes the understanding of problems more precise. And most importantly, rigor makes the modeller more accountable as when the model fails there is no fuzzy ground to where modeller can back down to. And finally, it allow the readers more easily to pick up modeler's attempt to pass on his political bias as "reasons".
@gwynedd1. Information, Behavioural and Experimental economics are major advances in the neoclassical community. There are many more developments. For instance, poor saving behaviour wouldn't have been understood well without concepts like hyperbolic discounting developed by Behavioural field.
On the note on cultural values, Economics and Behaviorial Psychology share a common method, understanding incentives. Cultural aspect will matter to some extent.
@gwynedd1. If you mean pattern recognition as doing controlled experiment, not just observing natural experiment, then that is actually a modern economic interest. Prof John List and Prof Abhijit Banerjee have interesting works on this subject.On the rent issue, Econ 101 or even intermediate level may not go into the details which you are interested because they aim to cover techniques over specific issues. A good political economy course, on the subject, should cover what you are talking about.
@gwynedd1. In reality, you won't be able to observe all relevant things sequentially but simultaneously. So most of the time, you observe A & B but not A then B. So correlation is what you can actually observe in natural experiments.
Since you have studied psychology, I am sure you must have encountered the concept "correlation doesn't imply causation". That is the exact problem to why recognizing pattern, without a solid theory behind it, is really useless to understand issues.
Pattern recognition is what allows the causative link. Its the over reliance on mathematically derived correlations that is indeed the problem. Math is great but it has allowed a vast supply of junk economics. Just look at the 15 trillion dollar "debt". Its meaningless, junk economics.
@gwynedd1. No, rent generated from resources should be covered in Econ 101. It is a simple argument of limited supply with unlimited demand generating profits more than competitive standards. True, Economics is not rocket science or a physical science but a social science. No credible Economists pretend otherwise. I don't know where you get this impression from. However, Economists use techniques of hard science to ensure its research follows logical consistency.
They try to make it into a hard science. That's the problem. A culture's value system will change any theory you have. That is why real time pattern recognition matters. However then again these same battles are fought in the field of psychology, yet its behaviorism that gets results because it concentrates on whats happening with pattern recognition. The neoclassical school created by physicists cannot mathematically define slavery, domestication, symbiosis , parasitism etc
On rent, yes they briefly gloss over it as a monopoly pricing power. Yet no mention of monopolistic land and resource rents or how taxation of that wealth has no impact on production or even increases it by punishing owners of idle resources. In other words a VAT tax is stupid. However that is built around the so called marginal utility break through as if rents add value. The marginal utility swindle substitutes pricing power with value.
@gwynedd1. Sorry, I am lost to what you are referring to in your first sentence. Yes, classical economists have provided solid foundation for economic thinking which is why we use these tools to understand new problems. Intuitively, major problems in Economics were solved by classical economists but modern economics have solved new problems related to the old problems and new issues.
I think it went backwards. I can think of few major advances. Even marginal utility seemed to be well understood by Marx who supposedly held dogmatically to the labor theory of value. "yet that fact is by no means sufficient to guarantee the utility of his 20 yards of linen. If the community's want of linen, and such want has a limit like every other want, should already be saturated..." The neoclassicals considered a change in point of view revolutionary?
@gwynedd1. In my opinion, undergraduate finance degree holders are rarely exposed to modern economic modelling. Undergraduate finance courses, maybe final year courses, rarely touch on frontier research in economics such as asymmetric information etc. Just read the textbooks in Industrial Organisation and you will find problems related to economic rent and price discrimination.
But you don't need that. I can read Henry George in plain English. Ricardo's explanation of rent suffices. Much of economics was solved more than a 100 years ago. Its like Aristotelian logic. I went to school in a social science aimed at industrial psychologist. So I am well positioned to attack this field. I am also well aware of the self serving philanthropy of industry in our school systems which did not happen prior to the 20th century.
@gwynedd1. This is because you can create a model that predicts the trend well but no idea to what causing the trend. Macroeconomic variables can easily correlate with each other masking what is causing what. A trend only model, at best, would help you to differentiate which macroeconomic variable correlates with the truly independent variable (pretty uninformative.)
Following the Keynesian doctrine made economists unable to understand how stagflation was even a possible thing. Moving away from that doctrine allowed economists to solve more and new problems from a better premise: people respond to incentives. Blindly following Keynesian curves or supposed pattern will mask the fundamental force of human behaviour: incentives.
Moreover, pattern detection is not the only priority. We need to understand what causes these patterns.
That is because they wrote resource rents out of the book. Sort of obvious don't ya thing seeing as OPEC was a rentier cartel. Stop pretending economics is rocket science. That is why I hate economists in general. Its little more than basic crowd control.
Recognizing the pattern also implies identifying cause. If A then B is a pattern. A is the cause. The biggest pattern economics seems blind to is resources in progressive societies going to non producers. That is because capital and labor cannot store value long. Only rents have value storage capabilities, thus the arrival of rent is the arrival of stagnation. Its why every landed society ends up with an idle ruling class.
@gwynedd1. I won't try to convince you to believe in mainstream but will try to dispel some myths, created by media and heterodox schools, about mainstream's short fall.
I am curious to how you think you can pinpoint down precise patterns without data? Back in the days when Economics just followed intellectual speculations, "insights" and Keynesian doctrine, they made models failing to explain the stagflation in the 1970-1980. In fact, Keynesian prescription just made the matter worse.
You don't need mathematical data is my point. Math may be useful to map behaviors but every assumption must be observed to be correct. Again the Keynesian model at the time conflated capital with a resource rent. Capital shortages cause demand for labor. Rentier constraints cannot be solved with labor. Ironically though Keynesian economics applies here because people are over saving, and its application would also break the private credit crunch.
@gwynedd1. Did he precisely pin point about the scale massive crash in financial market, its rippling effect across the globe and depth of the recession? That is what I usually mean predict. Anything short of above, you will find a mainstream economists who had talked about it. Again, I wish to emphasize that mainstream economists hold heterogenous beliefs but they require higher standards to assert their claims.
Since Hudson studied the Babylonian debt jubilees and I saw him brink up the housing bubble in as early as 2002, yes Hudson saw it coming. Bill Still who is a reporter saw it coming since the 90s. All it takes is for people who are not modern economists to study economics. Again I was trained in social sciences and I know the potency of authority overrides the truth. Economics serves the interests of the wealthy. They just loved Malthus for that reason.
@gwynedd1.Mainsteam academic community isn't all thick and adherent to market fundamentalism as portrayed by media and other pop culture writers.In fact, major research in mainstream economics in the past half of the century had been done on market imperfections and frictions.They were ignored by politicians, and non-academic economists etc because the research didn't benefit their political rhetoric. Those, in power, often use economics to justify their ideologies than use it to solve problems.
That is not what I see coming from people who have finance degrees. What happened to economic rent and unearned income? Any theory without it is a joke to me. However the concept is alive and well in the business world since price discrimination is rather rampant. Successful price discrimination maximizes product. Thus it would do the same with tax policy. So where is it in main stream, macro economics?
@gwynedd1. However, the possibility of the financial catastrophe didn't completely escape mainstream economist's research. (for instance, read work done by Prof Raghuram G. Rajan) These works weren't dismissed on standard of mainstream academic but by Feds, politicians and economists who held a market fundamentalist belief.
I have yet to see any evidence showing heterodox schools had the proper understanding, backed up by data, on the scale of the financial problem before the crash.
You don't need data. That is one of my fundamental dislikes of mainstream economics. What you need is pattern recognition. Mathematical models must be built around around very precise patterns that can only be determined by observation. That is why mathematical chess algorithms never beat the best humans. The break through was to use a database of pattern recognition. The biggest thing to notice is that stores of value are the antitheses of human progress.
@gwynedd1. No the housing bubble didn't escape the mainstream economist's observation (Read Prof Robert Shiller's work for instance). The main denial came from economists who are in politics, media and various entities who had incentive to deny, for job reasons. What the mainstream economic didn't predict was the scale of financial crisis associated with the bubble and how this brought people into the recession.
And again, Hudson's post Keynesian position did predict the scale of the crisis. That is because they understand the role of debt. I heard Hudson and Keen talking about jubilee. So again I see no reason why I should flock to the mainstream. They were wrong.
@gwynedd1, the problem is his so-called research doesn't stand up to scrutiny by modern standards. Maybe in politics and Feds, due to special interests and ideologies, certain truths are suppressed. But, in academia, if you can make a solid and sound case the chances are your research will be accepted by some decent standarded journals. But that's not his case.
He's not the only one voicing out against the problems in financial market but his arguments falls on fictitious hunches
You have got to be kidding. The fashionable, mainstream neoclassical economics denied the housing bubble. That is why you have to go to heterodox post Keynesians(Hudson and Keen) and Austrians(Schiff and Ron Paul) who don't take on the ideas of Jean Baptist Say to the gills. You want Hudson to be accepted by the false prognosticators? I believe Hudson because he is an historian and channels the likes of Smith, Mill and H. George. Pretty decisive IMHO.
@gwynedd1, just look at what his contribution as an academic has been so far. He plays a larger focus on getting media and public attention than building discipline and original research. Now he is making more ridiculous claims about government to attract attention. This happens often when an economist can't produce good research to attract attention instead. The stuff he is right about aren't much ground breaking either.
The research is there. The problem is its being ignored. Who else is trying to publicize the truth? We took a wrong turn in the 20th century...because finance took the wheel.
this whole question of the debt is a scare tactic. its bs. the us is flooded with wealth. otherwise they would not allow 30 million impoverished illegal aliens into the country. don't be fooled, people! NO country would do that unless they could easily afford it
So far, the Fed is reporting record profits. It said yesterday it will pay $76.9 billion to the U.S. Treasury as part of an annual dividend bolstered by its holdings.
Who REALLY runs our world? search "israel Did 911" and search "ZionCrimeFactory" for proof.
"US Rep. McKinney has accused the pro-Israel Lobby in America (AIPAC, ADL, etc) for ruining her political career.She refused to sign the pro-Israel pledge from Congress and took a pro-Palestinian stance. Because of this, she said “war was declared” on her by them. In 2009 she told TIU's Ognir that “more than 99% of Congress work for Zionist-Israeli interests.”
"MH(2003) : The problem of inadequate consumer demand to fuel an economic recovery does not lie with the cost of labor so much as with the fact that it is now normal for families to pay a quarter or even a third of their income for debt service. This diverts spending away from goods and services. The Bureau of Labor Statistics reports that this proportion rises to 40 percent for home-owners who have taken out big mortgages to buy their homes as the real estate bubble has pushed housing ... "
"Most everyone involved in the real estate bubble thus far has made at least a few dollars. But that is about to change. The bubble will burst, and when it does, the people who thought they’d be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom…" - Michael Hudson May 2006
Most people who start learning about the Fed scam always encounter this red herring. The profits of the Fed are rebated to the Treasury. While I am sure its not a model of efficiency its not really where the problem is. The problem is fractional reserve lending against fixed assets like real estate which create ponzi schemes extracting all the economic surplus. 27 trillion created between 2001 and 2008 by private banks.
I DONT THINK MOST PEOPLE REALIZE THAT THE FEDERAL RESERVE PRINTS OUR MONEY AND THE FEDERAL RESERVE IS NOT A GOVERNMENT AGENCY. THE FEDERAL RESERVE IS A PRIVATE BANK THAT EARNS 46 CENTS IN INTEREST FOR EVERY DOLLAR THEY PRINT. WHAT THE U.S. NEEDS TO DO IS TO GET RID OF THE FEDERAL RESERVE AND HAVE OUR TREASURY DEPT. PRINT THE MONEY AS NEEDED AND THEN THE U.S. CANT GO INTO DEBT.
STOP SAYING AH............
MegaTonL 1 week ago
@MegaTonL and say ahhhhhhhhhhhhhhhhhhhhhh WWWWWWTTTTTTFFFFFucccckk!
goldengyrl2010 2 days ago
This guy is an idiot
Danlovesmakinvids 2 weeks ago
@Danlovesmakinvids
Logically reverse that statement and you are on the fictitious debt, aka the money.
gwynedd1 2 weeks ago
@Danlovesmakinvids WHAT MAKES YOU SAY THAT?....I think hes rite on the money, open your fukn eyes!
luminatedgame 2 weeks ago
if national debts are just symbolic how come my student loan debts are real? Can someone tell me where I can get my debt ceiling raised, I wanna but a new SUV. Thanx.
bluehorse888 2 weeks ago
@bluehorse888
Because you don't control the currency. Our government does. They do not go to a credit market, They create the credit market. They used to go to the gold credit market but no longer. Its now a command credit system.
gwynedd1 2 weeks ago
@gwynedd1 the federal reserve controls currency, the treasury borrows it from the fed.
the FED is a seperate entity privatly owned and above from the government. Look up the federal reserve online pamphlet, and read their mission statement!
luminatedgame 2 weeks ago
@luminatedgame
It just isn't true. Just like the merchantilsm of the British empire, there is no real distinction between the Fed, big business and government. I keep telling people the simple fact that profits are rebated to the treasury, and they keep ignoring it. I have been exposed to all the Fed Internet conspiracy material, but unlike many who keep ignoring the facts, I have also exposed myself to economic theory, how it really works and where it is going wrong.
gwynedd1 2 weeks ago
@bluehorse888 your debts are as real as the money you borrowed, if you "trust the value of currency" than your loan is real, and so is its debt. but if you cant pay for it you can reset your personal debt clock......OH thats rite, you took a student loan thats government backed you can never bankrupt out of it. College loans are gonna be the next and one of the biggest bubble you have ever seen.
luminatedgame 2 weeks ago
@luminatedgame
No it won't because its only a trillion dollar sink hole. Nothing can absorb debt like real estate which is why its always the biggest bubble. Like I said, Henry George more or less adapted Ricardo's theory on rent to the land speculation problem two depressions ago. Adam Smith, Ricardo , Henry George....that is where you can begin to find the truth. The 20th century is full of robber baron mythologies. Can't make sense of it without that foundation.
gwynedd1 2 weeks ago
WTF is this idiot talking about? A $14 trillion government debt which American taxpayers have to service is fictitious?
thespacialone 2 weeks ago
@thespacialone
Yes. What is owed? More debt, that's what. If you can pay off IOUs with more IOUs, what is it? 1971 was kind of an important year. It was the year the US went to a fully chartalist monetary system.
gwynedd1 2 weeks ago
@thespacialone yes.....open your mind and research it.
luminatedgame 2 weeks ago
@thespacialone Just grab your bottle and go back to sleep.
TrainingStream 1 week ago
@TrainingStream Are you high? The US Gov owes $14 tr to its bond holders. That debt servicing is funded by US taxpayers ($500 billion per year or whatever).
Just grab your crack pipe and go back to sleep.
thespacialone 1 week ago
@thespacialone Just as long as we are all dreaming the same dream, my freind.
TrainingStream 1 week ago
@TrainingStream All I'm hearing is increasingly incoherent noise. Do you actually have anything to say?
There is a US govt debt. That debt needs to be serviced. The burden for such falls upon US taxpayers. If you're saying, don't be a taxpayer, fine. But do you dispute the transparently obvious? If so, how?
thespacialone 1 week ago
@thespacialone
The debt does not need to be serviced. Its the money supply. All the interest bearing form of the debt means is future inflation(all money and coin is basically debt, symbolic of value) . If you keep treating this like your checkbook and your own debts you will just get everything wrong. Debt is meaningless without context and there are hundreds of them. Seriously, read and understand MMT and understand it. Then you will know whats really wrong.
gwynedd1 1 week ago
@gwynedd1 No government borrowing, no government debt. I think you're confusing this with debt money generally.
thespacialone 1 week ago
@thespacialone
All money is debt. Money is generally not interest bearing but a treasury to its maturity is nothing more than moving from a saving account to a checking account. Where do you think a dollar comes from? How do you think dollars come into existence? Most money/credit is lent into existence from banks. Yet it originally starts with a government deficit which creates money. No national debt, no money.
gwynedd1 1 week ago
@gwynedd1 No. Not all money is debt. In fact, the currency derived from credit systems like the Federal reserve barely counts as money, in that the three functions of money are very much impaired.
UK taxpayers paid almost $80 billion last year to UK gilt holders. You don't seem to have a clue what you're talking about. Watch The Money Masters.
thespacialone 1 week ago
@thespacialone I have no clue? I have seen Money Masters . All money quantifies credit and is symbolic for a debt of real goods and services. Money is inherently debt based. You are confusing lending money into existence against a fixed supply used to quantify debt. But then again I didn't just watch a video created by a new reporter and studied economics which is why I have a clue and you don't. Not to say MM does not make good points just like Rothbard.
gwynedd1 1 week ago
@thespacialone The intrest the fedralral reserve charges on the fiat currency it issues doesnt exsit. Its a ponzi scheme where the bankers end up with everything of real value in the end, you dont know this? Study monetary thoery and fractional reserve banking.
TrainingStream 1 week ago
@TrainingStream
Profits are rebated to the treasury. I have said it a hundred times. What's the problem? Why don't you look into it before spreading disinformation? You are correct that fractional reserve banking lent out for rent seeking and ponzi is a fundamental problem. It is the problem.
gwynedd1 1 week ago
RON PAUL 2012 ....... NEWT IS A FRUIT AND MIT IS SHIT !
2020starman 2 weeks ago
@2020starman ron paul cant do anything at this point, too many big wigs in control
better get ready for a big crash!
JamesAlan051 2 weeks ago
why borrow from china when we can just print???
JamesAlan051 2 weeks ago
@JamesAlan051 We dont print, We borrow from the Internatinal Bankers that own all the shares in the Central Bank (the Fedral Reserve). When you print new money where do you think it gets its value from? It takes vaule from the money that is already out there, it takes vaule away from your money, my money and your neighbors money, its called inflation and its a hidden tax.
TrainingStream 2 weeks ago
@TrainingStream The Federal Reserve is a money printing scam on the country.
You better know we are in the printing business. why do you think the dollar has been losing value? WE dont borrow from ourselves ! Haven't you been listening?
JamesAlan051 2 weeks ago
@JamesAlan051 Who are you talking too? I know this information, didnt you read my first comment to you? Anyway good to see you know its fiat.
TrainingStream 2 weeks ago
@TrainingStream Im hearing you, guess we both know whats going on,
Ive been praying lately
JamesAlan051 2 weeks ago
@JamesAlan051 I should start praying more.
TrainingStream 2 weeks ago
@TrainingStream thanks dont want to lose you, good drummer too take care
JamesAlan051 2 weeks ago
@JamesAlan051
The profits of the Fed are rebated to the treasury, so that is not really where the problem is. Its the fractional reserve system and private banks creating unproductive credit that control the Fed.
gwynedd1 2 weeks ago
@TrainingStream
Most of that is from commercial banks and the mortgage industry. In theory this would not be a problem if they monetized things of value. Since they monetize ponzi schemes, you are absolutely correct.
gwynedd1 2 weeks ago
@gwynedd1 There is a couple really good documentaries on Youtube anyone can watch. 1. Money as Debt - Full 2 hrs 2. Money Masters - Full 3 hrs. Their is also a really short cartoon 29 min Called 3. The American Dream - Full 29 mins, since you and I know about Monetary Theory I suggest The American Dream - Full 29 min it will make you laugh my freind, nice conversating with you.
TrainingStream 2 weeks ago
@TrainingStream
Yes I have seen them. Its instructive if not entirely accurate. As I said, the profits of the Fed are rebated to the treasury so its just not where the action is. If I may suggest Henry George to you, which tied to the modern finance ponzi gives you a better picture of the scam. But then again M. Hudson explains it quite well also.
gwynedd1 2 weeks ago
This guys a real moron....is he from this planet
fuiya 3 weeks ago
@fuiya
Speaking of yourself of course.
gwynedd1 2 weeks ago
Whatever the GOP wants, do the opposite. They want to cut SEC, bolster it. They want to end social programs, add more. The want less regulation, do more.
ShogaNinja 4 weeks ago
Who disliked this video? Damn people!
haliaeetus19 4 weeks ago
@haliaeetus19
Got me. Treasuries are just interest bearing ( now at 2%) notes payable in non interest bearing notes, all debt since that is what a note is. Trouble is securities don't secure anything anymore like gold so its all fictitious just like he said. Then you have the twits come on here talking about China which he clearly stated is a problem that we are not talking about. What did he say that was wrong?
gwynedd1 3 weeks ago
Are you people still believing anything Obama says? Amazingly stupid.
landlogger 4 weeks ago
This guy should probably take a visit and talk with the people at the nonpartisan Government Accountability Office. The debt ceiling is just a gimmick anyway, being as how they keep raising the thing. The real danger with the national debt is the future interest payments the government will have to make. At some point in the not distant future, the interest payments will take up most of the federal budget. That's going to leave very little for all the other things the government provides.
josephc28 1 month ago
@josephc28 Its all debt, every last bit of it. If bank credit declines to nothing, then interest rates would be zero. If the economy picks up, along with banks credit, then it will increase "revenue" to balance the budget. As MH said, its fictitiousness since the national debt is the money supply. Can't pay off debt when debt has been monetized to exclusivity. Only the foreign debt matters.
gwynedd1 4 weeks ago
They can print money out of thin air and send it threw out the globe in inflation that number is run up to inslave the American People!!!!
sellingmiamihomes 1 month ago
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Besides, Philips curve are just one of many things, initially purported by "insights" or "intuition", which makes little incentive sense. My main point relating to Philips curve is that incentives matter in economic studies. And approaches to economics, not accounting people's incentives, should be viewed with suspicion. This is often why quite considerable number of heterodox schools are unable to work with mainstream - some of the stuff they talk about makes no incentive sense.
TKKTism 1 month ago
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TKKTism 1 month ago
@gwynedd1. Understanding incentives and not sticking to Keynesian dogma is why classical economists would have seen it. In current mainstream approach, stagflation is not a mystery because it takes people's incentives seriously like the classical economists did (which is partially why people call mainstream the neoclassical fields). If you look at old Keynesian models, many relations just came out of thing without good incentive reasoning (though not to say Keynesian insights are wrong).
TKKTism 1 month ago
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CHINA HAS THE GREATEST COUNTRY IN THE WORLD
youraposer1 1 month ago
@gwynedd1. For instance, the Philips Curve ignoring how people can adapt to their expectation and information led to policy disaster with US experiencing the stagflation. So it may be very well to dismiss need for rigor once you have seen the proof etc but instances like above says otherwise.
TKKTism 1 month ago
@TKKTism
The failure of the Philips curve is exactly the case of the failure of that "old, outdated" economics being discarded. The classical economists could have seen the problem, in the words of JS Mill, "in their sleep". Stagflation was a mystery only to a modern, dismal economist.
gwynedd1 1 month ago
@gwynedd1. I would agree if we have sufficient evidence to show a phenomena is correct then we should focus on the intuition behind this problem. That is something many economists do. In ex-post of proving a phenomena is correct, the problem may seem to trivial to have warranted focus. But in ex-ante of proving a phenomena is correct, loose ends may well be the killer of the theory.
TKKTism 1 month ago
@gwynedd1. Your intuition partially captures the issue argued by the models. However, have you thought about if fund managers knows this group think is unstable, surely they can do better off by betting against the group think at some point? This arguement implies this group think itself is unstable for co-operation which may lead to many groups pitting against each other. These are little loose ends which an economist need to tie up to ensure the argument, in the model, is sound.
TKKTism 1 month ago
@TKKTism
Again the loose ends are interesting, but the fundamentals of economy and democracy are more important. The monetary system in a democracy must be intuitive, not counter intuitive. This is basically a derivative that only an educated democracy can function. What also can happen is the addition of complexity to effectively accomplish the same ends. This is a fundamental gap between economic thought and the hazards of the applied theory. This thread is a perfect example.
gwynedd1 1 month ago
@gwynedd1. Economists have constructed model to show that herding can actually be a rational behaviour for fund/investment managers which may be stable despite investors may well know the problem. Theory, like this, justifies regulation as the effects aren't temporary.
TKKTism 1 month ago
@gwynedd1. Of course, if people just herd and not process information individually then we don't necessarily have efficient market. But here is another similar question to asymmetric information problem. Is herding a rational behaviour or it will disappear over time as people learn? These have different implications. If we are in the latter case then people will eventually learn their way out. If we are in the former case then we would rarely have efficient market outcome where herding happens.
TKKTism 1 month ago
@gwynedd1. All these question you ask can be evaluated with current economic tools - the beauty of economic tools is its applicability to so many interesting questions. However, by its specific applied nature you would likely find these type questions answered in public policy journal than in economic journal.
TKKTism 1 month ago
@gwynedd1. Let's think of Philip's curve for instance.It was a pattern that observed in data for a long time so people started to take it for guaranteed without providing a rigorious foundation for it.And something impossible in the Philip's curve happened, Stagflation. Without rigorious foundation, people struggled to understand why this was happening.There are many other examples to why adherent prescription to a "theory" without rigorious foundation fell on its face with confusion.
TKKTism 1 month ago
@gwynedd1. It may sound intuitive to you. But how can you be sure that such result, with asymmetric information, in different settings. In other words, it is not easy to prove this result rigoriously. You may wonder why you need to prove it rigoriously? Look how market fundamentalists ended up when they blindly apply free market's intuition to every problem. Rigor disciplines your intuition to ensure you don't carelessly over-state results etc.
TKKTism 1 month ago
@TKKTism
I always thought asymmetric information was obvious. What we have is group think which appears as an efficient market because adopting it does not put anyone at a disadvantage against the market. These are inherently unstable especially when the beliefs are serialized instead of experienced. Doesn't fashion and prestige pricing completely obliterate an efficient market theory? No one has the same information at the same time and its always digested differently.
gwynedd1 1 month ago
@gwynedd1. The ground breaking part is that you can show a rational individual, knowing this problem, would still go along with the program. However, it would lead to more costly and inefficient outcome. Most importantly, it rigoriously show that market mechanisms, partially because a market of information is not feasible, won't be able to efficiently correct these problems which market fundementalists preach.
TKKTism 1 month ago
If you want something ground breaking how about something at the core like converting to a market based land value tax with a nationalized mortgage industry and ending all other taxes? How about a public currency with publicly accessible accounts that all balance out to the national money supply? Need privacy? private commodity currencies creating alternatives and serving different markets. That's post office, UPS and Fed-ex applied to money. That deals with issues known for 100 years.
gwynedd1 1 month ago
@gwynedd1. Curbing this demand is what I think this is a public policy issue. People should vote more responsibly by becoming more aware of what the consequences are to economic policies supported by their politicians.
TKKTism 1 month ago
@gwynedd1. Moral hazard problem, agents cheating out its principals, has been known back in the 1960s. Again, politicians choose the "right" theory to govern and run the US. With the cold war going on, anything with "too big state" was bad politics - US gov wouldn't want to imitate its worst enemy USSR. By the key principle of suppy and demand, you will always find economists who will sponsor biased theory to support their politicians. Hence, curbing this demand is more practical.
TKKTism 1 month ago
@gwynedd1. I am not sure how you interpret what you mean by "good faith". If you mean blind faith as blindly following models then that is not true. That is why we have experiment done on fields and econometrics method to test out the relevant assumptions or predictions. If by good faith you mean we trust people to always do what it is right then that is also inaccurate. Asymmetric information literature shows how financial managers can cheat out its customers and invest in more risky shocks.
TKKTism 1 month ago
@TKKTism
"Asymmetric information literature shows how financial managers can cheat out its customers and invest in more risky shocks."
What is so ground breaking about it? I don't get it?
gwynedd1 1 month ago
@gwunedd1. You will find only two mentionable journal, in economics, done by Hudson, according to his CV. And they are barely constructive on building economic knowledge. However, he has written so many books instead. It tells me he is more interested on building a public image and earn money off his readers than doing academic research and debate.
TKKTism 1 month ago
@TKKTism
Which is why I applaud him. I have no idea what could possibly be accomplished in academic research at this point. Are we going to take a soil sample when we cannot even get to the right state? The old term "political economy" is more appropriate and emphasize political.
gwynedd1 1 month ago
@gwyendd1. If you prefer then I will call them mainstream instead of neoclassical. But the key point is that credible research, be it based on rational expectation assumption or new keynesian thoughts, are able to make it way to mainstream's top journal. Look at how much many journals Stigilitz and Akerlof have published in top journals like American Economic Review, Quaterly Journal of Economics, Econometrica etc and compare that volume to what Hudson has done.
TKKTism 1 month ago
"Salt water" schools form a large chunk of good institutions like MIT and Harvard etc. They are both named neoclassical or mainstream because they differ on assumptions but not techniques in analysing problems. Both school approach theoretical problems by analysing incentives and use econometric methods to support their theory. This is why Stigilitz is considered mainstream. He analysed results by showing incentives problem rather than relying on wild intuitions which heterodox tend to use.
TKKTism 1 month ago
@TKKTism
I think were we differ is you approach is based upon economic theory on the behavior of the masses based on good faith. I share Hudson's opinion that actually wanting to fix this mess is the wrong assumption. We are not wrong with a misplaced policy. We are dealing with a policy of corruption primarily. Junk economics is being used to conceal this as much as possible.
gwynedd1 1 month ago
@gwynedd1. Good! I think we may have found our misunderstanding:) Neoclassical or mainstream economics is not equivalent to the so-called "Chicago School" as wrongly characterized by the media, non-academical books and some left leaning heterodox schools. In macroeconomics, there are two divisions of approach: "salt water" and "fresh water" schools. The so-called "Chicago Schools" thought are mainly held by fresh water schools.
TKKTism 1 month ago
@TKKTism
Chicago school was what Hudson specifically mentioned. Its mainstream enough to completely infest the Fed, government and out universities. Salt water economics is not typically associated with neo-liberalism in my estimation. Hudson is not engaging the field as an academic. He is trying to reach the populous.
gwynedd1 1 month ago
I should correct that because it sound like I said Keynesian is rational expectations. Chicago school is "rational expectations".
gwynedd1 1 month ago
@gwynedd1. Ever since the fall of Soviet Union, politicians, who were in power, became ever and ever more feverent supporters of blind free market doctrine. And the public kept voting in these type of governments. "Fault Lines:
How Hidden Fractures Still Threaten the World Economy" is a well-researched but very readable book outlining this political problem. That is why I said it was a public policy problem. The policies were designed by those who were in power, not by those who are knowledgable
TKKTism 1 month ago
@gwynedd1. The failure to regulate the financial system was a fault with those who are in power and choose to blindly flavoured free-market doctrine and to ignore literature outlining problems leaded by blindly following it. Neoclassical economists who went public to challenge this policy behaviour were ridiculed and dismissed by free-market supporters due to their unquestioned support by politicians, like Clinton and Bush administration.
TKKTism 1 month ago
@TKKTism
They followed neoclassical theory. You don't know what it is.
gwynedd1 1 month ago
@gwynedd1. I don't understand why do you hold onto an inaccurate view of all neoclassical economists misrepresented by cash-cow books and the media? I am constantly showing you with references to counter these inaccuracies.
TKKTism 1 month ago
@TKKTism
I don't know why you do since nothing you have said is remotely correct. You have not correctly described neoclassical theory and have misidentified their representatives. Akerlof and Stigiliz are New Keynesian economists opposed to the neoclassical school.
gwynedd1 1 month ago
@gwynedd1. What makes you think all neoclassical economists believe in efficient markets? Prof Joseph Stigiliz and Akerlof had won The Memorial Nobel Prize of Economics for their work on information deficiency which can lead to inefficient markets. If neoclassical macroeconomists believe efficient market always hold then there wouldn't be any literature on co ordination failure or sticky price leading to recessions or depressions.
TKKTism 1 month ago
@TKKTism
Why should I believe you when you classify Stigiliz as a neoclassical?
"The End of Neo-liberalism?" Written in 2008-07-07 by Stigiliz. You can't just define a theory any way you like. What you are describing isn't Chicago school. Its "rational expectations".
gwynedd1 1 month ago
@gwynedd1. I am attacking Hudson's claims because they lack credibility, logic and simply trying to cry wolf to get public attention. There are problems in public policy etc. But he is making up some claims and exaggerating others.
TKKTism 1 month ago
@TKKTism
You call this problems in public policy? A multi-trillion dollar ponzi real estate rip off with out right frau,d and you call this a policy problem? No one went to jail in the largest heist in the history of the world. The problem is you are incredibly naive, and he is not. We are at the level of Russian oligarchy, only worse because we don't know it. That you prefer those who are more polite does not reveal why. Quesnay had to be polite too, in the presence of the Royals
gwynedd1 1 month ago
@gwynedd1. What I am saying is that mainstream economists aren't homogeneous in thoughts. There are mainstream economists who have done good work on the issue. All this is not hidden in some ivory towers. Most of them allow readers to access their recent publications and working paper on their websites. Admittingly, it is not easy to read modern research economics, without higher training, compared to books written by heterodox schools. But it can be really rewarding to understand them.
TKKTism 1 month ago
@TKKTism
Again these would be interesting case studies on what is generally understood.
gwynedd1 1 month ago
@gwynedd1. Wealth of Nations have great economic intuition and insights. But not all of its intuition carries across. The intuition fails badly when there is asymmetric information. I like said constantly, studies in asymmetric information are a huge modern achievement in economics. Adam Smith shows the benefits of free market; modern economics complements it with showing failures of market.
TKKTism 1 month ago
@TKKTism
Neoclassicals are the ones who believe in efficient markets. Adam Smith was not perfect, but soundly refuted the mercantilism economy we have today.
gwynedd1 1 month ago
@gwynedd1. You would be surprised to how policy makers and politicians often implement economic policies which distort incentives and exasberate problem they initially intend to solve. Mainstream economists do research work on them and show why such policies don't work. However, somehow there seems to be significant barrier to some issues on these research ideas getting onto political spectrum. Why? As I mentioned before, politicians only mention economic idea when it support his initial idea.
TKKTism 1 month ago
@TKKTism
You can read that in the Wealth of Nations. Nothing is new under the sun. The general theory of economics was solved 150 years ago. That includes effective demand which is just another term for sentiment, as if fear of wolves, real or not, will not discourage sheep herding. All that is left is the applicable case studies, cultural differences and legal frame works which alter the landscapes requiring they be mapped to basic formulas.
gwynedd1 1 month ago
@gwynedd1. You are talking policy problems. These aren't problems Economists would have the power to solve. But as I have argued, thus far, there is sufficient economic tools to analyze these problems clearly and critically. Inefficient allocation of resources due to credit constraint is a widely research topic in economics. In fact, I am writing a paper related to this at the moment. But whether all these research results can get used all depends on who you vote into power:)
TKKTism 1 month ago
@TKKTism
OK you keep telling me mainstream economists have it right. Yet in their ivory towers, no one knows. So here is Hudson trying to dispel some of these destructive myths like having a national debt problem instead of foreign debt, private debt problem, and regulatory failure and you attack him for it. Its not "Credit constraint" , its a completely corrupt system meant to hide in unintuitive complexity. Unless the system operates at the 7th grade level, who we vote matters not.
gwynedd1 1 month ago
@gwynedd1. I also having trouble to see what you mentioned is in conflict to what neoclassical economists do. Neoclassical economists do experiments to test their assumptions to model. For instance, there is a large debate to whether moral hazard or adverse selection is main cause to credit constraint. Prof Karlman and Zinman respond to this problem with doing controlled experiment. Read Observing the Unobservavbles if you are interested in this matter.
TKKTism 1 month ago
@TKKTism The main problem is the surplus is going to credit managers who will become our chief economic planners. What experiment do you need? Take a look at Donald Trump. He has the buying power and therefore is an economic planner. The money needs to go to Tesla with less need to depend on the good judgment of Westinghouse. Economics is a deathly ill "science". We cannot even implement Ricardo's law of rent so what progress is going to be made tweaking an environment?
gwynedd1 1 month ago
@gwynedd1. I am confused to what you mean pattern recognition ,without maths or data, can allow causative line in practice?
TKKTism 1 month ago
@TKKTism
Have you ever seen a landscape or observe how best to cross a river? The data is everywhere yet our culture insists on putting it on a spread sheet as if that now makes it valid.
gwynedd1 1 month ago
And mathematical rigor doesn't cause Economists unable to study issues like slavery etc. It is possible to define all these concepts rigoriously with mathematics. However, it forces people to think seriously to what constitue these issues rather than using vague definitions borrowed from political rhetoric.
In fact, Economics' method is closer to Behavioural method than methods used by any other psychological schools. They both focus on incentives and response.
TKKTism 1 month ago
@TKKTism
Yes, you can model them with mathematics. You can try to create predictive engines or points of view. However its the validity of it where most of the sweat is. Other than that its all about human psychology based on imperfect information. We know how people might react to a siege and supply shortage, but we don't know is the siege will happen or if the Lake Ladoga ice bridge will be discovered. in due time. Indeed economics is operant conditioning.
gwynedd1 1 month ago
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@gwynedd1. Making it more rigorious is not a major issue. By making it more rigorious it makes sure Economists know what they are talking about. It makes the understanding of problems more precise. And most importantly, rigor makes the modeller more accountable as when the model fails there is no fuzzy ground to where modeller can back down to. And finally, it allow the readers more easily to pick up modeler's attempt to pass on his political bias as "reasons".
TKKTism 1 month ago
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TKKTism 1 month ago
@gwynedd1. Information, Behavioural and Experimental economics are major advances in the neoclassical community. There are many more developments. For instance, poor saving behaviour wouldn't have been understood well without concepts like hyperbolic discounting developed by Behavioural field.
On the note on cultural values, Economics and Behaviorial Psychology share a common method, understanding incentives. Cultural aspect will matter to some extent.
TKKTism 1 month ago
@gwynedd1. If you mean pattern recognition as doing controlled experiment, not just observing natural experiment, then that is actually a modern economic interest. Prof John List and Prof Abhijit Banerjee have interesting works on this subject.On the rent issue, Econ 101 or even intermediate level may not go into the details which you are interested because they aim to cover techniques over specific issues. A good political economy course, on the subject, should cover what you are talking about.
TKKTism 1 month ago
@gwynedd1. In reality, you won't be able to observe all relevant things sequentially but simultaneously. So most of the time, you observe A & B but not A then B. So correlation is what you can actually observe in natural experiments.
Since you have studied psychology, I am sure you must have encountered the concept "correlation doesn't imply causation". That is the exact problem to why recognizing pattern, without a solid theory behind it, is really useless to understand issues.
TKKTism 1 month ago
@TKKTism
Pattern recognition is what allows the causative link. Its the over reliance on mathematically derived correlations that is indeed the problem. Math is great but it has allowed a vast supply of junk economics. Just look at the 15 trillion dollar "debt". Its meaningless, junk economics.
gwynedd1 1 month ago
@gwynedd1. No, rent generated from resources should be covered in Econ 101. It is a simple argument of limited supply with unlimited demand generating profits more than competitive standards. True, Economics is not rocket science or a physical science but a social science. No credible Economists pretend otherwise. I don't know where you get this impression from. However, Economists use techniques of hard science to ensure its research follows logical consistency.
TKKTism 1 month ago
@TKKTism
They try to make it into a hard science. That's the problem. A culture's value system will change any theory you have. That is why real time pattern recognition matters. However then again these same battles are fought in the field of psychology, yet its behaviorism that gets results because it concentrates on whats happening with pattern recognition. The neoclassical school created by physicists cannot mathematically define slavery, domestication, symbiosis , parasitism etc
gwynedd1 1 month ago
@TKKTism
On rent, yes they briefly gloss over it as a monopoly pricing power. Yet no mention of monopolistic land and resource rents or how taxation of that wealth has no impact on production or even increases it by punishing owners of idle resources. In other words a VAT tax is stupid. However that is built around the so called marginal utility break through as if rents add value. The marginal utility swindle substitutes pricing power with value.
gwynedd1 1 month ago
@gwynedd1. Sorry, I am lost to what you are referring to in your first sentence. Yes, classical economists have provided solid foundation for economic thinking which is why we use these tools to understand new problems. Intuitively, major problems in Economics were solved by classical economists but modern economics have solved new problems related to the old problems and new issues.
TKKTism 1 month ago
@TKKTism
I think it went backwards. I can think of few major advances. Even marginal utility seemed to be well understood by Marx who supposedly held dogmatically to the labor theory of value. "yet that fact is by no means sufficient to guarantee the utility of his 20 yards of linen. If the community's want of linen, and such want has a limit like every other want, should already be saturated..." The neoclassicals considered a change in point of view revolutionary?
gwynedd1 1 month ago
@gwynedd1. In my opinion, undergraduate finance degree holders are rarely exposed to modern economic modelling. Undergraduate finance courses, maybe final year courses, rarely touch on frontier research in economics such as asymmetric information etc. Just read the textbooks in Industrial Organisation and you will find problems related to economic rent and price discrimination.
TKKTism 1 month ago
@TKKTism
But you don't need that. I can read Henry George in plain English. Ricardo's explanation of rent suffices. Much of economics was solved more than a 100 years ago. Its like Aristotelian logic. I went to school in a social science aimed at industrial psychologist. So I am well positioned to attack this field. I am also well aware of the self serving philanthropy of industry in our school systems which did not happen prior to the 20th century.
gwynedd1 1 month ago
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@gwynedd1. This is because you can create a model that predicts the trend well but no idea to what causing the trend. Macroeconomic variables can easily correlate with each other masking what is causing what. A trend only model, at best, would help you to differentiate which macroeconomic variable correlates with the truly independent variable (pretty uninformative.)
TKKTism 1 month ago
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TKKTism 1 month ago
Following the Keynesian doctrine made economists unable to understand how stagflation was even a possible thing. Moving away from that doctrine allowed economists to solve more and new problems from a better premise: people respond to incentives. Blindly following Keynesian curves or supposed pattern will mask the fundamental force of human behaviour: incentives.
Moreover, pattern detection is not the only priority. We need to understand what causes these patterns.
TKKTism 1 month ago
@TKKTism
That is because they wrote resource rents out of the book. Sort of obvious don't ya thing seeing as OPEC was a rentier cartel. Stop pretending economics is rocket science. That is why I hate economists in general. Its little more than basic crowd control.
gwynedd1 1 month ago
@TKKTism
Recognizing the pattern also implies identifying cause. If A then B is a pattern. A is the cause. The biggest pattern economics seems blind to is resources in progressive societies going to non producers. That is because capital and labor cannot store value long. Only rents have value storage capabilities, thus the arrival of rent is the arrival of stagnation. Its why every landed society ends up with an idle ruling class.
gwynedd1 1 month ago
@gwynedd1. I won't try to convince you to believe in mainstream but will try to dispel some myths, created by media and heterodox schools, about mainstream's short fall.
I am curious to how you think you can pinpoint down precise patterns without data? Back in the days when Economics just followed intellectual speculations, "insights" and Keynesian doctrine, they made models failing to explain the stagflation in the 1970-1980. In fact, Keynesian prescription just made the matter worse.
TKKTism 1 month ago
@TKKTism
You don't need mathematical data is my point. Math may be useful to map behaviors but every assumption must be observed to be correct. Again the Keynesian model at the time conflated capital with a resource rent. Capital shortages cause demand for labor. Rentier constraints cannot be solved with labor. Ironically though Keynesian economics applies here because people are over saving, and its application would also break the private credit crunch.
gwynedd1 1 month ago
@gwynedd1. Did he precisely pin point about the scale massive crash in financial market, its rippling effect across the globe and depth of the recession? That is what I usually mean predict. Anything short of above, you will find a mainstream economists who had talked about it. Again, I wish to emphasize that mainstream economists hold heterogenous beliefs but they require higher standards to assert their claims.
TKKTism 1 month ago
@TKKTism
Since Hudson studied the Babylonian debt jubilees and I saw him brink up the housing bubble in as early as 2002, yes Hudson saw it coming. Bill Still who is a reporter saw it coming since the 90s. All it takes is for people who are not modern economists to study economics. Again I was trained in social sciences and I know the potency of authority overrides the truth. Economics serves the interests of the wealthy. They just loved Malthus for that reason.
gwynedd1 1 month ago
@gwynedd1.Mainsteam academic community isn't all thick and adherent to market fundamentalism as portrayed by media and other pop culture writers.In fact, major research in mainstream economics in the past half of the century had been done on market imperfections and frictions.They were ignored by politicians, and non-academic economists etc because the research didn't benefit their political rhetoric. Those, in power, often use economics to justify their ideologies than use it to solve problems.
TKKTism 1 month ago
@TKKTism
That is not what I see coming from people who have finance degrees. What happened to economic rent and unearned income? Any theory without it is a joke to me. However the concept is alive and well in the business world since price discrimination is rather rampant. Successful price discrimination maximizes product. Thus it would do the same with tax policy. So where is it in main stream, macro economics?
gwynedd1 1 month ago
@gwynedd1. However, the possibility of the financial catastrophe didn't completely escape mainstream economist's research. (for instance, read work done by Prof Raghuram G. Rajan) These works weren't dismissed on standard of mainstream academic but by Feds, politicians and economists who held a market fundamentalist belief.
I have yet to see any evidence showing heterodox schools had the proper understanding, backed up by data, on the scale of the financial problem before the crash.
TKKTism 1 month ago
@TKKTism
You don't need data. That is one of my fundamental dislikes of mainstream economics. What you need is pattern recognition. Mathematical models must be built around around very precise patterns that can only be determined by observation. That is why mathematical chess algorithms never beat the best humans. The break through was to use a database of pattern recognition. The biggest thing to notice is that stores of value are the antitheses of human progress.
gwynedd1 1 month ago
@gwynedd1. No the housing bubble didn't escape the mainstream economist's observation (Read Prof Robert Shiller's work for instance). The main denial came from economists who are in politics, media and various entities who had incentive to deny, for job reasons. What the mainstream economic didn't predict was the scale of financial crisis associated with the bubble and how this brought people into the recession.
TKKTism 1 month ago
@TKKTism
And again, Hudson's post Keynesian position did predict the scale of the crisis. That is because they understand the role of debt. I heard Hudson and Keen talking about jubilee. So again I see no reason why I should flock to the mainstream. They were wrong.
gwynedd1 1 month ago
This guy scared me. He wants the economy to fall and have no law enforcement?
TBoGTGTA 1 month ago
@TBoGTGTA
No, he is saying that is what Wall Street wants.
gwynedd1 1 month ago
@gwynedd1, the problem is his so-called research doesn't stand up to scrutiny by modern standards. Maybe in politics and Feds, due to special interests and ideologies, certain truths are suppressed. But, in academia, if you can make a solid and sound case the chances are your research will be accepted by some decent standarded journals. But that's not his case.
He's not the only one voicing out against the problems in financial market but his arguments falls on fictitious hunches
TKKTism 1 month ago
@TKKTism
You have got to be kidding. The fashionable, mainstream neoclassical economics denied the housing bubble. That is why you have to go to heterodox post Keynesians(Hudson and Keen) and Austrians(Schiff and Ron Paul) who don't take on the ideas of Jean Baptist Say to the gills. You want Hudson to be accepted by the false prognosticators? I believe Hudson because he is an historian and channels the likes of Smith, Mill and H. George. Pretty decisive IMHO.
gwynedd1 1 month ago
@gwynedd1, just look at what his contribution as an academic has been so far. He plays a larger focus on getting media and public attention than building discipline and original research. Now he is making more ridiculous claims about government to attract attention. This happens often when an economist can't produce good research to attract attention instead. The stuff he is right about aren't much ground breaking either.
TKKTism 1 month ago
@TKKTism
The research is there. The problem is its being ignored. Who else is trying to publicize the truth? We took a wrong turn in the 20th century...because finance took the wheel.
gwynedd1 1 month ago
That's what happens when your research career as an economist fails, you turn to a crazy and controversial media person to earn a living.
TKKTism 1 month ago
@TKKTism
Failed at what? He is a big reason why I got into precious metals years ago, and stayed clear of the housing bubble.
gwynedd1 1 month ago
this whole question of the debt is a scare tactic. its bs. the us is flooded with wealth. otherwise they would not allow 30 million impoverished illegal aliens into the country. don't be fooled, people! NO country would do that unless they could easily afford it
craigenputtock 1 month ago
This guy is the biggest turd ever to take a chair.
link6065 1 month ago
Lol but to create credit(money) it must be borrowed. *cough cough*
link6065 1 month ago
@link6065
No it doesn't.
So far, the Fed is reporting record profits. It said yesterday it will pay $76.9 billion to the U.S. Treasury as part of an annual dividend bolstered by its holdings.
Borrowing from the Fed is "fictitious debt".
gwynedd1 1 month ago
This has been flagged as spam show
Who REALLY runs our world? search "israel Did 911" and search "ZionCrimeFactory" for proof.
"US Rep. McKinney has accused the pro-Israel Lobby in America (AIPAC, ADL, etc) for ruining her political career.She refused to sign the pro-Israel pledge from Congress and took a pro-Palestinian stance. Because of this, she said “war was declared” on her by them. In 2009 she told TIU's Ognir that “more than 99% of Congress work for Zionist-Israeli interests.”
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LordLindsey12 1 month ago
@LordLindsey12
Israel was set up as a secondary patsy.
The bankers did 9/11. Do an investigation. If I am wrong then so what? If I am right we need to prosecute them to the fullest extent of the law.
hamberg42 1 month ago
Why have all American women always got such shrill, annoying voices and horrible irritating ways of actually delivering the words . .?
Do you breed them like that ON PURPOSE ? ! - or is it some sort of weird mutation going on . .?
You can fucking keep them all , anyways
flamesfromblazer 1 month ago
What this man says is scary!
Amarx00 1 month ago
"MH(2003) : The problem of inadequate consumer demand to fuel an economic recovery does not lie with the cost of labor so much as with the fact that it is now normal for families to pay a quarter or even a third of their income for debt service. This diverts spending away from goods and services. The Bureau of Labor Statistics reports that this proportion rises to 40 percent for home-owners who have taken out big mortgages to buy their homes as the real estate bubble has pushed housing ... "
gwynedd1 1 month ago
"Most everyone involved in the real estate bubble thus far has made at least a few dollars. But that is about to change. The bubble will burst, and when it does, the people who thought they’d be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom…" - Michael Hudson May 2006
gwynedd1 1 month ago
This guy knows nothing about how the money works in the USA.
hamberg42 1 month ago
@hamberg42
Please explain it to us then.
gwynedd1 1 month ago
@gwynedd1
The FEDERAL RESERVE PRIVATE BANK prints it out of thin air.
The government sells bonds to the FED. The fed makes monopoly money to pay for them.
Then the FED charges us interest on the dollars.
hamberg42 1 month ago
@hamberg42
Most people who start learning about the Fed scam always encounter this red herring. The profits of the Fed are rebated to the Treasury. While I am sure its not a model of efficiency its not really where the problem is. The problem is fractional reserve lending against fixed assets like real estate which create ponzi schemes extracting all the economic surplus. 27 trillion created between 2001 and 2008 by private banks.
gwynedd1 1 month ago
@gwynedd1
The FED is definitely the problem. They are trying to, and successfully owning us.
hamberg42 1 month ago
@hamberg42
But you have to realize the FEd is the lobbyist for major banks like Chase and the investment banks like Goldman Sachs.
gwynedd1 1 month ago
@gwynedd1
The FED owns them.
hamberg42 1 month ago
@hamberg42
They make their money through the member banks. Crony capitalism needs a private enterprise to collect. .
gwynedd1 1 month ago
I DONT THINK MOST PEOPLE REALIZE THAT THE FEDERAL RESERVE PRINTS OUR MONEY AND THE FEDERAL RESERVE IS NOT A GOVERNMENT AGENCY. THE FEDERAL RESERVE IS A PRIVATE BANK THAT EARNS 46 CENTS IN INTEREST FOR EVERY DOLLAR THEY PRINT. WHAT THE U.S. NEEDS TO DO IS TO GET RID OF THE FEDERAL RESERVE AND HAVE OUR TREASURY DEPT. PRINT THE MONEY AS NEEDED AND THEN THE U.S. CANT GO INTO DEBT.
stjohnsmanor 1 month ago
@stjohnsmanor However, most people DO realize where the Caps Lock key is located.
TheKarmaComedian 1 month ago
@stjohnsmanor
Do you have a reference to back up this claim?
gwynedd1 1 month ago
@gwynedd1 Type the question in any search. There are a lot of resources on line.
stjohnsmanor 1 month ago
@stjohnsmanor
In other words, no you don't.
gwynedd1 1 month ago
@gwynedd1 Try fact check dot org, global research dot ca, and federal reserve dot gov, and there are a lot more.
stjohnsmanor 1 month ago
@stjohnsmanor
I mean the 46 cents for every dollar they print specifically.
gwynedd1 1 month ago
@gwynedd1 I tried sending this last night but it wont send unless I spell out the web pages as so.
stjohnsmanor 1 month ago
This has been flagged as spam show
@gwynedd1 I tried sending this last night but it wont send unless I spell out the web pages as so.
stjohnsmanor 1 month ago