Paul Samuelson and Robert Merton differ on the causes of the financial crisis

Paul Samuelson thinks that government, and economists in general, have become far too right wing.

Category:

News & Politics

Tags:

• Samuelson
• Merton
• Newshour
• Economy

[qazqashire]

i cant believe this is the only video of paul samuelson online! i mean, this man invented the economics textbook!

[Slash417]

The soviet union failed for political reasons. Paul Samuelson is an intelligent man. If you read any of his works, you'd understand he's open to many opinions and is modest. You can't chastise a man for saying one thing that's crazy. Milton Friedman wanted to get rid of doctor licensing and the FDA. No one is calling him a fool.

[Slash417]

@mpc91

The Federal Reserve is essentially Wall Street in another form. The big banks

comprise the Federal Reserve.

I've learned that printing money is the source of the boom and bust cycles,

and that the Federal Reserve is lowering the purchasing power of the dollar for

the average citizen. In my opinion, it seems that Wall Street is to blame.

Do you agree?

[warwize]

@mpc91

By "de-regulation" he means Non-regulation. People were trying to get derivatives regulated but the Fed along with the Treasury totally destroyed any attempt to regulate the derivatives market, then what happened?...LTCM collapse...then what happened? financial crisis a decade later...

Glass-steagal is actual "de-regulation" the rest was just "non-regulation"

The Fed didn't matter that much Global interest rates were being suppressed by Asia's high savings level anyway.

[warwize]

How could the losses be "as massive" without fancy financial engineering tools, like Credit default swaps? There were 3x the amount of insurance policies taken out on mortgages as there were mortgages...and those CDS were a huge part of the losses...and if they didn't use CDO's to manipulate risk levels how would the high risk shit mortgages get AAA ratings? I dont think merton is being totally honest...or maybe he just understands everything better than me

[mpc91]

@Slash417 - Samuelson blamed deregulation. How is he wrong - we didn't actually have significant deregulation. We have more regulation now than we ever have. 115 agencies were regulating Wall Street, do you think a 116th would have made a difference?

The main culprit is the Federal Reserve, which creates the business cycle. They cut interest rates after the dot com bust, and this led to a housing bubble, fueled by cheap artificial credit. There's more to it than that, but that's the heart of it

[Slash417]

@mpc91 Interesting. What does he think about the current crisis?

And how is he wrong? More importantly, what do you think about the current crisis?

[mpc91]

@Slash417 - Keynesianism has a monetary aspect. Monetary policy on the part of the central bank is a central part of the his General Theory.

Watching videos like this one will not make you more knowledgeable, you'd be better off watching no videos at all. You'd really be far better served though to look up Tom Woods. Try the individual rights side.

Why discredit Samuelson? He's the subject of the video, and he's as wrong on the current crisis as he was on the Soviets.

[Slash417]

@mpc91 Keynesian economics is a system of fiscal policy, while the Federal Reserve is a institution that affects monetary policy. That is what I learned 3 years ago when I took economics. I am not an economist, that's why I watch videos like these to learn from people more knowledgeable than me.

Now, do you care explain to me why you are trying to discredit Samuelson?

[mpc91]

@Slash417 - What does the Fed have to do with Keynesian economics? You are serious, aren't you?

You don't know? Do you actually know anything about Keynes? Anything about his ideas on interest rates... about the Fed's role on interest rates?

You think monetary and fiscal policies are independent? Really?

[mpc91]

@Slash417 -It doesn't matter what you suspect. He wrote it, in 1989.

He definitely spent more time in a classroom than I did in terms of economics, but that doesn't make him any less wrong.

What motives? Keynesian economics in its many forms has been justifying the forcible and failing acts of governments for decades. It hurts people.

And really, you want to separate Keynesian economics from the Fed (a Keynesian tools)? You might as well try to mention baseball and the bat separately.

[fuckooo]

Samuelson is on the money, Merton, well, LTCM anyone?