HEY LOOK AT ME.... I AM JON MURPHY.. .AND I DECLARE THE RECESSION IS OVER
I am no expert in economics. But the profession is as divided as any and I have read much from both sides. It is the very rational and real world consistent explanations from Keynesian economist who seem to explain things more logically and consistent with historical evidence and ongoing trends. I have been following the economic debate for over a decade and the Keynesians were the ones who warned of this coming economy and now the failure of austerity measures continues to confirm their claims.
The Hayekian claim against the use of knowledge to direct the economy is BS. The policy changes that lead to concentrated wealth at the topped and stalled demand in the middle are fairly obvious and easily addressed in theory but not so in practice when you have a 60 vote rule to get anything passed the senate and tons of elitist money and influence doing a great job of not allowing change.
Again….record bank profits while the rest of the economy stagnates has some pretty obvious causes and some pretty simple solutions….none of which can be found in the libertarian recipe of doing more of the same.
November 27, 2011 at 9:58 am
- “I am no expert in economics.”As evidenced by every post you’ve ever made and highlighted even more by this one.Austrian economists have been warning of the recession for nearly a decade. If fact, it was the policies advocated by such Keynesian as Krugman (Don’t forget, he said after the tech bubble burst that we need a housing bubble to make up for lost ground) that not only set the stage for the crisis, but perpetuated it.You also grossly misunderstand the Hayekian use of knowledge. You interpret it has blind groping in the dark for an answer. That’s pathetically incorrect (and confirmed by your bias that we are anti-intellectual). Austrians warn that knowledge is DECENTRALIZED, meaning NO ONE PERSON OR GROUP OF PEOPLE HAVE ALL THE KNOWLEDGE YO ALLOCATE RESOURCES EFFICIENTLY. What this means is to allow a bottom-up plan to come about, as a top-down plan will be limited simply because of the limited knowledge. You interpret that any action not taken by the government is no action at all, that it is doing nothing. But it’s not doing nothing. It’s doing something. We want plans by the many, not by the few, not this banal authority of DO-SOMETHING.“record bank profits while the rest of the economy stagnates has some pretty obvious causes and some pretty simple solutions”Bank profits are higher because people are paying off debt. I don’t see how that’s a problem. Additionally, how is the economy stagnating? Manufacturing is at an all time high. Retail Sales are at an all time high. In the last three months, the US economy has added nearly 2 million jobs in the private sector, a time frame when the economy usually sheds jobs. Capital equipment production is exploding. New Orders are showing further growth ahead. Housing is growing again (albeit mildly). So is Nonresidential Construction (also mildly). If Black Friday sales are any indication, then it will be the best Christmas season since 2007. Show me where the economy is stagnating.
- Also, Disposable Personal Income increasing.
November 27, 2011 at 2:21 pm
- Keynsians warned of the impending financial collapse? You think only people who subscribe to GOVT stimulus and greater GOVT controls thought an inevitable crash was looming? Lending institutions were ordered to consider welfare benefits as part of income toward meeting the almost non-existent qualifications for a mortgage. Lending institutions were threatened with lawsuits should they arbitrarily deny a loan to someone who met lowest qualifications. Since, those ‘bad’ loans would be bought by Fannie and Freddie, regardless of bundling, the lenders obliged. They wouldn’t be on the hook for high default loans….. So why fight the GOVT, and why not take the ball and run with it. BofA did put up a fight and they were excoriated. Ran up before congress and Janet Reno. Told that if stats were not found to be more to the federal GOVT liking, BofA would be brought up on discrimination charges. From denial of diversifying and expansion, to lowered credit ratings, threats of lawsuits and criminal charges, ACORN picketing, etc.,… And then positive incentive of Fan/Fred buying loans and giving lenders a quick positive return as opposed to waiting on payments for a profit, the federal GOVT directed the housing boom and inevitable bust from market distortions.
November 27, 2011 at 2:43 pm
- I am no expert in economics. But the profession is as divided as any and I have read much from both sides.Tell you what “doctor”, since there’s plenty of contentious debates in medicine, let me read up and hang out a shingle.The problem with you, is that you are to economics, what some guy with a subscription to “PREVENTION” (and its pretty clear from your prose that you never venture far from the statist echo-chamber) is to medicine-cocksure and unqualified.I seem to recall the first rule of the Hippocratic Oath is “first do no harm”, or are you OK with iatrogenic ills, as long as the efect is economic and the introducing agent is the state?
November 27, 2011 at 3:02 pm
- “Austrian economists have been warning of the recession for nearly a decade.”This is not something to brag about. A broken clock is right twice a day. Most decades have recessions.
November 27, 2011 at 3:21 pm
- Heh, I see your point Greg G, but I don’t think I explained what I was saying. There were some Austrians saying in 2001-2002 that if we didn’t get our house in order, we’d be facing a massive recession in the latter part of the decade. In 2005, at a meeting of CEOs and manufacturers, an Austrian economist Alan Beaulieu said that the economy would enter recession in 2007, the market would crash in October 2008, and the recession would be the worst since the ’30′s.
- I should also mention, the numbers I cite are 12 Month Moving Totals. This eliminates seasonality and one can see the greater trends.
- JonIt is always possible with hindsight to discover individuals who have made accurate predictions. I am not convinced any school of economics is very good at predicting recessions. Any individual who is capable of accurately making such predictions should be very rich. Did Beaulieu get rich betting on recession in 2007 and market crash in 2008? If so, I will be very impressed. If not, I want to know how many wrong predictions he has made that we are not hearing about.Anyway, don’t Austrians believe such specific aggregate macro predictions are “the pretense of knowledge” – impossible even in principle?
- Believe it or not, I agree with you Greg. In hindsight, it is easy to see who’s predictions are correct and who’s are incorrect. And I agree that no one school is any better/worse than the other one at predictions. In most cases, it’s just a matter of analyzing trends, which is primarily what I do. By looking at economic trends, one can make predictions of 4-6 quarters fairly easily (quantitative forecasts are harder).
- JonIf you really can make consistently accurate 4 to 6 quarter predictions and back them up with good investments you should eventually become very rich. One thing I like about Austrian economics is the recognition of the difficulty of prediction.I don’t mean to disparage what you do but I think most economic prediction just extrapolates existing trends. If you predict the weather by looking outside you will often be right – except when you are not.
- Predicting the stock market is impossible. The stock market is very much a random walk. I’m talking about the larger economic trends (of which the stock market is largely divorced).The predictions I do are largely extrapolations. However, we do have forecasters who do long term predictions with accuracy of about 96%.Overall, I agree with you. But looking at trends and news, one can easily predict what will occur. If a government keeps printing money, you can predict a weak currency, for example.
November 27, 2011 at 4:29 pm
- Jon, the issue is timing, not accuracy of the prediction. If the Fed keeps inflating the money supply by monetizing the national debt and the federal government continues its anti-business rethoric, then the US will have stagflation. When it will begin I cannot say. And, my aummptions about government policy may prove to be wrong. Hope so. But, would not bet against it.
November 27, 2011 at 6:32 pm
- Jon said, “Austrian economists have been warning of the recession for nearly a decade.”And the Jon said, “Additionally, how is the economy stagnating? ”Thanks Jon… your incoherence and cognitive disconnect are quickly making it apparent that you too like most proclaimed libertarians are an unserious ideological thinker.Just so you all know JON HAS PROCLAIMED AN END TO THE RECESSION. I will post this to my own blog so I can remind you how wrong you were in this silly silly prediction. The Keynsians are making no such claims and suggesting at best we will bounce along the bottom if not go int another recession or something much worse.Yeah you are on record as being a total dope… thanks for putting it to history.
- Hey everyone…. there is this looney guy naked out in the middle of the street twirling around and screaming at the top of his lungs, ” HEY EVERYONE…LOOK AT ME…I AM A GD FULL ON IDIOT….HEY LOOK AT ME!!!!”I give you Jon Murphy,“Additionally, how is the economy stagnating?….. Show me where the economy is stagnating. “
posted by muirgeo @ Sunday, November 27, 2011
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