Economists Support Occupy Wall Street

[Bonam]

What happened to people saving up themselves for a rainy day? Why does everyone nowadays assume that if hard times come, it's the government that has to take care of everyone? Why is this complete mindless reliance on the state just second nature to people now?

[dre]

What happened to people saving up themselves for a rainy day? Why does everyone nowadays assume that if hard times come, it's the government that has to take care of everyone? Why is this complete mindless reliance on the state just second nature to people now?

Its pretty much just a figment of your imagination.

[Bonam]

Its pretty much just a figment of your imagination.

What is?

[dre]

What is?

Well you seem to be suggesting that theres been some kind of big sea change and that suddenly people have this "complete mindless reliance on the state". Im just not seeing it.

[Bonam]

Well you seem to be suggesting that theres been some kind of big sea change and that suddenly people have this "complete mindless reliance on the state". Im just not seeing it.

Well, to be fair, I don't know exactly what attitudes were like in the past. But, presently, it seems to me like the first things that comes up in the media or in public debate or on forums like this, when economic times get bad, are topics like what can the government do about it, which politicians/parties are to blame, etc. All of this implicitly assumes that it's the government's fault, and that it's the government's role to fix the problem. The entire regime of thinking about the problem is fundamentally wrong in that way. It is attacking it from completely the wrong direction.

For example, you talk about the nature of our monetary system and debt, and how the governments create rules that allow financial institutions to constantly create new debt thereby increasing the money supply, in your opinion unsustainably. What's the supposed solution? To have the government create a new, different, financial system that solves the alleged problems. Why is the solution never to have people borrow more responsibly, thus slowing the rate of creation of new debt, and thus slowing the rate of the expansion of the money supply to a more sustainable level? Is borrowing responsibly just too much to expect from people? Why? Why are the standards of financial literacy so low that people can't be expected to not be complete and utter idiots with their finances?

Anyway, I maintain the position that people should act with financial sense and should save money themselves for various eventualities. It's a good idea for everyone to have enough savings to go at least 6 months or so without a job. Why should it be the government's role to force everyone to join in EI? If people want insurance, why can't they go and purchase their insurance, and those that don't want it, get the option not to? Because it wouldn't work? Why wouldn't it work? Because you'd no longer be milking the people that actually manage to hold long term jobs and not go on EI. Frankly, it's no less of a method of wealth redistribution than any other form of tax, despite claims to the contrary.

Edited November 28, 2011 by Bonam

[blueblood]

Every single part of this post is wrong.

1) Social assistance and EI are two different things

2) EI is an insurance scheme, not a government handout. The government doesn't blow money on EI. The program has a tripartite administration with representatives for the workers, the employers and the government.

3) Social assistance is built up during the good times when less people are on it and pays out when the economy is bad and more people need it. It keeps them from losing everything, living on the streets, and resorting to crime to survive. It serves to protect those with capital from civil unrest. Money is not saving up during the good times.blown on social assistance in bad times. It is paid out in the interest of stability and security after being banked through the good times.

4) The government doesn't do anything (in regards to saving people). It simply administers programs.

How is it wrong? What rational person takes on more debt when he has an income shortfall? If you lost your job would you rack up your credit card? No, you cut spending and look for ways to improve your financial situation.

[punked]

How is it wrong? What rational person takes on more debt when he has an income shortfall? If you lost your job would you rack up your credit card? No, you cut spending and look for ways to improve your financial situation.

Yah you are all about depression era economics. News flash depression way worse then we have now.

[blueblood]

Yah you are all about depression era economics. News flash depression way worse then we have now.

News flash, FDR trying to prop up prices made the depression worse. He'd have been better off doing nothing like in 1920 when unemployment was also double digits.

[August1991]

They just gave it away to him, like that. I can't seem to reconcile your theory with Milton Friedman getting the prize though.

The Swedish Central Bank had to give it Friedman because if they hadn't, their prize would have lost all credibility. Nevertheless, they gave it to him six years into the game - and after giving it to a hack Soviet economist. IOW, the Swedish committee (like the CBC/R-C) tries to be "balanced" while drawing the middle line far to the left.

Take R-C [thread drift ahead] for example. R-C will invite, for example, Jean-François Lisée and then Denis Coderre. One is a pur et dur and the other is a Liberal. I love R-C; it's so balanced!

----

Since I'm on the topic of Nobel Prizes in economics, let me add that the Swedish committee has become too willing to add names recently. I'm waiting for the "four winner" prize.

IMHO, if you create a "prize", at least have the courage to award it to one person. When a committee awards a prize to several people who never worked together, then the whole notion of a "prize" loses its meaning.

Edited November 29, 2011 by August1991

[cybercoma]

I'm not really sure what you're driving at, August. You seem to suggest there's no credibility in the selection of Nobel winners, yet they make the selections they do for credibility. It doesn't really make sense.

[sharkman]

Krugman is an American leftist and the Swedes gave him a "Nobel" prize because of this, like when the Norwegians gave a prize to Obama.

Some Scandinavians like to give awards to foreigners who kowtow to them.

Yeah, it was beyond belief that they gave the Nobel to Obama like that. And even Obama seemed a little sheepish about it.

[punked]

News flash, FDR trying to prop up prices made the depression worse. He'd have been better off doing nothing like in 1920 when unemployment was also double digits.

Yep must be why Hoover rode it out for 2 and some years and it DIDN'T WORK. The depression of 1920 lasted for a year and a half and bottomed out pretty quickly compared to the Great Depression which was made worse by do nothing Hoover Policies which is what you preach btw.

Edited November 30, 2011 by punked

[blueblood]

Yep must be why Hoover rode it out for 2 and some years and it DIDN'T WORK. The depression of 1920 lasted for a year and a half and bottomed out pretty quickly compared to the Great Depression which was made worse by do nothing Hoover Policies which is what you preach btw.

5 myths about the great depression

The "depression" of 1920 lasted a year and a half precisely because the government did nothing. Had they done that in 1929, there wouldn't have been much of a problem. However Hoover/FDR tried to inflate prices which ironically benefits producers which tend to be the rich guys leftists don't like and screws over consumers. Had prices been allowed to drop, consumers would have been able to afford more products.

To say Hoover was a laissez-faire individual is flat out ignorant.

Whats wrong with falling prices? If we kept that attitude we wouldn't be able to have computers and smart phones all over the place.

[punked]

5 myths about the great depression

The "depression" of 1920 lasted a year and a half precisely because the government did nothing. Had they done that in 1929, there wouldn't have been much of a problem. However Hoover/FDR tried to inflate prices which ironically benefits producers which tend to be the rich guys leftists don't like and screws over consumers. Had prices been allowed to drop, consumers would have been able to afford more products.

To say Hoover was a laissez-faire individual is flat out ignorant.

Whats wrong with falling prices? If we kept that attitude we wouldn't be able to have computers and smart phones all over the place.

No FDR did inflate prices(for many different reasons BTW producers doesn't mean rich guys) however this was close to three years of depression, at that point already TWICE as long as the depression of 1920. The problem for people wasn't the rate of unemployment it was how long that high rate lasted because your HOOVER policies kept them in depression.

Edited November 30, 2011 by punked

[blueblood]

No FDR did inflate prices(for many different reasons BTW producers doesn't mean rich guys) however this was close to three years of depression, at that point already TWICE as long as the depression of 1920. The problem for people wasn't the rate of unemployment it was how long that high rate lasted because your HOOVER policies kept them in depression.

What the hoover policies of big government? Did you not read the link?

So Hoover racking up spending 50% from 1929-32 didn't happen? If that's laissez faire then Obama is part of the tea party.

[jacee]

Hmmm ... I guess there are two schools of thought among economists, not surprising.

I like this one ...

The Occupy Wall Street movement, displaced from some key geographic locations, now enjoys a small but significant encampment among economists.

Concerns about the impact of growing economic inequality fit neatly into a larger critique of mainstream economic theory and its deep faith in the efficiency of markets. Many unbelievers (including me) insist that we inhabit a global capitalist system rather than an efficient market.

Willingness to use the C-word(capitalism) often signals concerns about a concentration of economic power that

unfairly limits individual choices,

undermines political democracy,

generates financial and ecological crises

and limits access to alternative economic ideas.

We can’t address these concerns effectively without a wider discussion of them.

http://economix.blogs.nytimes.com/2011/11/28/occupy-economics/

[punked]

What the hoover policies of big government? Did you not read the link?

So Hoover racking up spending 50% from 1929-32 didn't happen? If that's laissez faire then Obama is part of the tea party.

No Hoover cut spending just like you want, debt went up because revenues went down. Those are two very different things Hoover did everything you suggest should be done now and dug a deeper hole by doing it. He cut so much he actually ran a surplus in the first year of the depression but blew a huge hole in his budget when he realized he was only making the situation worse by doing what you preach.

[blueblood]

No Hoover cut spending just like you want, debt went up because revenues went down. Those are two very different things Hoover did everything you suggest should be done now and dug a deeper hole by doing it. He cut so much he actually ran a surplus in the first year of the depression but blew a huge hole in his budget when he realized he was only making the situation worse by doing what you preach.

Read the link. Now you are just plugging your ears and saying la la la la when facts are presented to you.

My link

Hoover did what you wanted to happen and FDR made it worse.

Just stop now.

[punked]

Read the link. Now you are just plugging your ears and saying la la la la when facts are presented to you.

My link

Hoover did what you wanted to happen and FDR made it worse.

Just stop now.

Your article is garbage that is why. The UK did all those things and still had to suffer through the great depression. It wasn't until they started spending and getting off the gold standard did the problem correct itself over there. Sorry you are wrong.

Yah again nope Kurgman has a good article today about austerity with growth policies you preach about in Britain.

http://krugman.blogs.nytimes.com/2011/11/30/bleeding-britain/#

Here is a hint it aint working. If you want to look at how your solution is working you have to look no further then Britain. Here is a chart comparing the US to UK. Remember you are the UK and they even have spent more then you would have liked.

http://thinkprogress.org/economy/2011/10/26/354460/chart-stimulus-us-u/

Edited November 30, 2011 by punked

[blueblood]

Your article is garbage that is why. The UK did all those things and still had to suffer through the great depression. It wasn't until they started spending and getting off the gold standard did the problem correct itself over there. Sorry you are wrong.

Yah again nope Kurgman has a good article today about austerity with growth policies you preach about in Britain.

http://krugman.blogs.nytimes.com/2011/11/30/bleeding-britain/#

Here is a hint it aint working. If you want to look at how your solution is working you have to look no further then Britain. Here is a chart comparing the US to UK. Remember you are the UK and they even have spent more then you would have liked.

http://thinkprogress.org/economy/2011/10/26/354460/chart-stimulus-us-u/

Outstanding, instead of rebutting the points of the article, you just declare it garbage. What Krugman says is garbage, and I'll go one step further and tell you why; anyone who goes on Fareed Zakaria and makes the case for massive government spending for a space invasion and defends that point is saying garbage. Do you think we should spend all sorts of money on a space invasion defense?

The UK is still going through withdrawal because of the massive debt, and tax/spend policies. I didn't say that slashing spending was going to be pleasant in the short term. It's not, but it makes for a more solid and prosperous future.

Its working right now, the UK is in the withdrawal phase, you really need to get out of that short term thinking because its that kind of thinking that got us into this mess in the first place.

And no I'm not wrong, Anyone who quotes Krugman shouldn't be taken seriously in an economic discussion. My line of economic thinking predicted the crisis, the severity of the crisis, and the causes; your line of thinking caused it and makes it worse.

Medicine sometimes tastes bad, but we have to swallow it.

[punked]

Outstanding, instead of rebutting the points of the article, you just declare it garbage. What Krugman says is garbage, and I'll go one step further and tell you why; anyone who goes on Fareed Zakaria and makes the case for massive government spending for a space invasion and defends that point is saying garbage. Do you think we should spend all sorts of money on a space invasion defense?

The UK is still going through withdrawal because of the massive debt, and tax/spend policies. I didn't say that slashing spending was going to be pleasant in the short term. It's not, but it makes for a more solid and prosperous future.

Its working right now, the UK is in the withdrawal phase, you really need to get out of that short term thinking because its that kind of thinking that got us into this mess in the first place.

And no I'm not wrong, Anyone who quotes Krugman shouldn't be taken seriously in an economic discussion. My line of economic thinking predicted the crisis, the severity of the crisis, and the causes; your line of thinking caused it and makes it worse.

Medicine sometimes tastes bad, but we have to swallow it.

Yah you seem to missing the whole point of what Krugman is saying all the time. He isn't saying that government should be spending for a space invasion he is pointing out even that kind of spending would be better then nothing at all which is what you preach. He is pointing out how bad your policy is.

Your line of economic thinking is what we did 150 years ago and back then we went through a recession like the one we have now every 5-8 years so it wasn't a very good time and not something anyone wants to go back to.

[blueblood]

Yah you seem to missing the whole point of what Krugman is saying all the time. He isn't saying that government should be spending for a space invasion he is pointing out even that kind of spending would be better then nothing at all which is what you preach. He is pointing out how bad your policy is.

Your line of economic thinking is what we did 150 years ago and back then we went through a recession like the one we have now every 5-8 years so it wasn't a very good time and not something anyone wants to go back to.

Oh right the period of time where e USA had the highest growth in it's history. They went through small recessions every 5-8 years. Recessions aren't the bogey man you make them out to be, they correct the market and bring prices down when they get too high. Krugman thinks prices should rise in perpetuity and that we should go into debt to ensure that. Well that doesn't work, bills have to be paid, the only failure is Krugman policies which Europe swallowed lock stock and barrel. Do you think all recessions are severe? Do you seriously think that house prices should rise in perpetuity? Prices have to fall to encourage buying, that's why oil futures are always going up and down.

You cannot pay people for doing something that is non-productive. Krugman wants us to pay for consumption of things that aren't of productive value. It's like 5 people being stranded on a deserted island. Four of them forage for food, build shelter, look for wood. The other one has the job of doing nothing but eat. What you and Krugman are stating that without that person eating, there would be no point of those other four doing all that work, really? Same goes for the broken glass theory, what you and Krugman suggest is that we should break all the glass in town so that the store keepers and homeowners will buy windows from the window guy and there is money flowing in the economy. What you don't realize that with all that spending, in the long run society is poorer,

Krugman isn't fit to run a hamburger stand.

It is far better to square off the debt, save money, and let the economy purge all the malinvestments.

[maple_leafs182]

It's like 5 people being stranded on a deserted island. Four of them forage for food, build shelter, look for wood. The other one has the job of doing nothing but eat. What you and Krugman are stating that without that person eating, there would be no point of those other four doing all that work

Someone has been listening to a lot of Peter Schiff He is a smart man.

[dre]

Oh right the period of time where e USA had the highest growth in it's history. They went through small recessions every 5-8 years. Recessions aren't the bogey man you make them out to be, they correct the market and bring prices down when they get too high. Krugman thinks prices should rise in perpetuity and that we should go into debt to ensure that. Well that doesn't work, bills have to be paid, the only failure is Krugman policies which Europe swallowed lock stock and barrel. Do you think all recessions are severe? Do you seriously think that house prices should rise in perpetuity? Prices have to fall to encourage buying, that's why oil futures are always going up and down.

You cannot pay people for doing something that is non-productive. Krugman wants us to pay for consumption of things that aren't of productive value. It's like 5 people being stranded on a deserted island. Four of them forage for food, build shelter, look for wood. The other one has the job of doing nothing but eat. What you and Krugman are stating that without that person eating, there would be no point of those other four doing all that work, really? Same goes for the broken glass theory, what you and Krugman suggest is that we should break all the glass in town so that the store keepers and homeowners will buy windows from the window guy and there is money flowing in the economy. What you don't realize that with all that spending, in the long run society is poorer,

Krugman isn't fit to run a hamburger stand.

It is far better to square off the debt, save money, and let the economy purge all the malinvestments.

What you don't realize that with all that spending, in the long run society is poorer,

The problem is that you seem to support the whole system that allows this to happen, and creates the moral hazard... The fraction fed reserve system.

The WHOLE POINT of this system is to give governments the power to dump huge ammounts of new money into the system in order combat recessions. In one breath you attack the system, and in the next you defend it. It makes me question your understand of how the system works and how it came to be.

The FR system was put into place because JP Morgan got stuck being the lender of last resort in the first banking crisis in the last century. Banks pushed for central banking so that it would be the government/taxpayer/fed thats on the hook ultimately for maintaining liquidity. Your position seems to be that we should not do this... yet you pine for the system that allows it to happen.

If you dont want the fed to deal with shortages in liquidity, and you really want a "pay as you go" system, they why on earth would you support fractional reserve fiat lending? Thats the whole god damn point of it.

[dre]

It is far better to square off the debt, save money, and let the economy purge all the malinvestments.

Problem is that when you do that, you get thousands of bankings failing at the same time. Banks will not allow this to happen... they very last thing on earth they want is people paying back loans. If people even try do this the banks will ease credit because if they dont the money supply will contract quickly.