I’ll just point out that he hasn’t logged in for 2 days now.
I’m sure I’ll regret jumping in - but what the hell. In reference to the crash of 1929, your wrote this in your op:
(Bolding mine to highlight key point. Snipping mine to keep peoples heads from exploding)
You state that the policies of FDR caused the Depression to drag on and on. But I’m not sure the facts agree with you. In fact, I’m pretty sure that the lessions of the Great Depression don’t support your argument the way you think they do.
Lets go back and look at what happened. Roughly - Market crashes in 1929. Response by Hoover includes cutting spending and trying to balance the budget (something you seem to support). Result - the economy worsens.
4 years later - FDR is elected and pushes through huge increases in government spending as part of the new deal. Recovery begins in the spring of 1933.
After 4 years of modest growth, conservatives in Congress convince FDR to trim spending and balance the budget. In response - the economy tanks and a new recession begins. Growth doesn’t return until large increases in government spending occur, primarily associated with re-armament.
Note - the above is an oversimplification of actual events. But the bottom line is - there were 2 different responses to the Depression. The response by fiscal conservatives from 1929-1933, and again in 1937, was to cut spending. and the result was a shrinking economy - both times. In contrast, increased government spending occured from 1933-1937, and from 1939-WWII. And the result was growth - both times. This figure gives a nice graphical representation.
In short - you seem to be arguing that the lessons of the great depression are that government response to crises should be to cut spending and balance the budget. However, the actual data from the great depression pretty clearly shows exactly the opposite.
The amusing thing is that I was responding to a post by xtisme, not to him. XT claimed that conservatives couldn’t possibly want bad government.
It is a matter of faith to right wingers - both conservative and libertarian - that the disaster that happened on their watch couldn’t possibly be their fault. Ron Paul claiming it was all the result of loose money just shows what a fool Ron Paul is. They are still claiming that the cause of the crash is the encouragement of home ownership, as if this forced mortgage lenders (especially ones not even covered by the programs) to offer loans without documentation, and that this forced the rating agencies to slap AAA ratings on them.
No wonder Greenspan is now hated - he actually admitted the philosophy failed, and these people would rather pluck their eyes out than face reality.
Ah, okay; I freely admit that I got confused because your posts have been all over the frigging map, which is naturally a result of your Magnum Opus OP. I thought that you were implying that Austrian/Libertarian economics were going to cause some improvement on these subjects. Which you apparently weren’t, since not a single one of your four answers here mentions a single thing about any economic policy whatsoever.
Which kind of means the fact that I scoffed at the idea that economic solutions to these problems means that I understand economics - at least well enough to know what it won’t fix.
Also, gold isn’t as inflation-proof as you think. But putting that aside, I’d instead like to talk about this “better yet competing currencies” thing you keep talking about. Have you actually thought about what this entails?
Competing currencies made of gold are by definition the same currency - unless you intended for the minted gold coins to be worth more than their materials value, in which case they’re just an expensive-per-pound fiat currency, like the old copper pennies were before they inflated past their metal weight and started getting melted down. So, presuming you’ve thought about it, you can’t want your competing currencies to be made of gold.
Presumably that means that you want more fiat currencies floating around. And guess what: your wish is granted. They’re called the peso. And the dinar. And the pound. And the mark. And the yen. These are exactly what you think is more preferable to a gold-backed currency to make the world a halcyonic place. So, please explain, why isn’t the world already a halcyonic enough place for you, monetary-wise? Why are you mentioning gold at all?
If it’s because most of those currencies aren’t accepted by all vendor in all places, what makes you think your new competing currencies will be either? Suppose I take note of the fact that I have an incredible supply of wealth stored underneath my mattress - in a battered box marked “Monopoly”, that is. If I dig these out and take them to your store, in your ideal world should I expect them to be accepted?
None of this has anything whatsoever to do with reducing reducing regulations, of course. That kind of came out of nowhere, really.
You eventually got around to it. And then I promptly posted a response, which you again haven’t gotten around to: Post #203, where I use the power of Economics! (well, basic economics) to refute your dismissal of the immorality of leaving the fate ot the poor to the amorality of the market.
I’ve learned, though: I will be patient a while longer to see if you eventually get around to it.
Yeah.
Look at your stats. National debt quadrupled under Reagan and Bush senior, went up about 20% under Clinton and then doubled again under baby Bush. Its up 30% so far under Obama and much of that is the result of the stimulus plan passed under Bush Jr.
As for Austrian economics. Its a bullshit fringe theory that noone takes seriously.
I sincerely hope it makes you feel better to know I read, and understood every word of your lectures.
You seem like a fairly smart guy to have swallowed this load of hooey. Oh well, takes all kinds.
You know why people think the Tea Party people are ignorant racist rednecks? Check out some film footage of their rallies, it’s nearly impossible to not see a misspelled, racist, protest sign. I mean, come on, you know there will be filming, the world is full of spell checkers. I don’t see anyone from the TP, (hey, hey, I just realized how very appropriate that abbreviation is, I’m liking it a lot!), doing a damn thing to weed out the racists, or even speak out against them. As long as they are swelling the ranks it’s okey dokey. Somehow they seem to think if they just keep saying they’re not racists we’ll ignore the ignorant, misspelled, signage.
How many Tea Party folks could read through that tome, ya think?
There seem to be three superfluous words in this…
This is an excellent example of how unrealistic the position is even in places where I suspect almost everyone agrees on the goals.
After the Civil War, in a land close to the libertarian paradise you propose, the government attempted to prevent Southerners from taking away the rights of former slaves. You think that made everyone more tolerant? I’d say we are in general far more tolerant than we were 50 years ago when I was a kid, and the reason for that is the government forced us to deal with “the other” in schools, workplaces, and restaurants.
You say you live in California. Haven’t you heard Prop 8 proponents say that it is wrong for their kids to be exposed to gay people in love? What do you do when a group feels that another group exercising the freedom you support if forcing a belief on them?
A lovely idea. But there seem to be a few problems. Rich people, and corporations, can afford better lawyers than poor people. Do you prevent them from getting the best defense possible? Or do you use government money to pay for the same class of lawyer for the poor. How do you pay for this? How do you deal with the problem that the rich, and especially corporations, have the time and resources to understand the system better than the poor and poorly educated? So this is a lovely goal, but I don’t think you have thought through how to get to it practically.
Actual data! 
You expect Actual data to have any effect on the “thinking” of a Teabagger?? :smack: … one who wants the Feds to start buying gold? :smack:
Thanks for this morning’s laugh, Kiber.
He ain’t coming back, guys.
He’s probably on vacation or something. Say what you will, he’s always been pretty persistent.
Yes he will. He’ll be back, starting all over again with yet another 2 or 3 page screed.
Question for the Mods. If he starts another [del]lecture[/del]debate, are we allowed to refer back to questions asked in this thread, or do we have to start all over again?
I don’t rule out the possibility of his return to this thread.
He’ll probably be back in a few weeks to start a new thread with a new essay. That’s generally his pattern - he starts a thread, sticks around for up to a week responding to posts, then comes back up to a month later to start a new one, oblivious to the substantive and rational objections to his previous thesis.
I don’t expect he’ll get anything out of this thread, and will be repeating the exact same easily-disprovable assertions in the next one.
He’s convinced himself that even though virtually 100% of the responses here have debunked and/or ridiculed his theories and claims, that a silent group of believers is growing with every screed he posts, and that come next election* the Libertarian/Rand/Austrian Economic Forces will sweep to victory, amazing the doubters. The logic behind his program is incredibly strong, after all. 
Or the election after that. Or the one after that. Victory is inevitable once we come to our senses.
Note to everyone reading this thread: I have been unexpectedly busy the last few days and so I had to take a break from responding to this thread. I don’t spend all my time on message boards on the internet, I do actually have a life. But I want to finish up and respond to everyone in the second half of this thread. Feel free to commence with the contributions to this debate.
That said, ITR champion, you clearly have learned a version of history and economics that I know to be incorrect. Clearly the information gap between you and me is quite wide and it would be very hard for me to correct every misconception in the limited space we have here. I will try though.
I should have stated that differently or been more specific with that point. Obviously, in some ways our standard of living is much higher than it was fifty years ago. We all have computers, cell phones, HDTV’s, multiple cars, and so forth. The market is powerful enough that it can overcome bad government policies and inflation to actually bring down prices in certain goods, allowing luxuries that used to be exclusive to the super rich to be available to the poor. Not to mention the fact that we have a much higher population that we did, thereby having a larger base of workers to produce. This has nothing to do with the question of whether government policies are good or bad. As time marches on, new technologies are developed and going back even a decade seems crazy.
However, the crucial question is the rate of development and growth in the market, the fundamental soundness of the economy and the level of debt and obligation the people face. The fallacious argument that people throw around is to say that if I advocate a return to governmental policies of several decades ago or a return to a gold standard, I somehow think we should return to the social standards of the day (slavery, segregation), or that immediately our prosperity would be the same as it was then. The highest levels of growth and objective health of the economy were during the Industrial Revolution at the end of the 19th century and after World War II until the late 60s.
But it is more than that. Our standards of education have plummeted. Health care has gotten worse. American families are breaking up. There is more drug addiction and crime than there was. We have gone from the Greatest Generation and those who got through the Great Depression to the people of my generation (I am only 25), who are more depressed, more criminally inclined, and more prone to abuse drugs.
We are no longer a great nation. I am certainly not the only one who has said this. In so many ways this is verifiable. It has a great deal to do with government policies. Our civil liberties are trampled regularly, we are harassed at the airport, small business is regulated out of existence, we have dangerous levels of debt, and we bail out the crooks and politically favored corporations. You claim we have all this prosperity? Based on what? GDP? Fudged government statistics? What we have is more stuff bought on credit, made in china, and consumed by an increasingly ignorant and obese population.
True wealth in my opinion is factories, tangible assets, healthy industry, savings, and high levels of production. We have lost these things.
This is just astoundingly ignorant. You say the current rate of inflation is three tenths of a percent? Are you crazy? You believe government statistics?
Please read this: http://mises.org/daily/2302
What you don’t understand is the very definition of inflation:
Ludwig von Mises said: “What people today call inflation is not inflation, i.e., the increase in the quantity of money and money substitutes, but the general rise in commodity prices and wage rates which is the inevitable consequence of inflation.”
Therefore the increase in the monetary base IS inflation. The result of inflation is rising prices. You are claiming that because there haven’t been massive increases in prices yet we don’t have inflation that is nonsense.
Get this in your head: The Federal Reserve has more than doubled the monetary base since September 2008.
This is, by itself and by definition, very high levels of inflation. To understand this it is beneficial to recall a debate between Michael Shedlock and Marc Faber:
Bernanke is flooding the financial system with liquidity, yet credit is contracting. Shedlock says:
“The money supply is just sitting there as excess reserves on bank balance sheets,” Mish says. “Bernanke can print this money but unless it makes its way into the real economy we’re not going to see inflation.”
So, while the money is sitting on the banks balance sheets and not yet being spent into the economy, they can claim that deflation is occurring in the economy looking merely at prices. This money is NOT going to sit there forever.
But Shedlock is missing one critical factor says Faber, “When the economy’s bad, governments pile up these fiscal deficits and they print money” to offset the deleveraging of the private sector, he says. “They’re going to print and print and print.”
If the economy sours again and especially if deflationary forces take hold, we’ll have “even more stimulus packages and even more printing,” Faber says. "That will bankrupt western governments - not just in the U.S. but everywhere. "
He means that the dollar and other western currencies will collapse, leading to rising (even hyper-) inflation around the globe, spurring on all manner of societal unrest.
The steps to hyperinflation are as follows (From another site):
**1.During a recession when price deflation is occurring the central bank creates vast amounts of new money (Hey, prices aren’t going up so this is consequence free, right?). Price deflation occurs because the income-velocity of money is low, aka people aren’t spending as much but instead hold onto their cash. We see this happening right now with businesses holding onto massive reserves unlike any period in US history. The demand for money increases as the public thinks prices will continue to fall, thus leading to more price deflation. The government thinks this is great and that it can print money with impunity. Massive government spending on debt borrowed from the Federal Reserve leads to huge increases in the supply of money.
2.Eventually the demand for money peaks and begins to fall. The income-velocity of money returns to normal levels and prices begin to rise in response.
3.In phase three, prices go up faster than the money supply because they were pushed low by the deflationary pressure. This creates a shortage of money, causing the government to print even more. Prices and the money supply spiral upwards as the demand for money falls. Since the public perceives the price inflation they spend their money as soon as they get it, otherwise it’s losing purchasing power while they contemplate it. Hyperinflation kicks in and we get one hundred trillion dollar bills.**
You see, falling prices is what should be happening. The market is desperately trying to correct itself. The politicians and the economic “experts” don’t want prices to fall. They will print money and create new stimulus packages to keep prices from falling. As all this money circulates into the economy, prices will soar through the roof. “Price” deflation occurs in the early part of this process.
Like I said earlier, inflation is the act of printing money by the federal reserve. Rising prices is a result of inflation. That will come soon enough.
I posted this already, but you apparently missed it. The monetary base:
http://www.leap2020.eu/photo/1237272-1612820.jpg?v=1234825015
Given the TRUE definition of inflation, are you sure you want to claim we don’t have inflation?
This is also ignorant. Gold in relation to paper currencies changes all the time unless we are on a Gold Standard. If the price of gold drops it is because the dollar is stronger and there is more confidence in that currency. If gold costs more, the currency is weaker. Today the price of gold is almost $1300 an ounce. If what you say is true and gold was only $200 an ounce in 1998, we have experienced a profound devaluation in the dollar in twelve years. In 1981 we were in the midst of an inflationary panic relating to the problems of the 70s. Volker bit the bullet and raised interest rates really high and reduced the inflation and likely bought Reagan a second term in the process. The price of gold tells the value of fiat currencies, which change all the time. What you need to look at is what that gold will BUY at any one time. Think about this, you know how high gas prices were a few years ago? Look at this graph:
The price in gold is virtually flat. The true value of gold only changes when there is a massive new mining effort for gold, which doesn’t happen that often, and is certainly not comparable in any way to how central banks can print paper money.
There were abuses of free markets and government intervention even in the 19th century. And there was corporate abuse and fraud. There always has been. But the notion that poor exploited working class were able to escape the exploitative conditions of a “free” market is bullshit, plain and simple. This myth is drilled into our heads to make the notion of returning to a truly free economy unthinkable. You should read this excerpt from Human Action:
I mean the philosophy of the governments ability to take care of us and manage the economy is being discredited in most peoples eyes. Medicare and Social Security have bankrupted our country. Nobody believes in the promises of government any longer. No president in the foreseeable future is going to be able to run on this massive “Progressive” platform and win.
Well, at least we agree the news sources I listed are untrustworthy. However, you have got to be shitting me when you claim that those sources have a bias towards libertarianism. Are you insane? I would buy that they are not sufficiently progressive and I would agree with that. But they are not in any way libertarian. Lets just call them mainstream, establishment bullshit, all right? That is descriptive enough.
By the way, I like the Daily Show, and Salon.com. I am not a fan of the Dailykos, NPR, and I don’t know what Bartcop is.
I did read a very interesting essay from Markos called “The Libertarian Dem” which I thought was fascinating. I would be interested in your take on it:
He appears to have abandoned this libertarian democrat idea since Obama has been elected, but I always thought that libertarianism should be appealing to people on the left. This would be a good start.
I have answered those points many times. Anyone who wants to reform Social Security and Medicare, necessarily meaning a reduction in care given and reduced benefits along with partial privatization based on economic realities is an immoral scumbag?
Then what do you call someone who stubbornly refuses to acknowledge reality and continues to fund these programs until a complete collapse of the system, an acknowledged bankruptcy with hyperinflation causes people to be out on the streets with no alternatives? Mother Teresa?
I’m not making up scare stories. I have my ideal system in mind, but I don’t begrudge you if we don’t entirely agree. However, you must understand that we need to cut spending significantly. And we need to replace this monetary system with something else. There can be no disagreement among rational people about those two facts.
I don’t know what having “an axe to grind” implies regarding the validity of my opinion or argument, but if you want to post a more involved critique of the philosophy or policy ideas we could go from there.
The end result of fiat money, with high inflation or hyperinflation is the destruction of the middle class. Short of that, the middle class is slowly eroded through depreciating purchasing power. There are lots of different types of central banks and monetary systems in the world. Some countries have very low rates of inflation and low debt. Some have very low regulations and freer markets. There are too many variables. In the long run, however, fiat money simply does not last. The natural course of human civilization is for some to organize to take advantage of the masses of the people through force. Therefore authoritarian governments and economic fascism has been the norm, unfortunately. You cannot claim that simply because a system is not used in very many countries, it is nonviable. The middle class is hurting in Europe, with crushing levels of debt. Japan suffered a lost decade and many economic problems of its own. There are so many problems associated with central planning and paper currencies.
You are making the mistake of assuming that the Gold Standard is the only thing that goes into a healthy economy according to my view. This is far from the truth. Yes, for a while, even decades a nation can have a healthy economy. Some central banks maintain the value of the currency and don’t print as much as others. But look at the levels of debt around the world. No economy is doing great.
During the Gold Standard and the Industrial Revolution, the rate of wealth creation was far higher than it is today. There was more upward mobility in society. People were poorer overall because the condition around the world at that time was extreme poverty was the norm. However, the free economic system and industrialization proved that, for the first time in history, nobody would have to go hungry, everyone could have access to a decent standard of living. Now, with a stable dollar, low public debt and less regulation, making it easier for small business to thrive, and more savings and production, the middle class would be much larger and more prosperous. No more having to work two, three jobs to make ends meet. The upward mobility that we used to have in this country is gone, for the most part.
I have already responded to those. I am awaiting YOUR response to what I wrote. By the way, if I create a thread here and one hundred people respond, it will take me a while to get to everyone, especially if I want to respond to everyone. This mock indignation on your part about how I might have missed a reply of yours on one of my threads is silly.
Thanks for that. You might want to look at the response I made to ITR yourself. He made a good attempt, but not quite a slam dunk. It comes down to a faulty definition of inflation and misconceptions on several issues.