Hudson Gets Religion

[marvenger]

Re: Hudson Gets Religion

can you understand the concept government can make mistakes and be too redistributive causing masive imbalances and instability and corruption, or it can be a force for stability and rule of law designed for a more fair participation in wealth creation, or it can be abused by those with massive control of private wealth to increase that wealth and power causing further inequality and instability and corruption. That its normally a combination of all these things and the hard partis to keep it in the middle. And most importantly for most people on this site, there is no utopia of the free market free of government leading to Nirvana. This final point is really what most people here cling to and keeps them from seeing the importance of the middle option. Blind faith in something there is no evidence of leads to opportunities for those with a more realistic and abusive outlook of how to manage things to tak e advantage of these religous ideologues.

[Ghent12]

Re: Hudson Gets Religion

I have no problem with the middle portion. In fact I don't really believe in a perfect free market as a blueprint towards a sustainable society. I'm highly in favor of a limited government providing a strong legal framework and appropriate 'regulation' where it makes sense.

However, I do not have confidence that we will see that setup, which was essentially what we had in the late 1800's, in our lifetimes. One simple fact is that we have the largest government (resource-wise) in the history of the world and it's only growing larger. Government capture by the financial elites is seemingly inevitable under this circumstance, and no amount of blind faith that government will eventually do the right thing and simply provide a structure for much-needed reform will change that fact. For the record, we are two-plus years after the "beginning" of The Great Recession and have not addressed any of the problems, in spite of a $4 Trillion budget.

[marvenger]

Re: Hudson Gets Religion

I agree with what you have said. I think this means there has to be an active involvement by the people to either take more control themselves of government or to support those that want to support institutions and law that they think will result in better outcomes. SO there there needs to be active involvement to create better government, not just government bashing which to me seems the option most resorted to here. The problem with supprting better govenrment is that its not as intellectually neat as the free market type arguements that appear more internally consistent but are just based on bogus assumptions. There's never certainty with supporting better government.

[chr5648]

Re: Hudson Gets Religion

it can be a force for stability and rule of law designed for a more fair participation in wealth creation

When you look at our legal system, we do have stability and a rule of law, one of the most transparent in the whole world. Our court systems work regardless of the complaints and rumors people spread, and when compared to other countries we have one of the most fair and transparent legal systems around. Even when others try to discredit our legal system or laws, I would ask them if they would like to be tried in another countries court system and by their laws? Half of europe has very strict speech laws. I sure as hell wouldn't want to be in a trial in another country. It seems like that middle option you talk about with 'force for stability and rule of law' is here and it exists. The real threat is the destruction of this system from the elites. The real threat are the politicians and their 'right vs left', the UNELECTED media, the various entities that create information asymmetries, and ambitious people who create policy who think they know whats best for everyone else.

Blind faith in something there is no evidence of

Kind of funny how the social sciences and economics almost never refer to actual data or evidence, usually they are some pie in the sky theories in the mind of some crackpot. The natural sciences such as physics or chemistry can always be tested and evidence for or against found. Not so much in the social or economic sciences, I would be extremely sceptical of every so called theory from the social or economic 'sciences' (isn't that a paradox 'social science' and 'economic science')

[bart]

Re: Hudson Gets Religion

If I remember correctly, Klein is quite the fan of murderous communist dictators, so at the very least I would take her word with a grain of salt. Second, the reforms in Chile were implemented some years after pinochet took power, he didn't go into it thinking he was going to build a "capitalist paradise", far from it... he just wanted to take power. It was because of the continued economic troubles of chile that he decided to give those reforms a try... As for what it did for chile, considering it is the most developed country in Latin America, I wouldn't exactly call it a disaster... If she want's to see a disaster she can go see what Chavez is doing, what other "non-capitalist" governments did in the region. The chinese where a murdering government way before any reforms they did, to say Friedman partook in such actions, is laughable. I would love to hear that argument on how Friedman caused hyperinflation in bolivia... many other countries in Latin America did it without his help, I would love to know why Bolivia needed his help to do it... Finally, if I remember correctly Friedman himself was against the FED, and said we would be better off without a Federal Reserve. I imagine he had similar opinion on the IMF and other useless organizations. As for hudson, though he has some things right. I usually find he does nto seem to understand exactly what free-market's are. He also condemns the abuses of government power while thinking that by just changing the master we will get a different result. I think world history has proven that theory wrong. Finally, there has been a separation between, "friedman libertarianims" and mainstream conservatives who borrow some of friedman's philosophies. However, I do agree the Chicago School of thought missed the boat on much of the causes of the crises, incidentally the austrians had called it right...

Indeed - the differences between Friedman and the Chicago School are legion, at the very least. Its not in the interest of power & control freaks to point out the various substantial differences.
Anyone who thinks otherwise just plain hasn't done proper and substantial research, or is into some vested interest of their own.

Even those who bash the hell out of Keynes (sometimes deservedly so) almost never also note that he also believed in paying down debt during good economic times... it's too much of an inconvenient truth.

[Rajiv]

Re: Hudson Gets Religion

Indeed - the differences between Friedman and the Chicago School are legion, at the very least. Its not in the interest of power & control freaks to point out the various substantial differences.
Anyone who thinks otherwise just plain hasn't done proper and substantial research, or is into some vested interest of their own.

Even those who bash the hell out of Keynes (sometimes deservedly so) almost never also note that he also believed in paying down debt during good economic times... it's too much of an inconvenient truth.

Interesting article at Zero Hedge - Goodbye Keynes - Hello Ricardo!

Submitted by Frode Haukenes of Econotwist

Goodbye Keynes - Hello Ricardo!

The world has been fighting the financial crisis by using every possible trick according to John Maynard Keynes‘ playbook. But, as The Great Depression taught us, extreme government spending tends to cause about as much problems as it solves. Perhaps it’s time to put Keynes back on the bookshelf, and pull out the 200 year old theories of David Ricardo.

“While budget stimulus measures are intended to boost demand from financially constrained consumers, it may for others – the majority – result in the emergence of Ricardian behavior.”

Philippe d’Arvisenet



For those not too familiar with economic theories; Ricardian behavior is basically increased consumer spending due to expectations of higher taxes in the future. This effect has been shown to emerge more widespread in countries with large governmental debt, and lead to significant difference in the recovery process among nations.

The increase in public debt registered over the last few years is without precedent.
In each of the main OECD countries, public debt is not on a sustainable path, BNP Paribas chief economist, Philippe d’Arvisenet writes in a research paper.

This contrasts with past periods, during which emerging markets have appeared more at risk from this perspective.

The majority of developed countries will have a public debt ratio in excess of 90% in the middle of the decade, BNP Paribas estimates.

However, according to the IMF, from 2007 to 2014, the debt ratio in these countries is expected to rise by an average of more than 30 points of GDP, reaching an average of 110% of GDP.

Philippe d’Arvisenet points out that of this increase, 3 points will be related to supporting the financial system.

• 4 points to the increased cost of debt.
• 10 points to automatic stabilizers.
• 3.5 points to budget stimulus measures.
• 9 points to losses of tax revenues relating to the decline in asset prices.

“The widening of deficits is largely structural in nature. The deficit ratio adjusted for cyclical variations is 4.4% in the euro zone out of a total deficit of 6.7 points, with 9.8 points in the UK (out of a total of 13.3 points) and 8.8 points in the US (out of a total of 10.7 points). In the past, this structural deficit has shown a strong tendency to persist,” the french chief economist writes.

For the time being, surplus production capacity limits the risk of public debt having a crowding-out effect on private investment.

Ricardo, Who?

About 200 years ago British economist David Ricardo presented his “theory of equivalence” in a newspaper essay.


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[marvenger]

Re: Hudson Gets Religion

the US makes it extremelydifficult for any country that makes independent policies. The US wanted parts of Asia to develop under their control and they were largely successful, you cannot call South Korea and Taiwan free societies especially in the 60's and 70's when they had rapid growth. It was US support that aided it, US even guarateed South Korea's debt when they ran into trouble signaling investment in theses areas was a sure bet. Planned capitalism.