an argument for a deflationary policy in the You Ess of Heeeeey

[Cain]

Basically, Malcolm Gladwell is the Thomas Friedman of...whatever the fuck he decides to write about.  Or Thomas Friedman is the Malcom Gladwell of geopolitics, take your pick.  Whichever way it is put, uncomfortable images emerge.

[Disco Pickle]

I've read nothing of them and that just reminds me that my conclusion are based on insufficient knowledge.  I'm ok with that.  I don't expect the have read everything, but I'm damn well going to try. 

I came here for the cheap drinks, I stayed for the extremely uncomfortable barstools.

Back to the OP that seemed to piss a few off, my reasoning for a hefty bout of deflation in the value of the dollar is that is benefits everyone EXCEPT the people sitting on an ass load of collateral they've leveraged against, and will also bring prices like housing and energy down to levels the rest of us can afford. 

The propping up of the housing market through monetary inflation of the value is the worst idea I've ever hear of.  It didn't work in the 70's and 80's recession and there's nothing to suggest it will ever work in this one. 

The boom and bust cycle is part and parcel to Keynesian economics, and we're all effected by that school of economics whether we want to be or not.  His theories have been the driving force behind every bull and bear market for almost the last 100 years.

http://en.wikipedia.org/wiki/Business_cycle

This isn't offering any new information to a few here who read about these things, but I sincerely contend that it's not information that anyone cannot learn.  What you take from it is..  what you take from it. 

To anyone paying attention, it should by now be clear that I think Keynes was wrong on the long view.

A central aspect of the Keynesian revolution was a change in theory concerning the factors determining employment levels in the overall economy. The revolution was set against the orthodox classical economic framework, and its successor, neoclassical economics, which based on Say's Law argued that unless special conditions prevailed the free market would naturally establish full employment equilibrium with no need for government intervention. This view held that employers will be able to make a profit by employing all available workers as long as workers drop their wages below the value of the total output they are able to produce – and classical economics assumed that in a free market workers would be willing to lower their wage demands accordingly, because they are rational agents who would rather work for less than face unemployment.
Keynes argued that both Say's Law and the assumption that economic actors always behave rationally are misleading simplifications, and that the classical economics was only reliable at describing a special case. The Keynesian Revolution replaced the classical understanding of employment with Keynes's view that employment is a function of demand, not supply.[3]
[edit]

That part in particular I have to posit is flawed, given the inflation created by a central banking system, inflation that has to continue to grow in order to give the illusion of wealth creation.  It was most famously proved during the stagflation era in the late 70's/early 80's, when prices outpaced wages enough to force Paul Volker to make the highly unpopular political decision to raise interest rates to somewhere near 20%.  This made borrowing money a really bad idea and drove down monetarily inflated prices, and within 3 years there was a robust recovery because prices returned to a level the average person could afford.  Following that, the interest rate to borrow fell as well.  Yes, there will be people willing to lower their wage in order to find employment.  They are the exception, not the rule. 

I will always hold, baring exceptional evidence to the contrary, that cyclical recessions like we experienced in the 70s and are experiencing now, are monetary problems, not problems in government or policy (read: regulation).

I'm open to ideas that change my mind on this.

[Freeky]

I will always hold, baring exceptional evidence to the contrary, that cyclical recessions like we experienced in the 70s and are experiencing now, are monetary problems, not problems in government or policy (read: regulation).

Okay, just so I'm clear, you are in favor of regulation, and think that is mostly just stupid inflation and whatever going wrong now?  If is true, I can get behind that I guess.  I'm just confused or something.

[Scribbly]

After a few discussions on here like this, I've been rereading A Theory of Justice by John Rawls.

It is a fantastic book. He's written others which are worth reading, but this one is what stands out for me. It picked up a lot of traction amongst certain circles, but since his fundamental argument is to try and reorder society so that the circumstances of your birth are minimized as much as possible, including your intelligence as well as your physical capabilities and social status, it has fallen out of favour with most mainstream politicians.

Just mentioning this because Nigel's argument, in particular, meshes very well with Rawls... and he puts forward a convincing argument about things we could try to do to make society more just, and more fair, in order to make life better for people.

It won't happen, because it seems like it is much easier to convince people that they should accept the status quo than try to change it, because of the 1 in a million* shot of being in the Winning Team. But as far as political philosophy goes, I think Rawls is the best I've found.

*odds are actually far far far worse.

[Triple Zero]

I will always hold, baring exceptional evidence to the contrary, that cyclical recessions like we experienced in the 70s and are experiencing now, are monetary problems, not problems in government or policy (read: regulation).

I'm open to ideas that change my mind on this.

1. these two paragraphs are contradictory.

2. you are STUPID. as Dok said, is this your religion or something?

how the fuck is the rampant fraud and the not-quite-fraudulent carelessness and the politicians that are bought and owned by wall street to do nothing about it, how is that a monetary problem and not a regulatory one??

this is EXACTLY analogous to (just an example) the problem we have in NL with cattle and antibiotics in their food, there's stringent rules, but the people that are supposed to check on it are paid off (with both money and power) and look the other way. is this a cattle-ary problem then?? you stupid fuck.

you are always like "oh you're so smart and if I just bounce my dumbass ideas against you guys long enough, you see, I CAN change my mind! I'm not so bad!" EXCEPT THAT YOUR DUMBASS IDEAS DONT REALLY REQUIRE ANY SMARTNESS TO REFUTE WHICH IS GETTING REALLY TEDIOUS BECAUSE APPARENTLY YOU ARE NOT CAPABLE OF REALITY-CHECKING REALLY DUMBASS IDEAS BY YOURSELF WHICH CAN ONLY LEAD US TO THE CONCLUSION THAT YOU ARE REALLY REALLY REALLY DUMB

EXCEPT MAYBE NOT BECAUSE SOMETIMES YOU SEEM KINDA SMART AND CAPABLE OF LOGICAL THOUGHT WHICH MEANS THAT YOU ARE IN FACT AN OBNOXIOUS STUBBORN SHITFUCKER THAT SHOULD DIE IN A FIRE

PICK ONE

ALSO, HAVE A NICE DAY

(NO I DID NOT MEAN THAT, I REALLY WISH YOU A SLIGHTLY AVERAGE BORING DAY WITH AT LEAST ONE REALLY SHITTY THING HAPPENING IN IT AND NO FUN AT ALL)

[Cain]

May you live in tedious times?

[LMNO]

Say what you want about Paul Krugman's politics, his economic arguments are pretty persuasive.  DP, I'd suggest you go to that link and do some reading.

[Disco Pickle]

I read Krugman.  I don't mind his politics, I'm sure he has his reasons for them.  I do not often agree with his economics.

But I still read what he writes, because he is a smart guy, and there should be room for disagreement on economic theory.

Hey Trip, your reply goes a long way toward confirming my belief that PD has more dicks than a 70's gang bang porno.  Probably more hair too.

I'm having a fucking fantastic day, btw.  Most of them are.

[ñͤͣ̄ͦ̌̑͗͊͛͂͗ ̸̨̨̣̺̼̣̜͙͈͕̮̊̈́̈͂͛̽͊ͭ̓͆ͅé ̰̓̓́ͯ́́͞]

What criteria would you need an argument to satisfy before you would change your mind on this, Pickle?

[LMNO]

I read Krugman.  I don't mind his politics, I'm sure he has his reasons for them.  I do not often agree with his economics.

But I still read what he writes, because he is a smart guy, and there should be room for disagreement on economic theory.

So, when he states his theory, then goes and looks at historical evidence, and both of them match, that's somehow an error on his part?

[Disco Pickle]

What criteria would you need an argument to satisfy before you would change your mind on this Pickle?

On what, how we're going to pull the nose up on this thing the fastest?  Historical evidence showing artificial liquidity and price inflation ever turning a bear market back to a bull market would go a long way.  The problem with that is it doesn't exist.

This thing wont recover until the Fed jacks up the interest rate and makes it actually painful to borrow for a few years.  Prices will come down out of necessity, people will be able to begin to actually afford to buy a home again without risking bankruptcy because their monthly payments are too high, and interest rates will come down again.

I understand Bernanke's reasons.  He's a student of the Great Depression, which was a liquidity problem.  A monetary problem.  But by over liquidating the market on top of the over liquidation that's occurred the last 2 decades, he's preventing a short depression and quick recovery and helping ensure a protracted recession with a tepid recovery.

[ñͤͣ̄ͦ̌̑͗͊͛͂͗ ̸̨̨̣̺̼̣̜͙͈͕̮̊̈́̈͂͛̽͊ͭ̓͆ͅé ̰̓̓́ͯ́́͞]

What criteria would you need an argument to satisfy before you would change your mind on this Pickle?

On what, how we're going to pull the nose up on this thing the fastest?  Historical evidence showing artificial liquidity and price inflation ever turning a bear market back to a bull market would go a long way.  The problem with that is it doesn't exist.

So if someone showed you irrefutable evidence of this, you'd have to abandon your current position?

Everything rides on that one criterion?

[Disco Pickle]

I read Krugman.  I don't mind his politics, I'm sure he has his reasons for them.  I do not often agree with his economics.

But I still read what he writes, because he is a smart guy, and there should be room for disagreement on economic theory.

So, when he states his theory, then goes and looks at historical evidence, and both of them match, that's somehow an error on his part?

I don't disagree with him on everything.  Economics have different schools of thought, and he happens to have the advantage that his school has been the dominant one used for most of recent history.

When he says things like "the size of the monetary base really doesn't matter" I take issue with that.  If that's the case, where's the M3?  Why stop publishing it?

[Disco Pickle]

What criteria would you need an argument to satisfy before you would change your mind on this Pickle?

On what, how we're going to pull the nose up on this thing the fastest?  Historical evidence showing artificial liquidity and price inflation ever turning a bear market back to a bull market would go a long way.  The problem with that is it doesn't exist.

So if someone showed you irrefutable evidence of this, you'd have to abandon your current position?

Everything rides on that one criterion?

That's the crux.  I've read a lot (lot) about this and have never seen anything suggesting it's ever worked and sustained a real recovery.  That could be because I just haven't found the correct evidence.  I can only read so much, or have things recommended to me.  I could be wrong because I don't have all of the information. 

[Cain]

You can tell economics is a real science because, just like science, it has different schools of thought which agree or disagree on basic conceptual approaches.  It's like how some scientists don't accept causality, or believe in the principle of non-contradiction.