tag:blogger.com,1999:blog-6276561747841568697.post1142097183044552316..comments2024-03-12T08:15:56.379-04:00Comments on Krugman-in-Wonderland: The Great Inflationist KneecapperWilliam L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger51125tag:blogger.com,1999:blog-6276561747841568697.post-229508885609193132011-12-19T20:51:15.466-05:002011-12-19T20:51:15.466-05:00Great post. My least favorite attack against the ...Great post. My least favorite attack against the Austrian Schools is the they-aren't-scientific-because-they-utilize-deduction thesis. I thought your counter argument was well put.Danielhttp://bastiatscorner.blogspot.com/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-2756820273559469912011-02-14T01:17:22.314-05:002011-02-14T01:17:22.314-05:00Public school and TV has turned the average Americ...Public school and TV has turned the average American into a retarded psychopath. John Taylor Gatto is right.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-63552138714706780002011-02-13T22:39:26.783-05:002011-02-13T22:39:26.783-05:00Economic bust comes when there is high employment....Economic bust comes when there is high employment. With our current high unemployment rate, any economic bust is now eliminated.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-2661952866098512402011-02-13T06:49:31.312-05:002011-02-13T06:49:31.312-05:00Forget economics. It is time for "Winning the...Forget economics. It is time for "Winning the Future" like Maobama told you to think in his little State of the Fascist State address. I guess only public school retards and neo-liberals understands what that means.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-8253426142045654692011-02-13T05:35:49.975-05:002011-02-13T05:35:49.975-05:00Since we all know that a "Liberal" is a ...Since we all know that a "Liberal" is a bratty little parasite, can someone define what a "Neo-Liberal" is?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-91986712518533756862011-02-13T02:43:31.988-05:002011-02-13T02:43:31.988-05:00If we get rid of the Government then we will all d...If we get rid of the Government then we will all die of lack of money.<br /><br />Sniff-Sniff.<br /><br />Government-Lovers say the stupidest things. Like a 6 year old.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-39260247004076952972011-02-13T00:47:44.087-05:002011-02-13T00:47:44.087-05:00AP Lerner is just an elitist brat who feels entitl...AP Lerner is just an elitist brat who feels entitled to other people's lives. The parasite has no problem with human slavery...as long as he's the slavemaster. This is also Krugman's attitude.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-78147721517168349872011-02-12T23:52:00.321-05:002011-02-12T23:52:00.321-05:00"FYI - Employing slaves was a choice. and if ..."FYI - Employing slaves was a choice. and if you feel so violated by using USD, then ask your employer to pay you in gold, goods, services, or some other commodity."<br /><br />@AP Lerner: you really should avoid throwing bombs on websites, being a self-declared monetary genius if you don't understand simple concepts like LEGAL TENDER. <br /><br />Also, it's really annoying when people invent nonsensical terminology that is not meant to relay any meaningful idea, such as 'neo-liberal'Dnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-8925574303957375372011-02-12T21:17:09.098-05:002011-02-12T21:17:09.098-05:00"If so, may I suggest transferring, or findin..."If so, may I suggest transferring, or finding a new major?"<br /><br />To whom? To you who knows no economics? If I were a student of Prof. Anderson, I wouldn't touch you with a 100 ft barge pole, leave alone a 10 foot one. Go back to your hut and contemplate how to impose your hut tax.Balanoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-8150924445402815022011-02-12T21:06:42.878-05:002011-02-12T21:06:42.878-05:00I'm curious, who on this thread are students o...I'm curious, who on this thread are students of Prof. Anderson? If so, may I suggest transferring, or finding a new major?AP Lernerhttps://www.blogger.com/profile/10131895292917933329noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-13890606987333746902011-02-12T20:48:33.453-05:002011-02-12T20:48:33.453-05:00"Once upon a time this blog was about economi..."Once upon a time this blog was about economics...my how times have changed."<br /><br />And AP NEVER discussed economics. He probably can't ever.Balanoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-88018715718012378402011-02-12T20:47:26.493-05:002011-02-12T20:47:26.493-05:00AP - Even assuming your statement that Prof Anders...AP - Even assuming your statement that Prof Anderson does not understand the modern monetary system, there is only one conclusion I am able to come to after perusing some basic info about capital adequacy ratios and the capital constrained nature of modern banking - It is much worse than fractional reserve banking. It creates far more humongous amounts of money according to its own whims and fancies than the FRB system does. Put that way, you are not saying that Prof. Anderson is wrong but that he does not understand the gravity of the situation.<br /><br />The funny part of course is your "economics" which only people who have inverted cause and effect will call economics. It is best represented in your attempt to show that government spending it what creates funds. Thanks for making your pseudo-economic theories appear this obviously nonsensical.Balanoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-32496776682106884062011-02-12T20:42:10.994-05:002011-02-12T20:42:10.994-05:00"@ Bob – you’re getting closer. Where do the ..."@ Bob – you’re getting closer. Where do the funds come from to pay the hut tax if the government does not spend first?"<br /><br />This is downright hilarious. Are you saying that money and funds cannot be produced on a free market where government does not spend money, that too first? So money becomes money BECAUSE government spends it first? How interesting that there are people who believe this horse manure.<br /><br />AP - You couldn't have chosen a better way to make a complete joke of yourself.Balanoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-50040898585774714732011-02-12T18:32:07.281-05:002011-02-12T18:32:07.281-05:00APL is completely tone deaf to and ignorant of the...<i><br />APL is completely tone deaf to and ignorant of the ethical issues surrounding funny money...<br /></i><br /><br />Obviously, but given that this was established a long time ago, what's the value in rehashing ethical principles?<br /><br />More important to focus on directly measurable outcomes, such as whether employment participation in the US will pick up, how much inflation we can be expecting and how best to measure that, and how to maintain rule of law in an increasingly unaccountable system.<br /><br />Getting back to the more important matter of inflation, the "hut tax" theory does not in any way result in a conclusion that inflation cannot occur. It merely states that inflation is a consequence of government spending more than it taxes -- so from a deliberately narrow minded perspective we could say the Federal Reserve is off the hook, because Congress is the fundamental source of inflation rather than the Fed.<br /><br />From a broader perspective, the US federal government works as a whole, and attempting to finely allocate cause and effect among the cogs and wheels in a big machine is mostly an academic exercise -- the correct answer is "who cares?"<br /><br />Having established that inflation can occur (even under APL's operational theory) we need a metric to decide whether inflation is really happening right now. I suggested food prices. As a general rule food prices are not particularly volatile, and part of government's "protection" services is to put in place a bunch of mechanisms to keep food prices from getting volatile (such as the "food stamp" system that ensures farmers keep producing even when segments of the population cannot afford to buy their output).<br /><br />In as much as short-term events such as storms and bad harvests upset prices, the physical mechanisms for leveling this out are food storage and food transport. If a number of short-term event happen to accidentally correlate then you might expect a brief spike in prices, which is restored within maybe 6 months or a year. I for one totally reject that claims of multi-year worldwide poor harvests are in any way legitimate.<br /><br />Australia, for example, had a bigger wheat harvest this year than last year, and we had nearly a decade of drought before that. Admittedly late season rains caused an unusually high percentage of our harvest to be downgraded to stock feed, but large numbers of stock in our region are grain fed anyhow -- it all ends up going on the dinner table sooner or later!Telhttp://lnx-bsp.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-22242796378669124502011-02-12T16:12:37.666-05:002011-02-12T16:12:37.666-05:00Rick: It is true that it takes hard work to study...Rick: It is true that it takes hard work to study ancient economic history. But some things are quite clear. Metals, coins are very durable, so people understand well when they started to be used. <br /><br />Gold was of zero importance in the development of money. It is much too rare. Mesopotamia (and Egypt) don't have any. The oldest coins are only around 700 BC at the earliest, and are invariably associated with states, not private mercantile transactions. Money is thousands of years older. Basically, money was created by governments/temples, not private individuals trading with each other. <br /><br /><i>People who don't consume all they produce can lend out their savings for interest, if they so choose, so they can consume more in the future.</i> But that just was not how it happened, or could have happened. What was it that they would be saving, and then lent out? <br /><br />The real point is that the whole idea of money as a commodity that could be "saved" and "lent out", that money is a thing, a commodity, is absolutely wrong. Money is a relationship between two entities, not a thing. <br /><br />All money everywhere has been created by governments & bankers & private individuals "counterfeiting the currency". The "honest money" that Austrians believe in never existed. <br /><br />Money is intrinsically associated with governments. When governments deficit spend, they are not necessarily "robbing" the private economy, but answering the needs of the economy for a resource it desperately needs - (base) money.Another Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-86314158766420671272011-02-12T15:00:35.231-05:002011-02-12T15:00:35.231-05:00has nominal gdp been* doing its*has nominal gdp been* doing its*Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-23206868548764971482011-02-12T14:44:53.902-05:002011-02-12T14:44:53.902-05:00I think what Lerner is saying that you can't h...I think what Lerner is saying that you can't have a discussion about monetary policy until you actually understand the monetary system in placed today. He's not trying to say it's immoral or immoral and that he necessarily approves of it (I don't now if he does. Simply that all the bickering between the Austrians and the New Keynesians is irrelevant to the problem today because the monetary system the Austrians and the New Keysians think they have isn't actually there. The confusion in the debate isn't if the fed is printing too much money or too little. It's that the monetary system where the fed is capable of doing that doesn't actually exist. When he says the government isn't revenue restrained, he isn't saying that the government should be allowed to spend all they want and no problems would result. He's saying that as an "operational fact", the government isn't revenue restrained. The government doesn't have to raise taxes and have enough bond buyers to spend money, but they usually do anyway. The government may not see it this way, but taxes only serve to restrain inflation. With the monetary system we have in place, it would be best for the government to run bigger deficits for pragmatic reasons. Just like with the "welfare state" we have in place, Ron Paul likes to restrict "freedom" by wanting to send employers who higher illegal immigrants to jail. <br /><br />"Always. The money multiplier is a myth."<br /><br />So is it just a coincidence that nominal GDP has been stabilized to a trend growth path of about 5% for the past 20 years since what has been refereed to the "Great Moderation"? Has nominal GDP being doing it's own thing unrelated to the Fed and government deficits have stabilized nominal gdp just by luck and coincidence? (exception with the current recession)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-8796044338834081622011-02-12T14:12:51.351-05:002011-02-12T14:12:51.351-05:00FYI - Employing slaves was a choice. and if you fe...FYI - Employing slaves was a choice. and if you feel so violated by using USD, then ask your employer to pay you in gold, goods, services, or some other commodity.<br /><br />Or, if living in a pegged currency world is so desireable to you, move to Europe, or China.<br /><br />Or, if you want to live without governmet counterfeiting, move to Somalia. <br /><br />Two can play the irrelevant referance game. Except, I'm bored with it already.AP Lernerhttps://www.blogger.com/profile/10131895292917933329noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-87737473829893225192011-02-12T13:56:20.048-05:002011-02-12T13:56:20.048-05:00APL: "@ Rick Teller – you do realize the US i...APL: "@ Rick Teller – you do realize the US is no longer on the gold standard, right? "<br /><br />Well, duh...how does that respond to anything I wrote? Try again please. Or admit that the government counterfeiting money is not different than what slavery was for thousands of years - the way nearly every society was run, but wrong nevertheless.Rick Tellernoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-67582980037523322962011-02-12T13:17:08.536-05:002011-02-12T13:17:08.536-05:00Working my way down on comments worth responding t...Working my way down on comments worth responding too:<br /><br />@ Anon #1 – you said “when you say the fed doesn't have control over the money supply, is this only true in zero bound conditions, or alway?”<br /><br />Always. The money multiplier is a myth.<br /><br />http://www.federalreserve.gov/pubs/feds/2010/201041/201041pap.pdf<br /><br />so the reserves the Fed creates are irrelevant to bank lending, since bank lending is never constrained by reserves. Reserve balances influence the size of bank balance sheets, but never the size. One day Austrians and neo liberal Keynesians alike will realize this and also realize we left the gold standard a long time. <br /><br />(as an aside, I have asked Prof. Anderson to critique this Fed paper in the past and he has come to the conclusion it is more productive to call Krugman names than actually have an intelligent economics debate. Who can blame him after he failed at answering my question on interest rates in this post. He has given up in engaging me in debate after this disaster: http://krugman-in-wonderland.blogspot.com/2010/06/commentary-on-current-bond-rates.html)<br /><br />I was anonymous in this post. <br /><br />@ Rick Teller – you do realize the US is no longer on the gold standard, right? <br /><br />@ Anon #2 – you said “Maybe you missed the hearing. There was a Keynesian economist at it”<br /><br />Great, more neo-liberals that do not understand the monetary and banking system. I am not a Keynesian, and neither is Mosler. Keynesians and Austrians are equally ignorant to how the monetary system works.<br /><br />@ burkll13 – you said: “this is what im getting from this statement. all economic activity is derived from government action and to take that further, economic activity CANNOT happen without a prior government action.”<br /><br />That’s what you want to hear, but it’s not what I’m saying.<br /><br />You said: “if the dollar disappeared tomorrow, would people not still own capital?”<br /><br />Yes<br /><br />“would they suddenly be unwilling to trade their production in order to consume?”<br /><br />No.<br /><br />“Economic activity happens because people choose to engage in it.”<br /><br />Well said. <br /><br />Now what does any of this have to do with the current monetary polcey?<br /><br />@ Bob – you’re getting closer. Where do the funds come from to pay the hut tax if the government does not spend first?<br /><br />@ Sean O’Donnell – I, nor Mosler, are Keynesians. If you paid attention to me, or MMT, you would know they have contributed to many of the neo-liberal myths and fundamental misunderstanding of the monetary system that Austrians believe in. The bullshit is on you.<br /><br />@ Anon – you said: “Lerner is from a MMT school a thought. Closer to post-keynsians. They're an even smaller minority than Austrians and have completely different views from the New Keynsians like Krugman and Bernake. New Keynsians are closer to Friedman than Keynes. “<br /><br />Bingo. Finally somebody that’s paying attention and not copy and pasting from some Austrian web site or repeating the same neo liberal nonsenseAP Lernerhttps://www.blogger.com/profile/10131895292917933329noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-82889579105356685122011-02-12T12:53:15.646-05:002011-02-12T12:53:15.646-05:00Lerner is from a MMT school a thought. Closer to p...Lerner is from a MMT school a thought. Closer to post-keynsians. They're an even smaller minority than Austrians and have completely different views from the New Keynsians like Krugman and Bernake. New Keynsians are closer to Friedman than Keynes.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-29779042466665243562011-02-12T11:50:01.652-05:002011-02-12T11:50:01.652-05:00AP Lerner said:
"You want to do add value to ...AP Lerner said:<br />"You want to do add value to the discussion Prof. Anderson? Then use your contacts to encourage an alternative point of view into the debate."<br /><br />I'm not a PhD. I don't have a masters in anything. I don't even a have an Econ or Finance degree. I have an engineering background, and have been in jobs for 20 years where people can be killed if they're wrong, cut corners or sling bullshit. And thus I have an excellent bullshit detector. AP Lerner is full of shit.<br /><br />Based on the quote above, is AP Lerner suggesting we haven't had enough representatives from the Keynesian community? These people have been shoving socialist nonsense down our throats for years? There WAS a Keynesian on the 3-man panel, and he got plenty of play.<br /><br />Regular people - thanks to Bill Anderson, Ron Paul DiLorenzo, etc - are slowly figuring out that wealth cannot be obtained from a printing press; nor can jobs be created from printing money or simply by spending money. Resources are never best allocated when investment is socialized. <br /><br />And rarely are losers who camp out on other peoples' blogs making half-baked comments of any real use.Sean O'Donnellnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-14615989374883676492011-02-12T10:52:35.322-05:002011-02-12T10:52:35.322-05:00I doubt there is enough ethical common ground betw...<em>I doubt there is enough ethical common ground between myself and the person calling himself AP Lerner, to sensibly discuss anything at all from a purely moral standpoint.</em><br /><br />APL is completely tone deaf to and ignorant of the ethical issues surrounding funny money (and a whole lot of other issues too).Bob Roddisnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-81372863278050610282011-02-12T09:32:32.790-05:002011-02-12T09:32:32.790-05:00As for the "tax hut" theory, why not jus...As for the "tax hut" theory, why not just call it by the correct name, which is a protection racket? One way or another, the only real commodity that government has to sell is protection: partially protection from the government itself, and partially protection from other governments and other individuals.<br /><br />You pay tax, in return you don't get hurt. Whether this arrangement is counted in scraps of paper, or credits in a computer, or whatever you like makes no difference. When you accept paper money in return for your goods or labour, you are doing so in the expectation that at some future stage you (or someone you can trade with) will be in need of this government protection, so the paper money has value.<br /><br />Under this system, it should be obvious that a government that spends significantly more than it takes in tax will create a surplus of paper money beyond what anyone needs to pay their protection fees, and thus inflation must occur. However, so many taxes now are linked to wages that once inflation gets round to result in higher wages, the tax automatically goes up again. Similarly, things like Capital Gains Tax also automatically increase taxes to balance against increased inflation. You buy assets expecting inflation to destroy the value of your paper money, then inflation comes along as you expected and the taxman holds hand out for the nominal "increase" in value of your assets.<br /><br />Because of the way these are locked together, government spending is always balanced by tax in one shape or another -- inflation being one possible manifestation of tax, if no other tax comes instead.<br /><br />I think this discussion regularly gets muddled by looking at moral issues: "Is it morally acceptable to run a protection racket?" "Is it morally acceptable to deceive people into believing they can have something for nothing?" and then trying to ignore the practical question of whether certain approaches are workable.<br /><br />I doubt there is enough ethical common ground between myself and the person calling himself AP Lerner, to sensibly discuss anything at all from a purely moral standpoint.<br /><br />It is however, quite sensible to discuss whether a protection racket can work from a practical viewpoint. Certainly there are many historical examples of highly successful systems based on this design. People are willing to put up with some level of subjugation in return for stability -- and in some cases (such as societies that support slavery) certain people put up with very high levels of subjugation.Telhttp://lnx-bsp.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-12080172063805669402011-02-12T05:54:21.680-05:002011-02-12T05:54:21.680-05:00Another Anon: I didn't mean to imply that I co...Another Anon: I didn't mean to imply that I could identify a specific ideal society way in the past in which a government (and associated religious authorities) didn't try to steal from their subjects, the ones who produced what the powerful bosses consumed. Likewise, one would probably have to go back thousands of years, if even then, to find a society of more than trivial size that didn't run at least partially on slavery. Does that make slavery a natural and acceptable state of affairs?<br /><br />That said, I have no confidence in opinions of Assyriologists trying to describe the detailed workings of a society thousands of years ago. Of course the records of the time may well have covered mostly debt and credit transactions - barter and business done with a stable medium of exchange such as gold don't need any records. Historians and certainly economists get things blatantly wrong about events fifty years ago, and we should trust some guys reading the 1/10 of 1% of cuneiform tablets that survived to make sweeping assertions about the economy at the time because...why?<br /><br />And even if credit and debt were big features of that society, so? What is wrong with that? People who don't consume all they produce can lend out their savings for interest, if they so choose, so they can consume more in the future.<br /><br />The problem is when governments counterfeit the currency, as the Fed is doing so diligently now, they destroy the money as a stable medium of exchange. Not overnight, it takes some time, but eventually it turns out to be a bad policy for the society however measured. And it is theft from those who have honestly worked for their money, even before the bad policy effects show up.Rick Tellernoreply@blogger.com