tag:blogger.com,1999:blog-6276561747841568697.post8705129101206051669..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Robert Murphy Takes On Krugman's "Hangover Theory" CaricatureWilliam L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger72125tag:blogger.com,1999:blog-6276561747841568697.post-15049177102898078202010-10-29T14:43:45.494-04:002010-10-29T14:43:45.494-04:00@Lord Keynes
Did you even watch the first video? ...@Lord Keynes<br /><br />Did you even watch the first video? Because it happens at 5:45. Also, if you knew anything about Austrian economics, or economics in general (which by your posts, everyone knows you don't), you would know that when Peter states that the market is overvalued (by these low interest rates), it is implied that the boom will turn to bust.<br /><br />Refuted, sorry.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-41522926583108455072010-10-23T11:21:38.122-04:002010-10-23T11:21:38.122-04:00Yes, I am so ashamed to have allowed myself to get...Yes, I am so ashamed to have allowed myself to get involved in such a stupid argument.<br /><br /><em>As interest rates have come down, people have built and bought homes. The effect has been felt throughout the economy, especially in construction, materials, labor, furnishings, etc. Low interest rates have <b>given rise to a bubble in the housing market</b> with home prices rising continually ever since the early 1990s.</em><br /><br />Hans Sennholz, May 24, 2002 <br /><br />http://mises.org/daily/967<br /><br /><em>Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer.</em><br /><br />Paul Krugman, October 7, 2001<br /><br />http://www.pkarchive.org/economy/ML071801.html<br /><br />Some people warned of a housing buble. Some people promoted it.Bob Roddisnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-46923010686679675812010-10-23T11:06:59.650-04:002010-10-23T11:06:59.650-04:00Like the housing bubble, I recall most EVERYONE be...Like the housing bubble, I recall most <b>EVERYONE</b> being concerned about the dot-com bubble, which really made no sense, and anticipating a bust. With housing, at least you had a house to live in.<br /><br />This "who was on first first" stuff is pathetic. Are you saying Sennholz stole his ideas from Baker? If you don't have an economic theory that makes sense, you have nothing.<br /><br />And how did those surpluses in 1920-1923 impede that quick recovery from depression?<br /><br />It is so clear the Keynesians and Chartalists have absolutely nothing to offer, ever. It brings hope that our opponents are noodle-brains. It's also pretty depressing.Bob Roddisnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-62145986114507237362010-10-22T15:43:02.987-04:002010-10-22T15:43:02.987-04:00Randall Wray and Wynne Godley wrote a bunch of pap...Randall Wray and Wynne Godley wrote a bunch of papers about Goldilocks and the Three Bears starting in 1998 - saying the Clinton surpluses, trade deficits, speculation, debt, financialization etc. would lead to a crisis. Godley is deceased, so even though they did not focus on the housing bubble, I think Wray deserves the title of NostWraydamus. He's been a little bit sheepish about being <i>too</i> prescient.Another Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-61833752972828732102010-10-21T17:34:27.213-04:002010-10-21T17:34:27.213-04:00The CRA left them vulnerable to discrimination law...The CRA left them vulnerable to discrimination lawsuits if they didn't make said 'garbage loans'.<br /><br />If the CRA caused the bubble, the bubble would have been concentrated in Harlam and Watts, not San Francisco and Ft Lauderdale.<br /><br />Fannie and Freddie guaranteed the 'garbage loans'<br /><br />Uh no. They were shrinking their balance sheets during ge bubble.<br /><br />Get a clue.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-27804270783866170612010-10-21T17:27:23.135-04:002010-10-21T17:27:23.135-04:00So Hans Sennholz called a housing bubble in Novemb...So Hans Sennholz called a housing bubble in November 2002, about 3 months <i>after</i> Baker did in August 2002??<br /><br />Confirms what I said above.<br /><br />My challenge for you to point out where Schiff predicts a housing bubble in these videos:<br /><br />http://www.youtube.com/watch?v=B0XJu9l3Mfk<br /><br />http://www.youtube.com/watch?v=hv1rI41W838<br /><br />is still unrefuted.<br /><br />The silence is deafening.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-47122069062655918152010-10-21T11:06:58.690-04:002010-10-21T11:06:58.690-04:00Of all the dumb comments in this thread, this may ...<i>Of all the dumb comments in this thread, this may be the dumbest. Noboby forced New Century and Countrywide into making garbage loans.</i><br /><br />Really? Oblivious troll is oblivious. <br /><br />The CRA left them vulnerable to discrimination lawsuits if they didn't make said 'garbage loans'.<br /><br />Fannie and Freddie guaranteed the 'garbage loans'<br /><br />The Fed printed the money driving down interest rates for said 'garbage loans'<br /><br />If you sat out the housing bubble you didn't make money, and if you lost your shirt you got a bail out.<br /><br />Still want to blame capitalist greed and animal spirits?jason hhttps://www.blogger.com/profile/03795436962579269461noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-52548730263098317922010-10-21T09:50:27.851-04:002010-10-21T09:50:27.851-04:00This blog is about Krugman. What did Krugman say ...This blog is about Krugman. <a href="http://www.pkarchive.org/column/122801.html" rel="nofollow">What did Krugman say</a> around New Year’s Eve 2001?:<br /><br /><em>The good news about the U.S. economy is that it fell into recession, but it didn't fall off a cliff. Most of the credit probably goes to the dogged optimism of American consumers, but the <b>Fed's dramatic interest rate cuts helped keep housing strong</b> even as business investment plunged. The pain is far from over — unemployment looks set to keep on rising, even if the G.D.P. starts growing again — but our worst fears have not been realized.</em><br /><br />Krugman is cheerleading for the rate cuts that caused the housing bubble. There's nothing further to argue about here.<br /><br /><a href="http://mises.org/daily/1089" rel="nofollow">Austrian Hans Sennholz</a> wrote in 2002:<br /><br /><em>The real estate bubble is bound to burst as soon as the distortions become visible to ever greater numbers of participants.</em><br /><br />Krugman and Baker are inflationist loons. The fact that they may or may not have predicted an EXTREME Keynesian-induced housing bubble and bust* is quite irrelevant in relation to their obvious philosophical deficiencies. This “debate” is one-sided, silly and boring. <br /><br />The Austrians win again.<br /><br />*I'm quite certain that the Keynesians did not predict an extreme Keynesian-induce recession in so many words.Bob Roddisnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-66687675496592768322010-10-21T09:27:38.899-04:002010-10-21T09:27:38.899-04:00Nice bait and switch!!
So obviously you cant deny ...<em>Nice bait and switch!!<br />So obviously you cant deny Baker predicted the housing bubble.</em><br /><br />I’ve never denied that Baker sorta predicted the housing bust. In my comment <em>supra</em> I expressly said that anybody and everybody should have seen it coming. <br /><br />My point latest point is that, like all Keynesians, Baker is a moral degenerate who thinks that debauching and diluting fiat money is the key to solving economic problems when it’s the cause.<br /><br />BTW, we’re all breathlessly waiting for you so show the slightest familiarity with basic Austrian concepts.Bob Roddisnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-23213582194853886542010-10-21T07:15:37.035-04:002010-10-21T07:15:37.035-04:00Banks didn't just up and decide to lower their...Banks didn't just up and decide to lower their lending standards in 2002, they were pushed by Congress and discrimination lawsuits<br /><br />Of all the dumb comments in this thread, this may be the dumbest. Noboby forced New Century and Countrywide into making garbage loans. And nobody forced borrowers to take the garbage loans. Typical for this blog: when you have no idea what you are talking about, blame the government. Convenient.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-90803138249092055962010-10-21T00:28:40.132-04:002010-10-21T00:28:40.132-04:00My comment above:
I challenge you or anyone to po...My comment above:<br /><br /><i>I challenge you or anyone to point out where Schiff predicts a housing bubble in these videos:<br /><br />http://www.youtube.com/watch?v=B0XJu9l3Mfk<br /><br />http://www.youtube.com/watch?v=hv1rI41W838<br /><br />Any takers????</i><br /><br />The earlier claim that Schiif predicted it in 2002 remains pure nonsense.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-90917383843723776992010-10-20T23:59:29.781-04:002010-10-20T23:59:29.781-04:00"No One Saw This Coming": Understanding ...<a rel="nofollow"> "No One Saw This Coming": Understanding Financial Crisis Through Accounting Models</a> Has a nice table and appendix of accurate prophets of DOOM, including most of those mentioned above.Another Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-46110309544338402492010-10-20T23:38:22.367-04:002010-10-20T23:38:22.367-04:00What debate Anon? Mostly a pissing contest over wh...What debate Anon? Mostly a pissing contest over who predicted the housing bubble first. No actual augments against ABCT (the only coherent theory on the cause of the business cycle).<br /><br />Banks didn't just up and decide to lower their lending standards in 2002, they were pushed by Congress and discrimination lawsuits. It was all fueled by cheap money fresh off the printing press. <br /><br />Long term capital investments were made in all industries assuming there were (non-existent) resources and wealth actually available.jason hhttps://www.blogger.com/profile/03795436962579269461noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-90363041529553437612010-10-20T23:21:10.583-04:002010-10-20T23:21:10.583-04:00@LordKeynes: And with that last straw-man, which I...@LordKeynes: And with that last straw-man, which I already addressed, I dismiss thee as irrelevant. It's ironic that a post-keynesian would criticize an Austrian theory as being 'irrelevant', considering the school's place in economics and its importance in developing the Credit-Cycle theory they place so much emphasis on. <br /><br />And personally, I find Dean Baker's 'just cuz' explanation behind the housing bubble a bit odd. <br /><br />At the least, I can see my macro teacher was right. One should debate a post-keynesian at least once, for the sake of being exposed to a different perspective. He was also correct that it is very much like debating a conspiracy theorist.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-30820565564087217782010-10-20T21:45:05.763-04:002010-10-20T21:45:05.763-04:00Bob Roddis,
Nice bait and switch!!
So obviously y...Bob Roddis,<br /><br />Nice bait and switch!!<br />So obviously you cant deny Baker predicted the housing bubble. <br />You cant point out where Schiff *predicts* the 2000s housing bubble in the youtube videos.<br />Like other commentators here - you got nothin', budLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-84955809638971120702010-10-20T21:25:48.976-04:002010-10-20T21:25:48.976-04:00Here is the brilliant Dean Baker:
"Tax cuts ...Here is the brilliant Dean Baker:<br /><br /><em>"Tax cuts directed at low and moderate-income families are a good way to jump-start the economy, as would be government investment aimed at neglected infrastructure needs, such as re-building New Orleans and preventing the collapse of more bridges. <b>Pushing down the value of the dollar should also be a top priority.</b> There is no way to correct our trade imbalance with an overvalued dollar providing a massive subsidy for imports and imposing a tariff on U.S. exports. A lower dollar will make U.S. manufactured goods far more competitive in the [p.130] world economy, and will thus create a large number of relatively high-paying jobs. One benefit of the housing meltdown is that it should be much easier to get our trading partners to go along with a lower dollar now that we can show them how much money they lost by investing in U.S. financial assets that have gone bad.<br /><br />Finally, we must get people on the Federal Reserve Board who take financial bubbles seriously. Greenspan recently asserted that "the human race has never found a way to confront bubbles." But it is possible for the Fed to do so, most obviously by repeatedly and <b>publicly warning</b> against stock, housing or other market bubbles as they arise. This would educate even the stupidest hedge fund managers, or at the very least make them fear personal liability for mismanaging billions of dollars. Clearly, Greenspan was not up to the job. We will need more qualified people running the Fed in the future."</em><br /><br />Yes, the donut eater state must push down the value of the dollar. Just brilliant. Just trick people into accepting lower wages and prices without asking them about it. That's authorized in the constitution, right? None of that "stagnant" Austrian theory here.Bob Roddisnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-46232693284251463812010-10-20T17:31:41.658-04:002010-10-20T17:31:41.658-04:00and a post-keynesian making a similar prediction t...<i>and a post-keynesian making a similar prediction through credit cycle theory, which is based on ATBC. And this disproves ATBC, how? </i><br /><br />Unfortunately, that credit has something to do with business cycles was taken up 70 years by Irving Fisher, in his debt deflation theory of the Great Depression. That theory was developed by the Keynesian Hyman Minsky.<br /><br />To the extent that Austrians brought in credit as a theory of the business cycle, they made some original contributions 70 years ago. But those ideas were also had by other economists and have been developed in new and serious ways outside the Austrian school. Meanwhile, Mises-Hayek-Garrison ABCT is a stagnant and pretty much irrelevant theory today.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-62475774536947793382010-10-20T17:24:50.835-04:002010-10-20T17:24:50.835-04:00So we have two austrians predicting a bursting bub...<i>So we have two austrians predicting a bursting bubble utilizing ATBC</i><br /><br />Nope. Schiff predicts no housing bubble - he refers to a bubble in stocks and shares that ALREADY EXISTS.<br /><br />Contrast that with a real prediction by Dean Baker:<br /><br /><i>This paper shows that there is no obvious explanation for a sudden increase in the relative demand for housing which could explain the price rise ... In the absence of any other credible theory, the only plausible explanation for the sudden surge in home prices is the existence of a housing bubble. This means that a major factor driving housing sales is the expectation that housing prices will be higher in the future. While this process can sustain rising prices for a period of time, it must eventually come to an end ... the collapse of the housing bubble will lead to a loss of between $1.3 trillion and $2.6 trillion of housing wealth. This collapse will slow the economy both by derailing housing construction and by its impact on consumption through the wealth effect. In addition, millions of families are likely to face severe strains in their personal finances. The average ratio of equity to home values is already near record lows. This ratio will plunge precipitously if the housing bubble collapses, leaving many families with little or no equity in their homes. This situation is especially troublesome since the population is comparatively old, with much of the baby boom generation on the edge of retirement.</i><br /><br />Dean Baker, The Run-Up in Home Prices: Is it Real or Is it Another Bubble? August 2002, pp. 17-18<br />http://www.cepr.net/documents/publications/housing_2002_08.pdfLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-44706618585833755512010-10-20T17:19:50.711-04:002010-10-20T17:19:50.711-04:00His predictions were based on the Fed's action...<i>His predictions were based on the Fed's actions in response to the recession of 2001/2002.</i><br /><br />His predictions were wrong!<br /><br />(1) A long bear market in stocks from 2002 for years onwards - FALSE, the S&P had a bull market from 2003 to 2008; the NASQAQ had a bull market from 2003-2008.<br /><br />(2) US dollar collapse that sends US interest rates through the roof - FALSE.<br /><br /><i>At that time, it would've been difficult to predict exactly where the crash would begin.</i><br /><br />He never predicts a housing bubble in that video - again I challenge you or anyone to point out where Schiff predicts a housing bubble in these videos:<br /><br />http://www.youtube.com/watch?v=B0XJu9l3Mfk<br /><br />http://www.youtube.com/watch?v=hv1rI41W838<br /><br />Any takers????<br />I bet not. <br /><br /><i>However, he was correct that the Fed's actions would lead to a bubble that would eventually burst.</i><br /><br />He predicted no housing bubble. And he talks about the over valued stock market in these videos.<br /><br />So in other words: you've got nothing.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-13681939697176556212010-10-20T10:21:47.340-04:002010-10-20T10:21:47.340-04:00Wow! Do you guys ever sleep?!?
But, to be honest,...Wow! Do you guys ever sleep?!?<br /><br />But, to be honest, the back-and-forth is what I had in mind when I created this blog. Granted, lots of insults get traded, but that is part of it all, too.<br /><br />As I have said before, I have no problem with someone going after me, even if I have to put up with the "You only teach at Frostburg" line. (I call it the True FSU, although I admit that the other fsu plays better football.)William L. Andersonhttps://www.blogger.com/profile/01802990642236807359noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-55192313359017004972010-10-20T10:13:16.050-04:002010-10-20T10:13:16.050-04:00@LordKeynes: Ah. I see. Those restrictions/separat...@LordKeynes: Ah. I see. Those restrictions/separations in Australia/UK were lifted in the early-late 80s, which resulted in the outcomes seen above. Glass Steagall was repealed in 1999. The copypasta written above was done after the year 2000. It's fair to say that those examples you gave had done away with the legal separations for about 20 years before the US did.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-11880051606472039902010-10-20T06:32:14.897-04:002010-10-20T06:32:14.897-04:00@LordKeynes: His predictions were based on the Fed...@LordKeynes: His predictions were based on the Fed's actions in response to the recession of 2001/2002. At that time, it would've been difficult to predict exactly where the crash would begin. However, he was correct that the Fed's actions would lead to a bubble that would eventually burst. So we have two austrians predicting a bursting bubble utilizing ATBC, and a post-keynesian making a similar prediction through credit cycle theory, which is based on ATBC. And this disproves ATBC, how? <br /><br />Once again, you're getting caught up in the details. In the end, the prediction of a bursting market bubble brought about by the federal reserve's actions is still valid. Aristarchus' model of the solar system had all the stars equidistant from the sun and each other. Does this invalidate his accurate placement of the planets in their orbits around the sun, in the right order? <br /><br />That doesn't look like a forced legal separation between S&L, commercial banks, and insurance companies like he's talking about. And even the article you reference discusses how, in Britain, loosening up restrictions helped building societies compete with banks, while it helped banks compete with building societies in Australia. Neither case seems to be tied to any financial problems.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-59382947409411800472010-10-20T02:34:36.524-04:002010-10-20T02:34:36.524-04:00Australia: In Australia, building societies evolve...Australia: In Australia, building societies evolved along British lines. Because of strict regulations on banks, building societies flourished until the deregulation of the Australian financial industry in the 1980s. Eventually many of the smaller building societies disappeared, while some of the largest (such as St. George) officially attained the status of banks.<br /><br />http://en.wikipedia.org/wiki/Building_societyLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-46220942118081064222010-10-20T02:32:25.645-04:002010-10-20T02:32:25.645-04:00As far as can be told, we have one post keynesian ...<i>As far as can be told, we have one post keynesian who predicted the crash as early as the Austrians. </i><br /><br />The claim that Schiff "predicted" the housing bubble in 2002 in these Youtube videos is utterly false:<br /><br />http://www.youtube.com/watch?v=B0XJu9l3Mfk<br /><br />http://www.youtube.com/watch?v=hv1rI41W838&feature=related<br /><br />Schiff talks about a bubble that ALREADY EXISTS at 7.25 (in part 1), but it is clear he is referring to stocks and shares. <br /><br />The <i>interviewer</i> refers briefly to "housing prices up" (in part 1) but that's it.<br /><br />And what about his actual predictions in these videos?:<br /><br />(1) A long bear market in stocks from 2002 for years onwards - FALSE, the S&P had a bull market from 2003 to 2008; the NASQAQ had a bull market from 2003-2008.<br /><br />(2) US dollar collapse that sends US interest rates through the roof - FALSE.<br /><br />Your claim that Schiff is some kind of prophet of the 2000s housing bubble in these videos is nonsense.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-81383444718043637132010-10-20T02:31:51.463-04:002010-10-20T02:31:51.463-04:00Actually, I am having a fairly elaborate discussio...Actually, I am having a fairly elaborate discussion with Lord Keynes out here<br /><br />http://blog.mises.org/14283/putting-austrian-business-cycle-theory-to-the-test/<br /><br />My point with his is simply that ex-ante, the houses bought by sub-prime borrowers, NINJA loan takers, home flippers, etc. were not consumers' goods but producers' goods.<br /><br />The basis of my argument is Rothbard's point that from a catallactic ppoint of view, a good is not the physical thing but rather the services it renders. Secondly, it is the ex-ante analysis that is important for the catallactic study of demand and thus to understand any particular demand as demand for consumers' goods or demand for producers' goods.<br /><br />My arguments are on that thread. If I am right, his arguments carry no value. It would help if Austrians, maybe even Prof. Anderson, could evaluate my argument and give their assessment.Balanoreply@blogger.com