tag:blogger.com,1999:blog-6276561747841568697.post6264821232155862682..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Uh, Mr. Clinton, didn't loan guarantees help get us into trouble in the first place?William L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger89125tag:blogger.com,1999:blog-6276561747841568697.post-54897377505933083232017-01-26T13:06:24.350-05:002017-01-26T13:06:24.350-05:00MRS. IRENE QUERY FINANCE IS THE BEST PLACE TO GET ...MRS. IRENE QUERY FINANCE IS THE BEST PLACE TO GET A LOAN {mrsirenequery@gmail.com}<br /><br />God bless you Mum, I will not stop telling the world about your kindness in my life, I am a single mum with kids to look after. My name is Mrs.Rachel Alex, and I am from Singapore . 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Does your firm,company ...Do you need personal loan? Does your firm,company or industry need financial assistance? Do you need finance to start your business? Do you need finance to expand your business? We give out loan to interested inviduals who are seeking loan with good faith. Are you seriously in need of an urgent loan contac us at Email: honestloan10@gmail.com<br />APPLICATION DETAILS<br />Your Full Details:<br />Full Name:<br />Loan Amount Need:<br />Loan Duration:<br />Phone Number:<br />Applied before?<br />State:<br />Monthly Income:<br />Country:<br />You are to send this to our Company Email Address: honestloan10@gmail.com <br /><br /><br /><br />frankrogershttps://www.blogger.com/profile/13160745286388057296noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-8339891412236681182012-12-30T16:07:02.993-05:002012-12-30T16:07:02.993-05:00If stimulus works in bad times why does it not als...If stimulus works in bad times why does it not also work in good times? Oh, it does work both times but we don't need it in good times. We can identify the good times, I suppose?<br />Keep in mind that government creates a disaster, which of course it can't explain? -then uses that disaster to grow larger in a lame attempt to fix the problem. When really all it's doing is making everyone worse off. Anthony Limahttps://www.blogger.com/profile/15923530382897881718noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-18144122957184971122012-12-30T14:20:45.859-05:002012-12-30T14:20:45.859-05:00Plenty of competent commenters HAVE answered the c...Plenty of competent commenters HAVE answered the criticisms but in the statist world there has to be a 'leader.'<br />Anthony Limahttps://www.blogger.com/profile/15923530382897881718noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-78041346575577529022012-12-30T14:08:30.031-05:002012-12-30T14:08:30.031-05:00One thing you have you to understand about Paul Kr...One thing you have you to understand about Paul Krugman- he always leaves himself wiggle room. So he'll never just come out and say something.Anthony Limahttps://www.blogger.com/profile/15923530382897881718noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-72133765148450827742012-12-30T13:31:38.530-05:002012-12-30T13:31:38.530-05:00He also thinks utility calculation will show how m...He also thinks utility calculation will show how much more productive statism is.Anthony Limahttps://www.blogger.com/profile/15923530382897881718noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-88767434398136720502012-12-30T13:17:50.361-05:002012-12-30T13:17:50.361-05:00There is no mixed system. The government plays by ...There is no mixed system. The government plays by the rules of the market in all its dealings. The government employees do not understand how the market works. This is why governments observe depressions without knowing how to get out of them.<br />Markets are suppressed when people are oppressed but that does not change the rules or expunge economic law.Anthony Limahttps://www.blogger.com/profile/15923530382897881718noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-20549010689371466782012-12-30T13:04:55.962-05:002012-12-30T13:04:55.962-05:00This is rich! Lord Keynes is telling us that the m...This is rich! Lord Keynes is telling us that the monopoly AT&T facing a little criticism from regulators set up a lab that "innovated" stuff!<br />Sure they innovated! They had to. All the other competing companies were gobbled up by the government created/supported monopoly. That's a lot to give up for a little innovating. The entire US tele-communication system under one company and they poop out a few inventions? Next, we'll get to here the story of how the post office invented email.Anthony Limahttps://www.blogger.com/profile/15923530382897881718noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-42160036985739161742011-07-10T21:05:57.023-04:002011-07-10T21:05:57.023-04:00Austrians have coherent responses to these issues....Austrians have coherent responses to these issues. Maybe you just aren’t listening, or haven’t been exposed to them yet. For me JG, it’s the statism you advocate and the insistence that magic bureaucrats can solve our problems that is the simplistic childish dogma. <br /><br />Even in a recession, savings is necessary for economic growth and recovery. During the boom years, people spent way too much and invested in unsustainable lines of production because of cheap credit and artificially low interest rates. Now that the bust has ensued, people need to rebuild their savings and deleverage in order to put the economy on a sustainable trajectory. <br /><br />People don’t just save all at once. Different people have different preferences, and no one would deliberately stop spending on consumer goods and go hungry. However if people cut back on spending in the present, all that would mean is a lengthening of time preference. This would signal that people value future consumption over the present. This in turn would indicate to entrepeneuers that they should invest in more long term capital projects. Basically, if individuals in the present cut back on consumption in the present, that would represent a lengthening of time preference thus a lengthening of the structure of production. Resources would simply shift from producing consumer goods to more long term capital goods. No need for a recession, just a readjustment of the structure of production. That is the Austrian Response. <br /><br />People don’t stuff money under the mattress when they save. That’s nonsense. The great depression did not happen because “liquidity” died. Actually, the fed lower rates and pumped in reserves into the system providing “liquidity” and the depression still happened anyway. <br /><br />It was government intervention and monetary stimulus that caused the depression and it was Keynesianism and government intervention that prolonged it. In 1921, without Keynesianism, the economy recovered in about a year. I guess the economy can self correct and recover in the absence of Keynesianism. Because it did.<br /><br />When Keynesians find a response to how the pricing system and economic calculation are distorted by funny money dilution and government spending and why this is in fact problematic I will stop thinking Keynesianism is stop statist left wing dogma.zackA89https://www.blogger.com/profile/03695722179840739720noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-52924797625760520742011-07-09T10:32:39.633-04:002011-07-09T10:32:39.633-04:00Zack,
Your position illustrates what is wrong wit...Zack,<br /><br />Your position illustrates what is wrong with Austrian ideas in general. Yes, savings in necessary for future investment. No kidding, it doesn't take a rocket scientist to recite something like this. But what happens when panic grips an economy and everyone saves at the same time? How are otherwise solvent busiesses able to obtain the financing to run their operations when liquidity disappears because savings replaces investment? These are the questiosn that Austrians cannot answer because their theory is "do nothing, the market will solve itself"....only it doesn't. The Great Depression is what happens when liquidity dies and everyone replaces investment with savings and money is stashed under the mattress.<br /><br />When Austrian theory can find a coherent response to these issues then I will stop thinking of Austrian theory as a childish outgrowth of simplistic libertarian dogma.JGnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-395814068368902132011-07-04T23:32:01.651-04:002011-07-04T23:32:01.651-04:00Right production is very important no doubt, I sti...Right production is very important no doubt, I still think quibbling over what comes first is not really that important to fight over. <br /><br />Production is the focal point of economic growth, but in order to increase their productivity, one must save. Not just personal savings, but collectively society must save in order to add to the pool of real funding in which profitable investments can legitimately be financed that produce real wealth. <br /><br />So savings is crucial in creating economic growth, increasing productivity, and sustaining it in the long term. Production, savings, capital, and investment are all important. Government spending, funny money dilution, and other forms of "stimulus" undermine those key elements. <br /><br />Unfortunately, the Keynesians have declared a war on savings when there are “idle resource”, but recession or not, savings are still important and necessary for a strong economy.zackA89https://www.blogger.com/profile/03695722179840739720noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-17167602273249582212011-07-04T22:27:33.658-04:002011-07-04T22:27:33.658-04:00Bala,
I apologize for being unspecific,mea culpa ...Bala,<br /><br />I apologize for being unspecific,mea culpa I was using income, in the vaguest possible since, from fiat money now, to gold in the 19th century, to nuts and berries for tribesmen in the stone age. Yes , production is the starting point of it all. and what you said about saving all true! I never said saving was unimportant, all i implied was saving in absolute terms is a function of income, which is itself a function of production to profitably satisfy consumer desires.Waynenoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-71138265017035441962011-07-04T22:21:10.070-04:002011-07-04T22:21:10.070-04:00“You don’t necessarily have to have earnings or pr...“You don’t necessarily have to have earnings or profits to save, you can acquire goods in nature that can allow you to free up time to do other things that are more productive. The acquisition of goods could be considered a profit or an earning, but nonetheless savings is still very important in the wealth creation process. “<br />I never said saving was not important. And the acquisition of goods in nature is called earning, hust like you said.<br /><br />“Quibbling over what the most crucial component of economic growth for me is pointless and useless.” It really isn’t useless. Dramatically different ways of looking at things come when you realize that earning is more important and comes before saving. Let me ask you this, who would you rather be a hedge fund manger who saves 1% of his after tax $68 million income, or a civil engineer who saves 10% of his 40,000 dollar income. If you say the engineer, than I pity you “For me, its savings and adding to the the pool of real funding.” (We are entitled to are own opinions but not to our own facts zack) “This funding is what facilitates potentially profitable investments to take place” This funding leverages and amplifies the future earning potential or a firm or a person, but does not constrain that person or firm’s initial ability to earn money. Warren Buffet compounded his wealth by re-investing his savings again and again, but even he had to work certain jobs to create that original savings pool.Waynenoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-6430313401384156442011-07-04T22:16:18.038-04:002011-07-04T22:16:18.038-04:00Wayne,
I'll start by saying that you are wron...Wayne,<br /><br />I'll start by saying that you are wrong. Let me now explain.<br /><br />'Income' is the wrong term to use. 'Production' is the right term to use. It is 'production' that is at the base of it all. Production is the application of labour to nature to churn out consumers' goods for consumption. Saving is the forsaking of consumption in the present in favour of consumption in the future.<br /><br />Saving is the fundamental prerequisite for man to increase his output of consumers' goods and thus attain a state of greater well-being. Saving enables the application of labour in more roundabout methods of production that alone can increase the output of consumers' goods. Without saving, man will continue to live at his current level of consumption or in fact fall to a lower level of consumption as his existing stock of capital goods wears off in the process of churning out consumers' goods.<br /><br />Your 'infinite regress' stops at the point in time where man had to apply his labour to just the means found in raw nature to produce his first capital goods.<br /><br />Hence, your claim that 'income' is the basis of it all is incorrect. It is 'production'.Balanoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-9352409552854957692011-07-04T21:57:32.351-04:002011-07-04T21:57:32.351-04:00oh and zack,
I forgot to mention when you said
&qu...oh and zack,<br />I forgot to mention when you said<br />"Even if earnings or profits come before savings that does not mean that profits and earnings are somehow more important to economic growth than saving. "<br />you are wrong because saving is a dependant variable, its means if you want to save, it depends on something else, namely profits, which depends on investment of human capital, intellectual energy, and other productive factors. <br />If in order to achieve value y, you need value x, it follows that value x is more important than value y, If in order to achieve x u need w, than w is more important, and so on, in a infinite regress, the least dependent variables and values are more important than the more dependent and marginal variablesWaynenoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-39995832273053748482011-07-04T18:29:48.584-04:002011-07-04T18:29:48.584-04:00Even if earnings or profits come before savings th...Even if earnings or profits come before savings that does not mean that profits and earnings are somehow more important to economic growth than saving. <br /><br />I still feel saving is the most crucial component to economic growth. Adding to the pool of real funding by forgoing present consumption allows savings to be channeled into capital investments that produce real wealth.<br /><br />If the investment turns out to be in conjunction with consumer desires, then a profit is realized. It is only if the investment turns out to produce a good or provide a service that satisfies consumer preferences is a profit realized. The profit comes after the capital investment financed by real savings. <br /><br />You don’t necessarily have to have earnings or profits to save, you can acquire goods in nature that can allow you to free up time to do other things that are more productive. The acquisition of goods could be considered a profit or an earning, but nonetheless savings is still very important in the wealth creation process. Peter Schiff’s book how an economy crashes and why it grows explains this. <br />http://mises.org/daily/4796<br /><br />Quibbling over what the most crucial component of economic growth for me is pointless and useless. For me, its savings and adding to the the pool of real funding. This funding is what facilitates potentially profitable investments to take place.zackA89https://www.blogger.com/profile/03695722179840739720noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-86923544947695899692011-07-04T14:16:13.438-04:002011-07-04T14:16:13.438-04:00zackA89,
"John" is studying finance at ...zackA89,<br /><br />"John" is studying finance at MIT He graduates at the top of his class and a month later gets a job at Citadel working for Ken Griffin paying him a percentage earned when trading profitably.a year later he pulls in a million. the the total burden of taxes where he lives (in a high tax state is 40% of the $600,000 that remains. He saves 10% of that income. A year later a financial crisis hits . Griffin gets hit hard. He has no choice but to lay of dozens of people, even good traders, with unemployment insurance set at one year before it expires and his savings he has $83,000 to live on before he finds a job paying him a similar salary, or he has to adjust his future consumption patterns, in the meantime, he is living off and running down his savings. If he finds a job paying him less, say as a stockbroker at a government protected bank paying him $100,000 and saves the same percenatge, he'll find that in ABSOLUTE terms, his savings are less, even if he saved the same fraction 10%. So you see earning comes BEFORE saving, and funds it.<br /><br /><br />I think I''l know how you'll respond. the funds That Ken Griffin managed came from people's savings. Which is true, except for the fact that those savings came from earnings, if you do the thought experiment, all the way back to the stone age. you'll find that production profit and earnings come FIRST. If you define savings as refraining from consumption, than you run into a problem How can you speak of consuming ANYTHING before there are earnings to consume?<br /><br />I apologize for my long winded rant, but to summarize earning come first, and yes saving is important and accumulates capital, but that's the proximate cause of capital accumulation, the ultimate cause of CAPITAL CREATION is earningsWaynenoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-26238500783178958872011-07-04T13:59:31.704-04:002011-07-04T13:59:31.704-04:00*does come*does comeEdnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-73858952823812622692011-07-04T13:58:56.360-04:002011-07-04T13:58:56.360-04:00Zacka89,
I agree with Wayne. Investment dies come...Zacka89,<br /><br />I agree with Wayne. Investment dies come from savings, but those savings come from surpluses (profits). Saving is impossible in a deficit situation or break even point.Ednoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-71657671273396161712011-07-04T13:31:36.494-04:002011-07-04T13:31:36.494-04:00Wayne I disagree. Without savings, there is no inv...Wayne I disagree. Without savings, there is no investment. Because without savings, there really is no capital. Savings is what constitutes the pool of real funding in which real investments can be made and thus profits realized.<br />Yes profits are important, but savings are the building block of economic growth. Savings adds to the pool of real funding, which allow for these capital investments to take place. When you refrain from engaging in present consumption in order to consume in the future that is saving. What you do with those savings in terms of investing in something that increases your productivity of labor is an investment. <br /><br />I believe Mises touches on that here: http://mises.org/efandi/ch4.aspzackA89https://www.blogger.com/profile/03695722179840739720noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-15652830296507249012011-07-04T13:01:16.586-04:002011-07-04T13:01:16.586-04:00I apologize for the many typographical errors. I a...I apologize for the many typographical errors. I am typing on a iPad and it seems to think certain words I type should be other words...Ednoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-39031248389710503002011-07-04T12:58:14.220-04:002011-07-04T12:58:14.220-04:00JG,
Your statement: "1) The broken window an...JG,<br /><br />Your statement: "1) The broken window analogy isn't really advocating the destruction of physical assets so that they can be rebuilt (like military spending that ulimately goes towards destroying other assets). It's a metaphor for an external event that triggers spending and usually takes the form of future investments (new bridges, highways, airports, etc.) that actually generate future wealth. "<br /><br />Is inaccurate. The fallacy is based off the destruction of currently functioning infrastructure and the associated cost the owner/responsible party must pay to repair it. This causes a loss of resources for the owner and reduces his net benefit and the potential societal net benefit as a result of his not being able to reinvest those resources into improvement. It destroys investment.<br /><br />The danger of this fallacy, as Krugman and neo-keyneisans advocate (remeber Krugman in 2001 said 9/11 could be a boon to economic growth), is they assume that "the right people"(tm) somehow have this magical knowledge and understanding of economic causality that no one else has. This hubris of knowledge results in inefficient allocation of resources, distortions of price signals by disrupting supply and demand, and the overall reduction in net benefits for the short term stimulus of cherry-picked actors. <br /><br />Do you honestly think a small group of career academics ankhd lawyers can order an economy better than millions of individual actors working in concert to produce economic output? <br /><br />I am reminded of Animal Farm, where snowball assures the animals that all of them are created equal, and should majestic their own decisions. Except they might make the wrong decisions, and then "where would we be?"Ednoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-51363965644702117682011-07-04T00:28:44.558-04:002011-07-04T00:28:44.558-04:00zackA89,
"Savings does in fact generate econ...zackA89,<br /><br />"Savings does in fact generate economic activity. Savings is the most crucial component in creating economic growth, and thus promoting general economic activity. Real economic growth comes when people refrain from spending in the present in order to save for the future which allows the accumulated savings to be channeled into capital investments that produce real wealth. Thus, savings is necessary for capital accumulation which promotes economic growth by increasing productivity and output."<br /><br />Savings is "the most crucial component of economic growth?" What about profits? Without a steady stream of profits, you will run down your savings hoard until you have nothing. Don't get me wrong savings is still important. It acts as a form of safe leverage, amplifying future profits, and helping to make consumption easier in the future. Saving is a secondary virtue, but not the primary virtue. Yes earning and investment comes BEFORE saving you guys! Think about it, if you go all the way back to stone age tribesmen building spears, their own primitive 'capital goods" how can you talk about saving if its done ex nihilo? The process you are describing of refraining from present consumption and gratification in order to provide for the future, is called INVESTMENT, not saving. Saving is the stuff we earn, in the form of capital goods, money, or durable consumer goods not immediately consumed, but how can we speak of that before we speak of earnings? So its earning,investment and profits that drive savings,far more than the other way around.Waynenoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-30172055728985056512011-07-03T18:58:49.033-04:002011-07-03T18:58:49.033-04:00Quote from JG:
Keynesian stimulus is not meant to...Quote from JG:<br /><br /><i>Keynesian stimulus is not meant to be standard operating procedure for normal economic conditions, it is meant as a temporaty emergency measure to be taken during times of recession and credit contraction.</i><br /><br /><br />So in response, I'd just like to ask how many years the US government has run a deficit in the last 20 years or so? What about the artificially low interest rates going back right through Alan Greenspan's watch?<br /><br />"temporary emergency" ?!?Telhttp://lnx-bsp.net/noreply@blogger.com