This is Why Obama Will Lose in November

Perados

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No, not at all. It means counter-cyclical at all times. In good times, you save, in bad times you spend.

You need to read up on your econoimcs.

the better advice would be, you change your prof :wink:

no, serious
this understanding of keynes is one reason why we are in this mess...

sinc the 70´s he politics trys it and fails all the time. take a look at the long time scales and you will see hat really happened to our economy.
in special at the 70´s, the politic tried it massivly.
and what happened???
instead of a 12 year cycle of growth, with useually 4% growth a year, we got a 13 year cycle with less then 3% a year. the period of growth was shorter and less strong (cause the gov had to save money) and the recession got longer but only a bit less heavy

the other effect was, the debts started to grow, cause it was impossible to pack back as mutch as they spend.

That's exactly what it says to do. You don't understand economics.

This also hasn't been whats happened, so you don't have history either.

No, since the 70's we've been seeing "spend in good times and bad times" which is not Keynesian at all.

i am really afraid of how wrong you are. - what you see as "spending in good and bad times" is the flop of a try of cuts.

it is nearly impossible to get all the money back you spend. its by simple MATH and a bit of undestanding in ecomomy to understand :tongue:

keynes theory was published and based on the experience of the big depression. and everyone should reed it in that context...

also isnt keynes right in every point. there are a few other who discribed the economy way better.
 

Perados

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I am curious. What do you think are the reasons the crash happened? Which policies were in play by whom that made it occur?

Was it Clinton? Bush Sr.? Bush Jr.? Was it business decisions? Was it a combination of things? Could it have been prevented from a political standpoint? Is there anything being done to correct the mistake?


one mayor reason was the low intrest politics of the FED... alan greenspan declared the age of no inflation. what he didnt noticed, was that all that new money got, forced by the politics "every american a home", into the house market. where it created a huge bubble.... at the end, you could define a bubble as inflation in an isolated part of the economy.


so its by FARE not only the unleashed finance industry
 

D_Davy_Downspout

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the better advice would be, you change your prof :wink:

I'm a socialist and well past my college days, but that doesn't mean you know what you're talking about.

no, serious
this understanding of keynes is one reason why we are in this mess...

sinc the 70´s he politics trys it and fails all the time. take a look at the long time scales and you will see hat really happened to our economy.
in special at the 70´s, the politic tried it massivly.
and what happened???
instead of a 12 year cycle of growth, with useually 4% growth a year, we got a 13 year cycle with less then 3% a year. the period of growth was shorter and less strong (cause the gov had to save money) and the recession got longer but only a bit less heavy

the other effect was, the debts started to grow, cause it was impossible to pack back as mutch as they spend.

Thank you for accurately describing how the US has not been following a Keynesian economic policy for the past few decades.

Congratulations on learning that what the government says it's doing and what it actually has been doing are not the same thing.

i am really afraid of how wrong you are. - what you see as "spending in good and bad times" is the flop of a try of cuts.

This sentence doesn't make sense. I'm assuming English is not your 1st language. Could you try to reword this?

it is nearly impossible to get all the money back you spend. its by simple MATH and a bit of undestanding in ecomomy to understand :tongue:

Another odd sentence.

keynes theory was published and based on the experience of the big depression. and everyone should reed it in that context...

The current economic times are very similar, so you're right in a way, but probably not the way you meant.


also isnt keynes right in every point. there are a few other who discribed the economy way better.

Absolutely, nobody says Keynes is the only economist worth reading, or always right. But maybe you should start by actually reading him before you explain how he's wrong when you clearly don't know a lot about his work.
 

D_Davy_Downspout

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one mayor reason was the low intrest politics of the FED... alan greenspan declared the age of no inflation. what he didnt noticed, was that all that new money got, forced by the politics "every american a home", into the house market. where it created a huge bubble.... at the end, you could define a bubble as inflation in an isolated part of the economy.


so its by FARE not only the unleashed finance industry

The housing bubble was driven by and for the financial industry. Who do you think helped repeal most of Glass-Steagall? Who do you think was involved in letting the Citibank-Solomon-Travellers merger go through? How do you think the bubble got so big.

You're correct that low interest rates caused a bubble, but the definition of a bubble as inflation is silly. Stop making up things to justify gaps in your understanding.
 

dandelion

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Reagan enacted the largest tax cut in modern history shortly after he took office. As a result the USA saw a huge economic boom. Toward the end of his presidency, he raised taxes slightly to help cut the deficit. To your point though, Reagan was known for his radically pro growth supply side economics which is a tax cutting strategy.
This is a point widely discussed on here. No, he didnt. he claimed to cut taxes but in fact quietly increased them. thats how you win in politics, tell people what they want to hear and do the right thing regardless. Trouble comes when you tell people what they want to hear and do the wrong thing. Real trouble comes when people start believing that the reason someone succeeded was by doing what they claimed to have done.
 
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D_Davy_Downspout

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This is a point widely discussed on here. No, he didnt. he claimed to cut taxes but in fact quietly increased them. thats how you win in politics, tell people what they want to hear and do the right thing regardless. Trouble comes when you tell people what they want to hear and do the wrong thing. Real trouble comes when people start believing that the reason someone succeeded was by doing what they claimed to have done.

Reagan didn't even have a boom, economic growth in the 80's was the lowest of any post-WWII decade. Also he doubled the payroll tax, and ended up raising income taxes later on to levels significantly above where they are today.
 

lucky8

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Businesses don't hire because they don't have the demand to hire. They currently have huge piles of cash and are sitting on them because the consumer doesn't have money. There's no magic "well if you do this policy we'll hire people" route. If there is need to add an employee, they will add an employee. Anyone who's ever run a business should know this.

You're implying here that big business creates all the jobs. However, small business accounts for more employment than big business. I don't think we necessarily need incentives for big business. Like you've stated. that sector does have plenty of cash. It's the small business sector that's in need. I could give a shit less about WalMart and the likes.


You haven't really given any specifics though. Obama has governed conservatively, he's mostly just continued the policies of the previous administration, so if you liked Bush you should be OK with Obama. But neither of them is a liberal.

A tax cut for small businesses is a good place to start. It isn't going to solve the problem now, but it would have helped a bit if implemented 3 years ago. Also, many small business owners I've talked to have directly said they're afraid to hire until they know how the new healthcare bill is going to affect them. This goes back to the political risk associated with running a business. What they're doing is forgoing hiring because they aren't sure of the costs they're going to bear when the bill is in effect. The bill is way too ambiguous for them to feel comfortable investing in new employees at this point.

No, that's not a flaw of Keynesian theory, that's a flaw of your understanding of economics. All Keynesian theory is about is counter-cyclical spending. Keynesian don't simply address one side, it simply addresses the government's reaction.

Sorry to burst your bubble but I understand economics just fine. Keynesian theory is entirely about government investing in the consumer, so the consumer can spend their money in hopes that will in turn spur demand in the business sector. You can argue against that, but you'd be incorrect.

Hilariously, you have the complete opposite of reality here. The administration has been very, very good to the business side, and not nearly good enough to the consumer, hence our current economic doldrums. Businesses have huge piles of cash, we're buying up their bad debt, relaxing policies, etc. The administration keeps hiring pro-business types, and is also hugely favored by Wall St, even moreso than Republicans, when it comes to contributions.

Yes, we are all aware by now that Obama is owned by Wall Street. Again, this isn't about big business. This is about the actual job creators, small businesses. He's implemented a healthcare bill that puts the burden on small businesses rather than trying to address the actual problem of inflated costs. Big business got exactly what they wanted there. Like I said, I don't give a shit about big business. If BofA went under today, another company would step up to the plate.

This is accurate. Consumers don't have the money, or the jobs, to go buy things right now. Public spending would be a good thing right now, but we're really not getting much of it. As you've correctly stated, giving piles of cash to banks and corporations isn't really helping hiring.


In order for consumers to spend, they need money and job security....companies have security, they don't have demand. You need to make the consumers better off, not the businesses, which we have been doing.

In order for consumers to have money, they need jobs. Large companies have security, but small businesses don't have that much security at the moment. You need to create a stable climate for small businesses so they have a sense of security to go out and hire. Without it, it's an added risk which inhibits many owners from taking those risks that would otherwise create growth. Case in point, my best friend works at his mom's company that employs about 60 people. They see an opportunity to create a new division, but because of instability of the business climate and the fear of new regulations, they are reluctant to take the plunge and make the investment. Again, this is about the little guys, the big guys can fend for themselves no matter what the business climate is like.

Again, this is quite frankly bizarre, because it's pretty much the exact opposite of what has happened. Somehow you've looked at a massive unemployment rate, huge increases in poverty, and said the government has given the people too much. What earth are you on?

Where did I say government has given the people too much? You've incorrectly inferred that all on your own. I said the government has made investment on the consumer side, but little to no investment on the business side. There needs to be a balance. You have to attack both sides of the circle to solve the problem.

Wages have been stagnating for decades, while healthcare and housing have risen due to unregulated businesses and banking. You're correct on the lack of discretionary income, but you've misidentified the cause. Look at the % of money spent on healthcare and housing over the past few decades. We actually spend less on almost everything than our grandparents did, including food, as a % of income. Rising product prices in general aren't actually happening at a drastic rate(core inflation nearly flat).

You're close, but not quite there.

The current increases in consumer prices is directly attributable to the government's and the "Federal" Reserve's spending. Although the government isn't admitting it, there has been some pretty serious inflation in consumer staples over the last 3 years. Look at the offset of oil prices vs gas prices for example. That offset is directly attributable to the decreased value of the dollar. The last time gas prices were this high, oil was around $140 a barrel. Now it's around $100, but the price of gas is the same. That alone shows a massive offset in pricing in just the last 3 years.
 

Perados

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I'm a socialist and well past my college days, but that doesn't mean you know what you're talking about.

okay you are amerikan... maybe we sould talk about, what you would define as "support of the economy, in bad times"

Thank you for accurately describing how the US has not been following a Keynesian economic policy for the past few decades.
read it again - and you will notice, that they didnt followd... CAUSE ITS IMPOSSIBLE. So, not bad will, but wrong understanding of keynes

Congratulations on learning that what the government says it's doing and what it actually has been doing are not the same thing.
thats something i learned allready years earlier... but maybe you should learn to desite, "bad will" and "sorry but the idea doesnt worked".

This sentence doesn't make sense. I'm assuming English is not your 1st language. Could you try to reword this?
if you would have read my post with a bit more attention, you could have noticed that earlier :wink:
but again:
YOU sayd, the politics started to sepnd in good times and bad times, cause they dont want to cut in good times.
I ANSWERED WITH:
its frightening how wrong you are... What you try to interpretate as "spending in good times and bad times" is the result of spending in good times and the failed try to cut.

Another odd sentence.
its absolutly logic that your interpretation of keynes cant work. to proof your wronf, you only need a little bit knowledge of mathematics and economy.

The current economic times are very similar, so you're right in a way, but probably not the way you meant.

yes they are... i never sayd it would be wrong to use keynes in the nearest future. all i say its totaly wrong to use keynes in every period of time.
keynes is only for crisis

Absolutely, nobody says Keynes is the only economist worth reading, or always right. But maybe you should start by actually reading him before you explain how he's wrong when you clearly don't know a lot about his work.
i havent only read him...

but if you read more then keynes, you should have noticed that you cant use keynes in ordinary economical times, to argue state spendings
 

Perados

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Reagan didn't even have a boom, economic growth in the 80's was the lowest of any post-WWII decade. Also he doubled the payroll tax, and ended up raising income taxes later on to levels significantly above where they are today.

at least he is right with reagan... he was the most "democratic" republican president.
but the boom in the 80´s exist, there your wrong again.... (even if only the ritch benefits from the 80´s boom)
 

D_Davy_Downspout

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Ever heard of the $800 billion stimulus?

Oh, you mean the one where 1/3 went to tax cuts that mostly didn't tough the working class, and the rest was only a tiny fraction of what businesses have received.

The one that apparently hasn't done a whole lot because people still don't have healthcare, jobs, or spending money, so it was at best able to stop some of the bleeding?

Yeah I heard of it.
 

D_Davy_Downspout

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at least he is right with reagan... he was the most "democratic" republican president.
but the boom in the 80´s exist, there your wrong again.... (even if only the ritch benefits from the 80´s boom)

No, it didn't. Look at economic growth numbers in versus prior decades.

Look at household debt.

Look at unemployment.

Look at wages.

If only the rich benefited it's not a boom, you silly, silly person.
 
D

deleted15807

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Just returned from the land of the banned and already up to the same old tricks.

BINGO. Do they ever learn?

Yo 24065 I thought you said Gingrich was gonna win and they had nothing to charge Zimmermen with. Wrong on both accounts.
 

Perados

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If only the rich benefited it's not a boom, you silly, silly person.


take a look at germany in the past 20 years... and you will nitce that a boom without benefis for ereage joe is possible. just like it was in the 80´s in america.

but no need to be ashamed.
im pleased to give you a lesson
 

D_Davy_Downspout

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You're implying here that big business creates all the jobs. However, small business accounts for more employment than big business. I don't think we necessarily need incentives for big business. Like you've stated. that sector does have plenty of cash. It's the small business sector that's in need. I could give a shit less about WalMart and the likes.

If you want to boost small business, you need to get the consumer spending again. Small businesses already get quite a few breaks and assistance programs. They don't hire because people aren't buying enough.

It's that simple.

A tax cut for small businesses is a good place to start. It isn't going to solve the problem now, but it would have helped a bit if implemented 3 years ago. Also, many small business owners I've talked to have directly said they're afraid to hire until they know how the new healthcare bill is going to affect them. This goes back to the political risk associated with running a business. What they're doing is forgoing hiring because they aren't sure of the costs they're going to bear when the bill is in effect. The bill is way too ambiguous for them to feel comfortable investing in new employees at this point.

Small businesses already get numerous tax breaks. The thing is, there's no tax break big enough to offset the cost of hiring someone, if there's nothing for him to do. You need the demand. Supply does not create it's own demand.


Sorry to burst your bubble but I understand economics just fine. Keynesian theory is entirely about government investing in the consumer, so the consumer can spend their money in hopes that will in turn spur demand in the business sector. You can argue against that, but you'd be incorrect.

No, you don't. You are wrong. Please crack an economics text.

Keynesian economics - Wikipedia, the free encyclopedia

Yes, we are all aware by now that Obama is owned by Wall Street. Again, this isn't about big business. This is about the actual job creators, small businesses. He's implemented a healthcare bill that puts the burden on small businesses rather than trying to address the actual problem of inflated costs. Big business got exactly what they wanted there. Like I said, I don't give a shit about big business. If BofA went under today, another company would step up to the plate.

Small businesses create a lot of jobs, and cause the loss of a lot of jobs. If you're going to help small businesses, you need to give them business.

By the way, you should read this article in regards to small business job creation:

Are Small Businesses the Biggest Producers of Jobs?

The ACA does little to make things harder for small businesses, it mostly makes things harder on the taxpayer. Which will not be good for the economy, unless you're in the insurance business.


In order for consumers to have money, they need jobs. Large companies have security, but small businesses don't have that much security at the moment. You need to create a stable climate for small businesses so they have a sense of security to go out and hire. Without it, it's an added risk which inhibits many owners from taking those risks that would otherwise create growth. Case in point, my best friend works at his mom's company that employs about 60 people. They see an opportunity to create a new division, but because of instability of the business climate and the fear of new regulations, they are reluctant to take the plunge and make the investment. Again, this is about the little guys, the big guys can fend for themselves no matter what the business climate is like.
If you're friend's company isn't making an investment because of "regulatory uncertainty" then they're idiots. Regulations change all the time, always have, always will. Obama has pushed for *less* regulation, at that.

Much more likely, the economy isn't good enough to justify the investment.

Go figure.

Where did I say government has given the people too much? You've incorrectly inferred that all on your own. I said the government has made investment on the consumer side, but little to no investment on the business side. There needs to be a balance. You have to attack both sides of the circle to solve the problem.

This ignores my point. The government hasn't made nearly enough investment on the consumer side, and a huge amount of investment on the business side.

There is no "side" here. The economy is demand-driven, and we need to stimulate demand. If people aren't buying, there isn't demand, and companies and the public all do badly.

The current increases in consumer prices is directly attributable to the government's and the "Federal" Reserve's spending. Although the government isn't admitting it, there has been some pretty serious inflation in consumer staples over the last 3 years. Look at the offset of oil prices vs gas prices for example.

Oil is specifically not included in inflation calculations because it is so volatile and dependent on numerous factors.

Look at a graph of inflation vs oil price, they're all over the place.

That offset is directly attributable to the decreased value of the dollar. The last time gas prices were this high, oil was around $140 a barrel. Now it's around $100, but the price of gas is the same. That alone shows a massive offset in pricing in just the last 3 years.

There a huge set of factors involved in gas prices. You're correct that lax Fed policy plays a huge part, but what you're missing is that only certain sectors are rising at a high rate, and wages are staying flat(in real dollars).

The fed is distorting costs in various sectors, but that is not exactly the same as inflation.
 

sbat

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Blah blah blah, Keynes, Friedman, Reaganomics, etc. Maybe half of our problems is as Einstein said - that we're trying to resolve issues within the same paradigms and ways of thinking that brought those problems into existence in the first place. The accuracy with which any of the schools of economic thought parroted on these political threads have predicted trends long term has been abysmally low. Even from an academic standpoint, economic study has lacked the precision of, say physics, until people started factoring in behavioral variations at the micro level into macro calculations (behavioral econ and complexity system econ).