Ugh -- Krugman Bringing Climate-Style Argument by Marginalization to Economics
Climate alarmists have mastered the trick of portraying opposition to their theories as not just being wrong, but being anti-science. For years many scientists who have not looked into climate science at all have reflexively signed petitions supporting the alarmists, in the belief they were supporting science against anti-science. (By the way, time and again when these physicists and Earth scientists have actually later looked at the quality of climate science work, they have been astounded at the really poor quality garbage they were implicitly supporting -- I know, I am in that camp myself).
It looks like Paul Krugman, the most politicized economist ever(TM), is trying to bring the same style argumentation to economics. If you don't agree with him, you are not just wrong, you are anti-science. He is Galileo, and you are the ill-informed mystic.
So let me summarize: we had a scientific revolution in economics, one that dramatically increased our comprehension of the world and also gave us crucial practical guidance about what to do in the face of depressions. The broad outlines of the theory devised during that revolution have held up extremely well in the face of experience, while those rejecting the theory because it doesn’t correspond to their notion of common sense have been wrong every step of the way.
Yet a large part of both the political establishment and the economics establishment rejects the whole thing out of hand, because they don’t like the conclusions.
Galileo wept.
There are two other similarities between economics and climate that support this kind of blind (but unwarranted) certainty:
- There are few if any opportunities for controlled experiments to truly test cause and effect
- There are near infinite numbers of moving parts and variables, such that one can almost always find an analysis that shows your favored variable correlated to something good or bad -- as long, of course, as you are willing to pretend that a zillion other variables weren't changing at the same time which could have equally likely been part of the causation.
Huh? What inflation is happening now? What is your proof that QE is hurting people now? There isn't any.
What do you see in QE as being inflationary? The stock market has risen in value, primarily because of low interest rates, but very little else.
We'll know we have too much inflation when people who work for wages are employed and unable to pay their bills because food and clothing and utilities are going up in price faster than their wages are rising. Now they can't pay their bills because they don't have work.
Getting usa bridges and roads up to snuff would be $2 trillion. That's not all new construction; that's doing all the deferred maintenance and replacing bridges that may fall down.
Repairing and maintaining water and sewer systems nationwide would be over a trillion.
Repairing and maintaining public schools would be about a trillion nation wide.
Having the federal government taking over ALL the state and local pension plans would strengthen the financial strength of those plans and would unburden those governments of expensive obligations.
For the past five years, when the federal government has borrowed money for a year or less, the interest rates have been less than 1/2 of 1%. Interest rates were negative for about six months -- T-Bills from October 2008 to March 2009 -- were sold at premiums -- investors paid $100,025 to receive $100,000 a month later.
All of this could have been done already, but Republican policy is NOT to invest in the country now while interest rates are very low, but to let the economy get worse, reasoning that Obama will be blamed, and that Republicans will gain control of the Senate in 2014 and the Presidency in 2016.
That’s not my question.
My question is, since your models are so precise, describe the exact point at which hyperaccomodative policy becomes inflationary.
You can also answer the question why people cannot find work, and why small business sentiment and activity is depressed.
The projects you describe were supposed to be contained within the stimulus bills.
Why weren't they completed?
Further, how does insolvent federal government takeover strengthen insolvent state and local pension obligations?
The cash in the stimulus bill for projects was $300 billion, the need is $3000 billion -- ten times more.
The federal government is not insolvent. Having the federal government take over state and local pension obligations would better enable state and local governments to govern.
For the past five years, when the federal government has borrowed money
for a year or less, the interest rates have been less than 1/2 of 1%.
Interest rates were negative for about six months -- T-Bills from
October 2008 to March 2009 -- were sold at premiums -- investors paid
$100,025 to receive $100,000 a month later.
When interest rates are below the rate of inflation, that means the USA treasury makes a profit when it issues debt.
You certainly did not answer what I asked. What is your proof that QE is hurting people now? What do you see in QE as being inflationary?
People cannot find work because there is not work to be found. Aggregate demand is low. Small business activity is low because sales are low. We are in a Depression. The Fed's intervention has prevented the recession from being severe. People and corporations are paying down debt and staying in cash. That's responsible for those persons, but altogether when everybody saves and pays down debt, the economy turns down, which is why the federal government needs to intervene.
Red herring.
Unless the economy remains dismal for the next 5 years, interest rates will rise back to normal.
Unfortunately, we are all caught under that Damocles sword these people have wrought, on the bet that the Fed can unwind its balance sheet in a controlled manner without driving interest rates the wrong way, and/or that the government either pays down its debt (new taxes?) or has the fortune of historic low interest rates for a generation (what kind of economy would that be?).
Incorrect.
Those projects were in scope for the stimulus, and were not completed because the “shovel ready” project funding wound up in the coffers of favored state union constituencies.
Correct though that the total funding needed is probably larger, but almost none of it was completed.
Also incorrect, the federal government is insolvent.
This is how that looks:
http://johnbtaylorsblog.files.wordpress.com/2013/10/cbodebt2013.jpg
I asked you a question first, at what point do your hyperaccomodative policies become inflationary. You didn’t answer with sufficient precision, given your purportedly highly precise models described above which “prove” the stimulus was too small.
[LMAO]
I also did not assert there were signs of inflationary trouble, yet.
QE is hurting savers, including those on Socialist Insecurity, which has been impacted by about $50 – 100 billion by the historically abnormally low rate environment. It is also hurting businesses and business lending, due to financial repression.
And finally, incorrect, there are no jobs because Obamascare, taxes, and regulation is killing small business
http://stawealth.com/images/stories/1dailyxchange/NFIB-Govenment-Problem-011514.PNG
http://stawealth.com/images/stories/1dailyxchange/NFIB-Survey-011514.PNG
You are a severely ignorant person.
What you're writing is false. It is not true. The benefits received by the whole economy from low interest rates far exceed the detriments suffered by low interest rates.
The charts do not say much that is not self-evident.
They show that members of the National Federation of Independent Business are concerned about federal government laws and complying with those laws. That a sample of wealthy people who have inherited large privately held businesses are concerned about not being able to keep all their inheritance is to be expected.
Active supporters of the the NFIB include the Bechtels, the Cargills, and the Koch's. The combined wealth of those three families alone exceeds $50 billion. The Koch's alone are worth over $30 billion. People worth billions of dollars are NOT SMALL BUSINESS OWNERS.
Federal debt > GDP does not meant the federal government is insolvent.
The name of this error is fallacy of composition.
I tutor CPA candidates, CFA candidates, and MBA students at NYU and Columbia.
Yes and I have been knighted by the Queen and have 2 Nobel Prizes in economics.
If you really speak the truth- I feel sorry for your students.
They pass their tests and pay me cash in advance for their tutoring.
No, but it is a large part of the picture.
The federal government is insolvent by any macroeconomic and net present value calculation.
The name of your fallacy is argumentum ad ignorantiam.
What you are writing is complete bullshit, and not based in any economic reality, which is why you struggle to reconcile this piss-poor recovery with what your models say should be happening, just like Krugfuck with his bullshit, and the irrational global warmists with their completely failed models.
But thank you for proving my point.
You are another clueless leftist scumbag.