Obama on Stimulus spending

[SparrowHawk]

Well Glenn, I have been reading a great deal in the last two years. Care to explain the differences between Keynesian and Austrian shool Economics? Attack me with a debatable point or be gone ya hump.

 

[Glenn Quagmire]

I am surprised you are not on the council of economic advisors...

Can you explain the difference between a Fiat and an MG?

My graduate degree is in real world business/economics/finance. I did have to study the foundations of economic thought in undergrad school (Keynes/Hayek, etc.).

Glad to hear you read stuff. BTW, have you found the link on that $3 Trillion donation yet?

Ron Paul, Ron Paul, (any other tags that I missed?)

Back on topic: it is widely viewed that the stimulus was not large enough. It is also well known in history that government stimulus spending has proven to stimulate growth after recession.

 

[SparrowHawk]

I am surprised you are not on the council of economic advisors...

Can you explain the difference between a Fiat and an MG?

My graduate degree is in real world business/economics/finance. I did have to study the foundations of economic thought in undergrad school (Keynes/Hayek, etc.).

Glad to hear you read stuff. BTW, have you found the link on that $3 Trillion donation yet?

Ron Paul, Ron Paul, (any other tags that I missed?)

Back on topic: it is widely viewed that the stimulus was not large enough. It is also well known in history that government stimulus spending has proven to stimulate growth after recession.

The 3 trillion dollar link? Nope because it is likely a typo. I am also having trouble finding a PDF of the actual partial audit because I too can read a financial statement. I did however find this little tidbit someplace but I didn't save the blessed link.

The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..
Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious — the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs. Please take note of the word "Secret" which is what many object to with the Fed.

As to the notion that the Stimulus wasn't big enough? If you're a pure Keynesian that would be your argument and it would have merit in that context. Keynes and the Austrian's are polar opposites in their approach. Austrians would allow the weak to fail (GM, Banks) in order to liquidate the debt so the market can come back quicker and stronger. IMO the Austrian Approach puts the risk squarely where it belongs on the backs of the risk takers. Why should hard working American shoulder the burden of bad business of a company like GM? Allowing them to fall into C-11 would have meant the stakeholders i.e Labor, Management, Bondholders, shareholders would have taken 100% of the hair cut for poor performance. Just because the UAW gave Obama a bunch of money doesn't mean they should receive special treatment. What happened was Crony Capitalism and it's but one example.

With the current dependance on the Keynesian approach I think entirely to much of the burden falls on the working class. I rant about commodity inflation and how it robs from the poor and gives to the rich, that's what the end result of Keynesian School economics gives us. fiat currency makes the above much easier then a currency back by Gold, silver & potentially other commodities.

We have the Chinese manipulating the Yuan, Japan the Yen, The Euro, Dollar and pound sterling each nation incurring an incredible debt. The debt bubble will burst one day without significant change. At this time it looks to me like the Keynesian model is slowly failing as people begin to struggle more financially.

 

[Glenn Quagmire]

The problem with your "allow the weak to fail" approach is that the wealth lost would have been that of the vast majority of working adults in the United States. If the banks were to have failed, all the 401k's, housing equity, credit markets, would have been wiped out. That would have resulted in most small bsuinesses and a majority of big businesses to lose their market.

If your model was followed in late 2008, October 1929 would have looked like good times compared to what we would have faced.

 

[SparrowHawk]

The problem with your "allow the weak to fail" approach is that the wealth lost would have been that of the vast majority of working adults in the United States. If the banks were to have failed, all the 401k's, housing equity, credit markets, would have been wiped out. That would have resulted in most small bsuinesses and a majority of big businesses to lose their market.

If your model was followed in late 2008, October 1929 would have looked like good times compared to what we would have faced.

Hard to say but yours IS the conventional wisdom, I'll grant you that. Lot's of variables in the global macro economic world. I do belong to an international discussion group on these matters and frankly I am very very surprised regarding the Austrian School. Some (not the majority) are saying "Maybe Hayek was right after all" I think the best thing Ron Paul accomplished in his failed bid for President is raise issues critical to the world. Can you remember a time when 18-30 year olds talked about economics? Of a Non Interventionist foreign policy. The young Paulbots know this stuff inside and out and they are challenging the status quo at every turn. This is good because it takes us away from the Tax return/birth certificate silliness.



http://www.scribd.com/doc/60553686/GAO-Fed-Investigation#outer_page_144PS: I just found a link to the entire GAO report and Shazaam on page 131 it shows Citi-Corp with 2.5 Trillion in transactions. Who knew?

 

[Glenn Quagmire]

Transactions are not "donation" . I am picking on your (or the article's choice of words). No entity "donated" that much money during the crisis. There was a bunch of currency floated at the time to prevent a global banking meltdown, however, donation was a poor choice of wording.

I agree that youth having discussions about economics is a good thing. It is only good of they do it in a classroom setting or somewhere where they are not being shouted at by talk radio hacks who present themselves as all-knowing on all issues. That goes for all sides of all issues.

I watched both conventions and have watched the news cycle since. I just want to puke every time I hear some talking head parrot the talking points.

Watching Ryan today on CBS FTN was painful.

http://www.cbsnews.com/8301-3460_162-57509048/ryan-defends-his-support-of-defense-cuts/?tag=exclsv

He tried to explain how he wasn't for defense spending reductions after voting for it and condemning Obama for the same thing.

Then there was Romney on MTP today talking about his tax reform.

"Pressed by NBC's David Gregory in an interview that aired Sunday on “Meet the Press,” the Republican presidential nominee said he would be able to lower individual tax rates and remain revenue neutral, since he would limit tax deductions for high-income earners that would not change the amount of taxes that the wealthy would actually end up paying. Under his plan, the middle class would not be affected, he insisted, and that would also spur economic growth.

“Governor, where are the specifics of how you get to this math?” Gregory asked. “Isn't that an issue?”

“Well, the specifics are these which is those principles I described are the heart of my policy,” Romney replied. “And I've indicated as well that contrary to what the Democrats are saying I'm not going to increase the tax burden on middle income families. It would absolutely be wrong to do that.”"

Sickening. Is that even a sentence? To think that he has had about 4 years to practice that answer.

Sigh.

 

[777 fixer]

The 3 trillion dollar link? Nope because it is likely a typo. I am also having trouble finding a PDF of the actual partial audit because I too can read a financial statement. I did however find this little tidbit someplace but I didn't save the blessed link.

The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..
Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious — the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs. Please take note of the word "Secret" which is what many object to with the Fed.

As to the notion that the Stimulus wasn't big enough? If you're a pure Keynesian that would be your argument and it would have merit in that context. Keynes and the Austrian's are polar opposites in their approach. Austrians would allow the weak to fail (GM, Banks) in order to liquidate the debt so the market can come back quicker and stronger. IMO the Austrian Approach puts the risk squarely where it belongs on the backs of the risk takers. Why should hard working American shoulder the burden of bad business of a company like GM? Allowing them to fall into C-11 would have meant the stakeholders i.e Labor, Management, Bondholders, shareholders would have taken 100% of the hair cut for poor performance. Just because the UAW gave Obama a bunch of money doesn't mean they should receive special treatment. What happened was Crony Capitalism and it's but one example.

With the current dependance on the Keynesian approach I think entirely to much of the burden falls on the working class. I rant about commodity inflation and how it robs from the poor and gives to the rich, that's what the end result of Keynesian School economics gives us. fiat currency makes the above much easier then a currency back by Gold, silver & potentially other commodities.

It does'nt matter which economic model you use. In the end the little guy is the one who will be affected the most.

 

[SparrowHawk]

It does'nt matter which economic model you use. In the end the little guy is the one who will be affected the most.

Affected the most? Perhaps.

One thing with sound money is you take away a great deal of the Banksters ability to work their manipulations of the currency for their benefit. Since their benefit adversely effects the little guy the most.

If you get right down to it, Austrian School economics is counterintuitive to politicians in that in order to do something positive you have to do nothing and let things run there course. You can't have a slogan that says, "Vote Sparrowhawk-I did Nothing" now can you?

 

[777 fixer]

Affected the most? Perhaps.

One thing with sound money is you take away a great deal of the Banksters ability to work their manipulations of the currency for their benefit. Since their benefit adversely effects the little guy the most.

If you get right down to it, Austrian School economics is counterintuitive to politicians in that in order to do something positive you have to do nothing and let things run there course. You can't have a slogan that says, "Vote Sparrowhawk-I did Nothing" now can you?

It's not a perhaps, it is a historical fact.

 

[SparrowHawk]

It's not a perhaps, it is a historical fact.

affected can be a positive or a negative in this case. So if you mean negatively I can support that as fact and a fiat currency is the culprit

 

[777 fixer]

affected can be a positive or a negative in this case. So if you mean negatively I can support that as fact and a fiat currency is the culprit

And you conviently leave out that being under a gold standard is not protection from economic downturns. Just crack open a history book.

 

[SparrowHawk]

And you conviently leave out that being under a gold standard is not protection from economic downturns. Just crack open a history book.

Not left out just not part of the discussion, Until now. We were under the tyranny of the Fed since 1913. Significant scholarly evidence to support the notion that the Fed caused the Great Depression. Debt is our biggest enemy right now and returning to gold while nice and a step in the right direction will not help much except as I mentioned. Moody is on the brink of downgrading us and if we lose our status as the worlds reserve currency we are in a giant world of hurt.

 

[joe mechanic]

Well bless your little heart Garfield! Now you silly little savage, run off and tell your mommy on me or just block me like the bed wetting punk arse you really are. What a buzz kill, I was just getting started with you, now you're taking your ball and going back to your mommy's basement. You're not done with me until I tell you you're done with me. LOL

You reminded me of something, LOL

 

[southwind]

The problem with your "allow the weak to fail" approach is that the wealth lost would have been that of the vast majority of working adults in the United States. If the banks were to have failed, all the 401k's, housing equity, credit markets, would have been wiped out. That would have resulted in most small bsuinesses and a majority of big businesses to lose their market.

If your model was followed in late 2008, October 1929 would have looked like good times compared to what we would have faced.

Good thing Barrack bailed out GM or else there might not be any new cars made, wait.......................GM's not the only one who makes cars, he actually bailed out the union !

 

[southwind]

Not left out just not part of the discussion, Until now. We were under the tyranny of the Fed since 1913. Significant scholarly evidence to support the notion that the Fed caused the Great Depression. Debt is our biggest enemy right now and returning to gold while nice and a step in the right direction will not help much except as I mentioned. Moody is on the brink of downgrading us and if we lose our status as the worlds reserve currency we are in a giant world of hurt.

Just raise the debt ceiling.................problem solved and money fo' everyone !