Skip to comments.The Austrians Were Right, Again
Posted on 08/04/2011 6:40:00 PM PDT by Recovering_Democrat
After three-plus years of floundering around, a consensus has finally arrived that we are back in recession. Growth is not happening. The meager statistical growth of the past few years no one dared claim it amounted to full recovery was probably illusory.
There is real growth, and there are government statistics. The statistics have misled every gullible person, but now the truth is obvious to everyone. Not only that: we face an impossible debt calamity, the banking industry is zombied, labor markets are static, the system is flooded with mispriced resources, housing is still a mess, and there is nowhere to go but down, down, down.
QE1 and QE2, plus incredible efforts at regulatory stimulus, plus oceans of fake money created by Ben Bernanke, plus sea-level interest rates haven't done anything but damage. Economic opportunities are being shut down for an entire generation. Free enterprise and therefore all prosperity is struggling for its very life.
This is all due to the one thing that Bush, Obama, the Republicans, the Democrats, and every existing major media mogul agrees was the right thing to do: correct market trends, stabilize and then stimulate the macroeconomy. One word: fail.
(Excerpt) Read more at mises.org ...
Keynesianism has failed every time it is tried.
The “New Normal” ain’t normal.
“Fear the Boom and the Bust”, Austrian School v. Keynesianism in a nutshell.
Correct. Yet we keep doubling down and going all in on the same stupid bet. That fail will just become a FAIL
Keynes is easy once you understand the government become the dominant player in the economy. Are politicians ever going to give up such power? Not likely.
Whatever happened to “The Summer of Recovery”? Did the Tea Party conspire with Sarah Palin to muck it up?
Savings is at a high point in our country, and companies are rolling in cash. That’s not the problem.
I posted before the deficit deal...whatever it was going to be...that this didn’t bode well for the economy. All the economists I saw on TV said so. The rule is: You don’t cut spending in a recession or a light recovery from a recession; it hurts the economy and is likely to catapult the country into a recession or deeper recession. (Talking about not increasing revenues at the same time, I think they were; if you increase revenues simultaneously, then I think they were saying you could do some cuts.)
I looked at the stock market today. It’s very upsetting. My 401K will be hit hard, as will yours. Because of the debt deal.
I think we oughtta vote all the a__holes out of Congress and get a whole new bunch, if this is the best they can do. A modest revenue increase on the richest Americans (or at least do away with tax loopholes for corporations like Exxon, THAT PAID ZERO TAXES LAST YEAR DESPITE RECORD PROFITS...one of the largest companies in the world), with modest cuts. You can’t fix in one swoop what has taken a decade to occur. Esp. not in a recession or slight recovery from a deep recession.
Now a lot of government workers may be laid off. There are no jobs out here in the private sector for them. They won’t be spending money on appliances, cars, etc. That will hurt the economy. Some may be foreclosed on. That will hurt the economy. And we’ll suffer at not having services. We already have crumbling bridges, levees that don’t stop flood waters, etc. They can do with becoming more efficient, that’s for sure. But layoffs at this time is horrible. Worse than an increasing deficit. Not that the deficit isn’t a big problem. It is. But we have a bigger problem right now.
We can’t decrease the deficit, really, if the economy stays bad. Fewer workers = fewer revenues = less $ to pay off debt. It’s pretty simple.
I heard someone on TV today say they thought the tea partiers in Congress intentionally wanted the economy to tank, thinking that it would hurt Obama’s chance at re-election. I hope that’s not true. That they care more about that than millions of Americans who relied on them to do their best for America and its millions of citizens. I’ve worked hard for decades and contributed to my 401K, doing without vacations and luxuries. Today I saw a good chunk of it go down the drain because of the debt deal. It does absolutely nothing to help the economy or jobs situation. Nothing. And worse. It hurts the economy.
Good read. Except the problem is that the people on the “Losing Team” are in charge. The MSM paints them as the “Wise Adults in the Room”. So, expect the status quo to continue for the indefinite future. Actually, I’m very pessimistic. I think you need a full blown revolution to purge this thinking from the System once and for all.
They may be right about the above, but that doesn't mean their own economic theory is desirable.
Well, I’ll just point out that most Tea Party politicians voted against the debt deal.
The Tea Party got nothing in that deal except fewer new taxes than there would have been.
Well, I’ll add that it wouldn’t be very nice to increase the cost of Exxon products by increasing their taxes.
No, I don't think "this is all due" to that.
The policies followed in 2008, if seen through by a market-defending administration, might indeed have had a radically different outcome than the same policies in the hands of marxists, as they are now.
The current administration is anti-business, anti-American, anti-prosperity, anti-good, essentially, and pro-death. To mention Bush and Obama in the same sentence in this context is an egregious lapse that casts doubt upon the entire thesis.
‘I looked at the stock market today. Its very upsetting. My 401K will be hit hard, as will yours. Because of the debt deal.’
It’s not ‘because of the debt deal’. It’s because of the debt-
Obama has plunged us all in to. And our children, grandchildren and great grandchildren.
It’s because Obama is not reason able /reasonable.
Read the book “New Deal or Raw Deal” by Burton Folsom Jr. Then tell us about the major economic policy differences that the current Obama administration and his lackey Progressive/Democratic Socialists bedfellows are doing that will not kill the economy and country for the next decade if not forever.
Government "services?" Please - that's a border line troll-like statement. True Americans are highly self-reliant. They need very few government services while in their working years, which should cover the vast majority of their life - vs. retiring at an average early age of 50 or so as many government leech workers do. MANY fewer government workers will not hurt anyone that isn't willing to take care of themself.
As for government workers losing their jobs - short term pain, long term gain. Same thing that should have happened at the start of this recession-turned-depression, before Bush/Obama and the "elites" that now rule over us decided to steal money from the middle class via TARP/Stimulus/QE2/QE3/etc. to bail themselves and their failed business ventures out at our expense.
We cannot sustain the level of government workers we have. If we are ever to recover, the size of government absolutely needs to be reduced. A central government that consumes 25% of GDP is FAR too big. Laid off government workers will eventually need to find a job in the private sector. No there's not much out there now in the labor market. But, if it weren't for the crippling regulations that many of these government workers have helped put into place, the continuous threat of ever-rising taxes to feed an ever-growing government monster, and even more innovation-choking regulations, that wouldn't be the case.
With a real reduction in business-throttling regulations, and even the HINT that threats to future business opportunity might be abating (won't happen until Obama is gone, if then), much of the pent-up capital you mention would free up and jobs may begin to come back. Most important of all, if the iron shackles of government nanny-state bureaucracy and regulation were removed from small businesses, it would become possible for many that are currently unemployed or underemployed to become self-employed, to start their own businesses to provide needed goods & services, and to create jobs for their neighbors. This spirit of entrepreneurship and self-reliance is what made this country great in the first place - unleashing the creativity and hard work of the masses to better their own lives.
Small businesses are the biggest engine of job creation in America, and always have been. Big government (and its millions of workers) and its now-indistinguishable cronies in large international corporations have crushed this engine. Until the shackles on small business creation & growth are removed, we will not recover.
I heard someone on TV today say they thought the tea partiers in Congress intentionally wanted the economy to tank, thinking that it would hurt Obamas chance at re-election. I hope thats not true.
If you were plugged into the movement itself and understood its core driving principles, rather than the hate-filled propaganda spewed by the elite-run media, you would KNOW this is not true. At its root, the tea party is all about true fiscal conservatism. Limited government, lower taxes, individual rights, self-reliance and the ability to pursue ones own hopes & dreams unshackled by an overbearing government. I believe the true tea party patriots that haven't been in Congress long enough to become part of the corrupt power/money hungry elite are actually there to achieve these idealistic fiscal conservative goals. Reducing taxes and thus the size of government is what they believe in (at least initially) - not getting re-elected. That doesn't come until they've been there for a term or two and become corrupted. Term limits are yet another critical item needed if we're ever going to turn around the ever-growing government monster, AND fewer government workers to start.
The author says we are “back in recession.”
Huh? At the tail end of Bush’s second term, we were in a recession. Obama came along and turned a recession into a full-blown depression. And it’s been steadily getting worse because of Obama and his cohorts.
No, its good. We don’t get enough crappy Trolls here. Thanks for toying with him. I miss Viking Kitty.
“I don’t understand all of this...”
“Economics in One Lesson” by Henry Hazlitt will help you.
The one lesson is simply that ALL parties to an economic policy or transaction need to be considered. Hazlitt expounds on that fundamental principle concisely and elegantly throughout the rest of his short, easy to read book.
In practical terms, nearly ALL government fiscal policy is dmagaing in that it simply steals from one area of the economy to benefit another.
Economics without the obfuscation and criminal game-playing is really quite simple.
Bad theory-bad results.