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Guest Post: The Keynesian Legacy Unravels

Tyler Durden's picture




 

Originally posted at Monty Pelerin's World,

“Those who cannot remember the past, are condemned to repeat it.” George Santayana

Ideology is powerful, capable of masking unpleasant facts. Whether we recognize it or not, we are all slaves to ideology.

Economists are no different in that regard than other people. They hold preconceived ideas which affect the interpretation of data and facts. In the extreme, ideology is capable of blocking the recognition of contradictory information, effectively blinding a person to valuable evidence.

Keynesian economists believe, regardless of logic and data, that economies can be managed from the top down. In their world, economies are little different than machines. Change some inputs here, speed them up over there, add some lubrication, etc. and the machine will respond in the fashion desired. Output can be “managed” to whatever level needed purely by adjusting the parts of the machine.

Austrian economists on the other hand do not see a machine. They see millions of individuals all making decisions to improve their own lives. The price system provides the coordination among these separate pieces, performing a function no human, supercomputer or government could ever accomplish. For Austrians, economics is a bottom up approach. To effect change, you must change the incentives and disincentives that individual decision makers are afforded.

The following graphic, which I have highlighted before, provides a wonderful comparison between the two approaches:

obamabind

No matter how good someone in Washington believes his grand plan is, it comes down to how individuals perceive it. While this graphic refers to ObamaCare, it could just as easily refer to any other grandiose (or not so grandiose) scheme dreamed up by central planners. Quite simply, if government were to offer constructive ideas and options, there would be no need for coercion and violence on its part to force people into behavior they are uninterested in.

Likewise, if government would leave the economy alone rather than continue to intervene to prevent necessary corrections, the economy would recover rather quickly and return to its normal growth path. But that is not what activist government does and it is the reason why this Great Recession drags on and on. In 2004, before the Great Recession hit, two economists discussed the Great Depression and why it lasted so long. Not surprisingly, they concluded that government had made matters worse:

Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.

 

After scrutinizing Roosevelt’s record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.

“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”

[To continue reading]

These findings would not surprise anyone of the Austrian persuasion. Nor would they register with anyone of the Keynesian persuasion which includes most Washington policy makers. As a result these (and many other findings with similar conclusions) were ignored by policymakers and we are repeating the mistakes of the Great Depression.
The reasons we are still in this deep recession are the same ones that accounted for the Great Depression lasting as long. If we continue on the same intervention/stimulus path, economic conditions will only deteriorate from here. Japan has been in their economic malaise for more than two decades. The US cannot last that long before falling into what history will call The Greater Decession.
Aside to John Maynard Keynes: Your series of short-run “solutions” is killing the long run. When we finally succumb to Depression it will be with a much more dysfunctional and hollowed out economy than the one you experienced in the 1930s. Thanks for bring us to this point.
 

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Sun, 12/30/2012 - 16:56 | 3107213 Sudden Debt
Sudden Debt's picture

If you talk history to somebody they look at you like:

I don't know that so it didn't happen because else I would know that....

try arguing with that...

Sun, 12/30/2012 - 17:00 | 3107218 Enslavethechild...
EnslavethechildrenforBen's picture

It's "we the people against the Federal Reserve". The sooner we start printing greenbacks, the sooner we can buy back all the wealth they stole from us.

Once we get back all our wealth, and they are holding the bag (of worthless paper) then we can start talking about the Gold Standard.

Sun, 12/30/2012 - 17:01 | 3107232 Sudden Debt
Sudden Debt's picture

we the people against the fed?

don't think so buddy.
the people pray to the golden calf called the FED.

it's "they he people" against anybody with a brain, common sense and logic.

Sun, 12/30/2012 - 17:05 | 3107242 Enslavethechild...
EnslavethechildrenforBen's picture

Sorry if my comment went over your head. Keep folowing Zerohedge and you'll figure out whats up soon enough

Sun, 12/30/2012 - 17:11 | 3107262 Sudden Debt
Sudden Debt's picture

you should read mine 10 times and figure out why you talk about it.
Than you'll figure out that your mainstream quote sounds pretty stupid.

So you say :

We the people against the fed....

where did you ever read we the people against the fed?
where did you see the people going against the fed?

unless you think that a small group is "we the people"

when you say we the people, you talk about the mayority.

and dude, you're not.

But you do like to throw a insult to protect yourself because you didn't figure it out yet.
Keep reading up kid, one day you'll figure it out.
That's going to be your wakeup call.

Sun, 12/30/2012 - 17:37 | 3107329 economics9698
economics9698's picture

Why bother printing greenbacks?  Do a FDR and steal all the wealth bankers have.

Sun, 12/30/2012 - 18:14 | 3107406 smlbizman
smlbizman's picture

i picked the second bubble in the cartoon...

Sun, 12/30/2012 - 19:58 | 3107640 August
August's picture

The second bubble is good. 

In coming years I may pick up a little earned income in overseas venues, but I will not be lifting a finger in gainful employment in the USA.  Why should a blackguard like me be permitted to further exploit America's 47%?

Mon, 12/31/2012 - 07:46 | 3108410 11b40
11b40's picture

Wish I had picked # 2 four or five years ago. What do you do when in your early 60's and things start falling apart? Decisions are easy in hindsight; not so much in real time. Most small business owners ride out many storms over their careers, but this time, it really has been different.

Sun, 12/30/2012 - 18:43 | 3107463 Keegan11
Keegan11's picture

Lighten up Sudden Debt. And maybe stop drinking and typing - Doosh

Sun, 12/30/2012 - 19:34 | 3107593 economics9698
economics9698's picture

Drinking and typing, what a combo.

Sun, 12/30/2012 - 21:25 | 3107867 cranky-old-geezer
cranky-old-geezer's picture

 

 

Economies are LOOTED from the top down.

If people don't see that by now, they're beyond hope.

Mon, 12/31/2012 - 10:09 | 3108663 JethroTull
JethroTull's picture

Best avatar ever! +100

Sun, 12/30/2012 - 20:18 | 3107693 Sean7k
Sean7k's picture

Enslave,

Why don't you punch up sudden's time at zh?

 

Mon, 12/31/2012 - 10:08 | 3108661 cosmyccowboy
cosmyccowboy's picture

no need to buy back anything, we can just seize it from them... right after we seperate their heads from their bodies! the color of God's money is silver and gold so let's skip the greenback and go straight to it!

Sun, 12/30/2012 - 16:59 | 3107226 Ghordius
Ghordius's picture

Or "it wasn't me!". Or "nobody asked me!"

BTW, Keynes advocated budget surpluses during good times

It's NeoKeynesians that think "budget deficits don't matter, period"

Sun, 12/30/2012 - 17:06 | 3107248 Sudden Debt
Sudden Debt's picture

you don't need to classify them into groups with difficult names.

They're morons discussing with morons and both groups are... morons.

We should be!!!

no....

We all should....

no....

only communists and socialists talk as we. All they rest say: "I'm going to...."

To bad there's not a lot of people who say that anymore. Unless it's "I'm going to do the original thing and vote for Obama because.... because I'm not a racist!"

Sun, 12/30/2012 - 17:13 | 3107264 Ghordius
Ghordius's picture

Ok, then "I'm going to..."
... relocate to Belgium, by Teutates! ;-)

Sun, 12/30/2012 - 17:14 | 3107266 Sudden Debt
Sudden Debt's picture

I still wonder why people do that...

all those rich people moving to Belgium...

WE HAVE A 50% INCOME TAX!

and it rains 367 days a year....

Sun, 12/30/2012 - 17:17 | 3107278 Ghordius
Ghordius's picture

it's the Belgian girls and waffles, of course

Sun, 12/30/2012 - 17:29 | 3107309 Sudden Debt
Sudden Debt's picture

Well.. if the Belgium woman look better than those in your country...

I pitty your country...

Why else do you think we drink all those strong beers?

Mon, 12/31/2012 - 06:30 | 3108388 Ghordius
Ghordius's picture

nah, have a look here. from what you have told us you don't even look around, you married waffle

http://www.youtube.com/watch?v=MCwlbHf3zGo

http://www.youtube.com/watch?v=XdlYb2IqgS0

http://www.youtube.com/watch?v=gR8GUFAu3JY

Sun, 12/30/2012 - 17:29 | 3107313 bank guy in Brussels
bank guy in Brussels's picture

Belgium really is a cool place actually

We are getting invaded on both sides, French from the south and Dutch from the north, both speaking the native languages of Belgium and quickly loving their 2nd home

There are not only some tax advantages for certain kinds of business and family structuring

But beyond that there is a bit of a somewhat anarchist, free-wheeling state of mind ... it is a very relaxed kind of place, a bit hard to explain ...

Sometimes late in the evening on the tram there are ten people drinking out of half-litre 'tall boy' cans of beer, in the rolling light-rail 'café' ... a bit of the rule-breaking naughty Belgianism that somewhat symbolises the attitude here

In fact, 'It's Great to Be a Belgian' - hit song from the 90s - nearly all in English, quite funny - sung by a Brit from Liverpool, 'Mister John' Makin who happily lived the last several decades of his life here

« As I walk along the street
With my mayonnaise and frites
You can tell I'm as happy as can be

With my beer glass in my hand
Then you must understand
I'm a Belgian, so nothing worries me! ... »

http://www.youtube.com/watch?v=uTqknJDZrlI

Sun, 12/30/2012 - 17:32 | 3107316 Sudden Debt
Sudden Debt's picture

after reading your text...

I get that patriotic feeling again :)

I almost got a tear in my eye... :)

Sun, 12/30/2012 - 17:36 | 3107327 Salon
Salon's picture

They still kinda like the USA too.

They remember the liberation.

We love you waffle heads

Mon, 12/31/2012 - 06:21 | 3108384 Ghordius
Ghordius's picture

nearly everybody likes the USA and it's people, here in europe

now the current US policies, that is perhaps a different matter

Sun, 12/30/2012 - 17:34 | 3107322 Sudden Debt
Sudden Debt's picture

OH AND THIS ONE!!!!

THE COUNTRY WHERE THE PRESIDENT SINGS THE WRONG NATIONAL ANTHEM!!!

http://www.youtube.com/watch?v=O5i5Sf7l5uw&sns=em

That moron was singing the Marseillaise... the French national anthem...

Sun, 12/30/2012 - 18:11 | 3107356 Ghordius
Ghordius's picture

That's understandable, you Belgians sometimes even forget to have a government

btw, you don't have a prez, you have a King. something you forget often, too

Sun, 12/30/2012 - 18:51 | 3107487 cynicalskeptic
cynicalskeptic's picture

The one really positive thing about the place - NO government for how long?  and yet the place manages to survive....

Maybe the US should try it.  Couldn't be any worse than what we've got or what we've had.  NOBODY is preferable to the two party charade we have now.

Mon, 12/31/2012 - 05:46 | 3108369 RebelDevil
RebelDevil's picture

So anarchy is good!? bahaha that's just as bad as saying Facism was awesome.
The only real solution here is to reform government to be compassionate towards the people.
And to do that, you need to destroy the power of all the elite scum who rig the system in their favor!

Sun, 12/30/2012 - 17:53 | 3107371 Bear
Bear's picture

Aren't we all one big country now ... National Anthem, what's that?

Sun, 12/30/2012 - 19:40 | 3107596 SpicyTuna
SpicyTuna's picture

"BTW, Keynes advocated budget surpluses during good times."

 

Ah yes, the 'no true scotsman' fallacy, a popular defence/rationalisation about the failures of keynesians, anarchists, communists, feminists, various forms of cultural marxism and other inpractical utopian idealogies.

 

Oh it wasn't 'real keynesianism', they didn't actually follow what Keynes advocated, you say. No shit, thats precisely the point! What Keynes advocated could never be made to work!

 

It is precisely Keynesian monetary policy that enables the so-called 'un-keynesian' fiscal policy! The monetary system Keynes fought for, freed the State from any fiscal discipline whatsoever.

 

This horseshit excuse 'that's not what Keynes advocated', which is pretty much the same excuse for disattributing Karl Marx from the USSR and Red China. Both authors wrote of an impossible utopian dream, with no way on how to get there, or how it could ever be sustained. Sure they can't be blamed for human nature and our proclivity to war and aggression, but they sure as hell don't get a 'free pass' from the attrocities and coercion committed in their name, their ideas.

 

 

Sun, 12/30/2012 - 19:33 | 3107591 grid-b-gone
grid-b-gone's picture

Historically, intellectuals rarely are able to change the direction of events about to unfold, but they know better than most when to flee.

Sun, 12/30/2012 - 19:44 | 3107617 SpicyTuna
SpicyTuna's picture

This is true, they don't change events per se, but they do lend legitmacy to the power brokerers or would be usurpers.

 

They are the modern voodoo priests. Every regime needs a propagandist class.

Mon, 12/31/2012 - 05:30 | 3108371 RebelDevil
RebelDevil's picture

...and intellectuals in secret societies do create change.  

Sun, 12/30/2012 - 20:13 | 3107684 ball-and-chain
ball-and-chain's picture

I don't argue with people.

I can't be bothered.

I don't have the energy.

http://www.angrysinner.blogspot.kr/2012/12/sunday_30.html

Sun, 12/30/2012 - 20:28 | 3107716 Dr. Sandi
Dr. Sandi's picture

 

If you talk history to somebody they look at you like:

I don't know that so it didn't happen because else I would know that....

try arguing with that...

 

That's when I always say, "Hey, how about those Mariners." Or this time of year, "Hey, how about those Seahawks."

This steers the conversation in a direction that the other person can be comfortable with.

And yes, I really do that.

There's no point trying to teach a dog algebra, no matter whether the dog is willing or not.

Mon, 12/31/2012 - 01:08 | 3108256 ZeroAvatar
ZeroAvatar's picture

Fuck you, Jumpers!

Sun, 12/30/2012 - 16:58 | 3107222 Joebloinvestor
Joebloinvestor's picture

"This time it will be different".

Sun, 12/30/2012 - 17:22 | 3107297 Salon
Salon's picture

Keynesianism and neokrugmanism works great with government debt to gdp less than 100 percent.

The problem is that by turning on the money spigot for every minor contraction we have saved ourselves small, but immediate sacrifices but exchanged them for a 50 year supercycle that looks great on the upside, but will be pretty painful on the downside.

But in the long term people alive now are all dead. They dont give a fuck about the future and are giving their grandkids the big middle finger

Sun, 12/30/2012 - 17:01 | 3107228 UnpatrioticHoarder
UnpatrioticHoarder's picture

Keynes merely advocated Government spending on worthwhile projects during downturns.

Sun, 12/30/2012 - 17:29 | 3107311 Salon
Salon's picture

Not exactly.

He also advocated inflation as a way to reliquify labor markets because people are fooled by nominal changes and can be made to work for less value if the number of units of value are larger.

That was where he said "not one in a million" could figure it out.

We all agree "worthwhile" projects are worth "investing" in. The problem is that politics always results in misallocation and inefficient use of resources.

Communism sounds nice in theory too

Sun, 12/30/2012 - 19:52 | 3107630 SpicyTuna
SpicyTuna's picture

The full quote is:

 

"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

 

Now its pretty clear from this quote that Keynes precisely understood that inflation is destructive and avaricious. That he later recanted all he said from this quote, in the entire school/discipline of economic thought he constructed, indicates to me that he had ulterior motives.

 

This man cannot plead ignorance for his actions.

Sun, 12/30/2012 - 20:29 | 3107723 Dr. Sandi
Dr. Sandi's picture

He's dead, Jim.

Sun, 12/30/2012 - 21:41 | 3107907 Chuck Walla
Chuck Walla's picture

“The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.”

 

~ Vladimir Lenin

FORWARD SOVIET!!

Sun, 12/30/2012 - 17:41 | 3107338 Clowns on Acid
Clowns on Acid's picture

"Merely", "worthwhile", "projects" - those are the merely words that Obama and the fascists use, supported ad nauseum by the MSM to get elected and continue deficit spending. 

Sun, 12/30/2012 - 17:00 | 3107230 buzzsaw99
buzzsaw99's picture

short, pointless, lacking substance, or evidence, or, well, anything other than conjecture

Sun, 12/30/2012 - 17:11 | 3107261 Water Is Wet
Water Is Wet's picture

In other words,

FLAWLESS INTERNET VICTORY!!!!

Sun, 12/30/2012 - 17:29 | 3107305 buzzsaw99
buzzsaw99's picture

doubtless this post will be linked to as supportive scientific evidence that austrian economic theory works flawlessly, painlessly, and should be instituted immediately worldwide to hasten utopia for all

Sun, 12/30/2012 - 17:33 | 3107318 Salon
Salon's picture

Austrian economics limits the fallout and imposes some discipline because fragile things are allowed to break early rather than allow fragility to build on fragility through government manipulation and bailouts

Now we have a fragile system too big to fail and too big to bail.

You are in favor of central planning I take it.

Sun, 12/30/2012 - 17:48 | 3107331 buzzsaw99
buzzsaw99's picture

your thinking is that either i drink the austrian koolaide or i am a zealous advocate of central planning? nice reasoning a-hole

 

either you are with us or you are with the terrorists [g. dubya bush]

 

nobody hates the central bank maggots more than i but only a simpleton could believe that were a different monetary system enacted the rampant criminality in high places would no longer be a problem

Sun, 12/30/2012 - 17:56 | 3107374 Salon
Salon's picture

Lol. It would still be a problem, but a smaller self limiting problem if they arent bailed out.

Small financial crises cleanse society. They liberate elites from a lot of their money and the game starts over.

Ok so you believe in central planning. You just think somehow it can be done right with just the right regulations. And pigs could fly if they had wings too.

You cannot be barely pregnant. You are, or you are not.

Sun, 12/30/2012 - 17:57 | 3107377 buzzsaw99
buzzsaw99's picture

You just think somehow it can be done right with just the right regulations.

 

wrong again. stop trying to figure out what i think you clearly aren't capable

Sun, 12/30/2012 - 19:59 | 3107642 SpicyTuna
SpicyTuna's picture

Then put some skin in the game and let others judge your ideas. Or GTFO.

 

Granted I felt the article was lightweight, but it has potential. For example we could flesh out the price mechanism and its importance in allocating resources and coordinating decision making over time. Point out the inherent disruptions to the price mechanism advocated by Keynes then relate it back to our real world examples.

Sun, 12/30/2012 - 21:19 | 3107850 buzzsaw99
buzzsaw99's picture

Salon started putting words in my mouth so you buzz off feces face. (also: I will elaborate my thoughts just for the asking no need to get nasty ar tard.) I reject the notion that there are two and only two choices for an economic system (a) what we have now and (b) some sort of austrian (gold backed or other full reserve lending) system and that they both (c) leave the bankers in charge of the world eCONoME. Further, I repudiate any system which could allow one person with enough clownbux, gold, or alien spacebucks to own the entire world to the detriment and impoverishment of everyone else. How that system would be administered or what form it might take I have no idea but if the world is to evolve past the dog eat dog zombie stage something more radical than just a switch from brass to gold coins must take place.

Sun, 12/30/2012 - 21:41 | 3107905 SpicyTuna
SpicyTuna's picture

Look I don't care for Salon's binary thinking, but the condescension in your posts was duly noted. Don't be so precious with your accusations of "nasty ar tard"; pot kettle black, refer to your previous unpleasant posts.

 

Now good and agreed, there is more than just 'two choices'; was it so hard to elaborate your thoughts there?

 

Mon, 12/31/2012 - 00:06 | 3108180 Oldwood
Oldwood's picture

 Kill competition and kill everything. People may not be comfortable in a competitive world but its the only thing that comes close to working. We don't need administers of prosperity, selectors of winners and losers. We need a world where people are free to pursue their dreams. The dispicable thing about racism is the thought that anyone can tell someone else what they can or cannot accomplish. What we are currently facing is many times worse because it is a matter of law and effects the entire world economy. The damage that will be done will take generations to repair, if then.

Sun, 12/30/2012 - 17:06 | 3107243 PeeramidIdeologies
PeeramidIdeologies's picture

Collective Group Consciousness is the most powerful force unknown to man. Beware it's direction...

Sun, 12/30/2012 - 17:27 | 3107300 Bear
Bear's picture

I will do my best to act independently, since I know best. Borrow, borrow, borrow and then default ... Oh, that's what the goberment is doing, join the happy throng

Sun, 12/30/2012 - 17:28 | 3107307 noob
noob's picture

...it has direction? *(spooky)

Sun, 12/30/2012 - 17:49 | 3107362 PeeramidIdeologies
PeeramidIdeologies's picture

Lol I just try to keep my eyes open to the times and their signs. The future that seems to be developing now is a tad shakier then the way I saw things as a young lad.

Sun, 12/30/2012 - 18:57 | 3107504 cynicalskeptic
cynicalskeptic's picture

sure - ever see the movie 'Idiocracy'?   Go to Walmart on any weekend and you'll see the direction we're taking.  Be afraid.... very afraid.   In some ways I can understand the plutocracy's POV.  Some - way too many IMO - even as serfs are stretching their potential.

'Class' and economic status can limit the potential of some - a professor from a village in the middle of nowhere who's a genius in math comes to mind - but a good number of people in the US are living a life far better than they could ever manage with their innate intelligence and skills.   There's a reason a good part of the world is po'd at us (nevermind the arrogance of our national leaders).

Sun, 12/30/2012 - 17:06 | 3107244 jvetter713
jvetter713's picture

Stopping paying taxes seems so much easier.  I did.

Sun, 12/30/2012 - 17:09 | 3107253 Seasmoke
Seasmoke's picture

so simple, yet so impossible

Sun, 12/30/2012 - 17:07 | 3107246 Banksters
Banksters's picture

Prosecute the bankers, jail them, and go after the Fed.    Keynesianism will die shortly thereafter.

Sun, 12/30/2012 - 17:08 | 3107252 Seasmoke
Seasmoke's picture

Just split the 50 states......25 red and 25 blue......everyone gets to go where they prefer......one free roll to start over again

Sun, 12/30/2012 - 17:15 | 3107274 Ghordius
Ghordius's picture

And which group would have balanced budgets? Just curious...

Sun, 12/30/2012 - 19:43 | 3107610 Fedaykinx
Fedaykinx's picture

before or after the underground railroad starts up again

Sun, 12/30/2012 - 17:18 | 3107281 Pharming
Pharming's picture

I've heard that before and I laugh everytime I hear it because it's so true!  No argument with it!  Hmmm....let's see, on one hand people work hard, play hard, keep most of their money to spend as they want, help who they want and the govt is small.  Then on the other hand, people work just enough because there isn't a reward for working hard or coming up with new ideas, people don't have any decision on what they use their money because the govt is spending it for them, less liberty, less freedom, lazy zombies everywhere.  Hmmm....I choose the first hand.

Mon, 12/31/2012 - 04:51 | 3108363 Roger Knights
Roger Knights's picture

Maybe start with just five red and five blue states, so middle-of-the-roaders can mostly stay put initially.

Maybe start with pairs of “buddy” red/blue states, such as VT/NH, ND/SD, NC/SC, WA/OR, IL/IN.

Have a bureau set up to facilitate job-swapping and house-swapping between immigrants/emigrants.

See how it works before taking the next step, if any.

If it works so well that all 50 states become dedicated to some specific set of political / social propositions, divide a few big states in two or three, to allow still more diversity. If we had 57 states, we could make the new national motto Heinz's "57 Varieties," and adopt a new flag based on Betsy Ross's patchwork quilt. (And retroactively unembarrass Obama for his blunder about the number of states.)

 

Mon, 12/31/2012 - 08:52 | 3108478 Acet
Acet's picture

By being stuck in the red-vs-blue mentality you've limited your options to maybe the two worse possibilities (just look at the track record of the last couple of decades of red or blue governance).

In a sense, your splitting guarantees that all states would inherit the rot and filth which is destroying the US and would thus continue on the path of implosion.

 

Sun, 12/30/2012 - 17:11 | 3107258 Pharming
Pharming's picture

I'm so pissed after reading that.  I've known all along it's true, but sometimes it just hits me and I'm pissed.  I'm pissed for everything I've worked for...going bye bye.  I'm pissed for making the right decision to go back to school and becoming a pharmacist after driving trucks for ten years.  I'm pissed that I did the responsible thing and paid off student loans.  I'm pissed that so many others have done the lazy ass thing, sponged from the government, take take take, never giving back.  I'm pissed so many of us know what to do to make this work and we have to drag lazy asses along with us to try to make it up the hill.  I'm pissed that Ben Franklin was right that in order to get people OUT of poverty you have to make being poor suck eggs to give them the kick in the pants to want to get out....not just enough to keep em stuck in the tar.  I'm pissed that my kids are inheriting this unbelievable pile of horse shit economy...

Sun, 12/30/2012 - 18:41 | 3107458 itstippy
itstippy's picture

Save some of your ire for your fellow middle-class working folks who were doing OK but got greedy and tries to make lots of easy money. 

They borrowed vast sums of money from the banksters to leverage themselves into extravagent houses, expecting to get rich through home appreciation.  Live high and get rich by doing so.  It almost sounds too good to be true . . .

They gave all their retirement savings to stock-based mutual fund 401K managers to gamble with in the stock market, expecting to get rich through stock appreciation.   It almost sounds too good to be true . . .

They fucked up.  Now they blame the banksters, the stock brokers, Congress, Obama, welfare bums, etc. for their dismal financial situation. 

There would have been no housing bubble or stock market bubble if there weren't millions of willing middle-class patsies throwing their money at houses and stocks, hoping to get wealthy by speculating.

Sun, 12/30/2012 - 19:00 | 3107515 cynicalskeptic
cynicalskeptic's picture

There have been all kinds of 'bubbles' through out history.  They are made possible by allowing unsupervised and unregulated scams to masquerade as 'business'.   Yes. some are greedy and fall prey to their own avarice but many are also naive and easily fleeced.

Sun, 12/30/2012 - 20:25 | 3107712 Angus McHugepenis
Angus McHugepenis's picture

itstippy: The man was talking about his own situation and doesn't need a lecture on what other fucktards are doing and have done to cause their own misery. At this stage of the game we are trying to protect what we have worked for, and trying to stop the assholes that want to take part of it (at the point of a gun) to give to their deadbeat friends.

Sun, 12/30/2012 - 20:30 | 3107728 Sean7k
Sean7k's picture

Sure, because the FED didn't create credit and expand the money supply, nor fail to manage bank lending policies (a FED responsibility) or exploit interest rates. Take your banking trolling and shove it up your ass. The failures of the debt based debacle is the cause of government imperialism, cronyism and banking whores that failed to apply standard banking policies towards leverage and credit in order to make fees knowing they would be bailed out by the prostitutes they run in DC.

Sun, 12/30/2012 - 21:01 | 3107816 Pharming
Pharming's picture

Yes itstippy, but I wasn't one of those "throwing" my money at houses, stocks etc...  I didn't borrow against my home to do this or that.  I've paid my bills, I've busted my ass.  I've never tried to make "easy" money.  I've worked for everything I have.  My dad died pennyless chasing that penny stock here and there.  He did what I never would do.  He gambled.  He didn't save...I did.  He was a racist.  I'm not.  It takes a generation to change the ways of the previous generations mistakes.  I continue to pay my bills, not default like my neighbors.  (Who still had jobs by the way)....   I could go on but you'll never understand.  It's about taking responsibility for your own actions.  You screw up?  You pay for it.  You get in a hole?  Get out yourself.  You need a hand up?  Sure!  You need a hand out?  NOT.

Sun, 12/30/2012 - 22:25 | 3107983 itstippy
itstippy's picture

I'm with you, Pharming, and I understand perfectly. I'm in the same situation.  I have worked my ass off, been prudent, and sacrificed today's luxuries for tomorrow's security for forty years.

We risk-averse savers are being shaken down to make good on the bad bets the risk-takers made.  We're being shaken down to pay for welfare parasites' lack of initiative.  We're being shaken down to pay for everyone else's bonehead choices. 

I'm sick of it too.

You "debt jubilee" fuckers can go to hell.  Pay your damned obligations or declare bankruptcy and start from scratch.  No, you can't keep the house and the two cars and the frikkin' stainless-steel appliances.  No bailouts for anyone. 

 

Tue, 01/01/2013 - 03:09 | 3111677 Pharming
Pharming's picture

Beer?  :)  Good luck in 2013

Sun, 12/30/2012 - 17:14 | 3107267 Banksters
Banksters's picture

Dow futures -226.   Rue the rumor.

Sun, 12/30/2012 - 17:24 | 3107298 Atomizer
Atomizer's picture

It will continue to plunge until the government can back up the new discount ZIRP window pickup.

Sun, 12/30/2012 - 17:15 | 3107275 rwe2late
rwe2late's picture

 "Economics" cannot be simply bottoms-up "Austrian" because the "price-system" and its incentives, disincentives, and restrictions are established/imposed by culture/society/government.

 

Sun, 12/30/2012 - 17:43 | 3107343 akak
akak's picture

?????

Sun, 12/30/2012 - 20:16 | 3107689 Angus McHugepenis
Angus McHugepenis's picture

Roadside shitting citizenisms???

Mon, 12/31/2012 - 01:29 | 3108273 ZeroAvatar
ZeroAvatar's picture

LOL!

Sun, 12/30/2012 - 20:17 | 3107690 S.N.A.F.U.
S.N.A.F.U.'s picture

akak, my initial reaction was the same as yours.  (And LOL, bottomS-up indeed!)

I believe what rwe2late is trying to say is that individuals in an economy operate differently under rule of law than without it, and operate differently under differing rules of law.  This is because various incentives (e.g., do honor your contracts or you'll get in trouble) and disincentives (don't stab your neighbor because you think he's ugly or you'll get in trouble) are basically what rules of law are, and rules of law are typically "established/imposed by culture/society/government".

In a way, everything is "bottom-up" -- it's all just individuals taking action.  I guess what makes us call it top-down is when there is a general acceptance of the use of force (e.g., to enforce rule of law).  To anarchists (aka, simple-minded numb-skulls who no matter how much they preach Austrian free market economics don't really understand human behavior at all and lack the logical fortitude to ever piece the real picture together), that such force will always exist and will therefore always be a part of the economics picture will be considered ridiculous.  But no matter how ridiculous the anarachists may think it, such force has been with us since well before the dawn of civilization and will remain into the future -- at least as long as humans and their "sinful ways" continue to exist as the dominant sentience.

Mon, 12/31/2012 - 10:12 | 3108670 rwe2late
rwe2late's picture

And at the most basic cultural/philosophical level (e.g. the very notion that the land,water, air and other species can be "privatized", and thereafter degraded to the benefit of one individual).

Mon, 12/31/2012 - 21:20 | 3111199 S.N.A.F.U.
S.N.A.F.U.'s picture

Yes, property rights are part of the rule of law -- rule of law determines whether or not you [effectively] have any property rights, what is covered under such rights, and when/how it is covered.

However, I have to disagree with your "degraded to the benefit of one individual" comment.  The idea of property rights is to allow property to be developed (allow it to be used in wealth creation), reduce mismanagement and prevent things like tragedy of commons.  Property rights places [or at least should place] both the property rights and the property rewards/responsibilities in the hands of one person/entity.  That means [ignoring theft/fraud which break this relationship quite readily] if they manage that property well they benefit, but if they manage it poorly they suffer.  That makes use of pre-existing human behavior by tapping into one's motivation to provide [obtain wealth] for themselves and their family, and it also makes use of evolutionary-type forces that will tend to move property out of the hands of those who use it poorly (create little/no/negative wealth) and into the hands of those who use it well (creating more wealth).  There is also arguably a moral reason for setting property rights up like this, as it [again ignoring theft/fraud] results in a meritocracy.  (To me, a lack of property rights sounds like it would be really hard to differentiate from legalized theft.)

I suspect that nearly every person on this planet who thinks they are getting screwed by property rights and free markets is in fact getting screwed by theft/fraud or their own ineptitude (or maybe bad luck), but they are just unable to see that and they need to blame someone/something [other than themselves] for their misfortune.

Sun, 12/30/2012 - 17:42 | 3107284 earleflorida
earleflorida's picture

it is no great secret why the great depression lasted so long! a simple historical flowchart of consequential events in a geographic/demographic floor'd mosaic, that the 'neo-flat-world' walked through and upon. this tapestry of a quasi daisy-chain'd spontaneity statism coalescing as the world became a linear fortress of self preservation, period!

america was reaching for all the brass rings... as we became the undeniable super power of the planet-earth, post wwi.  problem was the rings became valueless? hmmm

http://en.wikipedia.org/wiki/Scientific_Socialism

and this-- where the, 'means justify the ends'?... all by ideologic design.     http://en.wikipedia.org/wiki/Evolutionary_economics  

 

Ps.  TPTB don't plan in time slots... no, they plan in a 'Time-Frame'--  ie. 30yrs /40yrs /50yrs down the geopolitical global landscape? 

Sun, 12/30/2012 - 17:19 | 3107287 bank guy in Brussels
bank guy in Brussels's picture

Article talks about Keynesianism, and Austrian economics as the alternative

But there is yet another alternative, which Japan is about to try - Monetarism to the max, to the level of pumping up so much money supply they raise and maintain nominal GDP to growth a couple points higher than the interest rate

Certainly Ben Bernanke and the rest of the world are doing some 'monetarism', with their money-printing QE ... buying bonds and what not to goose the money supply

But for the hard-core monetarists (not a big group), just like for the hard-core neo-Keynesians, it is not enough

They say MOAR ... Or else the trillions in QE is not doing enough against the trillions in credit destruction (and credit is a key part of 'money supply')

In monetarist theory there is a 'perfect' goosing of the money supply, where you get just enough inflation to light the fire of real growth, and ease the burden of debt, but avoid Zimbabwe

And some of these hard-core monetarists say the problem with the current type of QE ... advancing money to banksters who own some bonds ... is a weak transmission mechanism, it would be better to do a 'helicopter drop', like have Ben Bernanke wire US $3000 into every American's bank account

In any case we will see what happens with Japan, when they go into the Monetarist Experiment, where no government has gone before

At least though with money-printing monetarism the debt does not increase as a direct result, the risk is radical inflation burping out in places

Very nice and brave of Japan to try the radical monetarist and Friedmanesque theory ... tho it's about the last thing they can try, so why the heck not

Wallstreetpro2 had a related line in one of his videos, something like, 'They say they increased the money supply ... I don't see any f-ckin' money. Where's all the G-dd-amn money?'

Sun, 12/30/2012 - 18:24 | 3107425 earleflorida
earleflorida's picture

question:  if gold were to become the 'standard monetary fix'... who or whom would own all or most in todays world?

and if one were to own said gold, would not the emperor[s] be exposed?

just asking... 

Sun, 12/30/2012 - 20:37 | 3107734 Dr. Sandi
Dr. Sandi's picture

Mostly the same families who own massive amounts of gold own most of the other stuff of real lasting value. But they'll let you have a few crumbs of it if you want. They're greedy, but not insane.

Central banks own a lot of it, but it's all pledged to back sovereign loans. And guess who holds much of those loans. When the governments start to default, their gold goes back to the rightful owners.

Lather, rinse, repeat.

It's all very egalitarian. You can have as much wealth as you can afford.

Sun, 12/30/2012 - 17:20 | 3107291 Herdee
Herdee's picture

Maybe you'll wake up one day and a Bank Holiday will be declared.One possibility is what happened to Israel years ago.You might wake up and the money in the bank and the money in your wallet is no longer any good and made illegal.You must trade it in.The trip to the bank won't be pleasant when you see the numbers on the exchange rate,because you just gave it all to the politicians in Washington.And your then worth what, 1/5,1/10,1/25th etc.of what you were worth before.Pick a number and never forget one thing; Banking law states that you don't own the money you deposit in a Bank.Some States right now are even pondering the idea that they will only take gold as payment from the Federal Government.It's right in the Constitution.

Sun, 12/30/2012 - 17:33 | 3107317 noob
noob's picture

..."Constitution," wut dat?

Sun, 12/30/2012 - 17:25 | 3107301 ebworthen
ebworthen's picture

Again, again, so many examples from the communist experiments of how central planning leads to tragic failure; misallocation of resources, unintended consequences, oppression of the individual life and spirit.

They are either intentionally employing the tools of despots or tragic fools.

Sun, 12/30/2012 - 17:45 | 3107348 Salon
Salon's picture

They have the hubris of progressives in thinking they can get it right this time if they just try a little differently.

You cannot manage a complex system with emergent properties by "learning the lessons" of past socialist mistakes.

The best thing to do is just avoid fucking it up. Thats the lesson progressives should learn.

Sun, 12/30/2012 - 20:12 | 3107681 Angus McHugepenis
Angus McHugepenis's picture

As I said in another post: Get six of your friends in a room and see how long it takes for all of you to decide on what type of pizza to order. Now magnify that chaos a thousand times and you will see how the STATE operates (or doesn't). Eventually each person ends up ordering their own pizza the way they like it but the STATE forces you to sit in the same room and wonder if the guy next to you has a better pizza.

Everything can be figured out with a good pizza.

Sun, 12/30/2012 - 17:35 | 3107320 q99x2
q99x2's picture

Keynesian economists believe...

They believe in lying to help take over the world and receive better pay from the NWO banksters. No one, except maybe George Bush, could be that stupid. I do not accept that they actually believe the bullshit they preach. They are guilty of treason. Arrest them.

Sun, 12/30/2012 - 17:43 | 3107330 THE DORK OF CORK
THE DORK OF CORK's picture

I imagine most Austrians would die without  the commons.

 

"They see millions of individuals all making decisions to improve their own lives"

 

Last time I checked we were a pack animal.

 

Not a ant , not a Tiger ,  a mainly hairless monkey that does that politics thingy.

 

http://www.youtube.com/watch?v=ahW9jOS0-pY

 

Sun, 12/30/2012 - 17:48 | 3107360 Salon
Salon's picture

Austrians believe the common good is best achieved on aggregate by avoiding those things which impair productivity.

We love society just as much as you, possibly more.

Sun, 12/30/2012 - 18:03 | 3107370 THE DORK OF CORK
THE DORK OF CORK's picture

Most large scale investments on the commons can only be made at the city or nation state level.

 

For example there is no profit in providing clean water but if Glaswegians drink out of the Clyde productivity becomes impaired..........

 

The world is a complex place - you cannot put everything into a little box and just leave it to stew.

Civilization does not work like that.

 

Example

Crumlin Northern Ireland - no railway station since 2003.......

Population now much larger

No railway station...........

http://www.ninis2.nisra.gov.uk/public/AreaProfileReportViewer.aspx?FromA...?

 

 

Northern Ireland travel stats published recently

http://www.drdni.gov.uk/tsni_indepth_report_2009-2011.pdf

 

 

 

The small relative use of NI railways (especially for commutes) can be explained by one chief factor

Only 4% of people live within a 6 minute walk of a railway station.

“Relatively few households were close to a train station. Sixty-two percent said it
would take them 44 or more minutes or that it was not feasible to walk. Overall,
just over one quarter (26%) of households lived within 26 minutes walk of an NI
Railways station, 9% within 13 minutes walk.”

 

 

Now can you put the two together ?

No commons

Despite a record growth in a almost dead transport system in Northern Ireland its new limit is the lack of commons.

Sun, 12/30/2012 - 18:05 | 3107387 Sean7k
Sean7k's picture

And why cannot the funding of the commons be voluntary? You see, that is what the Austrians recommend. It is not the funding of the commons that is the issue here- it is the coercion of the state, the cronyism of the state, the ability to take control of the state that creates the inefficiencies. 

If States were the best way to spend your labor- we would have no debt and happy people.

Sun, 12/30/2012 - 20:40 | 3107759 Dr. Sandi
Dr. Sandi's picture

Voluntary funding of the commons is the heart of the Third World.

Sun, 12/30/2012 - 18:07 | 3107394 Salon
Salon's picture

Austrianism is not anarchy.

I dispute that clean water and air cannot be reconciled with Austrian philosophy.

And there is nothing in Austrian theory that prevents large groups organizing to "invest" in things which collectively benefit everyone.

The problem is not the "investments" per se. It is the fact the word is used so carelessly by socialists who wish to hide spending on projects which harm productivity and are not in the common interest.

Sun, 12/30/2012 - 18:36 | 3107419 THE DORK OF CORK
THE DORK OF CORK's picture

Yee guys are talking about the failure of the state , which can indeed happen many times.

 

But if we have no debt we have no industry , we might indeed need less industry & debt via the production of greenbacks but most western people would begin to die within a few weeks if there was no debt.

 

My question is 

How do these settlements work if there is no state........

No train station since 2003.......

 

http://www.ninis2.nisra.gov.uk/public/AreaProfileReportViewer.aspx?FromA...?

 

No debt means no cars.......

How can these people get their shopping done in Lisburn ?

Do they walk ?

Do you abandon the village ?

These are the hard choices ?

what do you do with the spare people ?

Kill them ?

let them be killed ?

Sun, 12/30/2012 - 18:38 | 3107451 akak
akak's picture

 

How can these people get their shopping done in Lisburn ?

Do they walk ?

Do you abandon the village ?

Kill them ?

let them be killed ?

 

From the viewpoint of the ruling elites, all are good choices, and the future will undoubtedly consist of some combination of all of these options.

Sun, 12/30/2012 - 19:33 | 3107573 Sean7k
Sean7k's picture

At no time did I refer to the failure of the state. You are the one attempting to justify Central control- you must satisfy the issues regarding debt and the People's happiness or satisfaction. 

How do settlements work without the state? Try the Pennslyvania dutch colony from 1780 to 1795- until they were forcibly returned to state control. Try any contract based society in history. Try clan societies. They all functioned- some better than others. 

Now, for you ridiculous assumptions:

No debt, no cars? Really. The first roads in America were built by private concerns and funding. Most Car companies went into the markets and found whatever funding they needed. There is a difference between state debt and loans/bonds.

Do they walk? Heaven forbid. Maybe the trains and buses charge what is necessary to make a profit? 

Do you abandon the village? As a state run entitlement that incurs debt beyond its' ability to tax? Absolutely. However, the community can create the commons it desires and can afford.

These are hard choices, choices thrust upon the people BECAUSE of the State and the fallacy of the "commons" argument. Will people suffer? Are they not suffering now? Are not those that are able to create wealth not suffering as well? Everyone slould suffer from the bad choices of the minority? 

Should the crony capitalists and bankers be able to control the State, debt limits, the legal system? Because the State encourages these very actions.

Get off the socialist bandwagon and rejoin reality...

Sun, 12/30/2012 - 19:45 | 3107615 THE DORK OF CORK
THE DORK OF CORK's picture

@Sean

You proved my point.

Villages can't protect themselves in the modern world.

They get taken over by larger political forces (the state ?)

The last time villages in Ireland were self contained trading units was the iron & dark ages.......

They formed units called round or fairy forts.

 

Industry funds itself with debt , no debt no industry I am afraid

Interest channels capital upwards  and concentrates power - these power investors then build roads with what they call money.

Its just the way it is.

You can call me what you like.

Perhaps A pink fairy that lives in a fort.

Who cares .

 

 

This was a ring fort which saw the beginnings of state.

http://www.youtube.com/watch?v=YWHyJrd2xP8&list=UUDGN6PKvJsFcfsbz0Des4GQ...

Sun, 12/30/2012 - 20:39 | 3107755 Sean7k
Sean7k's picture

Funny, nothing I said "proves your point".

As for security, this does not require a state that is responsible for the commons in every other way. Please cite an argument. Good luck.

Industry funds itself with capital. Capital from investors that seek profits. Industry only uses debt when it cannot attract capital- this is where cronyism comes in. No entrepreneur in their right mind would pursue a project with no possibility of profit unless they are one, lousy or two, supported by the State.

Sorry, we no longer have anybody that builds roads beside the state. Nor does all capital choose interest over profit. 

 

Sun, 12/30/2012 - 21:10 | 3107838 THE DORK OF CORK
THE DORK OF CORK's picture

@Sean

Why is all the medival structures that lasted from that time come from taxing the kings fiat.

Why did England need the Bank of England to build the Navy ? starting a 2 to 1 leverage....i.e.debt

Thats where modern Industry started.

Masons , shipbuilders , the fusion of technology with astronomy creating reliable celestial navigation..........

It was the state , the King , the sovergin ,the church who paid these guys to think & do stuff.

Where did they get the money ?

The serfs.

 

Industry can only come from the concentration of capital claims using the power of the state.

 

Look Sean

Try to imagine medival Europe.

What forces were at work ?

well there was 3 or 4 in the main.

1. The Church - the first cross (tribal) border multinational corporation.

2. The Norse & Norman fiat /tax Kings also the Knights templer who gave letters of good credit so that people could cross borders without carrying metal.

3. The northern Italian banking republics.

 

These are all organisations ,guilds etc etc

 

http://www.youtube.com/watch?v=kz6oZ1kGgok&list=UUDGN6PKvJsFcfsbz0Des4GQ...

 

 

Sun, 12/30/2012 - 22:55 | 3108048 Sean7k
Sean7k's picture

Your intentionally blurring the lines between private debt or capital used to finance projects that create products that produce a profit and the use of debt by government for the production of goods and services the people have not asked for but become responsible for through debt and taxes.

The structures that lasted were built from acquired wealth. It has been taxation that has ruined them. They have become too expensive to maintain, sell ot inherit because of taxes by the State. They continue to exist because someone is willing to pay the fare. This is no justification for taxation.

It was not the State that funded exploration, it was private wealth accumulated by monarchs AND the contributions of other private investors in pursuit of profit (gold, silver and spices). Please let me know when the state is going after the Queens' wealth, because it is based on taxation. Her profits exists from investments, land and the peculiar status of the "city of london" or crown corporation. 

Where did they get the money? Many places, but serfs? Please. They could contribute foodstuffs or livestock. Taxes came from the gentry, merchants and others that PRODUCED goods for profit. They didn't care for taxes either. They saw it as theft.

Organizations and guilds are not states. They haven't the police power to coerce. They were beholden to competion- even the church or do you forget Luther? Or King Henry VIII? 

We have been educated to accept the State and its' authority. This does not make it essential or binding. We can plot another course and do so with greater liberty and opportunity. It begins with the elimination of legal tender laws. It is strengthen with private property laws and it is completed through the reduction of the state to its' decentralized ideal. Power must reside at the level of the individual first and foremost. Unless you prefer slavery...

Mon, 12/31/2012 - 10:20 | 3108691 THE DORK OF CORK
THE DORK OF CORK's picture

How did they acquire that wealth ?

They simply took it.

In medival ireland you had a bunch of ballsy Normans who got off the boat in Dublin and simply marched to the riches.

 

http://www.courcy.com/sirjohndecourcy.html

 

Monarchs were the state back then.

You are mixing up types of state , such as the later nation state.

 

John de Courcy tried to set himself up as the state by making legal tender money which so happened to be metal ,therefore there was a conflict with the King of England......i.e.another state.

 

You are also talking about craftsmen working with money lenders / pawnborkers............

But that is not Industry -i.e. the concentration of capital & labour to produce goods and stuff en masse.


Sun, 12/30/2012 - 21:50 | 3107920 hooligan2009
hooligan2009's picture

is apple a cottage industry..don't think it needs debt..and how does the printing of money fit in...yanno "in God we trust" when the state is separate from the church and acts of god don't exist in law?

Mon, 12/31/2012 - 10:18 | 3108683 rwe2late
rwe2late's picture

 The religion that productivity should be the arbiter of human conduct is myopic and crassly materialistic.

Sun, 12/30/2012 - 17:49 | 3107333 Getting Old Sucks
Getting Old Sucks's picture

TOO LATE.  IT'S DONE! 

If you're over 55 (definately over 65), do what you can to make your decendants, especially grandchildren, lives a bit more promising.  Distribute your gold with strict orders that your children hold it back till a certain age.  I have already given half my holdings to be held until my grandchildren are in their twenties, preferably as a graduation gift.  I'm confident that my children will honor that.  In a few years, I will be just as happy sitting by a window looking at a sunrise as I am now on a nice vacation.  Most of us have had a pretty good life (even strugling to make ends meet with four kids in a one bedroom apartment),and being a sole bread winner.  Time now to put our self interests aside and think about those sweet little grandsons and granddaughters who adore their Pop Pop.  That is the best feeling in the world!

Sun, 12/30/2012 - 17:44 | 3107345 kevinearick
kevinearick's picture

 

Crowd Sourcing in Time vs. Your Moment in Frequency

Producing the odd Newton is one thing; breeding Newtons on average is another. The equal operator is the relative pivot of force, within which all other operators dwell, with gravity as the relative time-dependent counterweight. Peer pressure is the distillant, which depends upon your perspective of self. Funny what happens when responsibility walks into a room of ignorance, which may be perceived as bliss to the individual, right up until it becomes the majority.

If you employ trust and faith as the negative feedback locally, to balance peer pressure globally, the pyramid inverts, automatically dispensing all the middlemen to your pension, good health. The breeder has reached threshold ignition, the key to catalytic conversion has been turned, and whether you choose to take a seat or become part of the fuel mix is up to you.

Go ahead; regulate free speech. Plainly, the empire, the majority, has rewarded failure and penalized success to the point where only failure is accepted within the empire, monetized by the Fed, its crystallized scapegoat. For the kids that want to see the future, failure by majority rule is not an option.

Only the hypocrites line the lines now, waiting in line, to get in another line, while the rules of the line change, so its operators may comfortably cut in front of the line, opinion leaders leading their followers to the demise of all. Voltage is relative. Induction is not currency dependent, despite the empire's best attempt to prove it so with increasing rule complexity, for which the only possible outcome is arbitrary, capricious and malicious tyranny, make work.

The difference between accounting firms and labor is the difference between controlling monkeys fighting over a typewriter and experience delivering economies. Decision makers are like diapers. As real war approaches, and it always does, the conductors of false wars are swapped out. That much the US Navy knows, from decades of experience. How labor gets from point A to point B it can never know. Swapping out Navy education is just the beginning.

Capital could care less about the absolute price of the S&P. All it cares about is whether it is free to issue stock, to print money, to serve the bond. The price is whatever maximizes its ability to do so, and it's not doing too well. If the S&P were not a rigged casino, a feudal system competing for control as the means to its end, the fluctuations would be fluid and buy and hold would not be the false assumption.

If you had loved your children more than yourself, you would not be dependent upon the worthless empire pension promise now. To error is human. To make the same mistake repeatedly is mechanical, empirical. Now stand in front of the machine of your own making and expect it not to run you over, because you were loyal to it for so many years, taxing your children out of the future to maintain the fantasy world of yesterday for yourself. When you have successfully eliminated free speech, complain as you go over the cliff.

Gold didn't serve Moses; Moses served gold. And as you can plainly see, nothing has changed much within the empire. Gravity is gravity is gravity, no matter how you dress it up. Marriage about children has withstood every test of time by religionist and atheist alike, but you go ahead and prove otherwise. The empire is just a stage. Real life is about raising children.

Sun, 12/30/2012 - 18:03 | 3107384 Getting Old Sucks
Getting Old Sucks's picture

You are way over my head and I'm in no way being critical.  I do get  part of the next to last paragraph.  You certainly do have deep (perhaps near genious) thoughts.  Could you translate that down to help me understand?  Thanks. 

Sun, 12/30/2012 - 17:51 | 3107364 boooyaaaah
boooyaaaah's picture

It goes back to Issac Newton and his good friend john Locke

The British empirisists vs the continental athiests

A liberal lawyer said to me that what is needed is a solution.

This was a quote from a 4 star general

It took me a while but I finally arrived at a flipppant answer 

The solution is there is no solution

But in order for this to work you and your society you

Need faith. This is what the planners the socialists the atheists do not have.

Unlike the founding fathers the pilgrims and entreprenures

Look at nat gas. The socialist, with peak oil based on evolution had a solution based on carbon tax carbon foot prints and government ratioing.

I

Sun, 12/30/2012 - 20:45 | 3107773 Dr. Sandi
Dr. Sandi's picture

You need to hand out free muck boots with posts like this.

Sun, 12/30/2012 - 21:17 | 3107854 Mike in GA
Mike in GA's picture

and strait jackets! :)

Sun, 12/30/2012 - 18:06 | 3107391 yogibear
yogibear's picture

John Maynard Keynes, may your worshipers at the Federal Reserve and elsewhere rot in hell when it all blows. 

 

Sun, 12/30/2012 - 20:46 | 3107777 Dr. Sandi
Dr. Sandi's picture

Why do I see a hell where Satan has been bribed to provide all the perks to those who were the most evil during their lives?

Sun, 12/30/2012 - 18:07 | 3107393 boooyaaaah
boooyaaaah's picture

Certainty is perfect knowledge that has total security from error, or the mental state of being without doubt.

Objectively defined, certainty is total continuity and validity of all foundational inquiry, to the highest degree of precision. Something is certain only if no skepticism can occur. Philosophy (at least historical Cartesian philosophy) seeks this state.[citation needed]

Cartesian = Descartes

It is widely held that certainty about the real world is a failed historical enterprise (that is, beyond deductive truths, tautology, etc.).[1] This is in large part due to the power of David Hume's problem of induction. Physicist Carlo Rovelli adds that certainty, in real life, is useless or often damaging (the idea is that "total security from error" is impossible in practice, and a complete "lack of doubt" is undesirable).[2]

Sun, 12/30/2012 - 18:12 | 3107403 Salon
Salon's picture

And it is extremely inefficient and harmful to society to misallocate a huge amount of resources to attempt to achieve absolute security and certainty.

Sun, 12/30/2012 - 18:10 | 3107399 Cycle
Cycle's picture

It seems like the problem with Keynesian theory is that it was symmetric, yet symmetrical application could not be executed because of the politics. The idea was to apply countercyclical pressure in the form of government spending when the economy was in low gear, and government saving when the economy was in high gear. It's the latter that Keynes did not predict would quickly become politically impossible.   The current Kabuki theater around the fiscal cliff, to be followed by an encore performance when the "debt ceiling" appears is a complete distraction from dealing with budgetary issues.

Sun, 12/30/2012 - 18:24 | 3107424 boooyaaaah
boooyaaaah's picture

The need for certainty causes one to eliminate faith.

Planning must be complete total. All doubt must be done away with

A final solution .

3 branches of arguing politicians is uncertainty and must be ended

The socialist must have total control or certainty can not be achieved

Freedom of action with no preconceved outcome? 

An internet running amok

Pilgrams with their families put ashore in the North American wilderness

Is uncertainty and faith

An accident that must be corrected

 

Sun, 12/30/2012 - 18:35 | 3107447 boooyaaaah
boooyaaaah's picture

What we are working with and what the founding fathers understood was that man is imperfect and suceptable to greed dishonesty lust for power

The solution then is freedom -- counter balacing freedom

Which if man is capable of evil you may think this is the worst solution --- freedom

But if the alternative is providing a solution of cetainty
Given that man is imperfect

That certainty at the expense of freedom is

Corruption
Slavery
Tyranny

Sun, 12/30/2012 - 20:47 | 3107779 Dr. Sandi
Dr. Sandi's picture

Burma Shave

Sun, 12/30/2012 - 18:37 | 3107450 Winston of Oceania
Winston of Oceania's picture

I agree with the opinion that WWII did not end the depression but rather it was the death of Roosevelt himself and of his policies that ended the long nightmare.

Sun, 12/30/2012 - 19:30 | 3107584 ramacers
ramacers's picture

it's all about K's need to control, age old.

Sun, 12/30/2012 - 19:51 | 3107627 Notarocketscientist
Notarocketscientist's picture

You need to get your definitions right...  Keynes NEVER advocated the system we are following now... what we have now is more like Soviet Russia... a centrally planned economy (run by Bernanke)

 

 

Keynesian economics (pron.: /?ke?nzi?n/ KAYN-zee-?n; also called Keynesianism and Keynesian theory) are the group of macroeconomic schools of thought based on the ideas of 20th-century economist John Maynard Keynes. Keynesian economists believe that, in the short run, productive activity is influenced by aggregate demand (total spending in the economy), and that aggregate demand does not necessarily equal aggregate supply (the total productive capacity of the economy). Instead, it is influenced by a host of factors and sometimes behaves erratically, affecting production, employment, and inflation.[1]

Advocates of Keynesian economics argue that private sector decisions sometimes lead to inefficient macroeconomic outcomes which require active policy responses by the public sector, particularly monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle.[2] The theories forming the basis of Keynesian economics were first presented by Keynes in his book, The General Theory of Employment, Interest and Money, published in 1936. Keynes contrasted his approach to the 'classical' (more commonly 'neoclassical') economics that preceded his book. The interpretations of Keynes that followed are contentious and several schools of thought claim his legacy.

Keynesian economics advocates a mixed economy – predominantly private sector, but with a role for government intervention during recessions – and in the US served as the standard economic model during the later part of the Great Depression, World War II, and the post-war economic expansion (1945–1973), though it lost some influence following the stagflation of the 1970s.[3] The advent of the global financial crisis in 2008 has caused a resurgence in Keynesian thought.[4]

http://en.wikipedia.org/wiki/Keynesian_economics

Sun, 12/30/2012 - 20:35 | 3107714 Radical Marijuana
Radical Marijuana's picture

Keynesian economists provided the bullshit to advance the interests of the biggest bullies. The top down was also from the inside out, whereby those who were the best at being dishonest, and backing that up with violence, were able to control governments, through bribery and intimidation, or by discrediting and destroying those who could not be bribed or intimidated. The bottom up influence is the resistance of all those whose lives were forced to adapt around accepting the triumphant legalized frauds, backed by the force of governments, which the best organized gangs of criminals were able to achieve, through their application of the methods of organized crime to take control over governments.

The masses of muppets in those scenarios were enough people, who could be fooled enough of the time, in order to agree with the bullshit social stories, and go along with the bullies' agenda, which WAS what happened in the real world, since central banks were created, and did take control over the economic systems, by controlling the money supplies, through the leverage of being able to make money out of nothing, as debts. The REALITY is that there was a "free market" in the competition between different organized crime gangs, whereby those who were the best at that competition were able more and more to achieve a runaway triumphant monopolization of the powers of government, to thereby systematically destroy the "free market" in every other aspect.

This article provides a classic false fundamental dichotomy approach to understanding that, with a matching impossible ideal solution. The bottom line of the money system was made and maintained by the murder system. The ultimate "free market" worked through militarism. It was success in the context of that competition, that then determined everything else.

Economists were merely the hired guns, to provide the intellectual rationale, that promoted the kind of bullshit which the bullies' approved of. All of the rest of the debates were superficial distractions, pretending that somehow the real world did not actually operate according to the principles and methods of organized crime, where the imperatives of militarism built states, and those states were effectively controlled by the best organized gangs of criminals, to serve their interests. Any and all economic debates and theories that ignore ecology, and the central role of the death controlling murder systems, are deliberate bullshit, intended to provide distractions and illusions to conceal what was really happening. Furthermore, any idealized versions based on that not still being the case are simply more alternative kinds of bullshit.

The only reason why The Keynesian Legacy Unravels is the paradox of final failure from too much success. The ecology is still there, and ecological succession still happens, despite the astonishing ways that "economics" manages to maintain its idealized mathematical bullshit, that operates through ignoring those realities. The Austrian persuasion was just another goofball way of promoting social ideals, which ignored social realities. The central feature of any economic system is the core of the ecology, which are the death controls. More importantly, the "best" of those death controls are those which are done the most deceitfully, in order to attain the maximum leverage. In that context, the assassination of politicians that could not be bribed or intimidated was the most important element in the real development of our economy. Next in line were the ways that the political processes were funded, in order to achieve putting in place puppets that would support those who were paying for their performance.

The only thing needed to make that political puppet show work was enough muppets who were morons, that believed the bullshit that they were brainwashed by, such as that from those paid to spout ridiculously idealized versions of economic theories, that operated without any grounding in the actual ecological realities. The ONLY way to make the bottom up system work is IF enough of the people were willing and able to address the murder system, and democratize the death controls. The problem has always historically been that success in militarism was based on deceits, which was why spies were the most important soldiers. Therefore, that is WHY the economic system we HAVE is run by the Fraud Kings, from the top down. Furthermore, they have been so totally successful that there are way too few people who are willing to face the facts that the murder system made and maintains the money system.

Therefore, we get an endless stream of fake fundamental dichotomy views regarding economic theories and ideologies. E.g., this article manages the delightful irony of proving what it started off stating: "Ideology is powerful, capable of masking unpleasant facts. Whether we recognize it or not, we are all slaves to ideology."

THE CENTRAL OF THE "unpleasant facts" IS THAT THE MONEY SYSTEM IS BACKED BY THE MURDER SYSTEM, AND IT IS IMPOSSIBLE THAT THE REAL WORLD COULD EXIST ANY OTHER WAY.

NO THEORY OF ECONOMICS THAT DOES NOT ADDRESS THE ROLE OF THE DEATH CONTROLS IN THE HUMAN ECOLOGY DESERVES ANY RESPECT, EXCEPT THOSE WERE PRECISELY THE KINDS OF THEORIES THAT BECAME THE MOST SUCCESSFUL, SINCE THOSE WERE PROPORTIONATELY THE THEORIES THAT WERE THE KINDS OF BULLSHIT THAT BENEFITED THE BIGGEST BULLIES THE MOST.

Mon, 12/31/2012 - 01:45 | 3108281 Pareto
Pareto's picture

I cannot accept that the Austrian persuasion was "just another goofball way of promoting social ideals."  Austrian economics starts from first principles of individual human action being purposeful action of endeavoring to always move from a less to a more desired state - that is, if we must say so - is its equilibrium, and doesn't give a shit about social ideals.

Mon, 12/31/2012 - 18:47 | 3110826 Radical Marijuana
Radical Marijuana's picture

"... human action being purposeful action of endeavoring to always move from a less to a more desired state" ends up manifesting through militarism, where those best at deceits prevailed. The abstract ideas about "more desired state" INCLUDES those who desire to be slave masters, while others are their slaves. Some people who promote their "more desired state" DO use dishonesty, backed by violence, to get what they want. Those people built governments, and control governments. When people achieve their "more desired state," they automatically end up in conflicts with those with different desires, and those conflicts ended up being resolved by fights in the past, where those who were the best at deceits prevailed. ... Anyway, I have never read anyone who claims to be of the Austrian persuasion that talks about that. My impression has been that the Austrian school has been going downhill. The earliest formulations appeared to me to be the best, while the later knock-offs and copies degenerated.

Basically, I have NEVER read any economic theories anywhere that have adequate ecology. When one applies basic energy laws and systems theories to groups of human beings, one can derive what history shows, namely, the people who were the best at being dishonest, and backing that up with violence, were the most labile components that control the systems. Furthermore, that cannot be changed by anything else. It is a fundamental fact, inherent to the way energy systems are defined and work.  I am not aware of any economic theories that are adequately inclusive. They tend to want to have ideals where there are "good" people who are productive and reproductive. They tend to want to not understand how and why the "evil" predator/parasites play a necessary role within the whole system, and that those functions will automatically continue to emerge, and actually becoming the controlling components.

I am not aware of any significant school of thought that is not "just another goofball way of promoting social ideals."

Of course, I must include my own school of thought within that, since what I have found is that the real world IS controlled by huge lies, backed up by lots of violence, and that more "truth" about that has no effect upon that continuing to be the social reality. Therefore, my work to promote more "radical truth" is clearly just more goofy work too.

Sun, 12/30/2012 - 20:48 | 3107781 Dr. Sandi
Dr. Sandi's picture

Do you think that makes one fucking micron of difference in how the world works?

Sun, 12/30/2012 - 20:52 | 3107788 Radical Marijuana
Radical Marijuana's picture

Of course!

Billsbest, see my comment above for WHY.

Furthermore, one has to go through a few more turns of the worm to go beyond superficial ideals, to understand WHY the death/debt controls were necessarily operated indirectly, through the maximum deceits. The deeper point is that heterosexual people having children end up destroying everything too! There are real reasons WHY the "evil" ends up evolving to do what it does. Furthermore, false fundamental dichotomies that attack that "evil," without providing better systems of limits, only enable that "evil" to return and flourish!

Something, or someone, has to fulfil the roles of the top carnivores in the human ecology, or otherwise limit the inherent potential of the productive and reproductive, to drive exponential growth of themselves, towards their own destruction. Given the dismal level of deliberate ignorance regarding that, we end up with the worse somethings, or the worse someones, actually doing that, through the maximum deceits and depravities.

However, the alleged "good" values of the productive and reproductive do NOT suffice in the context of the overall evolution of the human ecology.

Sun, 12/30/2012 - 20:32 | 3107733 ZFiNX
ZFiNX's picture

The human body, an example of an economic system, leaves very little to active management, in fact, as is commonly known, much of what we call ourselves is run through various unconscious checks and balances inherent in the minute mechanisms of our cells. Thus it is that no economic system or economy or population can be managed from the top-down and it is only through the unconscious communications of our cells that the body is maintained and well-managed. Quod Erat Demonstrandum.

Sun, 12/30/2012 - 21:11 | 3107842 Radical Marijuana
Radical Marijuana's picture

Yes, ZFiNX, but it took billions of years of selection pressures to fine tune the dynamic equilibria that do that. Such processes work because everything else eventually perishes.

The minute mechanisms of our cells were an ancient symbiosis. Since those are billions of years old, going back to the very first eukaryotic cells, their dynamic equilibria have been perfected through selection pressures enabling the survivors to evolve for a very, very long time!

Human civilization has been but the blink of eye in evolutionary terms. Our dynamic equilibria of organized systems of lies, operating organized robberies, has lost its checks and balances, and become a runaway, which will mostly destroy itself. Such are the real ways that we "learn." I.e., most never learn, but get wiped out instead. Those who are lucky enough to manage to survive, may then continue evolving.

Power is always distributed. Power can be assembled and channelled. Everyone has the power to rob and to kill. States evolved to be those who were the best at that, and the best organized gangs of criminals, who were the best of the best at robbing and killing evolved to be those who covertly controlled governments. To make more bottom-up systems workable, they MUST democratize the death controls, through a greater use of information and higher consciousness.

The THEORY of democratic republics, and similar idealized systems, is that "We the People" collectively assemble and channel the power to rob and to kill. (I.e., taxation, backed by the police and state run armed forces, supposedly limited according to some rule of law.) The problem has been the almost total triumph of the biggest bullies, to take control over that system, in ways that enough of the People are brainwashed to not understand, and to not want to understand.

Power is always distributed. Therefore, it should be appreciated and organized to operate that way, according to its inner realities. However, to do that, then the citizens must understand that they are members of an organized crime gang, and they must take responsibility for the effective death controls upon themselves. Barring that, then they will become the victim of top-down systems that will do it to them, in ways that use too little information, too little consciousness, and therefore, which eventually malfunction worse and worse.

Sun, 12/30/2012 - 21:27 | 3107874 Dr. Sandi
Dr. Sandi's picture

So, given all that, is the system working as designed, or is it broken? Or is broken the natural result?

Mon, 12/31/2012 - 19:00 | 3108238 Radical Marijuana
Radical Marijuana's picture

Dr. Sandi:

The "system" is BROKEN the moment we perceive it as separated from its environment, however, the "system" was DESIGNED TO WORK, by being selected by the conservation of energy through it.

The "system" is necessarily some subtracted set from the Whole which we can not know. Therefore, the moment we define the system, it is automatically broken, by the sheer fact that we have defined it as separated from the Whole. Thus, being "broken" is the natural result of how the "system" was originally subtracted from the Whole Environment, which Whole is infinite and inconceivable, and therefore, unable to be defined in any finite way that is both complete and consistent.

The paradox is always the nature of language itself, that defines things as separated from an unknowable Whole, and then attempts to put the defined pieces into some kind of assembled "system." The system is "designed," or selected for surviving, by that system manifesting the conservation of energy that goes through it. The energy that goes through the system apparently has no beginning or ending, but rather simply transforms as that energy goes through that "system."  Thus, the system is selected to survive, as much as possible, in order to exist, and continues being designed to survive, until it does not. Then that system appears to perish or disappear as a pattern, although the energy continues to transform through new patterns.

When we become aware of our existence, as separated from any others, then we become aware of our eventual death. When we appear to be separated from others, then we may be in conflict with them, and thus, there can be apparently different systems of organized lies, operating organized robberies. Since we are "born" by becoming conscious of defining ourselves to be, (and likewise all other things born by their perceived definitions) the automatic consequences of that is the we can perceive the end of anything that began. The ability to perceive ourselves as finite beings means we perceive we have a beginning and an ending. Therefore, we find ourselves necessarily in the middle, and the struggle to survive in that context creates the murder systems and the death controls, which then become elaborated and symbolized via civilization through money systems and debt controls. The struggle to survive is directly due to way energy is conserved through the separated systems. After being broken off pieces of the Whole, we are designed by our struggle to continue.

Sun, 12/30/2012 - 22:42 | 3108025 Angus McHugepenis
Angus McHugepenis's picture

Radical M: I love reading your posts despite how they bend my brain. I get what you say but it takes me a while to re-read your stuff to make sure I'm clear about it and not missing something.

I'll contact you via your website.

Cheers!

Sun, 12/30/2012 - 20:49 | 3107784 Dr. Sandi
Dr. Sandi's picture

No, I'm a unique, special snowflake, I tell you.

Sun, 12/30/2012 - 23:22 | 3108107 monad
monad's picture

Those who have had their past erased by statist nuclear family pruning and NEA conditioning will not know the difference. Huxley warned us.

Mon, 12/31/2012 - 05:31 | 3108372 From Germany Wi...
From Germany With Love's picture

'Aside to John Maynard Keynes: Your series of short-run “solutions” is killing the long run. When we finally succumb to Depression it will be with a much more dysfunctional and hollowed out economy than the one you experienced in the 1930s. Thanks for bring us to this point.'

 

Indeed. For example, if you play chess only tactically, thinking ahead only 3 or 4 moves, you might find yourself at one point in a situation where there is no good options left anyone - simply because your opponent has maneuvered you there strategically.

And that is why Keynes = fail.

 

Mon, 12/31/2012 - 06:29 | 3108387 smacker
smacker's picture

Excellent piece. As some of us might say: "governments spend their time pulling up the plant to see how the roots are growing."

When no evidence of growth is found, they introduce some incentives and regulations to speed it up. When that doesn't work, they introduce some new laws. When that doesn't work, they enforce their laws. And so it goes on. Eventually, they end up with a state run economy and the plant is unable to grow due to being repeatedly interfered with, so it wilts and dies.

One would think that the evidence of the 1930s and more recently, Japan's two lost decades, that policymakers might have learnt some lessons. Apparently not.

Mon, 12/31/2012 - 09:33 | 3108513 Anasteus
Anasteus's picture

A heartsome movement in Slovenia (Europe)

WE DEMAND THAT THE IRRESPONSIBLE AND THE UNPUNISHED GOVERNMENT OFFICIALS, BANKERS AND CEO’S WITHDRAW FROM THE DEMOCRATIC PROCESS WE ARE CREATING AT THIS MOMENT IN SLOVENIA.

One just wonders how such a bright understanding of the situation can arise and attract wider public attention in a small European country.

Do NOT follow this link or you will be banned from the site!