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New York Times Says "Lack Of Major Wars May Be Hurting Economic Growth"
It is no secret that as the Fed's centrally-planned New Normal has unfolded, one after another central-planner and virtually all economists, have been caught wrong-footed with their constant predictions of an "imminent" economic surge, any minute now, and always just around the corner. And yet, nearly six years after Lehman, five years after the end of the last "recession" (even as the depression for most rages on), America is about to have its worst quarter in decades (excluding the great financial crisis), with a -2% collapse in GDP, which has been blamed on... the weather.
That's right: economists are the only people who will look anyone in the eye, and suggest that it was harsh weather that smashed global trade, pounded retail sales (in the process freezing the internet because people it was so cold nobody shopped online), and even with soaring utility usage and the Obamacare induced capital misallocation still led to world's largest economy to a 5% plunge from initial estimates for 3% growth in Q1. In other words, a delta of hundreds of billion in "growth lost or uncreated" due to, well, snow in the winter.
Sadly for the same economists, now that Q2 is not shaping up to be much better than Q1, other, mostly climatic, excuses have arisen: such as El Nino, the California drought, and even suggestions that, gasp, as a result of the Fed's endless meddling in the economy, the terminal growth rate of the world has been permanently lowered to 2% or lower.
What is sadder for economists, even formerly respectable ones, is that overnight it was none other than Tyler Cowen who, writing in the New York Times, came up with yet another theory to explain the "continuing slowness of economic growth in high-income economies." In his own words: "An additional explanation of slow growth is now receiving attention, however. It is the persistence and expectation of peace."
That's right - blame it on the lack of war!
The world just hasn’t had that much warfare lately, at least not by historical standards. Some of the recent headlines about Iraq or South Sudan make our world sound like a very bloody place, but today’s casualties pale in light of the tens of millions of people killed in the two world wars in the first half of the 20th century. Even the Vietnam War had many more deaths than any recent war involving an affluent country.
Well, that's just unacceptable: surely all the world needs for some serious growth is for war casualties to be in the billions, not in the paltry hundreds of thousands.
Keynesianism 101 continues:
Counterintuitive though it may sound, the greater peacefulness of the world may make the attainment of higher rates of economic growth less urgent and thus less likely. This view does not claim that fighting wars improves economies, as of course the actual conflict brings death and destruction. The claim is also distinct from the Keynesian argument that preparing for war lifts government spending and puts people to work. Rather, the very possibility of war focuses the attention of governments on getting some basic decisions right — whether investing in science or simply liberalizing the economy. Such focus ends up improving a nation’s longer-run prospects.
To be sure, Cowen is quick covers his ass with some quick diplomacy. After all how dare he implicitly suggest that the only reason the US escaped the Great Depression is what some say was its orchestrated entry into World War 2:
It may seem repugnant to find a positive side to war in this regard, but a look at American history suggests we cannot dismiss the idea so easily. Fundamental innovations such as nuclear power, the computer and the modern aircraft were all pushed along by an American government eager to defeat the Axis powers or, later, to win the Cold War. The Internet was initially designed to help this country withstand a nuclear exchange, and Silicon Valley had its origins with military contracting, not today’s entrepreneurial social media start-ups. The Soviet launch of the Sputnik satellite spurred American interest in science and technology, to the benefit of later economic growth.
So what is it about war that makes economic "growth" that much greater. Apparently it has to do with an urgency in spending. As in urgently spending more than the trillions of dollars needed to support the US welfare state now, and spending even more trillions in hopes of, you guessed it, stumbling on the next "Internet" (which apparently wasn't created by Al Gore).
War brings an urgency that governments otherwise fail to summon. For instance, the Manhattan Project took six years to produce a working atomic bomb, starting from virtually nothing, and at its peak consumed 0.4 percent of American economic output. It is hard to imagine a comparably speedy and decisive achievement these days.
What we find surprising is that it took the econofrauds this long to scapegoat that last falsifiable boundary - the lack of war - for the lack of growth. But they are finally stirring:
Ian Morris, a professor of classics and history at Stanford, has revived the hypothesis that war is a significant factor behind economic growth in his recent book, “War! What Is it Good For? Conflict and the Progress of Civilization From Primates to Robots.” Morris considers a wide variety of cases, including the Roman Empire, the European state during its Renaissance rise and the contemporary United States. In each case there is good evidence that the desire to prepare for war spurred technological invention and also brought a higher degree of internal social order.
Another new book, Kwasi Kwarteng’s “War and Gold: A 500-Year History of Empires, Adventures, and Debt,” makes a similar argument but focuses on capital markets. Mr. Kwarteng, a Conservative member of British Parliament, argues that the need to finance wars led governments to help develop monetary and financial institutions, enabling the rise of the West. He does worry, however, that today many governments are abusing these institutions and using them to take on too much debt. (Both Mr. Kwarteng and Mr. Morris are extending themes from Azar Gat’s 820-page magnum opus, “War in Human Civilization,” published in 2006.)
Yet another investigation of the hypothesis appears in a recent working paper by the economists Chiu Yu Ko, Mark Koyama and Tuan-Hwee Sng. The paper argues that Europe evolved as more politically fragmented than China because China's risk of conquest from its western flank led it toward political centralization for purposes of defense. This centralization was useful at first but eventually held China back. The European countries invested more in technology and modernization, precisely because they were afraid of being taken over by their nearby rivals.
The fun part will be when economists finally do get their suddenly much desired war (just as they did with World War II, and World War I before it, the catalyst for the creation of the Fed of course), just as they got their much demanded trillions in monetary stimulus. Recall that according to Krugman the Fed has failed to stimulate the economy because it simply wasn't enough: apparently having the Fed hold 35% of all 10 Year equivalents, injecting nearly $3 trillion in reserves into the stock market, and creating a credit bubble that makes the 2007 debt bubble pale by comparison was not enough. One needs moar!
And so it will be with war. Because the first war will be blamed for having been too small - it is time for a bigger war. Then an even bigger war. And so on, until the most worthless human beings in existence - economists of course - get their armageddon, resulting in the death of billions. Perhaps only then will the much desired GDP explosion finally arrive?
Luckily for Cowen, he stops from advocating war as the ultimate panacea to a slow growth (at least for now: once the US enters a recession with a nother quarter of negative growth, one can only imagine what lunacy Krugman columns will carry). Instead he frames it as an issue of trade offs: "We can prefer higher rates of economic growth and progress, even while recognizing that recent G.D.P. figures do not adequately measure all of the gains we have been enjoying. In addition to more peace, we also have a cleaner environment (along most but not all dimensions), more leisure time and a higher degree of social tolerance for minorities and formerly persecuted groups. Our more peaceful and — yes — more slacker-oriented world is in fact better than our economic measures acknowledge."
And let's not forget that GDP is nothing but economic bullshit, confirmed when in recent weeks Europe - seemingly tired of waiting for war - arbitrarily decided to add the "benefits" of prostitution and narcotics. And there you have all the meaningless growth you can dream of. If only on paper. Because hundreds of million of people in the developed world, without a job, out of the labor force, can only be placated with dreams of "hope and change" for so long. And certainly not once they get hungry, or realize that the biggest lie of all in the Bismarckian welfare state - guaranteed welfare - is long broke.
Cowen's conclusion:
Living in a largely peaceful world with 2 percent G.D.P. growth has some big advantages that you don’t get with 4 percent growth and many more war deaths. Economic stasis may not feel very impressive, but it’s something our ancestors never quite managed to pull off. The real questions are whether we can do any better, and whether the recent prevalence of peace is a mere temporary bubble just waiting to be burst.
That's great. Now all we need is some economist and/or central-planner who actually gets top billing and determines policy to have a different conclusion, and decide that 4% growth is actually worth m(b)illions of dead people.
Judging by recent events in Ukraine and the middle-east that announcement may be just around the corner.
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I bet pro-war econo-babble papers pay even more than green energy econo-babble papers
Cowen's thesis is wrong because he fails to take note of the changing real-world parameters of major conflict.
21st-century style conflict is not labour intensive, and therefore even protracted periods of such conflict will not have the stimulatory effect seen in the 19/20th century West.
Meanwhile, the man needs to learn the meaning of the word, "malvestment."
Yeah, Haaretz On The Hudson never fails to deliver on the war-mongering -
especially when the target is a neocon-manufactured Hitler du Jour -almost always Middle Eastern that Israel - I'm sure coincidentally - just happens to have designs on.
Haaretz On The Hudson -
LOL ...+1
What assholes!
Another pink pansy academic telling men to go and die.
Go and die yourself O emasulate one. The air you breath is needed for a higher purpose.
Oil was $4 per barrel in 1945. Guess what it will be at the end of WW3? -not $4.
There will be no miraculous economic recovery without oil, bats for brains
Still- they might get a shuffle on with Cold Fusion for their Killer Droids. Without it, nothing will move.
http://coldfusionnow.org/gregory-chaitin-on-cold-fusion-research-japan-a...
Tyler Cowen is a fucking motherfucker. It's unbelievable how those educated assholes can write such bullshit about war being good for people just due to some fucking "growth".
Fuck you, Cowen, you sick fuck. You know, It would be much easier to write: Folks, the big war is coming, because the bankers and TPTB need it. People are not stupid not to see that americans need war to fuck the planet again.
Hey Cowen, I guess you can be a sack of turd and still sound 'educated'.
If the New York Times columnist wants a war, he can start one himself. He could shoot a couple of his neighbors and burn their houses to the ground. Obtain a couple of rifles, a handgun, a box or two of ammo and start shooting. Charlie Manson would give him the go ahead to commence firing. What is Mr. Cowen waiting for? Christmas? You can't expect peace if you want war. Making war is the bomb.
A few B52's on a bombing mission to level Detroit could bring a whole new economic boon to Detroit, so Tyler Cowen is not too far from wrong.
Quite a dumbass though, dumber than a box of rocks, even.
You can make stuff up but you can't make this stuff up.
they need to burn the NYT. Its now a Fascist/Nazi paper with no value except to promote destruction, death and tyranny. Burn it.
A bankster stooge down arrowed you?
wheat iand soy is used to produce car fuel,
why not burn people for the economy.
wiith a closer look that is what austerity is doing, help the banks by squeezing the last penny out of anybody.
except globalists which just move to a tax heaven.
there is a side remark aon austerity on making debt in the past that have to paid.
but thats the fuel, not the real productivity but debt making for everything
grown up in that stuff, will die in that stuff.
just watching it form far far out, no debt, no mone
nice megamachine is in charge, am a part of it, could be used other ways.
thats what keeps me up
Prescott Bush was a war lover. His son and grandsons love war also. Jeb Bush for war Lord! For the good of the economy, of course.
I believe it was back during the Viet Nam war (a Democrat war, btw) that someone coined the phrase "War is good business."
How ironic.
Don't think 0bamao wouldn't start a war-but it would be a civil war so he could finish his stealth marxist destruction on our country, the bastard.
BOTH "parties" are complicit. We only have the one party..."FASCIST OLIGARCHY". MY thought anyway.
Weren't we supposed to have a 'Peace Dividend' when we left Iraq? You know, the one that let us spend more on domestic handouts without increasing our trillion dollar deficit?
If you pull your pants down in Times Square and taking a shit in front of thousands to garner attention is no different that what the NYT has done here.
Nasty fucking NYT socialist DNA.
Yet another reason I do not buy the New York Times.
You gotta love hacks who write whatever it takes for their masters.
Such a shame, such a shame!
People who do not value peace and harmony will suffer its loss.
the Kochs and the neo cons don't like to see the Babylonians taking over the empire of the Romans.
This could be true if one considers the real enemy, the money changers.
"Blair rejects claims US-UK invasion to blame for Iraq insurgency"
http://www.ft.com/intl/cms/s/0/2178404a-f46b-11e3-a143-00144feabdc0.html
Would someone please tell me what these poor sops, who are now gimps, that got suckered into this last "banker war" who now realize that they the reason they had to sign up was because of said banksters, and all was for nothing..........................................feel like now?
It's fucking cruel, isn't it? Knowing it's all a big propaganda lie?
It's only cruel if you're stupid enough to buy into it...
They feel like signing up for another tour, cuz freedom ain't free! YEE-HAHHHHHHH!!!
I think that it is the lack of market crashes, fiat eradication and central banker executions, but what do I know.
The idea that wars help an economy is just Bastiat's Broken Window Fallacy on a macroeconomic scale.
on a deadly scale.
It's about resources and who controls them. Dead people are part of the energy expended to capture these resources. After WWII, we and our allies controlled and enjoyed the spoils of war, and with resources comes power. It's that simple. Iraq is a play for resources and a presence in that region. Obama fucked it up.
He's an errand boy, sent by grocery clerks to collect a bill.
These a-holes at the Times never quit, do they?
Fucking insane. It's worked before, let's do it again. Only this time we all have nukes. These idiots are crazy enough to try it to.
the gdp can't grow if everything is stolen...
Academic twaddle.
The cold war covered forty years, he's going to classify everything that happened then as caused by war?
This is one inch away from proposing it actually works the other way around, that money and technology CAUSE war, therefore we should go back to living like beasts.
Perhaps the administration wants an armed conflict in the South China Sea with its pivot to Asia strategy. A long drawn out war would profit and keep the banksters happily financing the MIC and at the same time reduce if not eliminate the cannon fodder currently drawing welfare benefits and "supplemental nutrition" programs.
JMO the elites would consider this a viable option and prevent any potential civilian insurrection. Just send the cannon fodder to the front.
Zorg Explains https://www.youtube.com/watch?v=Tt1W0F0yObg
Very misleading headline while as we speak,
War in Iraq
War in Libya
War in Syria
War in Ukraine
War in Africa
General Wesley Clark: Wars Were Planned – Seven Countries In Five Years https://www.youtube.com/watch?v=9RC1Mepk_Sw
In fact 8 countries:
Afghanistan
Iraq
Syria
Lebanon
Libya
Somalia
Soedan
Iran
And 9 with the Ukraine now.
What the New York Times is really saying is we should be happy with poor and slow economic growth. Well Fuck those liberals!
They dont call it "The Jew York Times" for nothing
Wow that Tyler Cowen is the type of guy I would send into the circus to face his fate and have a chat with hungry lions...
He thinks the computer was invented in the usa?
He really is that dumb?
He doesn't know how the German Enigma code was cracked?
The arrogant idiot.
It is no secret that as the Fed's centrally-planned New Normal has unfolded, one after another central-planner and virtually all economists, have been caught wrong-footed with their constant predictions of an "imminent" economic surge, any minute now, and always just around the corner.
And this compares poorly with the various postings on this site that the world as we know it (TWAWKI) is going to end "SOON", and everyone needs to stock up on gold, get off the grid, lay in a (your favorite time frame here) months./years supply of everything, stock up on ammo and cash out cause the market is going to loose 20, 50, 100? percent of its value --- etc etc. The feds prediction copares poorly with that in what way exactly?