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Larry Summers. Now there's a name you don't hear very often.
Unless you're standing by the water cooler talking about villages that are short staffed.
Not fair. Larry was able to look away from Timmy for not having the skills to drive turbotax. (Keynes said taxation had no other purpose than social engineering/data collection)
I doubt Obama(2nd term) or Ron Paul (1st term) will be so forgiving.
A jerk off said what.....?
I think he said somthing about confidence games ..............
Haha Professor Summers sums up the irony very well. In fact, this seeming paradox often confuses the less rigorous thinkers among us, who claim that Keynesian economics is not logically consistent. But of course, this realm of economics is reserved only for the most esteemed intellectuals and hence it is bound to escape the feeble minds of doomer libertarians. Those who can master this elite field of economics have proven themselves worthy of political power, so that they can tailor America’s economy for optimal prosperity.
So you agree with Summers? The problem will be solved by doing more of what caused the problem?
If that is Keynesianism in a nutshell then I hope you like cake.
Your interpretation is wrong as usual. The principle of Keynesian economics is to correct the imbalances in the economy caused by ignorant free market participants who mis-allocate resources. The government is responsible for reallocating these resources more efficiently, under the guidance of top economists, in order to correct the mistakes of the market. For maximum prosperity, resources need to be distributed according to the preferences of PROFFESIONALS only.
Your sarcastic wit escapes some on ZH but there are plenty of us who are ROFLing!!!! Thanks MDB
1. (n.) The abyss between the creator of witticisms and the intended recipient who does not find the humor in it.
I'm beginning to love this guy MDB.
I can get to bed earlier now and skip Kimmel. I get all the laughs I need from reading his posts.
Once you understand his MO, he's quite funny...and eloquent too!
The central irony of the financial crises is Larry Summers
Larry Summers "intellectual" insights are the black hole at the center of the universe from which there is no escape. The only hope humanity may have is to load Summers, Geithner, Greenspan and virtually any mainstream economists and politicians into a torpedo, eject the warp core towards the black hole and then fire said torpedo at the warp core and hope the blast will be sufficient enough to throw us clear of the soul crushing force of this horrible and otherwise inescapable feeding machine that is the global economy!
You are ALL WRONG.
Summers is correct.
Let me explain how- the ONLY way to fix the problem of not growing is to grow more. That is precisely what summers is referring to, whether he knows it or not. We're in an economic model that TOTALLY DEPENDS upon growth. All of the expectations that every one of you has is predicated upon a growth model. All that you have, are, and know comes from that.
The reality is that we cannot grow and that means there is no solution. Every person who thinks that there is some magic prosperity going to break out as a result of undoing all the bullshit over the past 40 years is a fool. We can't just go to a gold standard and have prosperity. We can't jail all the banksters and have prosperity. Confidence is down for GOOD REASON. It is because there is an undercurrent of collective point of recognition that there is contraction in the future, NOT growth.
Jailing bankers and gold standards and Glass-Steagal won't resurrect declining oil fields.
You're absolutely wrong; there's a very good solution to all the problems!...
Decrease global population to under 1 billion.
Ok. Just for fun and assuming that you are serious (God why doesn't someone invent an "Irony" font?) exactly which selected people will be lucky enough to increase the well being of the planet and its people, by no longer being a part of it?
Its very simple: those that can provide for themselves get to live; the rest die. I believe its called natural selection. The upcomming scramble for food, water, energy etc should provide an ample contest and a good contest...
Ok, so - 'First, and perhaps most fundamentally, credit standards for those seeking to buy homes are too high and rigorous in America today. This reduces demand for houses, lowers prices and increases foreclosures, leading to further tightening of credit standards and a vicious growth-destroying cycle.'
So tell me, how does credit standards being too high lead to INCREASED foreclosures?
this guy just makes it up as he goes along, and no one seems willing to stop him or even point out his infant grade errors...
Ok. Sounds good. According to your plan if I can provide for myself by being on the correct side of sufficient weaponry, and you are on the wrong side of my weaponry, I will provide for myself at the cost of your life and so on and so on until there are too few people left to try and take what is mine and then I get to live and you are dead!
What an unbelievable plan!
How do you find time to come up with all of this between your busy schedule of writing speeches for Summers, Paulson, Geithner and Michelle Bachman?
if you study animals they use many techniques to pass on their genes; some have shap teeth and amazing hunting skills; some out breed others; some have stength in numbers; some have great ways to find food. The crocodile has survived millions of years due to its amazing hunting skills and ability to defend its terretory, in spite of its small brain...
I foresee a stronger human race once the chaff has been cut away - natural selection is a poetic form of justice...let the stongest win!!!!!!!!
Utter horseshit. The solution to 'too much confidence, too much borrowing and lending and too much spending ' has historically always been BANKRUPTCY.
People on this site don't seem to think that undoing everything will bring prosperity as you say. They talk about buying guns andf holing up for christs sake. They know the system is dead, that it cannot perpetuate because no one can now make the payments. The solution to someone not being able to make the payments is not 'more confidence, more borrowing and lending and more spending, ' which makes you wrong, everybody else right and Summers a bloody fool...
What you say "feels" right to you because you believe we exist in a rational economy. And to be certain, most of what we see around is somewhat rational. There is nothing irrational about you going to work, your employer providing you with a paycheck, you using your paycheck to buy goods and services, etc. But the monetary system that supports that rational existence is completely irrational. And that is what Travis is talking about, and he's absolutely correct (as is Summers, whether he realizes it or not). The rather unholy combination of fiat/debt currency and fractional reserve banking (our monetary system) requires that aggregate debt be in a perpetual state of growth. When the system reaches terminal velocity, the system will crash. Everything our central bankers have done for the past X number of years is nothing more that prolonging the inevitable collapse (real collapse). What Travis says is 100% correct.
yes....and the reason "fiat" like we have is still worth something is because the debt is to be paid back with future growth. There is somewhat of a match between a debtdollar and some "thing" out there in the economy upon which a claim can be laid.
Take the economy away and the debts aren't worth much.
Afraid not chaps. What I say 'feels 'right because it is. You can lie about your assets for only so long, but then when someone wants their money out you are faced with the reality of having to return it.
Is Summers is correct then explain the bit where if an asset of house rises by 3% and the cost of borrowing is raised to 5% as Bernanke did then commercial borrowers are forced to produce an accounting loss and sell, even in a growth market. That has got nothing to do with what Summers says and in fact completely undermines it. There is no such thing as an infinite growth spiral which is inevitable if we follow Summer's logic.
and Trav, the debt will be defaulted either through write-off or debasement. there is no repayment from future growth, ever. Look around you at all this infrastructure. How much of it do you think has been paid for? None of it. The debt is simply sold on and traded for a margin by bankers because it cannot be repaid. It is utterly worthless and will be written off eventually. To say that a bankrupt can be made solvent by giving him more money is dreamworld stuff. Though I hear what you're both saying the logic is fundamentally flawed.
I can't speak for trav777, but I don't think you are disagreeing with us (with me anyway). My position is that what we face now is what we have always faced and is completely inevitable based on the system we have selected to facilitate economic growth. We can't avoid the total collapse of our monetary system. We can let it collapse now or continue to pretend (as suggested by Summers). Our monetary system is the very definition of a Ponzi scheme. There is a real economy in the middle of this, somewhere, but even that continues to be perverted by an irrational monetary system.
I think we do agree, but my position remains that we are in collapse now because we already have pushed it as far back as we can, and that it can now go no further.
Only a lunatic like Summers could suggest that this system is in anyway plausible. If you need to borrow this year to plug a deficit then you need to borrow next year to plug that same deficit AND pay the interest on this years debt. There's no way it can work...
You three were all making the same point. Trav was saying that the only possible fix was what summers said, a continuation of the fiat growth model, but this is impossible. He's only "right" insofar as he proposes the "correct" solution for a broken model.
I can't argue with the position you have explained us to be in currently, but NEVER say NEVER. It may not happen tomorrow, or even 10 years from now, but empires don't last forever. If the people continue to wake up and understand that there is no simple solution to the problem unless the entire system changes, they will eventually rise up and overthrow the system. All it would take would be an accelerated awakening and our military and police to stand down and stop listening to TPTB.
The ONLY way to fix the system so that it is fair for all, not just the super wealthy in positions of control, is to have debt forgiveness and reboot the system into something new. Talking only JPM and BOA, they have around ~150T toxic derivitives on their books alone (all US banks is probably double this, check the latest OCC report). US GDP is only 15T and all govt Debt can be paid off at 15T. All home mortgages in the US can be paid of for around 15-16T. All student debt can be paid off for about 1T. It becomes obvious for folks to see, this is a ponzi scheme beyond belief where profit is never shared, but losses are being piled onto the taxpayer at an alarming rate.
For Greece, the fact that PRIVATE investors had to take a 50% haircut this time shows the reality and is a step in the right direction. Just like Iceland has shown us...most of the debt is not the peoples debt, the debt lies in the mega banks because of thier risky financial instruments and they are simply looking for a way to lay it on the peoples backs. As long as we have central banks willing to keep peddling cheap crack money to keep these junkie institutions alive, the problem will contine. Let's hope the people are getting smarter and we will be able to eventually put a stop to it. Americans have generally been slobbering idiots following the propaganda fed to them, but many have woken up in the past decade or so, so that does give me some hope that we can't say NEVER.
The frisson is measured by the gap between entertainment and the desire for political action. Not saying there can't be both...
There is a difference between loaning money at interest, and investing and receiving a dividend.
Money loaned at interest WILL be repaid PLUS interest, regardless if the borrower is profitable or not. Courts, governments and central banks guarantee that all loans will be reapid with interest, so if anything ever goes bad with the borrower the printers will print the money to give back to the lender. This is our current system in a nutshell.
Money invested may or may not be repaid and may or may not receive a dividend payment. If the borrower succeeds then the money put in as capital deserves to be rewarded, if the borrower fails then the money put in deserves to be diminished. That is capitalism in a nutshell.
While it seems like a no-brainer that our current usuary system where "failure is never an option" appears to be less risky than capitalism where your money is always at risk... the truth of the matter is that it when there is NO RISK you get people making stupid mistakes but society has to pay for those mistakes. With capitalim you still get people making mistakes, but they pay for their own mistakes - and then LEARN FROM THE MISTAKES! There is no learning from any mistakes in our current system - which is why it will blow itself up in one cataclysmic intergalactic explosion, taking down most of humanity. Now which is better?
HOW AN ECONOMY GROWS AND WHY IT CRASHES ~ PETER SCHIFF
Won't matter. Oil supply has peaked...if this is THE PEAK, then it is the peak for ALL TIME. Do people really have that much trouble accepting this?
What it means is that all of this crap, stimulus, economics, all of it, was a mfing MIRAGE, as was all of our "confidence," our expectations, what we thought was real, and our understanding of the "social compact."
We either hail mary with fusion power or we contract. The debt overhang will make that contraction severe but no more severe than when the next batch of demographics realize that there won't be a bigger pie to fight over, but a smaller one.
Expectations will have to adjust...we are proceeding toward a feudal society where social and economic strata become really more fixed than this "American Dream" crap led people to believe.
Trav, oil supply is about to go balistic.
Oil demand has peaked now that credit is contracting and prices are soon to rise.
The excess will soon flood a global market terminally prone now to over supply in the very near future.
uh...supply is falling, not rising. You may mean to say that there will be increasing slack capacity; if so, say that
it appears Larry Summers never got the joke ;.
I've noticed before that many Americans don't seem to understand sarcasm. Might be because of the "Quality" of US sitcom "Humour"?
Most americans barely know how many states there are.
Even fewer non-Americans actually care...
Best "troll" ever...his material is classic, worthy of a book I'd say
Mr. Used Car Lot Auto Salesman (aka Lawrence Summers, PhD., MBA, BA, BS)
you cultivate a look that oozes Trust Me
Bud Light Real Men Of Genius Salutes YOU!
Lol! Good stuff!
Bravo ! this is your best post yet.....
Your understanding of Keynes is a little thin my friend. Perhaps you should take up knitting.
MDB you have out trolled yourself, you have taken stupidity to new heights, you sir have gone "full retard".
The Bernak has shared his, Larry and Timmy's favorite song with the ECB, and no it's not Kumbaya:
Can't help it, I'll take the bait.
On your next colonoscopy, have the doc keep an eye peeled for a misplaced economic text book. Somehow, yours appeared to wind up in the wrong place.
How disappointing that twice as many ZH'ers miss it, vs. get it.
i think the use of capital letters toward the end of the post is very deliberate... MDB has advanced training in marketing, more satire.
this is ricky gervais here.
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