58 replies to this topic

[checkymcfold]

basically, i'm curious as to the conservative response to this fairly straightforward argument might be:

http://www.nytimes.com/2009/09/06/magazine...amp;_r=1&em


the thesis of this lengthy thing is basically a combination of these two quotes:

"Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy" (p. 1).

and

"But it was inevitable that freshwater economists would find themselves trapped in this cul-de-sac: if you start from the assumption that people are perfectly rational and markets are perfectly efficient, you have to conclude that unemployment is voluntary and recessions are desirable" (p. 7).


i've been reading a bit of friedman lately, and although i think krugman slightly understates friedman's position vis-a-vis the purity of the kind of free market he advocates, i do find the tenor of this article quite compelling, all told.

thoughts?

[hblask]

Basically, the people who failed to predict this economic crisis were the people like Krugman who believe that government intervention cures all.

The CATO Institute economists were warning of the mortgage crisis and the associated economic meltdown for at least a decade. The pointed to the exact reason it would happen. More recently, the likes of Ron Paul and Peter Schiff had been publicly warning people for at least a couple year before the crisis struck. Krugman saying "nobody" predicted just means that him and his other incompetent friends failed to predict it. I'm not surprised by his lack of insight; he's been wrong way more than he's been right in his career.

As for whether a crisis is possible in a free market, the answer is that economic cycles occur under all systems, but they are less severe when money is free to move to efficient and effective uses, as they are in a free market. The mortgage crisis is a perfect example of the government forcing money into inefficient and harmful uses at the wrong time.

[Pot Odds RAC]

basically, i'm curious as to the conservative response to this fairly straightforward argument might be:

http://www.nytimes.com/2009/09/06/magazine...amp;_r=1&em


the thesis of this lengthy thing is basically a combination of these two quotes:

"Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy" (p. 1).

and

"But it was inevitable that freshwater economists would find themselves trapped in this cul-de-sac: if you start from the assumption that people are perfectly rational and markets are perfectly efficient, you have to conclude that unemployment is voluntary and recessions are desirable" (p. 7).


i've been reading a bit of friedman lately, and although i think krugman slightly understates friedman's position vis-a-vis the purity of the kind of free market he advocates, i do find the tenor of this article quite compelling, all told.

thoughts?

I haven't read the article, but I will.

However many would argue that the Efficient Free Market didn't fail, because we don't actualy HAVE a Free Market. Many of the Government imposed "Speed Traps" are what contributed to the melt down. That normal corrections were not allowed to occur. That, even so, ultimately the Market would have worked thru even this. That many of the "remedies" are in fact short term band aids that will do long term harm.

I believe that rationality of the market was also affected (manipulated) by the fact that the US was in an election cycle. The Media over-covered the "crisis" and influenced the actions of a large number of people. The Theory of a Rational Free Market never before had to contend with the potential impact of biased reporting. Think Swine Flu is as bad as people fear?

[Balloon guy]

basically, i'm curious as to the conservative response to this fairly straightforward argument might be:

http://www.nytimes.com/2009/09/06/magazine...amp;_r=1&em


the thesis of this lengthy thing is basically a combination of these two quotes:

"Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy" (p. 1).

and

"But it was inevitable that freshwater economists would find themselves trapped in this cul-de-sac: if you start from the assumption that people are perfectly rational and markets are perfectly efficient, you have to conclude that unemployment is voluntary and recessions are desirable" (p. 7).


i've been reading a bit of friedman lately, and although i think krugman slightly understates friedman's position vis-a-vis the purity of the kind of free market he advocates, i do find the tenor of this article quite compelling, all told.

thoughts?

You mean Aynnie Rand was wrong???

[Sal Paradise]

so he's saying that keynesians didn't predict that their methods wouldn't work? uh...

[strategy]

You mean Aynnie Rand was wrong???

I liked this

[Plus one]

The best system would be to tax ebveryone 100%, then equally distribute the proceeds to all.

[hblask]

The best system would be to tax ebveryone 100%, then equally distribute the proceeds to all.

Barack, is that you?

[Sal Paradise]

The best system would be to tax ebveryone 100%, then equally distribute the proceeds to all.

I see zero flaws in this plan. lets do it!

[DonkSlayer]

I see zero flaws in this plan. lets do it!

I know I'll have to work a lot less hard, since I'm getting guaranteed everything I need.

[checkymcfold]

it doesn't really surprise me that no one's responding to the actual article, tbh.

[85suited]

it doesn't really surprise me that no one's responding to the actual article, tbh.

See Pot Odds RAC response - we really dont have free markets

[hblask]

it doesn't really surprise me that no one's responding to the actual article, tbh.

I'm not sure what you are looking for here; I responded directly to both of the things you said were major points:

1. Few economists predicted this. My response: all good economists predicted it, it was right before our eyes. Just because Krugman and his cronies are unable to believe the government could cause unintended consequences doesn't mean mainstream economics was blind to it. If he was expecting someone to predict the exact day of the peak before the fall began, it just shows Krugman's further lack of understanding.

2. "Free markets can't have cycles" -- I don't know any serious economist that has ever said this, and I don't know any serious economist that believes that we have a free market system. What we have is crony capitalism, and that is what brought about the mortgage crisis -- as all *good* economists predicted. The "free markets can't have cycles" is a strawman created by people like Krugman after the fact. The only people who ever believed we had defeated economic cycles are the people who believe in the technocracy of central planning by government economists. How much response did you expect to a complete and total strawman?

Perhaps Krugman is not the best starting place for economics discussion; it's like using the Jane Dick and Spot books as a reference for discussing literature, except at least those books understand the basic rules of English.

[strategy]

See Pot Odds RAC response - we really dont have free markets

I haven't read the article, but I will.

So he's supposed to listen to the guy who either didn't read the article or never followed up for us?

[checkymcfold]

I'm not sure what you are looking for here; I responded directly to both of the things you said were major points:

thesis statements drawn out by a third party interpretation do not an argument make, kiddo. it's not as though he doesn't give reasons for saying the things i happened to quote above--the article is four pages of online type and probably upwards of 5000 words. i can create lists of warring theses all day long, but there's no helpful conclusions to come of that practice. it's the arguments that defend those theses that actually lead us somewhere.

1. Few economists predicted this. My response: all good economists predicted it, it was right before our eyes. Just because Krugman and his cronies are unable to believe the government could cause unintended consequences doesn't mean mainstream economics was blind to it. If he was expecting someone to predict the exact day of the peak before the fall began, it just shows Krugman's further lack of understanding.

2. "Free markets can't have cycles" -- I don't know any serious economist that has ever said this, and I don't know any serious economist that believes that we have a free market system. What we have is crony capitalism, and that is what brought about the mortgage crisis -- as all *good* economists predicted. The "free markets can't have cycles" is a strawman created by people like Krugman after the fact. The only people who ever believed we had defeated economic cycles are the people who believe in the technocracy of central planning by government economists. How much response did you expect to a complete and total strawman?

again, if you actually read the article, you would realize that the two points you're misinterpreting (i'll give you the benefit of the doubt and say that this is due only to a failure to provide yourself adequate context and not a failure to read good) are not actually arguing what it is that you're arguing against. it's more than a little ironic that you would so laughably strawman krugman by accusing him of creating his own.

why i am saying this should become quite clear to you after you actually read the article to which you're trying, in vain, to respond.

Perhaps Krugman is not the best starting place for economics discussion; it's like using the Jane Dick and Spot books as a reference for discussing literature, except at least those books understand the basic rules of English.

generally, when i would like to start a discussion about something, i'd say that someone holding a recent nobel prize on the subject would be a fine place to start, much less a semi-historical review of the past 100 years of economic theory constructed by such a person. but that's just me, apparently.

[mk]

generally, when i would like to start a discussion about something, i'd say that someone holding a recent nobel prize on the subject would be a fine place to start, much less a semi-historical review of the past 100 years of economic theory constructed by such a person. but that's just me, apparently.

maybe you still don't understand how this works in here.

[Jeepster80125]

maybe you still don't understand how this works in here.

You're thinking he should have made a post, insulted everyone, then left without responding like you did in the healthcare thread?

[hblask]

thesis statements drawn out by a third party interpretation do not an argument make, kiddo. it's not as though he doesn't give reasons for saying the things i happened to quote above--the article is four pages of online type and probably upwards of 5000 words. i can create lists of warring theses all day long, but there's no helpful conclusions to come of that practice. it's the arguments that defend those theses that actually lead us somewhere.



again, if you actually read the article, you would realize that the two points you're misinterpreting (i'll give you the benefit of the doubt and say that this is due only to a failure to provide yourself adequate context and not a failure to read good) are not actually arguing what it is that you're arguing against. it's more than a little ironic that you would so laughably strawman krugman by accusing him of creating his own.

why i am saying this should become quite clear to you after you actually read the article to which you're trying, in vain, to respond.



generally, when i would like to start a discussion about something, i'd say that someone holding a recent nobel prize on the subject would be a fine place to start, much less a semi-historical review of the past 100 years of economic theory constructed by such a person. but that's just me, apparently.

Are you saying you misrepresented the article with those two quotes? I read the first page of the article, and your points seemed pretty accurate. After reading 1/5th of the article and seeing that it was the same tired old arguments he's used before, there didn't seem to be a whole lot of point in continuing.

If there is some specific point you'd like me to address, let me know, but I'm not reading page after page of drivel that has already been debunked.

[hblask]

It’s hard to believe now, but not long ago economists were congratulating themselves over the success of their field

First sentence of article. Translated: I believed I knew how to single-handedly run an economy with 300 million people. No, you didn't Krugman, as time has shown.

Few economists saw our current crisis coming,

Clearly false, as I've already described. Few real economists missed the warning signs, and many have spent a decade trying to fix the legal environment that led to the crash.

Meanwhile, macroeconomists were divided in their views. But the main division was between those who insisted that free-market economies never go astray and those who believed that economies may stray now and then but that any major deviations from the path of prosperity could and would be corrected by the all-powerful Fed.

.... says Krugman, conveniently ignoring all the people who were correct. Perhaps he should leave his ivory tower and pay attention to real world economists.

But the basic presumption of “neoclassical” economics (named after the late-19th-century theorists who elaborated on the concepts of their “classical” predecessors) was that we should have faith in the market system.This faith was, however, shattered by the Great Depression.

Again, Krugman shows his misunderstanding of economics. The Great Depression was the result of two distinctly governmental interventions into market dynamics: first, a decade of loose money, followed by a sudden and severe contraction of the money supply at the worst possible time. Then, just as recovery appeared on the horizon, FDR came along and destroyed all the recovery mechanisms. No serious economists believe that the Great Depresssion was caused by unfettered capitalism.

These are pretty serious errors for the first page of an article. Am I to assume he corrects them in the later pages. No thanks, Krugman has proven himself again and again to be a hack governmernt lapdog; there's not really a lot of reason to spend time debunking him.

Again, if there is any specific point you want addressed, let me know, but I'm not wasting my time on him.

[Pot Odds RAC]

it doesn't really surprise me that no one's responding to the actual article, tbh.

Me either since it was essentially elitist drivel. Hblask is correct that Krugman starts with a failed premise that all economists had somehow reached a unified view of the Market and felt that it was completely stable and therefore Economists failed in their inability to fortell the collapse and therefore the market theories are completely flawed as a result. When he starts with that as his premise, I don't care how many Noble Prizes he has on the subject. Add to that the fact that his writing style is just not terribly interesting to me and I made it through about 25% of it and decided that I really didn't care enough about my "promise" to force myself to read the entire stinking thing and come back with a Book Report.

generally, when i would like to start a discussion about something, i'd say that someone holding a recent nobel prize on the subject would be a fine place to start, much less a semi-historical review of the past 100 years of economic theory constructed by such a person. but that's just me, apparently.

Yeah. In this case it is just you, apparently. Just because you find an article interesting and noteworty - based upon the background of the esteemed author - doesn't mean we're all going to share in your awe of his analysis.