"since the new deal and Keynesianism failed to end the great depression" That's patently and demonstrably not true. Government spending during WW2 put people to work, put money in their pockets, stimulated private spending and investment, created demand for more products, created the middle class as we know it. Whereas Reaganomics destroyed all of the above. Shipped jobs overseas, gutted the middle class, reduced domestic investment, increased unemployment, lowered wages, deregulated speculators, lowered income taxes on the richest upper class, and facilitated the greatest income redistribution towards the upper classes since 1920s. In other words, created all the prerequisites for an economic collapse, which promptly came in 2008. So now you're argument is: do nothing, don't change anything, keep all the things that brought us here, keep pushing the gas pedal after you've plunged off a cliff and into the sea.
Coase:You attacked a straw man when commenting on the effectiveness of wwII as fiscal stimulus.
Where did I do that?
I did present the real argument.
I must have missed it then. Could you please explain what the "fake" argument is that you "don't buy" and then "the real argument" that you supposedly presented and why they are different?
Let me put it this way: you call this argument nonsense. What about it is nonsensical?
You just acknowledged the fact that I wasn't even aware you presented an argument that you actually agreed with. If you'd like me to tell you what it is that makes an argument nonsense, you'll have to present an argument you don't think is nonsense. See the request above.
Your first comment on this thread as well as your responses to me.
I don't buy the real argument, which I presented.
To quote myself: "Obviously, war and fiscal stimulus in general won't have any positive effects on the business cycle. It can only do good during an event like the Great Depression where all this resources you're worried about being misallocated aren't being allocated at all, people are saving (hoarding) all their money because they have no jobs and nothing to invest in, and businesses are not investing and hiring because no one is spending any money. That's what fiscal stimulus is for. Government provides people income, creating a demand for products, businesses rush to supply the demand now that there are willing buyers, savings and investment are reunited, and the free market can go back to allocating resources and producing wealth."
I am not persuaded by the above argument, but no one here has even shown knowledge of or a willingness to grapple with this argument, let alone the ability to refute it.
beg to differ, Coase, but am interested in what you consider the refutation.
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
Can't say. Top secret. Paradigm-shifting paper forthcoming and all that.
I'm sure the Earth will shake when it comes out
Coase:I don't buy the real argument, which I presented.
So I wasn't "confused" as you claimed. It was exactly as I said. Your entire presence here has been to introduce an argument that you admit even you do not believe is viable.
So I ask you again, if you don't buy the argument, why is that the argument you're bringing up and defending? Based on your comments so far, the answer is "you want to have something to say, but can't actually voice an argument you actually believe because it is the subject of a "top secret" earth-shattering paper...so you just waste time posting nonsense even you don't buy into."
I must admit...I've never heard the "top secret paradigm-shifting paper" excuse. Most people who don't have an argument but want to pretend they do anyway just stick to the ol' "I could do that...I just choose not to."
Now I'm confused, but whatever. I presented the argument to show that you all were attacking a straw man, which I disapproved of.
I don't want people stealing my work. :(
Paradigm-shifting paper...
I can see the headlines now: Idealogical Shocker! New Report Answers Question of How Social Order Comes About Through Hand of Government, Rights and Liberties Maintained.
Turns out it was hot dogs. The answer was in hot dog production all along.
Of course, the tragedy is that the paradigm-shifting paper falls to the wayside, because the front page is splashed with the headline: Social Engineer Demonstrates Causal Relationship.
The resources have no alternative use.
Bullshit, they can always be scrapped. Car plant sitting idle? Tear down the robots and sell them as scrap. Car plant building empty? Let it go on the market... someone will find a use for an empty, solidly built building (long-term storage, airplane hangar, whatever). What you're saying is you don't like the market price at which these idle resources are going to clear, which will be an infinitesimal fraction of the amount of gold that was poured into them during the boom.
*shrug
Clayton -
A funny example of alternative use I've seen today:
http://www.howtomakecider.com/build-apple-press.php
An old car jack (inverted) will act as a press.
So you can make some cider using a tool originally intended to prop a car.
The car jack is an idle resource since it's not being used to jack up cars. Making apple cider is not a "use" of a car jack.
Clayton,
At that point it comes down to personal opinions and judgements.
Bullshit, they can always be scrapped. Car plant sitting idle? Tear down the robots and sell them as scrap. Car plant building empty? Let it go on the market... someone will find a use for an empty, solidly built building (long-term storage, airplane hangar, whatever).
Right, which is no economic downturn has ever lasted longer than, like, a day...
...Kind of like how no government has ever interfered with the economy for longer than, like, a day...