"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.
So I'm going to be charitable and assume that you have some strong empirics in favor of the view that government intervention of whatever kind explains all variation in economic recovery ever. Would you mind sending me a link?
"all 'variation' in economic recovery?" You would have to explain what that means. But in any case, I was merely pointing out the straw man nature of your statement. And even if the kind of thing Clayton was talking about was allowed to take place, your 24 hour time limit is ridiculous almost to the point of trolling.
government intervention of whatever kind explains all variation in economic recovery ever
Not sure what you mean by this but John James is pointing out that government involvement in the modern economy is extensive. You can't have it both ways. You can't have a government that has its fingers in every pie and then go on blaming market downturns on evil, shadowy private-sector hobgoblins like you could 100 years ago when government involvement in the economy was a small fraction of its current size. In America, government, when summed at all levels, is roughly half of the economy... and we're supposed to be the country of "free market capitalism."
Clayton -
So I'm going to be charitable and assume that you have some strong empirics in favor of the view that government intervention of whatever kind explains all variation in economic recovery ever. Would you mind sending me a link? Who needs logically cohesive theory when you can cobble together statistics which violate ceteris paribus and declare the argument won? | Post Points: 20
Who needs logically cohesive theory when you can cobble together statistics which violate ceteris paribus and declare the argument won?
When I said "a day" I wasn't expecting anybody to interpret me quite so literally, I was thinking most people would go with the slightly more sensible "some relatively short period of time" interpretation. Fact of the matter is this, if you want to assert that the market mechanism doesn't fail and sluggish economic recovery is purely the result of government intervention, fine. But you're going to have to back it up with some research showing this.
Please, if you're going to flog the proverbial dead horse that is the Austrian charicature of econometrics, at least make sure that your objections aren't answered until the second chapter of an introductory metrics textbook.
(What's a logically cohesive theory anyway?)
EconomistInTraining: Fact of the matter is this, if you want to assert that the market mechanism doesn't fail and sluggish economic recovery is purely the result of government intervention, fine.
Fact of the matter is this, if you want to assert that the market mechanism doesn't fail and sluggish economic recovery is purely the result of government intervention, fine.
By what standard and definition is it even conceivable that the market (voluntary action/exchange) "fails", and compared to what alternative? By whose measures does coercion/regulation achieve optimality?
You could've spent all that time it took to mount your high horse on actually explaining why the Austrian critique of econometrics isn't valid. Bonus points if you don't strawman us by saying we reject all empirical study.
I love how you play this game where you assume none of us have ever been exposed to statistical analysis or advanced mathematics courses before. You do know this a forum populated predominately by graduate economics students, mathematicians, and physicists, right? I swear, whenever your posts are displayed on my monitor the elitism and unwarranted self-importance practically oozes off the screen. Does it hurt your brain to analyze all of those polynomial functions?
Considering how long you've been on this forum I really don't feel I should waste time answering this question, so if you're not being facetious and are genuinely curious I'd be willing to post an academic source which would explain it to you.
EconomistInTraining:When I said "a day" I wasn't expecting anybody to interpret me quite so literally, I was thinking most people would go with the slightly more sensible "some relatively short period of time" interpretation.
Right...you used an extreme exaggeration in a sort of metonymic way so that your lackluster argument might have a more striking impact where it otherwise wouldn't. As I said...borderline trolling.
Fact of the matter is this, if you want to assert that the market mechanism doesn't fail and sluggish economic recovery is purely the result of government intervention, fine. But you're going to have to back it up with some research showing this.
Nice attempt at a reframe and burden shift, but it was you who implied that government intervention is desirable and necessary, offering no other evidence than the fact that economic downturns have not rebounded in a day. (which, again, I would assume no one would interpret that you meant literally 24 hours, but it's interesting that you would use such an embellishment, as it allows you deniability if anyone were to actually present a case of recovery in a "short time"...because of course, you didn't actually define "short time"...you simply said "one day". This of course allows you to confidently make a blanket statement about every economic downturn in the history of civilization without fear of being proven wrong.)
So, for one thing, making such an embellished blanket statement does nothing to support your case. Clayton makes the argument that resources do have alternative uses, and your response is a sarcastic comment meant to imply that if he were correct, downturns would rebound more quickly...as if the intervention you claim is so necessary weren't constantly taking place. My comment was meant point out the possibility that the interventions distort the market process—which is kind of what they do, by design and definition—and therefore a blanket statement which includes downturns where such manipulations took place is not an appropriate way to make such claims. In other words, you can't claim intervention is necessary by pointing to downturns and saying "look, they lasted longer than a 'short time'"...when the market-distorting intervention you're advocating was taking place during said downturns. If anything, that refutes your case that the intervention is desirable. Your response to this is that there is some burden of proof on me to demonstrate that the intervention retarded the recovery.
For one thing, this has been done countless times. The Keynesian argument for intervention, has been debunked, countless times. But even if it hadn't, that isn't even relevant for that argument. You essentially claimed intervention was necessary because "every economic downturn lasted longer than a day"...without even accounting for the fact that the vast majority of those (if not virtually every one) involved the intervention you're claiming is necessary.
I call attention to your fallacy and you commit yet another one and attempt to reframe the discussion and shift the burden of proof. It is you who is making the argument for intervention. It is you who is arguing for something. Therefore it is you who is shouldered with the burden of proof...which of course you have not provided. You simply beg the question.
But what's more, if you actually wished to go the other route (as you have done here) and claim that a free-er market doesn't recover as well as one that is intervened and manipulated by some central authority, you'd have to speak to specific examples of lesser intervention and compare them to other instances where government intervention was heavily involved and recovery decidedly occurred faster...preferably ones in which a direct causal relationship between the intervention and the intended economic outcome can be shown. (Of course, this comparison has already been done, many, many times (including those listed above) and the evidence shows exactly the opposite of the claim you are making)
So, if anyone needs to provide evidence, it is the one who is making an argument for intervention. (I.e., you.)