This is the video that inspired the discussion that led to this thread.
Dr. Pigliucci said that all of what I said (about the ABCT) is very interesting, but I am not taking into account the data presented in this video by this bureacrat Elizabeth Warren. Here is how I responded:
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The data in the video aren't accurate. There was no period of deregulation in the 1980s, and the 1920s were very, very regulated (though not by today's standards). And certainly, the Great Depression Part II, (a.k.a. the 1970s) followed a period of the greatest increases in regulation in the history of the United States, put into place by economic liberals who believed that the era of the business cycle was over.Even if I accepted that the 1980s were a period of deregulation, what followed it? A boom that led to a bust. The boom/bust cycle.Government manipulation of the interest rates and/or the money supply by either the central bank or the government issuing unbacked currency, legal tender laws, or both cause malinvestments which are unsustainable and would not have occurred in the absence of the government action. These malinvestments eventually show their unprofitability and are liquidated in the bust phase.The boom sews the seeds of the bust. That's the business cycle.
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I then made a comment along the lines of 'it's as if she never read a book or took a class in this subject'. I googled her name and discovered that she is a lawyer, and I posted something like 'No wonder she doesn't know anything about economics or economic history: she's a lawyer!" To which Dr. Pigliucci responded:
"Yeah, she's one of those stupid professors from Harvard (as Stewart says, "safety school!") who spent a huge chunk of their lives actually analyzing data and thinking about complex causality instead of sticking to an ideological denial of a reasonable role of regulation..."
My retort to this was:
"Apparently she doesn't, since none of her data are accurate. What she is saying is simply not true. Her brief outline of the history of booms and busts in the US has zero basis in reality. It's as if, in preparation for the show, she sat down and invented a fictional history that would support her views and justify her solutions."
In the meantime, the other participant (the 20-year economic journalist -- who by the way, reversed his position on the ABCT, saying "of course" he has heard of it, he just rejects it, whereas before, he acted like it was an idea that I invented, ad hoc, right there on Facebook -- also chimed in, saying that the only reason I believe in the ABCT is because I am ideologically opposed to government and I love greed. My response to that was:
"Jaakka, I cannot speak for anyone else, but for me, it's not ideological at all. I spent more than 30 years as a John Kennedy Democrat, who believed all the liberal Keysian and even Marxist views of the economy in general and capitalism, specifically. 15 years ago, I would have lapped up what this woman was saying like a kitten laps up milk. But the explanatory power of the Austrian business cycle theory dragged me, kicking and screaming all the way, to where I am now."
Earlier, in another thread, I said that engaging in these debates (I do this crap in real life too, though with much less curt language) is a stupid waste of time. I don't think so now. It makes me think and rethink my position. Makes me better able to defend these ideas and to explain why I accept them.
Read my Nolan Chart column "Me & My Big Mouth"
Her argument against "deregulation" is that it causes banks to go bankrupt. But what's wrong with banks, or any company, going bankrupt?
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
McDuffie:"Jaakka, I cannot speak for anyone else, but for me, it's not ideological at all. I spent more than 30 years as a John Kennedy Democrat, who believed all the liberal Keysian and even Marxist views of the economy in general and capitalism, specifically. 15 years ago, I would have lapped up what this woman was saying like a kitten laps up milk. But the explanatory power of the Austrian business cycle theory dragged me, kicking and screaming all the way, to where I am now."
Solid gold. +++
Daniel: Her argument against "deregulation" is that it causes banks to go bankrupt. But what's wrong with banks, or any company, going bankrupt?
That's an argument that is easy to exploit. What is wrong with failed businesses closing? Doesn't it destroy wealth to subsidize losers? And the assets don't disappear, they are re-allocated to successful businesses, so they can increase prosperity...
Pertaining to the lady in the video: How does one argue against actual history, not the fictitious history the lady in the video pulled out of her a**? Oh, that's right by ideological premises that force even history to submit to their mathematical equations.
Good job McDuffie! You did awesome!
wilderness: Good job McDuffie! You did awesome!
Thanks, but BAAWA deserves some credit too. I had previously been able to describe the Austrian business cycle, if you had 20 minutes to spare, but thanks to BAAWA boiling it down to 2 or 3 sentences, I was able to put it into the FB format (which doesn't allow for long screeds, diatribes or lectures).
I know i consider myself very informed on how the banking system works, how securitization works, how various financial instruments work- but i'm not very knowledgeable about the regulatory state.
This seems to be a gap in knowledge that is not exclusive to myself, and am willing to guess, prevalent throughout the mainstream. These interventionists, keynesians, and academic economists can exploit the fact- most people really don't understand how "regulations", the SEC, and various other regulatory agencies involved with the Fed and state organizations- So that they can just scream, Bla bla bla Regan deregulated, Bush Deregulated garrrrr-- and get away with it.
So Elizabeth Warren, can make vague sweeping claims that we "deregulated" in the 70's and 90's, and expect any crowd to just eat it all up. I'll bet she's clueless as to what exactly Glass-Steagal had an affect in commercial banking.
do we get free cheezeburger in socielism?
fezwhatley: I know i consider myself very informed on how the banking system works, how securitization works, how various financial instruments work- but i'm not very knowledgeable about the regulatory state. This seems to be a gap in knowledge that is not exclusive to myself, and am willing to guess, prevalent throughout the mainstream. These interventionists, keynesians, and academic economists can exploit the fact- most people really don't understand how "regulations", the SEC, and various other regulatory agencies involved with the Fed and state organizations- So that they can just scream, Bla bla bla Regan deregulated, Bush Deregulated garrrrr-- and get away with it. So Elizabeth Warren, can make vague sweeping claims that we "deregulated" in the 70's and 90's, and expect any crowd to just eat it all up. I'll bet she's clueless as to what exactly Glass-Steagal had an affect in commercial banking.
What was also amazing is she said all that and then Jon Stewart felt like the world was all better now. I can talk positive to and make you feel better, but you still shouldn't accept candy from strangers asking you to come closer to their car.
She just said regulations prevent banks from doing bad stuff. has no idea what she's talking about.