Dsglop, a Youtube personality attacks Bob Murphy.
Sorry, it seems it did not post my actual comment. Here is the actuall video I was refering to
http://www.youtube.com/user/dsglop#p/a/u/0/tBqjdbLFfGQ
Okay the points that he covers are mainly the great depression and the whole Herbert Hoover and wage rates issue.
Murphy actually made a video of himself, shirtless, in a bathroom...with a picture of Krugman on the mirror.
Oh god lol
Instead of watching a 7-minute-and-33-second video, I will respond to his self-description which includes why he disagrees with Austrian economist Peter Schiff. His specific disagreements with Peter likely extend to his disagreements with Murphy since they both broadly agree on many topics.
He calls those who agree with Peter Schiff “petey parrots”. The term parrot is likely used critically as in agreeing with someone without critically examining the person’s reasoning.
“you guys love a man who oversimplifies the economy.”
I do not believe Schiff is guilty of that, but maybe you will later present evidence to support your claim.
“You keep trying to blame the government for this entire economic disaster.”
The United States government is responsible for the late 2000s housing bubble and aftermath.
“You ignore key factors like there were many investment banks out there engaging in securitizing loans.Yes,Freddie and Fannie were major players in that market,but you are forgetting a few things.Facts like F and F were completely private corporations.”
Fannie Mae and Freddie Mac were created by government and prevented from failing by government. This and the rest of your argument has likely already been addressed by historian Thomas E. Wood’s Meltdown.
“their market share had been lowering for years due to completely private banks engaging in more risky loans than F and F were willing to get into.”
I am uncertain as to the accuracy of this statement. Regardless, Fannie Mae, Freddie Mac, the Community Reinvestment Act and affirmative action in lending, the “pro-homeownership” tax code, the Federal Reserve System’s cheap credit, the “too big to fail” belief supported by former Federal Reserve chairman Alan Greenspan, and past bailouts all supported the idea in private profits and public losses. That is the government’s fault.
“he forgets that in 2000 derivatives,or credit swaps,were deregulated and the market was allowed to bet against itself.”
A citation or two would be appreciated. Regardless, letting market actors experience the losses from foolish financial decision would deter such behavior. Moreover, the late 1990s was the dot-com bubble, the bubble that preceded the U.S. housing bubble.
“What's pete's solution?Let them all fail.He doesn't think that this will start the same cascade effect which deepend the Depression.”
The Great Depression was the fault of the U.S. government, as excellently explained by Austrian economist Robert P. "Bob" Murphy’s The Politically Incorrect Guide to the Great Depression and the New Deal.
“fundamental changes may need to be made to the banking system,but they need to be made while the economy is healthy.”
Too late. The malinvestments caused by the government’s cheap money already exist. They need to be liquidated, so labor and capitol can once again sustainably serve consumer demand.
“He thinks we need to worry about hyper inflation because we are injecting a few trillion dollars into an economy which has just lost tens of trillions of dollars.”
The concern the newly created money would circulate; thereby significantly pressuring the prices of everything upward was a legitimate fear that has yet to occur.
“Even though housing,the average persons biggest expense,and energy,another huge one,have crashed and are showing no signs of recovery in the short term,he still thinks hyper inflation is looming.”
If the new money starts to circulate, significantly rising prices will occur.
“The only areas inflation has been a problem were ones which were rife with speculators,a private creation.”
The fact you consider inflation to not be a problem in some cases show you believe currency devaluation which hurts creditors and helps debtors (especially the U.S. government) is okay and that government tinkering (more like playing god) with the economy is acceptable. It isn’t. It is tried-and-failed central planning. It is immoral. If not stopped, it will end the United States as we know it.
It's difficult enough to care about what a scarcely-known youtube poster has to say; his starting a video with, "So there's this little fella..." is proof this guy doesn't deserve the time or the frustration.
The fact that he seems to use Peter Schiff, who is not an economist, as the standard-bearer for the opposing viewpoint (hence referring to Murphy as a "Peter Schiff Wannabe") is also discouraging. If you're looking to talk economic theory, then an economist holding a PhD from a top-tier university is not a wannabe to a financial consultant (as successful and popular as Schiff is).
yeah well, he has like serval videos attacking all hose points. You should have watched his video however, because he directly adresses bob murphy's interpretaion of the great depression. Mainly attacking the wage rate issue. He seems to think this is not as important a factor as bob murphy makes it out to be. He says that only large manufacturers actually implemented the policy and small manufactueres did not, and that wages in all factories started to fall by 1931.
He backs this up with a quote from Steel that says that "we are living in a foolish paradise, if we think all employees have maintained the same rate of wage".
Then he goes off a tangent about how the real problem was a lack of demand. Does anyone have any hard evidence to challange his argument?
The reason I posted this here is because I have been debating him in the comments section on some of his videos, and need a little amunition. Plus i want to know the truth, and you guys usually seem to have it.
He isn't scarcley known either, Peter Schiff has actually mentioned him in several of his videos :D
Does anyone have any hard evidence to challange his argument?
Well, to start he provided no statistics about wages, all he has is a quote from one guy.
If you actually dig out the historical wage rates, you see they haven't dropped significantly until 1932 (and actually increased in 1931), you can check it out here:
http://www.measuringworth.com/datasets/uswage/result.php
Also, if a quote is what passes for evidence, you have this quote by Rexford Tugwell:
"practically the whole New Deal was extrapolated from programs that Hoover started."
And of course you can rely on more then just quotes for that. The Reconstruction And Finance Corporation comes to mind, but just take a look at Rothbard's America's Great Depression, and you'll get loads of examples of Hoover's intervention in the economy.
Then if you go with his entire tangent on lack of demand, he'll have hell of a time explaining the depression of 1920, where there was no intervention, huge deflation, but it was over within a year or so.
Ah yes. Very Useful.
what cracks me up is that he considers Murphy a Peter wannabe... WTF,,, he couldn't be more wrong... I've been trying out this new thing, instead of getting frustrated with people, just laugh because people like this deserve to get laughed at...
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Thats just a silly video not worth commenting on. Youtube is chalk full of these things.
Honestly, calling Dr Murphy a wunnabe Schiff? How counter productive is that.
Blueline976: Murphy actually made a video of himself, shirtless, in a bathroom...with a picture of Krugman on the mirror. Oh god lol
HAHAHAHAHA, he is the man!
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