Basic question for Keynesian economists on inequality
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28-02-2014, 08:40 AM
RE: Basic question for Keynesian economists on inequality
(27-02-2014 09:47 PM)frankksj Wrote:  This shows how Keynesian economics is a faith-based religion, not a science.

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28-02-2014, 09:33 AM
RE: Basic question for Keynesian economists on inequality
(27-02-2014 09:50 AM)frankksj Wrote:  
(26-02-2014 10:40 PM)PoolBoyG Wrote:  Walmart pays in Walmart Dollars
McDonalds pays in McBucks
Bank branches pay in their own currency
..and so on.

Currency that you can only use at their own institutions. This is the EXACT OPPOSITE of freedom. This is slavery. You're forced a currency that you're forced to use in certain stores and banks, with all the strings attached.

Ah, you must be one of the guys in the video below. Thoroughly indoctrinated by your leaders that without their loving direction your life would be lost. You're convinced that if the US did not haul people away at gunpoint for using alternate currencies pandemonium would set in, as every company made its own currency. Thus, the people who print the fiat currency and have amassed half the world's wealth as a result, have convinced you that it's for your own good and they're saving you from chaos.

If there's even the slightest crack in your brainwashing helmet I'll ask you to consider this.... Where I live in Switzerland and where I work in Hong Kong, they do not have legal tender laws. You can open a bank account in any currency you want. ATM's can dispense in any currency. Retail stores are totally free to accept any currency as well. Contracts can be written in any currency. Gosh, there must be sheer pandemonium, right? My local supermarket, Migros, will only let me buy food in Migrodollors, right?

Uh, no. If Migros did that, they'd go bankrupt as all customers switched to coop. See the free market has a way of preventing this naturally--and believe it or not, a policeman and his gun are NOT required. For a business to succeed they have to make it easy for customers. To the contrary, the fact that I can pay my grocery bill in whatever currency I want only makes things EASIER for me, as a shopper. The fact that the Swiss are not forced to use the Swiss Franc against their will means that the Swiss Central Bank has to fight vigorously to defend the currency lest we all start using Euros, or bitcoins.

Competition does NOT lead to chaos as you suggest. The people who teach you this are simply the people who are amassing massive wealthy by having monopolies. They're telling you their monopoly (such as the Federal Reserve's) are for your own good, and have succeeded in enlisting you as a foot soldier to defend their monopoly.

And you lap it up, just like...




You're projecting.

Government currencies are regulated, and backed. There's trust in them because they're well established, and if there's any fraud they'll be severally punished and reformed. There's no comparison between using different government currencies in tiny regions that don't have their own currencies or have their own but don't mean much, and monopoly money.

The question raised was to allow any institution to pay or accept whatever monopoly money they want, and force ordinary people to take it. Ordinary people are just supposed to find new jobs? Ordinary people are to just move to new regions? Ordinary people are to just get a second job monitoring currencies to make sure what currency is backed, and what's not, and for how long. The ordinary people will suffer, while the ones that can issue their own currency, and ghettoize and feudalize their own little currency enclaves, will profit. The amount of economic disconnect will be apocalyptic.

My job issues one type of monopoly money, while the banks will issue another, and my bills are for another monopoly money. The short term is apocalyptic. As I said before, even if somehow it all works out in the end, the damage would be great. And what are we left with? A completely monopolized currency system again. Because there'll be a few "trusted" providers of well backed and regulated currency, in which all the major intuitions issue and accept those currencies. We're back to square one, and all we had to do was go through hell for no reason.

As I said, thinking the only other option is anarchy is insane. Just reform the current system.
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28-02-2014, 09:38 AM
RE: Basic question for Keynesian economists on inequality
(27-02-2014 04:56 PM)toadaly Wrote:  I might add it to my reading list that I'm always way behind on. I assume you're talking about "The Crash Course: The Unsustainable Future Of Our Economy, Energy, And Environment "?

That's the one. It's not a heavy book because the author is trying to get across a message to as wide an audience as possible so it's very easy to pick up.
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28-02-2014, 10:17 AM
RE: Basic question for Keynesian economists on inequality
(28-02-2014 09:33 AM)PoolBoyG Wrote:  Government currencies are regulated, and backed. There's trust in them because they're well established, and if there's any fraud they'll be severally punished and reformed.

ROFL. That's a joke, right? You know the US, for example, signed a binding treaty with the rest of the world that US dollars would be claim checks for gold at a fixed price of $35/oz. The rest of the world sent the US their gold, the US gave them claim checks (dollars). But then secretly the US was printing more claim checks than they had gold, so when France came and asked to redeem it's claim checks for gold, Nixon basically said "fuck you, we're keeping your gold suckas. but you get to the claim check if you want." Major, major fraud. If a private banker did that, they'd have been thrown in jail, like Bernie Madhof. Nixon, however, was handsomely rewarded when he won the next election by a landslide. Americans were thrilled that he effectively confiscated the world's money and used it to pay for Vietnam.

So it's the opposite of what you suggested. Governments are the LEAST trustworthy because they can pay all their bills by printing money, devaluing currency, and effectively confiscating wealth, but they use the police and military to kill anybody who resists. The US tolerated Saddam Hussein UNTIL he tried selling oil in Euros, which the US responded to immediately with war. Iran, similarly, had a nuclear program for decades, but within 90 days of setting up an exchange to sell oil on other currencies, the US did a full blockade, which is estimated to have resulted in millions of deaths. Domestically in the US every time someone tries to use another currency, like liberty dollars, they get hauled away at gunpoint. If currencies were issued by private companies, they wouldn't be able to use extreme violence to force people to use it. If they debased it and defrauded, they'd go to jail.


(28-02-2014 09:33 AM)PoolBoyG Wrote:  There's no comparison between using different government currencies in tiny regions that don't have their own currencies or have their own but don't mean much, and monopoly money.

Excuse me? Monopoly money? The Swiss Franc is a safe-haven currency. People from all over the world park their money in Swiss Francs because it's one of the few currencies that isn't debased.

(28-02-2014 09:33 AM)PoolBoyG Wrote:  The amount of economic disconnect will be apocalyptic.

Wow, the brainwashing is impenetrable. The government is holding a gun to our head, forcing us to use a currency against our will so they can stealthily print all the money they want and confiscate everyone's wealth, and you're convinced it's not only for your own good, but if the government put the gun down and let people trade in gold or whatever it would be "apocalyptic".
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28-02-2014, 11:55 AM
RE: Basic question for Keynesian economists on inequality
(28-02-2014 09:33 AM)PoolBoyG Wrote:  The question raised was to allow any institution to pay or accept whatever monopoly money they want, and force ordinary people to take it. Ordinary people are just supposed to find new jobs?

Huh? How would anyone be "forced" to accept McBucks or Wallars? If your rent or mortgage can't be paid in McBucks or Wallers, you simply will not work at those places, and they will be the ones forced to change, not you. Why isn't Walmart "forcing" employees to work for Walmart gift cards, which essentially are a private currency? ...because it's stupid. No-one will work for gift card, because they are not generally accepted.

On the other hand, if everyone *did* accept Wallars as payment, then people would be happy to work for them.

You're turning something that has historical precedent into a theoretical discussion and throwing rocks at it. We already know free-for-all money works, because that's how it has been for most of human history.

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28-02-2014, 12:33 PM
RE: Basic question for Keynesian economists on inequality
(28-02-2014 09:33 AM)PoolBoyG Wrote:  The amount of economic disconnect will be apocalyptic.

Toadaly is right, there is a historic precedent. Your suggestion that if the government stops forcing people at gunpoint to use a fiat currency the results will be apocalyptic is absurd. It's the other way around. Fiat currency has been tried about 3,000 times and it, the fiat system you're defending, has failed miserably 100% of the time. I've challenged anyone to name just one of the 3,000 times this system has been tried that it did not implode within 50 years, and nobody has been able to name one example. In fact, remember what happened in Germany after WWI when they used this system you defend? It led to a complete economic collapse with the masses destitute, all the wealth concentrated around the [Jewish] bankers who controlled the fiat money supply, and eventually became one of the most infamous tragedies in human history.

By contrast, the system Toadaly and I advocate, where the people get to use their preferred medium of exchange, has also been tried for thousands of years, and has never led to the disasters, like a fiat currency. Remember, the Roman empire was successful and stable for 1,000 years without a forced legal tender, and only after they started debasing their currency and diluting the metals (which is essentially the system you're advocating) did the empire collapse.

Switzerland has no legal tender laws. And, since I've lived here, typically unemployment is around 2%, inflation is 0%, and it's widely recognized as one of the most stable economies and currencies in the world.

You're totally brainwashed if you think that if the government stopped defending the Fed's monopoly at gunpoint it would lead to the "apocalypse".
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28-02-2014, 01:08 PM
RE: Basic question for Keynesian economists on inequality
(25-02-2014 03:34 PM)frankksj Wrote:  To illustrate the point I made to CJLR in the 'fair tax' thread that my criticism of Keynesian economics is that they are stumped by even the most basic questions, here's one for Cathy and any "professional economists":

Let's say it's medieval Spain, when gold is money. There are 10 tonnes of gold in the whole country, 5 of it belonging to the King, and the other 5 to the common folks. Now the King sends out his conquistadors who bring back another 5 tonnes of gold from the New World which gets added to the King's stash.

How did that change affect the inequality between the King and everybody else?

a) they became more unequal with the King having a bigger % of the nation's wealth.

b) they became more equal with the common folks having a bigger % of the nation's wealth.

c) The rate of inequality stayed the same.

Now, say it's 2014, and instead of money being a barbarous relic, it's the fiat paper money Keynesians prefer, so instead of the new money getting added to the King's stash, it's added to the big banks' reserve accounts. Same question as above, how does that change affect inequality?

What the hell is the point of this exercise, Frank? Seeing if you can be and even bigger dick that you already are?

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28-02-2014, 01:31 PM
RE: Basic question for Keynesian economists on inequality
(28-02-2014 01:08 PM)Carlo_The_Bugsmasher_Driver Wrote:  What the hell is the point of this exercise, Frank? Seeing if you can be and even bigger dick that you already are?

The point is to respond to cjlr's claim in the 'fair tax' thread where he claimed my criticism of Keynesian economics was simply that I disagreed with it. As I explained, it has nothing to do with anybody's opinion.

It's simply pragmatic and reasonable to criticize one "group", no matter what it is, if they are unable to even answer the most obvious and rudimentary questions about their so-called expertise, and when they claim to be experts about something and yet their predictions are nearly always wrong.

This OP asked a very basic question a 10 year old could answer. You'll see the 'economist' in the thread, Cathy, was unable to respond and had to hunt for excuses. Similarly, like most Keynesians, they credit Paul Samuelson with being the most brilliant economist of our time, and the one who understood economic systems better than anybody else. But Samuelson's predictions were dead wrong--180 degrees wrong. He predicted the centrally-managed communist economies, like the Soviet Union, and now North Korea, would become the most prosperous and surpass capitalist economies. Clearly Samuelson/Keynes foundation was completely wrong, because the conclusions and predictions derived from it are as well.

Now, the same thing... Every Austrian economist will tell you many of the world's major currencies will likely collapse within the next 10 years, leading to a serious economic meltdown. The Keynesians, of course, say this is absurd. But when it happens just like the Austrians predicted, and the Keynesians look at all the suffering they caused, they'll never say "Ooops, sorry, my bad." Somehow they'll find someone else to blame, and just try to repeat the same system all over.

We saw it happen just a few years ago. After the dot-com bust the Fed started pushing home mortgage interest rates to near 0%. The Austrians warned this was creating a housing bubble and that there would be a banking crisis when housing prices fell leading to bank failures. The Keyensians said that was nonsense. And when it happened precisely as the Austrians predicted and the Keynesians sent the world into a financial crisis, they didn't even acknowledge that they got it so wrong. And the way they addressed it was by repeating the same mistake and lowering mortgage interest rates even MORE, so the next crash will be even worse.

Within the next 10 years when the currencies collapse and it creates an even bigger disaster, their solution will be more fiat currencies and more money printing.
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28-02-2014, 01:40 PM
RE: Basic question for Keynesian economists on inequality
(28-02-2014 01:31 PM)frankksj Wrote:  Now, the same thing... Every Austrian economist will tell you many of the world's major currencies will likely collapse within the next 10 years, leading to a serious economic meltdown.

I don't think they say such a collapse is likely or even inevitable. The general premise, is that this collapse is continuous. The dollar has lost 90% of it's value in my lifetime.

...of course, the higher debt/GDP is, the greater the risk of catastrophic collapse.

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28-02-2014, 03:12 PM
RE: Basic question for Keynesian economists on inequality
(28-02-2014 01:40 PM)toadaly Wrote:  I don't think they say such a collapse is likely or even inevitable.

Most I've read say a currency collapse is inevitable.

First, there's a historic precedent that this system has been tried thousands of times and has never lasted 50 years because, as Friedman said, the temptation to print will be too great, and eventually high inflation will set in, then people lose faith in the system as their income and savings disappear.

Second, the only reason the Fed is able to print so many dollars is that the world's oil supply is only in dollars, so other countries need to buy those pieces of paper. The US has shown it's willing to do anything to preserve that standing, and attacked or blockaded every oil-producing country that threatened this. BUT, the first thing China's new President did was establish a deal with Russia to buy oil in their currencies, and not dollars. For the first time, the US was unable to stop this, since invading and taking over China and Russia was too challenging even for the US military. India also has secretly been buying Iranian oil in Rupees, not dollars, despite every effort from the US. China, Russia and India account for almost half the world's population, and with them ganging up, I just don't see how the US military will be able to put that fire out. They haven't yet pulled the trigger and let the dollar collapse by eliminating the dollar as their reserve currencies. It would be self-destructive since they have so much debt denominated in US dollars, and the Fed would just pay them back with trillions in useless paper money. But, as you look at trends, they are clearly moving towards hard assets instead of paper, which, imo, means that they're probably going to pull the plug at some point.
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