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Why is Keynesianism still a thing? I am just...
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Why is Keynesianism still a thing? I am just so mystified as to why people defend it.
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Because

>dude the cycle lmao
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>>1069760
>dat strawman
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>>1069641

Because it works until it doesn't.

And it's been working for a long time now.

When the music stops, it will be too late. The Keynesians will be proven wrong- but who cares? there is fire falling from the sky and armed gangs roaming the streets.
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>>1069641
Why don't you explain why you disagree with it?
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If you don't support keynesianism you're a communist or anarcho-capitalist apparently
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Why do internet libertarians use 'Keynesianism' to refer to any non-Austrian economic philosophy?

There are other ones too, you know.
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It's not a thing -- look up the new global political economy: it's a neoliberal framework that relies on the so-called debt regime. We've moved past Keynesianism ever since the late 1970s.
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>>1070020

Would you say the response of the Federal Reserve, the EU, Australia and other nations to the GFC was neoliberal and not Keynesian?
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>>1069641
>Why is Keynesianism still a thing? I am just so mystified as to why people defend it.

It's not a thing. It's been decades since the US government followed his advice.
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>>1070061
That's like a broken clock is Keynesian two times a day

Of course is Keynesian when it's applied in a time of crisis, as intended by keynes. What isn't Keynes is blowing that shit up 24/7 with no end in sight
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>>1069641
Because its only meant to be applied in extremely niche circumstances like when interest rates are at the zero lower bound.
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>>1070002
Keynesianism refers to a specific school of economics that is widely adopted by almost every central abnk and government in the world
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>>1069641

Keynesianism isn't really a thing anymore. Fiscal stimulus became a prominent talking point in the last decade because of the Financial Crisis which caused the Fed to exhaust their monetary policy levers by pushing interest rates to the ZLB.
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>>1070100
>school of economics
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>>1070100
>widely adopted by almost every central abnk and government in the world

You seem to be confusing keynesianism with monetarism
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>>1070115
Monetarism targets money supply growth. Modern central banks target inflation levels.
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>>1069641

Yes we have a flawed monetary system. Austrian Econ. is "pie in the sky" thinking though.

Do you actually honestly believe that even if we "fixed" the monetary system tomorrow, govt. wouldn't be lending and borrowing again in under a decade?
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>>1070077

Why is Keynes the only significant non-Jewish economist since Pareto?
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>>1070100
>Keynesianism refers to a specific school of economics that is widely adopted by almost every central abnk and government in the world
This is false. The Keynesian era was between was the 30 years immediately after WW2. Since the late 70s, demand side economics has been dropped in favour of supply side economics. These days the policy mix is dominated my monetary policy, not fiscal policy, and the wider economy is heavily in the supply side from privatisation, deregulation, arbitrary fiscal constraints etc.

It's fundamentally false to say that Keynesian economics is the dominant approach by central banks and governments. 2008 was an exceptional scenario where they did fiscal stimulus because a depression death spiral would have been the alternative.
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>>1070820
I would like to think that central bankers look at the situation through all the various lenses they have, think about what would be a fix and then implement it. Or not the if Austrians are right today.
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>>1069995
it ignores how governments finance spending and ignores how inefficient the government spending will actually be. you hire unemployed people to plant trees and spend $100 dollars from the government coffers, taken from taxes from productive parts of the economy (private enterprises), and then expect that those $100 dollars will be spent back at the private enterprises allowing them to hire back the tree planters. but the gov'n has a funny way of wasting money and taking a bit for themselves, so you don't actually spend all $100 on the workers, let's say you only spend $80. Now you have a bunch of workers who are getting paid low wages doing menial labor, do you think they are happy? do you think they are fulfilled? no, so they don't spend their money productively, they spend high proportions of their wages on non-productive consumption goods: alcohol, clothes, food, nothing that leads to long term real GDP growth.

So basically all we've done so far is taken money from productive areas of the economy, money that could have been reinvested and led to real GDP growth, and redistributed it in an inefficient manner to people who will not use the money nearly as productively.

In the short run, adding gov'n monies into the economy probably does ease the volatility of the economic cycle. that reduction of volatility has social benefits (people are happier when they're unemployed less) and thus governments have incentive to follow the keynesian approach as it keeps their people happy and themselves in power.

In the long run you are reducing real-GDP growth by redistributing income away from the most productive parts of the economy. Let's say some policy will result in a .5% lower real-GDP growth. Over the next 300 years that policy will result in a lack of growth of e^(.005*300). Put another way, an economy that didn't follow that policy will be 4.5 times wealthier. Keynesianism is short-sighted, Friedman laid the path to prosperity for our children's children.
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>>1070820
>the wider economy is heavily in the supply side from privatisation, deregulation, arbitrary fiscal constraints etc.
to be fair, even demand siders advocate for supply side policies during a growth period
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>>1070888
Private enterprises don't necessarily have perfect productivity, and that's where most right-wing ideologies fail.

They have a responsibility to make products as profitable as possible. Which is fair, but profit is waste too. Not to mention that they can be just as wasteful in day-to-day operations, if not worse then government, with much less accountability.

Corporations are sitting on more cash than ever before, most of this money is "lost" when it comes to economic models because it doesn't get spent in a timely matter. Thus, when you have huge profit margins on products and none of it gets passed on the consumer for the sake of making investors (the rich and wealthy) happy, less and less money circulates. Which leads to poor economic performance.
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>>1070929
>they can be just as wasteful in day-to-day operations if not worse then government
kid, if government wasnt increadibly wasteful and a huge confict of interest whenever its dealing with any transaction, countries wouldnt be ainming to privatize
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>>1070934
Have you ever worked for a day in your life?
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>>1070937
yep
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>>1070929
>don't necessarily have perfect productivity
sure, but they're still far more productive than the government. history has shown us time and time again the government is an inefficient allocator of resources. If a private business is inefficient competition ousts them and they go under, being removed from the economy. If a government is inefficient they just take more money from tax payers.

the high profit margins we are seeing today are completely a result of keynesian policies and central bank intervention. See the Kalecki equation:
Profits = Investment - Household Saving - Government Savings - Foreign Savings + Dividends

Household and government savings put a drag on profits, right now central banks have artificial reduced interest rates lowering the incentive for households to save while governments frontload their spending by borrowing money and running deficits to support their interventionist policies.

If we want profit margins to revert the government has to stop thinking its smarter than the market while individuals actually save their fucking money.

The money that corporations are sitting on isn't "lost", it's just back-loaded. Economics 101: there's no free lunch. They are holding cash overseas because it's not in their best interest to bring it back over here and have it taken away. So they wait for opportunities to invest that cash on foreign lands. The opportunity cost is zero because that's where the FED put rates.
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>>1070934
> if government wasnt increadibly wasteful and a huge confict of interest whenever its dealing with any transaction, countries wouldnt be ainming to privatize
Those privatization deals are an example of that huge government waste and corruption you're whining about. Look at all the success stories of the government handing over control to private hands through questionable means
>Russia
>Venezuela
>Ukraine
>Latvia
>Britain
>Mexico
>The U.S
You could probably list most of the countries in the world as having examples of private appropriation of things paid for using public funds.

I cannot think of any country where mass privatization of public property has worked out for them. Why is this happening? Because the people who do it make a lot of money off of it and can use that money to hush up opponents. That and a weird blind acceptance that doing this somehow creates "free" markets.

I have a feeling that you will be capable of interpreting all of this as a failure of some vague government bogeyman rather than just a nasty mix of monetarist policy and public property giveaways.
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>>1069641
Keynes outlined a few market inefficiencies, it also provides insights into the minds of policymakers. The General Theory of Employment, Interest and Money is a must read for any serious /biz/raeli as part of their 10000 hours.

You don't have to agree with everything said, it is possible to acknowledge market inefficiencies yet still believe free markets are best. In fact is is important to in order to figure out how to mitigate them or spot them if you are picking stocks.
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>>1070954
Look im not talking about pure-lolbertarian brivatize everything xDDD
But 1. did privatizing industries in china, russia and other commie cuontries lead to better lifestyle and relatively less corruption overall? id say yes.
I am not argueing at all that if people privatize resources in a corrupt communist country, it wont become a corrupt capitalist country at all, if thats what u are getting at.
I am simply saying that if you intruduce elements into competition in the market it will be overall better off.
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>>1070948
Last time there was a repatriation tax holiday, it was declared a failure as it cost the government billions of dollars, resulted in job loss and less research spending, and was spent mostly on share repurchase, dividend payment, and the purchasing of other companies.

We are at a point where some of these corporations are receiving diminishing returns on their investments and it might be in the best interest of the economy if they all paid their taxes. Maybe even a little bit more, they and the rich can afford it with little impact to their lives.

We are stuck because of a certain ideology which chooses to paint everything in black and white and refuses to come to terms that perhaps the current economic model is not working out and we might need to go back to what has been proven to work. We can't rely on the Fed to make everything work forever, they are running out of options.
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>>1070888
Your post is full of numerous fallacies that are common.

1) Governments don't finance themselves with taxes. Taxes come AFTER governments have spent money. In fact, it's impossible to tax before you spend because taxpayers won't have any currency to pay taxes in if you don't first spend that currency into circulation. So the private sector doesn't surrender it's own funds to pay taxes. It simply repays the government what was the goverment's all along. When the government deficit spends, that means the non-government accumulates that deficit as a surplus and uses it for saving, consumption, investment instead of private bank credit. This is an enormous benefit for the private sector.

2) The public sector does not compete with the private sector for resources. There are millions of unemployed workers, idle resources and spare capacity in the economy for the private sector to use. If the government surrendered all of the resources it uses, that would only compound the problem of idle resources.

3) The private sector expands when there is demand. You need consumers to be spending money for businesses to employ and produce goods and services. You could lower corporate tax rates to 0 and they wouldn't invest if there were no sales.
>>1070925
>even demand siders advocate for supply side policies during a growth period
I don't. Neither do any of the Post-Keynesians I look at. We look at aggregate demand and then work from that.
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>>1070994
>did privatizing industries in china, russia and other commie cuontries lead to better lifestyle and relatively less corruption overall
No. Russia and other ex-communist countries suffered horrifically under mass privatization. Was it something inherently wrong with the free market approach that caused it? Not really, but the free market was still used as the lever by which public property was wrenched away specifically to weaken the state. Free market practices were "introduced" in the same way that an invasive species is introduced, and ultimately them running amok led to wide spread misery. Admittedly in these cases it was pretty much the fault of the countries who pressured Russia and other states to enact these practices because they saw it as a way to dismantle the power structure of the USSR and make sure they wouldn't be a threat.

China is a totally different case since much of their "privatization" has been heavily controlled by the government and was only implemented with a great deal of oversight.

People who advocate free-market practices too frequently fall into the ideology trap of assuming the entire goal of a country should be focused on being more "free-market" without acknowledging what effects a free-market will have. The only metric by which they seem to measure the success of free-market policies is whether they created a free-market, and if you can't see why that doesn't make sense then there's nothing to be discussed.
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>>1071028
1) if there already was an economy present trading with some common currency, say silver, and then a government formed in that society and began collecting taxes that government would neither need to spend first or add more currency into circulation. the currency wouldn't belong to the government, it belongs to private individuals who have acquired it through time. they agree to give up part of their earnings as part of the social contract. deficits are an enormous benefit for the private sector as they result in increased profits, see >>1070948. That doesn't mean constantly running a deficit is good for the long term health of the economy. It's really only good for those who already own capital and can get in on the opportunity to temporarily receive higher profits; see wealth inequality growth.

2) a good government doesn't compete with the private sector for resources but when they attempt to run insurance companies, invest in renewable energy, and hand out subsidies they not only compete with private enterprises but fund the competition by taking income from private enterprises.

3) yes, and you can create artificial demand by temporarily increasing spending but you can't do that forever and you can generally expect that spending to be inefficient. if the government is borrowing money to fund short term spending they must then eventually increase revenues. the idea is hopefully the economy recovers and increasing revenues will be easy. but if there is some structural reason why the economy won't recover properly, such as the lack of foreign demand we are seeing today, then you are just borrowing from future growth to pay for people to be employed in less than fruitful positions for the time being.

It's all about long term real-GDP growth; technological advancement. taking the same number of resources & labor and obtaining to have higher output. That only comes from human ingenuity and humans thus need to be free and unrestricted to seek their genius.
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>>1070994
You are aware the comparisons in Russia will end up with a Post Soviet collapsed system, or pre Communism Russia?
Privatization is never compared to the working Soviet economy. And its never compared because the period of Privatization was horrible.
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>>1071063
>That doesn't mean constantly running a deficit is good for the long term health of the economy.
It does. Because it can create full employment. Any unemployment just creates a permanent gap in potential output.

>artificial demand
It's no more artificial than any other demand.
>you can't do that forever
Yes you can. As long as you have the ability to tax you can spend as much currency as you want.
>they must then eventually increase revenues
There is no reason to increase revenues unless there's an inflation problem.
>you are just borrowing from future growth
Future growth is not impacted by current borrowing. Future growth is a function of future productivity. We are not impacted by the huge borrowing of the 50s. We consume what we produce. So does every future generation.

>That only comes from human ingenuity
Not in a monetary economy. You need money to coordinate idle labour and resources to create output. Otherwise you're just left with "potential".
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>>1070948
> history has shown us time and time again the government is an inefficient allocator of resources

This is true for most industries but not all. For instance, for profit education is complete shit unless geared towards those fed with a silver spoon. Think about how many accomplishments have been made in terms of research by all the California uc colleges. UCLA, cal Berkeley and the materials science research in UCSB are all top notch. The private sector benefits from this with r+d. The students benefit by toutition that is easily half any compatible private college. Plus, the communities benefit. That's just one state's government funded college system. Are you saying that for profit colleges are consistently better than the 3 institutions I mentioned?

Of how about spacex? Where would they be without all the government subsidized research into rocket tech? You have the Gaul to say that the private sector always allocates better on the internet? You realize that the internet was developed by the government, right?

So yes, the private sector almost always allocates better than the private sector. But when you say always, you only need one counterexample to be proven wrong.
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>>1071119
>Are you saying that for profit colleges are consistently better than the 3 institutions I mentioned?

The word he used was efficient

>But when you say always, you only need one counterexample to be proven wrong.

FYI all 3 matches for 'always' in this thread are in your own post.
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>>1071093
you are simply retarded if you think a government can run a deficit and borrow money to finance that deficit for eternity to prop up an economy. I really don't have a better word. We have to pay the debt down eventually or default.

No economy is purely monetary either. We are robinson crusoe on the island, at first he is handpicking strawberries and has an output of 20 per day. Then he has a technological innovation that shakes the strawberry bush and collects berries in a basket allowing him to collect 40 a day. He could have also borrowed 20 more strawberries a day from someone else on the island and we could say we now have an output of 20 per day, but we eventually have to pay those borrowed strawberries back or someones going to come looking to break our fingers.

There is nothing magical about debt and deficit spending, the debt we are currently holding must be repaid at some time in the future, and that will put a drag on that state of the economy. Suddenly we thought we had 40 strawberries a day but we owe 120, that sets us back 3 days, but then we also realize we only have the capacity to produce 20 per day. We're right back to square one.

According to your theory the government could employ everyone digging ditches and then tax them in order to pay their own salaries. It's clearly nonsensical.
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>>1071119
even non-profit schools are largely funded and dependent on private donations. They couldn't get by on the money given to the from the government alone.

While I agree with you that many of our public universities and other public institutions such as NASA are beneficial, it's less the private sector being inefficient and more government intervention alllows us to all receive positive externalities.

It also doesn't mean those instititions are set up and funded in the most efficient manner possible, I would argue we would be better off with a voucher system to fund public education where the vouchers were earned through merit and need. This would allow more direct competition of private schools, in the current scenario a student seeking to receive a private education must pay for that education AND the education of public school students through property taxes and state income taxes. That is really besides the point.

Either way you do bring up a good point that a good government should look for ways to create positive externalities and solve situations with negative externalities. This does not mean they should redistribute income to pay for non-productive labor.
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>>1071119
> You have the Gaul
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>>1071671
>you are simply retarded if you think a government can run a deficit and borrow money to finance that deficit for eternity to prop up an economy.
That's exactly what's been happening and there is no risk to this arrangement.
>We have to pay the debt down eventually or default.
This would make the country extremely poor. Debt like all financial securities is an asset and a liability. The government's liabilities are accumulated as assets by the private sector. If you pay off debt, you are confiscating money to extinguish assets people own. The private sector thus loses it's net worth. Imagine a private sector where there is $100 in treasuries and $100 in cash. If the government taxes the $100 in cash to pay off the treasury holder, the debt is now $0 but the private now only has $100 in total assets. At the beginning, it had $200 in total assets. Paying off public debt makes the private sector poorer. This is debt is simple rolled over continually.
>we eventually have to pay those borrowed strawberries back
This statement doesn't make any sense. If I produce strawberries today, do I send them back to the 1950s to pay off the debt that was made back then? No, of course not. Every generation consumes whatever it produces.

>There is nothing magical about debt and deficit spending, the debt we are currently holding must be repaid at some time in the future
Why do you think it "must" be repaid? In 1776 Adam Smith said no government has ever paid off it's debt. Fast forward to 2016 and it's the same. Government debt isn't supposed to be paid off.

>According to your theory the government could employ everyone digging ditches and then tax them in order to pay their own salaries.
This is how the public sector functions. The government credits bank accounts then debits them later on. You can't debit an account that hasn't be credited yet otherwise there will be nothing to debit.
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>>1070850

Requesting full image
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Except Keynes has been historically proven to work while Ancaps and lolbertarians have Somalia. Austrians are fucking retarded.
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>>1070888
You're assuming people with more money are spending them "productively". There are numerous circumstances where opportunity to do something for benefit of public would not be taken by private investor because it would be too difficult or outright impossible to force people to pay for this benefit.

Having some trees planted in to prevent soil erosion might be one such case. Primary research, infrastructure, civic healthcare programs and educations are another. But that's not really about keynesianism, and doesn't have to do with cycles, that's common sense.

It could have to do with keynesianism if the civil works projects were shelved until time of economic downturn and funded by reserves created from taxes during boom where bubbles and fads inflate prices and foster malinvestment.
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>>1070100
And Austro-failism is a specific meme of economics that is widely adopted by almost every washout soap box prophet.
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