What Economists Still Don’t Get About the 2008 Crisis • Hacker News Board

Re: What Economists Still Don’t Get About the 2008 Crisis

#21

Post by dfee » Mon, Jul 30, 2018, 6:21 PM UTC

Finnucane wrote: post #17

I remember distinctly the moment I realized the housing bubble was going to end badly. I was wondering in the early 00's how house prices, more or less everywhere, could continue rising past what most people could actually afford to pay. I hadn't really being paying much attention to the financial world, but sometime in 2004 or so, I saw an ad on tv for a mortgage deal that seemed to make no sense. I looked it up and…

I wonder that same thing today. To me, it feels like the bubble burst in 2007. But, that we're still here today, seems to indicate it didn't really pop, but instead it's a side-effect of another system.

Recently in Southern California, listening to the local NPR affiliate, they were covering a candidate race where one candidate accused the other of not hearing his constituents: ~"House prices have fallen, and that's bad for our voters. I hear them, and he doesn't."

I feel like housing in California is unsustainable: pricing, development, etc.

What's strange is that the candidate doing the accusation was a Democrat. I assume he benefits from loose borders (more housing demand), but constituents who can't actually vote and get their voices heard (immigrants wanting affordable housing, not what begins to approach slum-lord style ghettos).

Re: What Economists Still Don’t Get About the 2008 Crisis

#22

Post by paulpauper » Mon, Jul 30, 2018, 6:22 PM UTC

the post-2009 recovery is now the longest ever ,exceeding the 90's even, and I think it will last much longer given how low interest rates still are and the absence of any problems. I think this calls into doubt business cycles and other concepts economists take for granted. The steady-state economy (similar to that of Australia) where there are few, if any, recessions may be the applicable model. People get too hung up on 2008 and forget that although it was bad, it was brief, relativity speaking, and the economy has not only recovered but made huge gains too.

Re: What Economists Still Don’t Get About the 2008 Crisis

#23

Post by closeparen » Mon, Jul 30, 2018, 6:25 PM UTC

segmondy wrote: post #11

ksec wrote: post #9

My own theory after digging sometime into Economics is that no one seems to have a clear idea what on earth we are actually doing. We all seems to have our own theory, and they all seems to answer half of the question. And in practice none of them currently models the world we have now. And it will take a long time before any of those theory are proved to be correct this time around. May be we can finally say Keynesi…

They know what they are doing, the main players are extracting wealth. The financial market is one big casino were the bankers can extract as much wealth as possible in the name of providing liquidity. The suckers(masses) are the rest of us via our 401/pension funds. They know what exactly they are doing.

Active traders tend to lose money relative to the “rest of us” passive index investors.

Re: What Economists Still Don’t Get About the 2008 Crisis

#24

Post by dnautics » Mon, Jul 30, 2018, 6:26 PM UTC

dalbasal wrote: post #19

It's a pleasure to read an article by a writer who understands of the history economic thought, though I suspect I will disagree with him on a lot of things. Anyway, this is interesting. I'll look up these economists. On the face of it, I think it's interesting how economists are hesitant to consider money real. Money is fictional to most economists. What's real is consumer surplus, utility or some other abstract way…

david graeber's book is great, although i too take a lot of the anti-money tone with a grain of salt. If you're in a marginalized subcommunity, a concrete ledger of debts is far better than an informal ledger of debts, as a position to stand on to defend your ground.

You may like "the great wave: price revolutions..." by david hackett fisher for the role of economic conditions on local revolts and global revolution.

Re: What Economists Still Don’t Get About the 2008 Crisis

#25

Post by JackFr » Mon, Jul 30, 2018, 6:26 PM UTC

dalbasal wrote: post #19

It's a pleasure to read an article by a writer who understands of the history economic thought, though I suspect I will disagree with him on a lot of things. Anyway, this is interesting. I'll look up these economists. On the face of it, I think it's interesting how economists are hesitant to consider money real. Money is fictional to most economists. What's real is consumer surplus, utility or some other abstract way…

Hated Graeber's book on debt, but I thought the idea that debt preceded money was uncontroversial. Homer & Sylla go back at least to the Sumerians in 'A History of Interest Rates'

Re: What Economists Still Don’t Get About the 2008 Crisis

#26

Post by Bombthecat » Mon, Jul 30, 2018, 6:27 PM UTC

Finnucane wrote: post #17

I remember distinctly the moment I realized the housing bubble was going to end badly. I was wondering in the early 00's how house prices, more or less everywhere, could continue rising past what most people could actually afford to pay. I hadn't really being paying much attention to the financial world, but sometime in 2004 or so, I saw an ad on tv for a mortgage deal that seemed to make no sense. I looked it up and…

In germany, the same thing is starting to happen. A week or so ago I had something like this ad in my Facebook feed. "no money, no problem, get your credit now!"

Re: What Economists Still Don’t Get About the 2008 Crisis

#27

Post by paulpauper » Mon, Jul 30, 2018, 6:28 PM UTC

hayekfan wrote: post #8

Keynesian Economics are the economics of political convenience. If something goes wrong, we can juice the economy by engaging in extaordinary activities which generate the illusion of wealth resulting in increased spending. These ideas were very popular until Great Britain encountered stagflation - conditions under which both economic recession and inflation coincided and traditional Keynesian levers and predictions…

the post-2009 recovery is more attributable to monetarism, than Keynesianism

Peter schiff and other like him have been predicting crisis, recession, bear market, and inflation since 2008 to no avail. they were wrong and have no credibility as far as I'm concerned.

Re: What Economists Still Don’t Get About the 2008 Crisis

#28

Post by pleasecalllater » Mon, Jul 30, 2018, 6:28 PM UTC

I think they just don't understand almost anything.

I have a real problem with the economists. Take four professors of economics into a room and ask a simple question. A question like "is this a good thing for X to implement Y", like "is this good for the Great Britain to exit the EU" or "is this a good thing to increase taxes for the rich".

Just ask - you will get at least 5 different answers to every question. Those answers will usually exclude each other.

So now me: I listen to those professors and who's right? I'm sure some of them are not. Some of them are simply saying the truth, some are lying.

And now take just one professor - ask him/her something - you will get answers. How should I know that they are right? I simply cannot. I simply don't believe them.

Re: What Economists Still Don’t Get About the 2008 Crisis

#29

Post by paulpauper » Mon, Jul 30, 2018, 6:33 PM UTC

ksec wrote: post #9

My own theory after digging sometime into Economics is that no one seems to have a clear idea what on earth we are actually doing. We all seems to have our own theory, and they all seems to answer half of the question. And in practice none of them currently models the world we have now. And it will take a long time before any of those theory are proved to be correct this time around. May be we can finally say Keynesi…

China is not fudging the numbers. otherwise, it would imply that major US companies that do business with China are also fudging their numbers. Trade with china has surged in recent decades.

Re: What Economists Still Don’t Get About the 2008 Crisis

#30

Post by maxxxxx » Mon, Jul 30, 2018, 6:33 PM UTC

pleasecalllater wrote: post #28

I think they just don't understand almost anything. I have a real problem with the economists. Take four professors of economics into a room and ask a simple question. A question like "is this a good thing for X to implement Y", like "is this good for the Great Britain to exit the EU" or "is this a good thing to increase taxes for the rich". Just ask - you will get at least 5 different answers to every question. Thos…

There is no clear right or wrong in economics. A society must define goals and then economic policy can help achieve them.

Things like income distribution, freedom of markets and others are value judgements. You first have to agree on these before you can ask an economist.

This is not physics where nature decides what's right or wrong.