Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Third Depression

nytimes.com

Post reply on HN
Print view View original

111–119 of 119 posts

Re: The Third Depression

#111

Post by gaius »

bwanab wrote: post #87
gaius wrote: post #73

Earlier quoted context omitted.

Without a global presence it's questionable how long the USD would continue to be the world's reserve currency. If OPEC decides it'd rather trade in EUR then the USD goes into freefall and the US is pretty much screwed.

There's no evidence to back up this assertion. Many economies that don't have reserve currency status do just fine (e.g. Switzerland, Norway, S.Korea). The expense of US overseas deployments far outweighs the benefit of having a militarily enforced reserve currency.

You're missing one key difference: Switzerland never had the overseas garrisons to start with. For the US not to, it will have to withdraw from them. That will be seen as a sign of underlying weakness. The strength of any currency is relative to the confidence that the government that operates it will continue to do what it does.

There's precedent: look at GBP as the UK dismantled its empire.

Re: The Third Depression

#112

Post by exit »

protomyth wrote: post #108
exit wrote: post #98

Earlier quoted context omitted.

> Maybe in the future, what are the criteria for this future?

I guess when robots get too good at replacing humans (reasoning, mobile, perform skilled work).

so why are people unemployed now? isn't it, as Retric put it, that superficial jobs are being automated?

do you think all those unemployed now are just lazy?

Re: The Third Depression

#113

Post by hga »

sethg wrote: post #105
hga wrote: post #90

Earlier quoted context omitted.

The Keynesian prescription is fatuous because, with rare exceptions, politicians never are willing to stop the flow of goodies that get them elected (tax and borrow, spend, elect). Sure, in theory, it might work to smooth out the normal business cycle (although I have serious doubts about its applicability to catastrophes, e.g. pushing on a string), but in normal circumstances it's a recipe for ever increasing sovere…

The governments of the world have had plenty of time since Keynes to spend themselves into insolvency, and they haven’t done so yet. The US debt-to-GDP ratio dropped steadily between the end of WW2 and the Reagan administration, and dipped again during the Clinton administration. The UK ratio dropped from the end of WW2 until around 1975, held steady, and then had another dip around 1985–1990. Canada’s ratio has been…

How about the PIGS, just for starters (http://en.wikipedia.org/wiki/PIGS_%28economics%29)? Not all the world is part of the Anglosphere like the US, U.K. and Canada.

At the worst reasonable end, what about Argentina? They were epsilon from becoming a developed country ... when Peron gained power.

Or Japan. Do you really expect them to pay back their debt, with a rapidly aging population that's actually been decreasing in absolute and accelerating terms since 2007 (http://en.wikipedia.org/wiki/Demographics_of_Japan#Populatio...)?

Re: The Third Depression

#114

Post by roel_v »

paulnelligan wrote: post #106
roel_v wrote: post #75

Earlier quoted context omitted.

Sweet mother of jesus no. Engineers would gravitate towards a centrally controlled system in no time. Economics is not a control system, it's emerging behavior from independently acting agents (free market economics is, which I argue is the only morally defensible system). A UK (?) technology-oriented scientist build a computer-controlled economic system for some South-American country in the 1970's, complete with a…

The fact that one experiment went wrong does not a bad theory make... there are many variables to be accounted for in a complex system such as this. I respectfully, but completely disagree with you on the fact that free market economics is morally defensible, there isn't really any conscience behind it, just an overriding aim (i.e. profit) ... as for independently acting agents, I assume you mean various corporations…

Free market economics is the only defensible system on the grounds that any other system will necessarily infringe on individual freedoms. A free market in itself is morally neutral, what I meant is that a free market is the only system that does not rely on forcing individuals to act 'for the greater good'; sacrificing free people to the ideals, beliefs or whims of others is what I consider immoral.

Agents in a free market system act independently, pursuing their own benefit; be it corporations or individual consumers. Yes they interact in the sense that it takes two (or more) parties to trade or make contracts, what I mean is that they act for themselves and not coordinate on a mass scale to make the resulting system in a certain direction. Agents exhibit behavior that consists of simple profit-seeking rules, which in turn generates a system dynamic on the macro scale. Their independence lies in their freedom to behave in their own self-interest, in contrast with a centrally planned economy where individuals are told to do or produce as is deemed fit by the central command.

Re: The Third Depression

#115

Post by hga »

stcredzero wrote: post #28

So, besides drugs and entertainment, what were the growth industries during the Great Depression?

Government ( 1/2 :-).

That's certainly the case right now; since the start of the recession, according to the BLS government jobs have increased by 590,000 and 7,960,000 private sector jobs have been lost (http://www.powerlineblog.com/archives/2010/06/026620.php)

Re: The Third Depression

#116

Post by protomyth »

exit wrote: post #112
protomyth wrote: post #108

Earlier quoted context omitted.

I guess when robots get too good at replacing humans (reasoning, mobile, perform skilled work).

so why are people unemployed now? isn't it, as Retric put it, that superficial jobs are being automated? do you think all those unemployed now are just lazy?

wow, talk about interpreting what I said way out of context and intent......

No, I don't think unemployed people are all lazy. Where the heck did I even come close to saying that? I believe the "basic income" as described in your link is wrong for right now and has more of a basis in some future.

People are unemployed because we are in an economic downturn and people are not spending and capital has also dried up. Companies are going without more than automating. This isn't the consequence of some tech revolution, it is the consequence of poor decision making on Wall Street and in Government.

Re: The Third Depression

#117

Post by stcredzero »

hga wrote: post #115
stcredzero wrote: post #28

So, besides drugs and entertainment, what were the growth industries during the Great Depression?

Government ( 1/2 :-). That's certainly the case right now; since the start of the recession, according to the BLS government jobs have increased by 590,000 and 7,960,000 private sector jobs have been lost ( http://www.powerlineblog.com/archives/2010/06/026620.php )

Yes, but I know there are several other private sector industries that held their own or even flourished during the Depression.

Re: The Third Depression

#118

Post by anamax »

rbranson wrote: post #93
anamax wrote: post #80

Earlier quoted context omitted.

> The government can hold debt so long, that, due to inflation, it's value will fall to the point where paying it off is trivial. Reread what he actually wrote instead of responding to a strawman. Pay particular attention to the words after "debts". >>> We're going to do default the hard way by not paying our debts or we're going to default by inflation. Note that inflation isn't free - it has huge costs that play ou…

You're assuming the US government can just simply print money. It can't: the Reserve and the Treasury are two different entities. While I might agree that default and inflation both have costs, with inflation perhaps costing more, you're ignoring the time value of money and elasticity of supply/demand. You better believe default on loans by the US gov't would cause panic and economic stagnation. The purpose of this w…

> You're assuming the US government can just simply print money.

Actually, I'm not. I'm assuming that the US govt can enact policies that cause inflation, which is pretty much agreed on. (And, while the Fed is formally separate from the formal US govt, it's part of govt monetary policy. That goes beyond the US govt's power to replace the Fed leadership....)

> While I might agree that default and inflation both have costs,

Do you really think that there's some possibility that either one is free, especially at the levels required to deal with current debt levels?

> with inflation perhaps costing more, you're ignoring the time value of money and elasticity of supply/demand.

How do you know that I'm ignoring the time value of money or elasticity?

I never said that default would be pain free. My claim is that the pain is likely to be less than inflation.

Note that neither of us are providing any numbers.

> The purpose of this whole economic and central banking system is to smooth out the economic peaks and valleys, not to be perfectly efficient and/or "morally" correct.

That's nice, but irrelevant because no one is arguing for efficiency or correctness.

Note that inflation can cause serious panic and damage.

Feel free to provide examples of default causing as much pain as inflation wreaked on post-WWI Germany or Zimbabwe.

Re: The Third Depression

#119

Post by cturner »

cia_plant wrote: post #10
lionhearted wrote: post #2

I click the article. I see it's Krugman. Before I read further, I say, "Ah, Krugman. I bet his solution is to print money." > ...governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending. That's Krugman's answer for everything. Dot-com crash? Create more money: 2001 Krugman: “During phases of weak growth there are a…

I'm glad to finally find someone who knows exactly what caused the housing bubble and subsequent crash. Could you explain it to me? I find the whole matter very confusing myself, although I've read a lot about it. So: low interest rates caused the housing bubble. Could you explain how that happened exactly?

You might find this interesting: http://www.creditwritedowns.com/2008/12/confessions-of-an-au...

That blog in general deals with a lot of these issues.

Post reply on HN