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Future Economists Will Probably Call This Decade the 'Longest Depression'

huffingtonpost.com

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Re: Future Economists Will Probably Call This Decade the 'Longest Depression'

#91

Post by AnimalMuppet »

roymurdock wrote: post #48

This is a terrible article. It strikes me as too technical to do anything but anger the casual reader (see the article's comment section for examples) and too vague to say anything meaningful to the informed reader. The only new information presented here is the professor's (extremely late) admission that his strict adherence to a misguided school of theoretical economics that no longer applied in the face of structu…

One nit:

> As for spending on infrastructure - what budgets should we cut to get the funds?

He wasn't proposing cutting budgets to get the funds. He was proposing running increasing deficits to get the funds. While I consider that to be insane, given how far in debt the government is, and while it seems to contradict his first proposal, we still should state his position correctly before pointing out where it's wrong...

Re: Future Economists Will Probably Call This Decade the 'Longest Depression'

#92

Post by selimthegrim »

rm_-rf_slash wrote: post #36
jerf wrote: post #29

Earlier quoted context omitted.

"Consider what could happen if just a single state offered universal basic income, for instance." Roughly the same thing as one country that offers universal basic income but doesn't control its borders, for the exact same reason? Also, UBI isn't magic. If it would not work in a state individually, it does not become practical by banding 50 states it doesn't work in together. In fact, with the size of most US states,…

I know I'm contradicting my previous point, but a federal program would inhibit tax-paying citizens and corporations from moving to the most convenient nearby location to do the same business but for cheap. One example to look at would be the cities of Portland, Oregon, and Vancouver, Washington. A lot of people choose to live in Vancouver because Washington has no income tax and spend their time and money in Portlan…

They also spend their time and money in Portland because Vancouver is a hole. And I used to live in St. Johns (AKA Tweakville) so I know whereof I speak.

Re: Future Economists Will Probably Call This Decade the 'Longest Depression'

#93

Post by drjesusphd »

ashark wrote: post #20
rm_-rf_slash wrote: post #13

Earlier quoted context omitted.

That's why reform has to start at a local level. Solutions that work brilliantly in Massachusetts have no guarantee of succeeding in Mississippi. Whatever ends up working broadly should be adopted by the federal government. Perhaps they could provide a block grant to each of the states to experiment with reforms and study the effects.

Lots of things probably won't work very well at the state level, but might nationally. Consider what could happen if just a single state offered universal basic income, for instance.

Single nations and even single cities in the EU are adopting universal income as we speak. I'm sure they found a credible (though perhaps not not guaranteed) way to make it work. In any case, we can learn from their experience.

Re: Future Economists Will Probably Call This Decade the 'Longest Depression'

#94

Post by Amezarak »

AnimalMuppet wrote: post #84
Amezarak wrote: post #65

Earlier quoted context omitted.

http://economics-charts.com/gdp/gdp-1929-2004.html#table The New Deal had already kickstarted the economy by the time WWII rolled around - although obviously WWII served as an even larger public works and employment program. (The government did, however, have wage and price controls for many decades after the Great Depression.) As you can see in the chart, GDP had already doubled by 1941, returning to pre-Depression…

OK, but Europe was at war starting in 1939, and was trying to buy all kinds of stuff from the US. That's still WWII kickstarting the US economy, even though the US wasn't in the war yet.

The very same table I linked showed that story doesn't make sense. Look at the exports column. Nothing to write home about until after 1945. Definitely not an impact remotely comparable to the huge increase in government spending.

Re: Future Economists Will Probably Call This Decade the 'Longest Depression'

#95

Post by Amezarak »

AnimalMuppet wrote: post #86
Mikeb85 wrote: post #73

Earlier quoted context omitted.

Look at an economic chart pre and post New Deal. Not only did FDR's policies help the US recover from the depression, it set the framework for the strongest economic growth of the US' history (pre-1930s growth was much slower than it has been post 1945). Furthermore, your source is as partisan as they come. 'Austrian' economics exists pretty much only on the internet. Mainstream economics has progressed since 1930.

But post 1945, Europe had been bombed nearly to destruction, as had Japan. Even Russia had been devastated. The US was exporting to the whole world as everybody else tried to rebuild. You can't take 1945-1970 US economic growth as a measure of the quality of FDR's economic policies.

That's a common narrative, but it doesn't make sense when you look at the facts on the ground. And putting some thought into it, bombed-out economies are not good customers.

http://graphics8.nytimes.com/images/2012/11/19/opinion/11191...

As you can see, there was nothing more than a brief spike in the general upward trend in exports. The "Europe bought tons of stuff from us, fueling our economy" story is simply not true. Exports as a share of GDP briefly peaked at 8% and then rapidly returned to prewar levels by the early 1950s.

Re: Future Economists Will Probably Call This Decade the 'Longest Depression'

#96

Post by kaonashi »

Mikeb85 wrote: post #41
kaonashi wrote: post #10

A Solow-humper sees the error of his ways. It's the feel good hit of the new year.

Just curious, what do you think any of this has to do with Solow? Brad Delong was mistaken about certain shocks within the framework of the 'Keynesian' model - the Solow model is about how investment, capital and productivity (enabled by technology) sets long-run output.

> Back before 2008, I used to teach my students that during a disturbance in the business cycle, we'd be 40 percent of the way back to normal in a year. The long-run trend of economic growth, I would say, was barely affected by short-run business cycle disturbances.

it was a stupid flip comment based on that, probably best it was downvoted

Re: Future Economists Will Probably Call This Decade the 'Longest Depression'

#97

Post by digi_owl »

davesque wrote: post #54
digi_owl wrote: post #19

Earlier quoted context omitted.

I think it is more that this time round, economics as a "school" is quite a bit more entrenched. Keep in mind that during the great depression you had fascists in Italy and Germany, and communists in Russia. Now the fascists have gone underground, and the communists have imploded. All this gives the current mainstream economic thinking an air of correctness that it didn't have back then, by "virtue" of being the last…

Maybe the answer is somewhere in between all these failed, xenophobic systems. It always frustrates me when I see good ideas shot down in the public discourse because they sound too much like Communism or Socialism. There is a middle ground that we can't ever get to as long as politics are so polarized.

Nordic social democracy? Sadly its being rapidly dismantled, much like Thatcher did to the UK.

Re: Future Economists Will Probably Call This Decade the 'Longest Depression'

#98

Post by AnimalMuppet »

Amezarak wrote: post #95
AnimalMuppet wrote: post #86

Earlier quoted context omitted.

But post 1945, Europe had been bombed nearly to destruction, as had Japan. Even Russia had been devastated. The US was exporting to the whole world as everybody else tried to rebuild. You can't take 1945-1970 US economic growth as a measure of the quality of FDR's economic policies.

That's a common narrative, but it doesn't make sense when you look at the facts on the ground. And putting some thought into it, bombed-out economies are not good customers. http://graphics8.nytimes.com/images/2012/11/19/opinion/11191... As you can see, there was nothing more than a brief spike in the general upward trend in exports. The "Europe bought tons of stuff from us, fueling our economy" story is simply not t…

OK, but what about imports? I'd bet that the US didn't import much until 1970 or so - at least, not in the form of finished goods (and apart from imports from Canada).

Re: Future Economists Will Probably Call This Decade the 'Longest Depression'

#99

Post by Amezarak »

AnimalMuppet wrote: post #98
Amezarak wrote: post #95

Earlier quoted context omitted.

That's a common narrative, but it doesn't make sense when you look at the facts on the ground. And putting some thought into it, bombed-out economies are not good customers. http://graphics8.nytimes.com/images/2012/11/19/opinion/11191... As you can see, there was nothing more than a brief spike in the general upward trend in exports. The "Europe bought tons of stuff from us, fueling our economy" story is simply not t…

OK, but what about imports? I'd bet that the US didn't import much until 1970 or so - at least, not in the form of finished goods (and apart from imports from Canada).

The graph shows both. They track pretty closely until the 1980s, with the exception being that brief couple year export spike which was not matched by imports.
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