Best Thread Keynes Vs. Hayek

[scose-no-doubt]

I have met some naive, imbecilic old coots

So you've met Atilla then?

 

[Splitlink]

Anyone who has trodden the green grass of Parliament Hill Fields, as Atilla and I have done, although different generations, do not grow up to be naive, imbecilic old coots.

Wars have been won, fortunes made and cricket played on that turf.

 

[Atilla]

So you've met Atilla then?

I do have my moments but on these blogs one can't run away from told you so...

I'm not asking for anything to be deleted...

 

[Splitlink]

So you've met Atilla then?

No, I haven't had the pleasure, but a place is reserved upstairs, in the land of the Wise, where we have ringside seats of you, poor, strugglers down there.

You've heard the saying "You can't take it with you?" That's bull****, we're taking the lot.

 

[Atilla]

Although I would not dispute that Martin is indeed knowledgeable and probably quite wise with regards to his field of expertise

Linking wisdom with age is quite erroneous as I have met some naive, imbecilic old coots. Nothing wrong with childishness so I'll leave that out of the equation

I do agree with Splitlink and hope I end up like him really.

However, I'm not linking wisdom with age per say but the qualified measured way Martin posts compared to wild and outrageous way NT quotes - begs the question if these are two gentlemen, looking at screens full of same information, they arrive at two different sets of conclusions.

They then put forward and argue their points in very different laboured ways.


The delivery and receipt of that information is where the age and wisdom comes in. It does have a significant effect on how it is put and processed.

 

[Splitlink]

I do agree with Splitlink and hope I end up like him really.

Always supposing that I end up the way I would wish, too! Trouble is that I have not
thought of a way to let you know.

 

[crabbydog]

The socialists just can't 'fess up it was largely their fault the world is in economic meltdown. They ( Clinton/Blair/Brown ) unleashed the reins on bankers and those so-called top people cr*pped all over us, the ordinary Joes, who have to pay for their mistakes. Huge borrowing to cover loans that had little chance of being repaid and weren't checked properly. Huge Govt spending to try and re-susitate the senile economies of the West by Keynesian largesse. There is little point in giving a sick man more viagra or a sick economy more money.

The Western economies have been living well beyond their resources now for decades. Overpaying the upper elite and overtaxing the rest. Politicians just couldn't say no to more hand-outs for political reasons and now "the crunch" has come.

The idiotic socialists will go on spending/wasting ( Keynes )
The Tories are strangling the patient with their stupid remedies. ( Hayek )

Bush and Reagan are equally culpable on that basis.

The big problem with the crisis today is the way global trade imbalances were allowed to grow out of control, leading to vast amounts of cheap credit leading to the booms we have had. the crash was capitalism run riot - the banking system mis-managed risk on an epic scale; the regulators failed to spot or control it. The credit system froze up because of this. By running booms for decades based on credit, there was always going to come a point when there would be a blow out.

This was certainly not a problem caused by socialism, socialism has been beaten into the dust for years.

 

[crabbydog]

For anyone who has the ability to comprehend:

1) Inflation is an expansion of the money supply. Zero to do with taxes.

2) Low interest rates are more likely to stimulate consumption, that was the purpose of Q.E.

3) Production is stimulated by lowering barriers for people to produce (supply) goods and services, such as lowering income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation.

Inflation is a general and sustained rise in prices. In simplistic terms it is caused by an imbalance between supply and demand, but can also be imported if eg oil is prices are raised significantly. Inflation is not an increase in the money supply, although that MIGHT help fuel inflation. Taxes can fuel inflation under some circumstances - eg VAT is raised when prices are already rising, and may trigger off higher pay demands or higher prices from companies trying to increase margins during falling sales. Anything that increases costs ca be a factor in the rise of inflation.

Lowering interest rates can have many effects. For me personally at the moment it has made my mortgage payments lower, so I am putting more money into debt repayment, not increased spending. I am not sure QE was about stimulating demand so much as a belief that the problems in 2007/8 were ones relating to lack of general liquidity in the banking system; QE was meant to resolve that, to get Banks functioning again.

Production is stimulated by all sorts of things, but nothing you have mentioned would make a blind bit of difference unless demand is stimulated somewhere.

 

[Pat494]

I really am surprised that economics graduates/Phds etc. really can't come up with a better solution than reverting back to these 2 old imposters. Both their policies work a bit but are definately NOT the full answer.

Original and constructive thought is as rare as hen's teeth and as valuable as a dozen Fort Knoxes.

:smart:

 

[LuKOs.ro]

Inflation is a general and sustained rise in prices. In simplistic terms it is caused by an imbalance between supply and demand, but can also be imported if eg oil is prices are raised significantly. Inflation is not an increase in the money supply, although that MIGHT help fuel inflation. Taxes can fuel inflation under some circumstances - eg VAT is raised when prices are already rising, and may trigger off higher pay demands or higher prices from companies trying to increase margins during falling sales. Anything that increases costs ca be a factor in the rise of inflation.

Lowering interest rates can have many effects. For me personally at the moment it has made my mortgage payments lower, so I am putting more money into debt repayment, not increased spending. I am not sure QE was about stimulating demand so much as a belief that the problems in 2007/8 were ones relating to lack of general liquidity in the banking system; QE was meant to resolve that, to get Banks functioning again.

Production is stimulated by all sorts of things, but nothing you have mentioned would make a blind bit of difference unless demand is stimulated somewhere.

Excuse me, but all these years of "rebranding" inflation have took a toll on some of us.

1. Inflation represents the expansion of the money supply (which influences the supply side of the money equation) Money Supply * Velocity of Money = Quantity of Goods and Services * Prices. Even taking into account the sticky prices and the instability of the money velocity, the inflation of the money supply generates increased prices.

It is a completely different thing that we measure the increase in money supply by retorting to measuring the increase in consumer prices.

2. Low interest rates besides stimulating consumption, also stimulate overcrowding investments and bubbles.

 

[Atilla]

Excuse me, but all these years of "rebranding" inflation have took a toll on some of us.

1. Inflation represents the expansion of the money supply (which influences the supply side of the money equation) Money Supply * Velocity of Money = Quantity of Goods and Services * Prices. Even taking into account the sticky prices and the instability of the money velocity, the inflation of the money supply generates increased prices.

It is a completely different thing that we measure the increase in money supply by retorting to measuring the increase in consumer prices.

2. Low interest rates besides stimulating consumption, also stimulate overcrowding investments and bubbles.

1. Agree 100%

2. It is not low interest rates that crowd out investment but Government borrowing as they compete to finance PSBR with private sector for available funds. Low interest rates make investment decisions more attractive by increasing ROI and reducing payback time. Hence, encouraging R&D and Investment to take place.

 

[new_trader]

1. Agree 100%

2. It is not low interest rates that crowd out investment but Government borrowing as they compete to finance PSBR with private sector for available funds. Low interest rates make investment decisions more attractive by increasing ROI and reducing payback time. Hence, encouraging R&D and Investment to take place.

What absolute rubbish Atilla. The only reason you go along with the idiotic inflationist policy is because you want your Government to protect the value of your precious property portfolio... Nothing more, nothing less.

 

[Atilla]

What absolute rubbish Atilla. The only reason you go along with the idiotic inflationist policy is because you want your Government to protect the value of your precious property portfolio... Nothing more, nothing less.

Do you know the difference between real and nominal value?

People think others think like they do? You speak for your self Mr selfish that you are... I've heard nothing but I and MINE from your rants...

In the absence of raising taxes or price adjustments which are sticky downwards inflation is the only tool.

What you and I think or do is immaterial and of no consequence.

 

[new_trader]

Do you know the difference between real and nominal value?

You are the one who supports an inflationist policy. I would argue that the average person doesn't understand the difference between real and nominal value and that is why politicians get away with what they do. The average person only understands that "You can't lose with prop-uh-ee...me prop-uh-ee is me pension"

People think others think like they do? You speak for your self Mr selfish that you are... I've heard nothing but I and MINE from your rants...

In the absence of raising taxes or price adjustments which are sticky downwards inflation is the only tool.

It's the 'only' tool inflationists understand. Print money...arghhhh...print money...arghhhh...we could replace Merv King with a parrot. What makes you say I'm selfish? Is it because I don't want to pay more taxes or because I don't like the idea of impoverishing people through inflation or because I hate the concept of the prudent being 'punished' as the feckless are 'rewarded'?

What you and I think or do is immaterial and of no consequence.

This is the problem with you. I am part of 'The Economy' so to disregard what I think and do only highlights your ignorance.

 

[Martinghoul]

Inflation is a general and sustained rise in prices. In simplistic terms it is caused by an imbalance between supply and demand, but can also be imported if eg oil is prices are raised significantly. Inflation is not an increase in the money supply, although that MIGHT help fuel inflation. Taxes can fuel inflation under some circumstances - eg VAT is raised when prices are already rising, and may trigger off higher pay demands or higher prices from companies trying to increase margins during falling sales. Anything that increases costs ca be a factor in the rise of inflation.

Lowering interest rates can have many effects. For me personally at the moment it has made my mortgage payments lower, so I am putting more money into debt repayment, not increased spending. I am not sure QE was about stimulating demand so much as a belief that the problems in 2007/8 were ones relating to lack of general liquidity in the banking system; QE was meant to resolve that, to get Banks functioning again.

Production is stimulated by all sorts of things, but nothing you have mentioned would make a blind bit of difference unless demand is stimulated somewhere.

+1

 

[new_trader]

The idea that demand needs to be stimulated is too stupid for words.

Inflation is an expansion of the money supply.

 

[scose-no-doubt]

Inflation - Austrian Economics Wiki

Inflation: What Is Inflation?

never gonna agree.

 

[Martinghoul]

Inflation is an expansion of the money supply.

Is that always the case, though? Even when most of the "money" in the system is "credit", rather than "narrow money"?

 

[Pat494]

Is that always the case, though? Even when most of the "money" in the system is "credit", rather than "narrow money"?

shortages also cause prices to go up

 

[Atilla]

The idea that demand needs to be stimulated is too stupid for words.

Inflation is an expansion of the money supply.

READ!

Originally Posted by LuKOs.ro
Excuse me, but all these years of "rebranding" inflation have took a toll on some of us.

1. Inflation represents the expansion of the money supply (which influences the supply side of the money equation) Money Supply * Velocity of Money = Quantity of Goods and Services * Prices. Even taking into account the sticky prices and the instability of the money velocity, the inflation of the money supply generates increased prices.


UNDERSTAND IT and DIGEST...

Saying it is simply the Ms is far too simplistic.

Either you do not understand or you do but reject any other analysis outside of your narrow view.


NT Revelation 1
Inflation is an expansion of the money supply. :-0 :-0