Bush Hits New Low

Off Topic Politics & World Issues
41

[quote]Headhunter wrote:
I’m sure you realize that you pay way more in taxes than about 99% of us earn, per year. That’s remarkable![/quote]

Not really. I spent about 10 years of my life learning about the very rules that govern the stock, options and futures market. I would have to be a complete idiot not to know by now how to make plenty of money there…

The .com boom helped me build quite a large savings fund (which I did not lose during the .com bust, because I exited the market just in time), which I leverage extensively. :slight_smile:

You seem to do pretty well yourself in the stock market, from what you mentioned elsewhere…

42

[quote]Headhunter wrote:
Differential Equations, Stability and Chaos in Dynamic Economics, by Brock and Malliaris.

W.A. Brock is pretty good at explaining pseudo-randomness.[/quote]

That book is superb, and was highly influential to both my Ph.D. Theses. I also have it in my “recommended reading” list for my MBA students.

The only caveat is that in order to be fully understood it requires some knowledge of Calculus, including – obviously – Differential Equations. I would NOT recommend buying it for people without a science major (Math or Economics, preferably), since it is fairly expensive. It is VERY technical.

For non-scientists, I prefer this one:

Cycles and Chaos in Economic Equilibrium
by Jess Benhabib
ISBN: 0691003920

It is a much lighter read, and equally – if not more – insightful. It is also much cheaper – and from Princeton University Press, which I’m sure pleases NJ natives… :wink:

43

[quote]Headhunter wrote:
Its all there in Ms. Rand’s work.[/quote]

As I was preparing Monday?s classes, I just remembered something:

Objectivists – including Alan Greenspan, who you have mentioned to hold in high regard – have long defended a return to the Gold Standard (sending fiat currency, the current system, back to where it came from).

They are quite alone in that belief – in particular, Republicans fundamentally reject that proposal, which is no wonder since it was Republicans in the first place who made sure the Gold Standard was replaced by Fiat Currency – and it has been Republican presidents that have most exploited the mechanisms behind Fiat Currency – namely, through extensive use of Keynesian Economics.

You have never stated your position on this, so I’m here wondering what it is, especially since you made clear you have some level of respect for Bush II, who not only is a Republican, made very public his disgust for Greenspan’s objectivist position on this.

So, on which side are you on this, and why?

44

[quote]hspder wrote:
Headhunter wrote:
Its all there in Ms. Rand’s work.

As I was preparing Monday?s classes, I just remembered something:

Objectivists – including Alan Greenspan, who you have mentioned to hold in high regard – have long defended a return to the Gold Standard (sending fiat currency, the current system, back to where it came from).

They are quite alone in that belief – in particular, Republicans fundamentally reject that proposal, which is no wonder since it was Republicans in the first place who made sure the Gold Standard was replaced by Fiat Currency – and it has been Republican presidents that have most exploited the mechanisms behind Fiat Currency – namely, through extensive use of Keynesian Economics.

You have never stated your position on this, so I’m here wondering what it is, especially since you made clear you have some level of respect for Bush II, who not only is a Republican, made very public his disgust for Greenspan’s objectivist position on this.

So, on which side are you on this, and why?
[/quote]

You’ve got me there, doc. I did not know that Bush ‘made public his disgust’ for the ideas of, IMO, a brilliant man.

As for my ‘side’: I look at Republicans as the lesser of 2 evils. You know that I much prefer a voluntary society, where people have as much RATIONAL freedom as possible. One way to prevent such Keynesian manipulation is a gold standard. As Ms. Rand puts it, gold is an objective measure of value. Politicians hate gold because of the discipline it imposes. To a politician, gold must appear as evil. “And so, politicians confiscate gold and leave to its owners a counterfeit pile of papers.” (Shrugged)

It was my hope (pretty well dashed now) that the Contract with America would actually push our country back onto our basic philosophy. The Republicans became more like the Democrats once they obtained power – trying to outdo them in spending and regulating. However, since Dean and company pushed the Democratic party even FURTHER away from my beliefs, I still prefer the republicans.

45

Referring to everything as “evil” is surely a weak crutch.

You don’t need to clutch onto such a thing, do you?

46

[quote]vroom wrote:
To a politician, gold must appear as evil. “And so, politicians confiscate gold and leave to its owners a counterfeit pile of papers.” (Shrugged)

Referring to everything as “evil” is surely a weak crutch.

You don’t need to clutch onto such a thing, do you?[/quote]

“He who does not punish evil commands it to be done.”
— Leonardo Da Vinci

47

[quote]Headhunter wrote:
“He who does not punish evil commands it to be done.”
— Leonardo Da Vinci
[/quote]

Maybe some day you’ll develop the ability to share some of your own thinking with us?

I’m not arguing against my good buddy Leonardo, but you still need to be able to actually figure out what is and what isn’t an evil.

Things you like to classify as evil often do not qualify for the monikor, so go find a quote dealing with burning people for being evil, such as witches, and then finding out they aren’t actually witches, and thus they weren’t actually evil.

I hope you can do better than “oops”. Hmm, perhaps “witchhunt” will do?

48

Vroom,
I know you’re simply trying to provoke me, but what the heck…

Good and evil are relative to your defining characteristic. Whatever maintains or enhances your life AS A RATIONAL BEING is the Good. Whatever detracts from you AS A RATIONAL BEING is Evil.

Is it good to steal? Nope, it detracts from your honesty and integrity. Is it good to treat others as you wish to be treated? Yes, it enhances the respect you have for others.

I could go on, but I know you’re going to ‘Vroom’ me. So, go ahead, get it over with.

BTW: Since you would not respect the statement about evil if I said it, I found an appropriate quote from someone you would respect more. Since Vroom is always right, I should have known that that wouldn’t work.

49

[quote]vroom wrote:
Headhunter wrote:
“He who does not punish evil commands it to be done.”
— Leonardo Da Vinci

Maybe some day you’ll develop the ability to share some of your own thinking with us?

I’m not arguing against my good buddy Leonardo, but you still need to be able to actually figure out what is and what isn’t an evil.

Things you like to classify as evil often do not qualify for the monikor, so go find a quote dealing with burning people for being evil, such as witches, and then finding out they aren’t actually witches, and thus they weren’t actually evil.

I hope you can do better than “oops”. Hmm, perhaps “witchhunt” will do?[/quote]

While reading this my only thought was can anyone really decide whether something is evil or not? What is evil to you may not be evil to me, making it more a matter of perception. Taking a life is always considered evil, but when we do it in a war or in defense or even kill a rapist it is considered heroic or patriotic. Does being heroic or patriotic to you make it less evil to me should I feel that way?

Stealing is wrong or evil, but Robin Hood was fighting tyranny stealing and giving to the poor, making it good. Now which is it? Is stealing evil or is it good, or is it somewhere between? If everything is somewhere between how can one really fight or condone evil, now that evil is one of a million gray areas in human life.

If one were to take this attitude, none of the old adages would really apply. The only one left would simply be, “Vengence is mine sayeth the lord, and I shall have it”

50

[quote]Headhunter wrote:
As Ms. Rand puts it, gold is an objective measure of value. Politicians hate gold because of the discipline it imposes. [/quote]

Absolutely – the discipline it imposes on not only them, but most of all, of the public…

Having a positive opinion of the Dynamic Economics book, I’m a bit puzzled on how you consolidate those theories with your beliefs against Keynesian economics.

Dynamic Economics shows that economic fluctuations are neither random nor driven by random factors, and it also shows we do NOT have guaranteed rational decision-making NOR a perfect information environment – effectively disproving real business cycle models, which consider only fluctuations in supply (technology shocks), assume rational decisions in a perfect information environment, and ignore factors that dynamic economics proves are extremely important (market inefficiencies, unemployment, irrational decision making, lack of information, etc.).

That means that, according to Dynamic Economics Theory, Keynes was completely right in modelling economic fluctuations in terms of fluctuations of aggregate demand (rather than supply), because demand takes into account all the factors that Dynamic Economics defends are important.

The problem with that realization is that it makes Keynes’ conclusion also inescapable – that, in absence of guaranteed rational decision-making in a perfect information environment, economic downturns will be unstoppable and never reverse – unless Government intervenes through the injection of large amounts of capital, financed by public debt, that will then be repayed during economic upturns (basic Keynesian Economics).

So, on one side, we have the camp that believes in the theories of Dynamic Economics, Behavioral Economics, Keynesian Economics and hence in fiat currency and Social Democracy…

…and on the other we have the camp that believes in classical economics, supply-side economics, Real business cycles and hence in the Gold Standard and laissez-faire Capitalism.

So, your praise of Dynamic Economics puzzles me… It seems to go completely against your beliefs.

51

[quote]hspder wrote:
Headhunter wrote:
As Ms. Rand puts it, gold is an objective measure of value. Politicians hate gold because of the discipline it imposes.

Absolutely – the discipline it imposes on not only them, but most of all, of the public…

Having a positive opinion of the Dynamic Economics book, I’m a bit puzzled on how you consolidate those theories with your beliefs against Keynesian economics.

Dynamic Economics shows that economic fluctuations are neither random nor driven by random factors, and it also shows we do NOT have guaranteed rational decision-making NOR a perfect information environment – effectively disproving real business cycle models, which consider only fluctuations in supply (technology shocks), assume rational decisions in a perfect information environment, and ignore factors that dynamic economics proves are extremely important (market inefficiencies, unemployment, irrational decision making, lack of information, etc.).

That means that, according to Dynamic Economics Theory, Keynes was completely right in modelling economic fluctuations in terms of fluctuations of aggregate demand (rather than supply), because demand takes into account all the factors that Dynamic Economics defends are important.

The problem with that realization is that it makes Keynes’ conclusion also inescapable – that, in absence of guaranteed rational decision-making in a perfect information environment, economic downturns will be unstoppable and never reverse – unless Government intervenes through the injection of large amounts of capital, financed by public debt, that will then be repayed during economic upturns (basic Keynesian Economics).

So, on one side, we have the camp that believes in the theories of Dynamic Economics, Behavioral Economics, Keynesian Economics and hence in fiat currency and Social Democracy…

…and on the other we have the camp that believes in classical economics, supply-side economics, Real business cycles and hence in the Gold Standard and laissez-faire Capitalism.

So, your praise of Dynamic Economics puzzles me… It seems to go completely against your beliefs.[/quote]

I totally agree! (As soon as someone explains what he just said to me.)

52

Doc,

I don’t see the conflict. Since decision-making is not instantaneous and perfect, increasing aggregate demand via government debt has little effect until it becomes vast and overwhelming, such as in gearing up for a major war (sound familiar?). In all of this, we must realize that war itself is funded by debasing the currency — gold prevents that.

My argument with Keynesianism is that, because events are not random, or nearly as random as we suppose, interference via government debt simply substitutes a bureaucrat’s decisions for the marketplace’s. This is, more than likely, disasterous.

Note: I stopped 2 courses short of a bachelor’s in Econ. You’re take on this is surely beyond mine. Errors are unintentional.

53

[quote]Headhunter wrote:
Doc,

I don’t see the conflict.
[…]
My argument with Keynesianism is that, because events are not random, or nearly as random as we suppose, interference via government debt simply substitutes a bureaucrat’s decisions for the marketplace’s. This is, more than likely, disasterous.[/quote]

According to Dynamic Economics, it’s not more disastrous than letting the marketplace decide it.

The point is that Dynamic Economics shows that a) in the marketplace by itself there is NO automatic, inevitable mechanism to stop a downturn and b) downturns do happen (i.e., market fluctuations are inevitable).

That’s where the conflict lies – if you accept Dynamic Economics to provide a good model, you must also accept that laissez-faire capitalism will inevitably have an unbound (unstoppable, catastrophic) downturn (a) + b)).

54

[quote]hspder wrote:
Headhunter wrote:
Doc,

I don’t see the conflict.
[…]
My argument with Keynesianism is that, because events are not random, or nearly as random as we suppose, interference via government debt simply substitutes a bureaucrat’s decisions for the marketplace’s. This is, more than likely, disasterous.

According to Dynamic Economics, it’s not more disastrous than letting the marketplace decide it.

The point is that Dynamic Economics shows that a) in the marketplace by itself there is NO automatic, inevitable mechanism to stop a downturn and b) downturns do happen (i.e., market fluctuations are inevitable).

That’s where the conflict lies – if you accept Dynamic Economics to provide a good model, you must also accept that laissez-faire capitalism will inevitably have an unbound (unstoppable, catastrophic) downturn (a) + b)).
[/quote]

Yes. That’s where I disagree with Dynamic Economics. Only a mild downturn can effectively be countered by bureaucrats. It takes something momentous, such as WWII scale-spending, to reverse a major downturn. Yes, a Great Depression can be stopped, but only if the nation has a very strong currency which can safely be debased.

Since serious countries cannot afford the disasterous effects of hyperinflation, bureaucrats will simply be incapable of using Keynesian economic policy more than once, to counter a great depression. Everyone understands that the currency is being debased and begin bailing out, negating the hoped-for effect.

It may well be that, given the vast increases in information technology, economies will drift toward LF economics. As LF becomes more efficient, it will displace what we have now. I need to think more on this…

55

[quote]hspder wrote:
…Bush II, who not only is a Republican, made very public his disgust for Greenspan’s objectivist position on this.

[/quote]

This conversation is miles above my head, and has definitely made me want to learn more about economics.

hspder,

I want to ask where I can locate any of the statements by Bush expressing disgust toward Greenspan’s objectivist position on this. I realize you weren’t saying he used those words, but I don’t understand enough about the topic to even narrow down a search. I keep getting either totally unrelated crap or other people’s opinions on Bush and the gold standard. Thanks.

56

I agree! Makes me want to go back and finish my Econ degree.

57

[quote]doogie wrote:
I want to ask where I can locate any of the statements by Bush expressing disgust toward Greenspan’s objectivist position on this. I realize you weren’t saying he used those words, but I don’t understand enough about the topic to even narrow down a search. I keep getting either totally unrelated crap or other people’s opinions on Bush and the gold standard. Thanks.[/quote]

Unfortunately, I can’t find it on the Internet right now either.

I do have the Stanford Economics Department Newsletter that mentions it.

Bush’s statements were made on February 2003. Let me provide a little bit of context too:

Even though the GOP was a big supporter of the Gold Standard back in the 19th century, in the 20th century it was Nixon – who, as you know was a Republican – who killed its modern version, the Bretton Woods system. Thanks to Nixon, at that point for the first time in history, formal links between the major world currencies and real commodities were severed". The gold standard has not been used in any major economy since that time.

So that made the GOPs position abundantly clear – if they wanted the Gold Standard back, the last thing they would want to do is to kill its remnants in the form of the Bretton Woods system.

The GOP continued its support of fiat currency and Keynesian Economics through Reagan’s and Bush I’s terms, who both used them extensively – too much, in fact, since our debt doubled (as a % of the GDP), something that would NEVER have been possible if the Gold Standard or the Bretton Woods system was in place.

So people were absolutely flabbergasted when the Texas GOP, in its 2000 platform, announced it supported the return to the Gold Standard, completely going against what Bush I did.

Interestingly, the GOP National Committee never supported that part of the Texas GOP platform.

Even so, everybody kinda expected Bush II to at least make some efforts to implement that goal – after all, he is a Texan.

However, he never did so. In fact, absolutely no effort or statement was made by him on the subject, until February 2003, at which point he complained about Greenspan’s stance on Goverment stimulation of the Economy, including his stance on going away from fiat currency and back into the gold standard (he used it as a talking point presumably to show how stubborn and outdated he was).

Since then, obviously Bush has not made any attempts to go back to the Gold standard, and it mysteriously disappeared from the 2004 Texas GOP platform. That’s right: there’s no mention of that goal anymore in the 2004 Texas GOP platform:

http://www.texasgop.org/site/DocServer/RPTPlatform2004.pdf?docID=121

I guess they wised up…

58

[quote]Headhunter wrote:
Yes. That’s where I disagree with Dynamic Economics. Only a mild downturn can effectively be countered by bureaucrats.[/quote]

Why is that a problem? I mean, the whole point of Keynesian Economics is that downturns are countered WHILE THEY ARE MILD, which is a good thing; they never get serious. And if they never get serious, your other point:

[quote]Headhunter wrote:
It takes something momentous, such as WWII scale-spending, to reverse a major downturn.[/quote]

…is moot.

The proof is that we haven’t had any major downturns since we adopted Keynes and killed the Gold Standard.

[quote]Headhunter wrote:
It may well be that, given the vast increases in information technology, economies will drift toward LF economics. As LF becomes more efficient, it will displace what we have now. I need to think more on this… [/quote]

So my question is: how do you guarantee that a downturn – mild or serious – will be stopped and reversed in a laissez-faire capitalist economy?

Seriously.

59

[quote]doogie wrote:
This conversation is miles above my head, and has definitely made me want to learn more about economics. [/quote]

[quote]Headhunter wrote:
I agree! Makes me want to go back and finish my Econ degree.[/quote]

You just made my day. Seriously. That’s the absolutely biggest compliment anyone can pay any professor (really, any teacher), and I am no exception to that rule. Thank you.

60

[quote]hspder wrote:
Headhunter wrote:
Yes. That’s where I disagree with Dynamic Economics. Only a mild downturn can effectively be countered by bureaucrats.

Why is that a problem? I mean, the whole point of Keynesian Economics is that downturns are countered WHILE THEY ARE MILD, which is a good thing; they never get serious. And if they never get serious, your other point:

Headhunter wrote:
It takes something momentous, such as WWII scale-spending, to reverse a major downturn.

…is moot.

The proof is that we haven’t had any major downturns since we adopted Keynes and killed the Gold Standard.

Headhunter wrote:
It may well be that, given the vast increases in information technology, economies will drift toward LF economics. As LF becomes more efficient, it will displace what we have now. I need to think more on this…

So my question is: how do you guarantee that a downturn – mild or serious – will be stopped and reversed in a laissez-faire capitalist economy?

Seriously.
[/quote]

No guarantees are involved or even wanted. Freedom means the freedom to starve or to become a millionaire. We don’t want and shouldn’t want such a guarantee.

Ever see a movie called ‘The Dirty Dozen’? In it, a soldier is climbing a rope, gets to a point, and starts screaming how he can’t go up any further. The sergeant, Lee Marvin, promptly shoots the rope just below the climber. The climber shoots up that rope faster than a jackrabbit! It was either climb or die.

That’s the kind of world I want. I either ascend to the heights, or die. And if I die, I will have at least TRIED to climb the rope.

How pathetic it is, if you always have a safety net under you!!

So, that’s why I don’t like mixed economies, social democracies, or anything of that sort. We should not be timid little mice, trying to have a cushion there when we fall. We should be as vikings, going out on a quest. And that’s why I don’t like Keynesian economics.

HH