Cafe Hayek - Latest Comments in Recalculating

Re: Recalculating

indianajim — Wed, 07 Oct 2009 21:21:19 -0000

If you do any "Moonwalkin' with Michael" you'll be dead; I don't wish that on anyone who posts at the Cafe.

Re: Recalculating

foodist — Wed, 07 Oct 2009 19:07:56 -0000

Krugman is become Death, Destroyer of Worlds

Re: Recalculating

Spaceman Lesvic — Wed, 07 Oct 2009 00:54:25 -0000

JimmyCrackCornfield,

That's how I feel when you attack me, like I'm walkin' on air.

Keep it up, and I'll be Moonwalkin' with Michael.

Re: Recalculating

indianajim — Tue, 06 Oct 2009 22:26:55 -0000

I think it is great for Arnold that Krugman has attacked him. Think about it this way: Krugman is an anti-economist and if he is attacking Arnold, then Arnold represents a great threat to anti-economics.

Personally, I'm looking for Arnold to walk on the water in the near future.

:>)

Re: Recalculating

Joe_Blotnick — Tue, 06 Oct 2009 17:52:51 -0000

This really isn't so much different than the situation in California ...

Re: Recalculating

SymbolicalHead — Tue, 06 Oct 2009 15:43:41 -0000

In this particular context, one also has to remember the stock market bust shortly before the housing boom. That left a lot of idle, financially-trained people around. I'm sure most found employment in the asset bubble that followed, so you were drawing up a lot of slack as well.

I wouldn't agree with him anyway, but in this case it is particularly horrible, because it totally ignores that there was a tremendous pool of idle, trained people to draw into an activity very similar to their previous employment.

Re: Recalculating

vikingvista — Tue, 06 Oct 2009 12:58:24 -0000

Of course, I was referring to his use of "liberal", not ours. "Authoritarian" and "fascistic" are much more accurate, and "sociopath" does seem to fit the actions he proposes.

Re: Recalculating

Sam Grove — Tue, 06 Oct 2009 12:34:09 -0000

He pursued economics to further the goals of his ~~liberal~~ authoritarian conscience.

OK, I was being generous, you can read "authoritarian" as "fascistic". Given that, I wouldn't claim he has much of a conscience. There are all kinds of sociopaths.

Re: Recalculating

boblayson — Tue, 06 Oct 2009 11:30:28 -0000

The economy is not a see-saw with investment in housing up and investment and employment in consumer industries down. In a growing economy with immigration, replacement of workers by machines, and housewives taking up paid work out of the home, both output and employment will not fall -and may even rise- in consumer industries even as the building industry expands steadily.

If China supplies the loan money for materials and Mexico etc. supplies the building workers then both industries can expand at once. However, the Austrian cycle theory implies that when nearer to natural interest rates, that is, higher ones, arrive as arrive they must and combine with the inflationary effect of the credit expansion required to keep rates down in the first place then much investment will be revealed as malinvestment. The cost of inputs now outweigh the likely selling prices of many capital ventures and these are not worth bringing to market save to cut losses.

Re: Recalculating

Diego — Tue, 06 Oct 2009 11:27:43 -0000

Here in Spain there was a probably even larger housing bubble than in the US. And at least for the Spanish case, another source of asymmetry could be related to immigration. There was a large inflow of immigrants during the boom, many of whom came to work in the construction sector. However after the bust these immigrants are reluctant to return to their countries. They would much rather first enjoy the unemployment benefits to which they are entitled, and wait for the crisis to pass, since life in their home countries has at best not gotten any easier in the meantime. They are also reluctant to move to other European countries where they would have to adapt to a different language and culture and build up new social networks. So now you have a bunch of people in the labor force that weren't here before the boom, exacerbating the unemployment problem. (I hope this rant does not sound like I am against immigration, I just think that a lot of the recent immigration to Spain was misallocated to a fairy tale sector).

Re: Recalculating

adamruth — Tue, 06 Oct 2009 06:39:35 -0000

The response to Krugman is much simpler than all that. Booms and bust are mirror images of each other. In booms, new jobs are created. In busts, jobs are destroyed.

To ask why there's not unemployment during a time when new jobs are created is an idiotic question, not even worthy of an Economics 101 freshman. Really, Krugman should be ashamed to have even thought it.

Re: Recalculating

vidyohs — Tue, 06 Oct 2009 06:12:25 -0000

I agree that the limo driver's definition of success is his own personal decision, is it comfortable, is it being a man of significant means, is it very wealthy, but regardless he will be okay.

As for your entire comment, there is an all day conversation wrapped up in that brief comment, I understand exactly what you're saying, so my short version will be that yes running a large fleet of limos as an independent business owner can be as demanding as being a construction supervisor for a large successful builder.

But, what I missed as a kid in central Texas growing up and looking at all those "old" ranchers of 40 years of age, was yes they worked hard, yes they were 40 and just really starting to see the results of their labors pay off, but they all were doing what they "wanted" to do, what they dreamed of, and the restrictions demanded by their life style were of personal choice. That is the kind of situation that can get you out of bed each morning ready to go at it one more day, and another day, etc. because it is yours. That is freedom in my book.

Re: Recalculating

vidyohs — Tue, 06 Oct 2009 06:04:07 -0000

I'll just say that I have no such hopes for him, and let it go at that.

Re: Recalculating

D.G. Lesvic — Tue, 06 Oct 2009 03:30:11 -0000

"Krugman insults Arnold Kling."

That is so unnecessary. I don't know why anyone has to do that.

Re: Recalculating

vikingvista — Tue, 06 Oct 2009 03:05:26 -0000

Remember, he's the same one who thinks that when faced with the loss of a customer, a businessman's first and second (and maybe only) choices are to draw from savings and cut consumption. He places "adapting the structure of production" in quotes, not to give credit, but because he can't comprehend what it means. And he can comprehend no cost to government spending beyond the obvious transfer of wealth.

I don't know if he's dumb. I think it is entirely possible that he just doesn't care about what is true. He didn't develop the "conscience of a liberal" from his economic understanding. He pursued economics to further the goals of his liberal conscience.

Re: Recalculating

vikingvista — Tue, 06 Oct 2009 02:46:31 -0000

No, the Nobel Committee did that. And it didn't start with Krugman's award.

Re: Recalculating

vikingvista — Tue, 06 Oct 2009 02:44:32 -0000

Chemists and physicists prior to recognizing the second law of thermodynamics.

Re: Recalculating

vikingvista — Tue, 06 Oct 2009 02:36:51 -0000

Of course. Digging holes is how keynesiacs stimulate the economy.

Re: Recalculating

lee_kelly — Tue, 06 Oct 2009 01:50:08 -0000

Well, I am holding out hope that the Fed's decision to pay interest on bank reserves reflects a concern for inflation down the road; they may have trouble "mopping up the liquidity", but hopefully they can dam it in instead.

Re: Recalculating

Name — Tue, 06 Oct 2009 01:42:02 -0000

Well said, Ransomizer!

Re: Recalculating

Name — Tue, 06 Oct 2009 01:40:52 -0000

I wish he were here so I could throw my drink in his face.

Re: Recalculating

Blarney — Tue, 06 Oct 2009 01:39:20 -0000

You're on to something. I think Krugman is the Devil.

Re: Recalculating

Mark — Tue, 06 Oct 2009 01:37:46 -0000

Exactly. He's diminished the value of it.

Re: Recalculating

vikingvista — Tue, 06 Oct 2009 01:12:09 -0000

"It doesn’t explain why there isn’t mass unemployment when bubbles are growing as well as shrinking"

Is this Ivy League economist, and Nobel laureate, actually confused about the different implications of a positive demand shift versus a negative one?

Re: Recalculating

Justin P — Tue, 06 Oct 2009 01:10:47 -0000

Got to love the Fed!
Fed's one and only answer....print more money!!!