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View Diary: Right-Wing Propaganda Masquerades as a High School Economics Curriculum (160 comments)

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  •  Redux (1+ / 0-)
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    kyril

    Anyone who disagrees with you is a wacko.

    Question: What does work?

    P.S. I was not an economics major.

    •  Most economics professors (3+ / 0-)
      Recommended by:
      JVolvo, johnny wurster, JFactor

      will note that Capitalism is the best system available to manage scarce resources.  It's not perfect, but it's less imperfect than the alternatives.  I'm not saying anyone who disagrees with me is a wacko, what I am saying is that in academia, by and large the common theme from a large number of economics departments (again from all sides of the political spectrum) is that Capitalism is the best we've got.  The truth is that life would be a whole lot easier if Keynesian economics worked, but to achieve the ideal outcome requires a WHOLE LOT of assumptions that unfortunately don't hold up in real life.    

      All that being said, Capitalism too requires a whole lot of assumptions that don't necessarily hold up in real life (it assumes that all participants in the market play by the same rules and that those that "win" are those that behave the most responsibly and rationally).  As we've seen in a number of industries, those at the top end of the management spectrum currently have a strong incentive to boost short term profits and financials which sometimes costs them in the long run.  Behaving responsibly would be to set a company up to build profitability slowly over the long haul.  But because CEOs have their golden parachutes and the like, they have a much greater incentive to participate in sometimes risky behavior because it personally benefits them while potentially hosing everyone else.

      This is why we require regulation particularly in financial industries.  Regulation does what it can to more or less keep the decision makers within a company honest in how they operate.  It doesn't guarantee that no one ever fails, but it gives consumers some idea of how solvent or not a company is...

      I think that the conclusion of Capitalism being the best we've got comes from the understanding that neither system is going to be perfect (if all of the assumptions in Keynesian or Capitalist theory held true, either one would be adequate) but the consequences of imperfections going the Keynesian route are worse than the consequences imperfections going the Capitalist route.  

      •  Th3Drizzle - Keynesianism is not different from (4+ / 0-)
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        antirove, happymisanthropy, JFactor, ORDem

        capitalism. Capitalism is an economic system in which the means of production are owned by private individuals or firms.
           Keynesianism is a theory of the macroeconomy which assumes that the economy is unstable and is not self correcting.
           Keynes was a supporter of capitalism and was very skeptical of the European left.

        •  Yes and no (1+ / 0-)
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          Sparhawk

          While Keynes focused on macroeconomics and Capitalism is more microeconomics oriented, the two are somewhat at odds in that Keynes saw Capitalism as flawed and offered up a solution for what he thought would fix the problem.  The trouble is that by trying to force fit a recovery when recessions or depressions happen, the government spends a pile of money for some fake growth with no real sustained recovery in the economy.  Ultimately the market will take its pound of flesh for a real recovery to happen... We can either take a sharp downturn and then everything starts to tick back up at some rate, or spend a pile of money in order to attempt to delay a sharp downturn and then everything starting to tick back up...

          •  Capitalism is not "microeconomics oriented." (6+ / 0-)

            Capitalism is not an economic theory. It is an economic system in which the means of production are privately owned.
              What the hell is fake growth? Economic growth is economic growth. In Keynesian theory, in a recession, an increase in govt spending is multiplied through the economy so that the govt injection gets translated into increased consumer spending. Increased consumer spending adds to the number of jobs and becomes self reinforcing.

            Now, let's look at your belief: By what mechanism does a sharp downturn lead to an "uptick?" Classical economists (which is probably what you mean by capitalism) believe that the mechanism is price changes. Falling aggregate demand leads to deflation which leads to more spending which leads to recovery. When has that ever happened?
            BTW - I teach economics in a college.

             

            •  I've talked to people who say that before. (3+ / 0-)

              He probably means 'fake growth' because when the government spending stops, the jobs it created will hypothetically dry up with it.

              And all we're left with is roads, plumbing, electricity, bridges, internet and public transit.

              You know, 'wealth'.  The things that have absolutely no impact on the health of the public economy.

              I sometimes hear this from people who 'took a course' in economics once and are masters of the field now.  Funny how sometimes being armed with a teensy bit of information can make someone feel as if they're masters of the topic.

              Disclaimer: I 'took a course' in economics once.  In theory, I'm educated less about economics than the fellow you're talking to.

              •  One Million Auto Jobs Didn't Dry Up (1+ / 0-)
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                ORDem

                After Cash for Clunkers ended after only 2 months.  Instead, the auto industry kept gaining momentum and jobs and now we are back to near normal levels of production and sales.

              •  We have a name for that (0+ / 0-)
                Funny how sometimes being armed with a teensy bit of information can make someone feel as if they're masters of the topic.
                It's called knowing enough to be dangerous but not enough to be helpful.

                America—We built that!

                by Mokurai on Fri Dec 07, 2012 at 09:16:25 AM PST

                [ Parent ]

          •  Fake Growth - Really? (1+ / 0-)
            Recommended by:
            ORDem
            The trouble is that by trying to force fit a recovery when recessions or depressions happen, the government spends a pile of money for some fake growth with no real sustained recovery in the economy.
            The government in July and August of 2009 spent $3B on the Cash for Clunkers program because during the 6 months before, auto sales had fallen to an annual average of under 10 million.

            After C-4-C, auto sales increased by 50% over the next 3 years to a near normal level of 15 million.  Sales were "jump started" by Keynesian economic principles and have been sustained ever since.

            Nothing "fake" about that growth and it didn't cost a "pile of money" either.

      •  The myth of capitalist efficiency. (2+ / 0-)
        Recommended by:
        DarkLadyNyara, happymisanthropy

        Everyday scores of companies go backrupt because they ineptly handled resources, much less even marketing direction, etc.  It is a myth, more really political idealogy, that at a micro-level, or even macro level, that companies are efficient as they fail at such right rates.    In fact, if anything characterizes free markets is the high rate of failures within those markets.

        Capitalists tell themselves these delusional self serving homilies how some company found a niche or need, and gosh darn it, all was well.  It is very akin to Christians tell each others about how for example, some world famous brain surgeon was buying coffee, and decided operate for free on some poor barrista  attending the local Crazyville church. Zazem, Jesus saves the day.

        Government intrusion in many cases is necessary to fix the inefficiencies of private companies to keep entire industries from collapsing.  

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