My God, you are an idiot.

[sgtclub]

Originally Posted by Greedy,Greedy,Greedy

Sorry, I meant idiot tea partiers. Thanks for the correction.

What's really funny is that you honestly think you are both smart and funny.

[Greedy,Greedy,Greedy]

Originally Posted by sgtclub

What's really funny is that you honestly think you are both smart and funny.

I offer to be nice for a while, maybe not even ask you for some support for the idea that the Dems had a no-negotiation posture on entitlements, and see what I get?


Really, we have the market coming back today, even if debt is doing odd things, we have an evening in London without too much on fire, the Red Sox are in first place - maybe the world's not so bad, despite the best efforts to the contrary by that-party-the-tea-party-ate. Sit back and have a scotch with me, clubby.

[LessinSF]

Originally Posted by Adder

I don't disagree with that.

But that's different from Sebby's "we're all dead wood so get ready for The Road." (at the risk of referencing multiple sources)

What we need is more money, and thus more NCGP, which will mean a bit more inflation but also more real GDP and far fewer people who are "structurally" unemployed.

Originally Posted by Sebby

The majority of it is structural. For instance, can you call millions of unemployed real estate and construction workers in this climate anything but mismatched? Can you call millions of unemployed manufacturing workers, with no hope of competing with foreign labor, any but mismatched?* I could go on through endless industries (including, amusingly, or perhaps not, law)... You get the point.

This is all the same thing. The leveraging increased the amount of "money" in the system. People felt rich. They bought houses they couldn't afford, thus creating a mismatch of real estate to construction workers when the money contracted.

But, the "money" ain't coming back unless the leverage returns. We are in money detox, and further "stimulus"/deficit spending is nothing but a last short bump of the cocaine lining the baggie. The problem is permanent, and will require recalibration over time, or austerity.

As the Fed admitted today, there is nothing more they can do. We have to take our money detox lumps like the end of any coke binge - with the shakes, night sweats, and itchy eyeballs.

[Tyrone Slothrop]

Originally Posted by LessinSF

This is all the same thing. The leveraging increased the amount of "money" in the system. People felt rich. They bought houses they couldn't afford, thus creating a mismatch of real estate to construction workers when the money contracted.

No, it's not the same thing. The mismatch in structural unemployment is the mismatch between industries that are hiring and workers who need jobs. Right now, no one is hiring. That's not structural unemployment.

But, the "money" ain't coming back unless the leverage returns. We are in money detox, and further "stimulus"/deficit spending is nothing but a last short bump of the cocaine lining the baggie. The problem is permanent, and will require recalibration over time, or austerity.

As the Fed admitted today, there is nothing more they can do. We have to take our money detox lumps like the end of any coke binge - with the shakes, night sweats, and itchy eyeballs.

You said it before. It's deleveraging. Once we work through it the economy will start to grow again, but there are still a lot of people with mortgages they can't pay, etc.

[sgtclub]

Originally Posted by Greedy,Greedy,Greedy

I offer to be nice for a while, maybe not even ask you for some support for the idea that the Dems had a no-negotiation posture on entitlements, and see what I get?


Really, we have the market coming back today, even if debt is doing odd things, we have an evening in London without too much on fire, the Red Sox are in first place - maybe the world's not so bad, despite the best efforts to the contrary by that-party-the-tea-party-ate. Sit back and have a scotch with me, clubby.

Haven't had time to post the last couple of days, but rest assured, I will free up soon. Have one for me, I'm definitely parched.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

No, it's not the same thing. The mismatch in structural unemployment is the mismatch between industries that are hiring and workers who need jobs. Right now, no one is hiring. That's not structural unemployment.



You said it before. It's deleveraging. Once we work through it the economy will start to grow again, but there are still a lot of people with mortgages they can't pay, etc.

Distinction without a difference. And you get the point. No need to defend Rain Man here. Neither of you is on the econ faculty anywhere. Drilling the definition down to one so narrow you can claim to refute mine and Less's practical point is tantamount to conceding the point.

It's structural. There's a huge mismatch. And I'm not even getting in the portion of unemployment attributable to people being unable to move due to the housing mess. Which is, again, a for of structural unemployment.

You scored some points on me with the Keynesian thing. I missed an essential point the guy made there, I think. In this debate, you're off. Not your fault, of course. You're holding Adder's water here, and he's hopelessly academic on this shit.

[sebastian_dangerfield]

Originally Posted by LessinSF

This is all the same thing. The leveraging increased the amount of "money" in the system. People felt rich. They bought houses they couldn't afford, thus creating a mismatch of real estate to construction workers when the money contracted.

But, the "money" ain't coming back unless the leverage returns. We are in money detox, and further "stimulus"/deficit spending is nothing but a last short bump of the cocaine lining the baggie. The problem is permanent, and will require recalibration over time, or austerity.

As the Fed admitted today, there is nothing more they can do. We have to take our money detox lumps like the end of any coke binge - with the shakes, night sweats, and itchy eyeballs.

It's not a pure deleveraging thing. I don't need to cite the endless white papers explaining how unqualified for any of the future growth industries much of our workforce is, and will remain.

If our labor were competitive with foreign labor in terms of cost, unemployment and stagnant wages, which drive lack of demand, would not be problems. But they're not. They're grossly overpriced, and in many instances, not trained for the work that would compete. We can be needledick lawyers and argue whether that's structural or something else all day citing the differing definitions of the term, but one thing we can agree upon is it's not simply cyclical.

[Hank Chinaski]

Originally Posted by sebastian_dangerfield

If our labor were competitive with foreign labor in terms of cost

The rs wanted UAW concessions to approve the Big 3 bail outs. The Dems insisted the concessions could wait until the next labor negotiation round. Now the UAW is looking for more money, because the Big 3 is back "healthy."

when GGG first said "it's all free," my first thought was "He is Gilligan." Lately I'm afraid he was just mouthing the party line. Sad.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

This is wrong. The point of Keynesian policies is that they're not just a bridge to where you would get to eventually. They help you get to a better place than you would otherwise. More like a subway than a bridge.



No no no. The first paragraph of that post again:



Keynes says you may reach equilibrium at less than full production. That's the point. You need Keynesian policies to get to full production instead of an inferior equilibrium.

That is madness. That is, varnish of scholarship removed, in a nutshell: "Print, print, print, and print some more, until the private sector eventually turns around. Never stop. Never consider, 'Hey, we're turning into Zimbabwe.' Always print until the private sector comes back, no matter how long it takes."

Keynes never lived to see how long his policy could be used before it absolutely collapsed a nation's currency. He was gifted WWII, which took us out of the Depression while destroying the industrial capacities of all of our competitors. I doubt if he were alive today he'd advocate endless endless printing in a contraction like this one.

Why? Because this is not a common recession. It was wise to start with Keynesian policies. After a time, however, it becomes unwise.

I know... I know. You want to see the simple logic of "You can't print forever" beaten by the intellectual policy of an economist you clearly admire. Sorry. Sometimes, reality is Just as Simple as it Seems. You can't print forever. Eventually, it leads to trade wars and actual war. See Niall Ferguson for the rest of that explanation. He's written about it endlessly.

[Adder]

Originally Posted by sebastian_dangerfield

That is madness. That is, varnish of scholarship removed, in a nutshell: "Print, print, print, and print some more, until the private sector eventually turns around. Never stop. Never consider, 'Hey, we're turning into Zimbabwe.' Always print until the private sector comes back, no matter how long
it endlessly.

You aren't stupid. So why do you insist on pretending to be on the internet?

More in the morning.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

Distinction without a difference. And you get the point. No need to defend Rain Man here. Neither of you is on the econ faculty anywhere. Drilling the definition down to one so narrow you can claim to refute mine and Less's practical point is tantamount to conceding the point.

It's structural. There's a huge mismatch. And I'm not even getting in the portion of unemployment attributable to people being unable to move due to the housing mess. Which is, again, a for of structural unemployment.

This is not a semantic point. We all know there are no jobs for construction workers. If we had an economy where there were lots and lots of employers looking unsuccessfully for, say, high-tech workers, then we would have structural unemployment, with a mismatch between construction and high tech.

That's not the economy we have. There is no mismatch, because there is massive unemployment and there is NO part of the economy creating lots of jobs which are going begging. Structural unemployment is not the reason we are so full from full employment. If you think it is, you have to not only point to some part of the economy where things are lousy for workers, like construction, but also to some part of the economy where the opposite is true. There isn't one. The employment situation is lousy all over the place.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

That is madness. That is, varnish of scholarship removed, in a nutshell: "Print, print, print, and print some more, until the private sector eventually turns around. Never stop. Never consider, 'Hey, we're turning into Zimbabwe.' Always print until the private sector comes back, no matter how long it takes."

I'm not sure where you found this caricature of a Keynesian economist. I'm not familiar with anyone saying anything like that.

[LessinSF]

Originally Posted by Tyrone Slothrop

I'm not sure where you found this caricature of a Keynesian economist. I'm not familiar with anyone saying anything like that.

You should follow Adder on Twitter.

And, as others have noted, Adder you need to get beyond your pedantic lawyer obsession with terminology. The rest of you too.

Whatever you call it, we are halfway down a jump out of an airplane. the Fed just said there is no parachute - your bleating about further deficit spending notwithstanding. It's time to bend our knees, hit and roll, and wait for the swelling to go down.

Ty said it referring to me sayin it - "You said it before. It's deleveraging. Once we work through it the economy will start to grow again, but there are still a lot of people with mortgages they can't pay, etc."

Yup. So what's your non-caricaturistic Keynesian point?

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

This is not a semantic point. We all know there are no jobs for construction workers. If we had an economy where there were lots and lots of employers looking unsuccessfully for, say, high-tech workers, then we would have structural unemployment, with a mismatch between construction and high tech.

That's not the economy we have. There is no mismatch, because there is massive unemployment and there is NO part of the economy creating lots of jobs which are going begging. Structural unemployment is not the reason we are so full from full employment. If you think it is, you have to not only point to some part of the economy where things are lousy for workers, like construction, but also to some part of the economy where the opposite is true. There isn't one. The employment situation is lousy all over the place.

Yes it is. Think globally. There is a huge need for workers we don't create. This is a global economy. Our unemployment problem is not cyclical. Perhaps we can disagree over whether it is classically structural. Fine. The point is, large sections of our workforce will never be competitive again, or even work again.

Whatever that is, it's not cyclical. And you're wrong if you think we'll return to something like 5% unemployment in the next decade. We will hemorrhage jobs, or at best stagnate in terms of employment, until the cost of foreign labor meets ours, and the skill sets of greater numbers of our workforce meet those of skilled workers abroad.

You can't argue against that point. You will. But you won't succeed. It's ironclad fact.

And please, don't say, "Inflation is going to cause their workers to become more expensive. The more the Fed prints, the more their labor costs rise. Another basis for further Keynesian policies!" Debasement of one's own currency is exactly what Ferguson has argued leads to trade and real wars. And that's only if it works. Right now, it appears that every time our numbers swoon, the world swoons with us. This means emerging markets have not yet decoupled, and are probably not self-sustaining enough to do so any time soon. So even if we kept on printing, it probably wouldn't have the desired result of making our workforce more competitive versus competition.

That's the conundrum. Print like mad and it works, trade wars, then real war. Print like mad and it doesn't work, an exercise in futility that punishes domestic savers. Many of whom are retirees.

You clearly worship Keynes. You might also consider Friedman: No free lunches. A position with which Keynes would agree.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

I'm not sure where you found this caricature of a Keynesian economist. I'm not familiar with anyone saying anything like that.

That's your point run to its logical conclusion.

Your Keynesian/Krugman-esque hypothesis that we can print our way of this rests on the assumption the private sector will inevitably fill in the lack of demand. That Keynesian spending will hold us at equilibrium until the private sector comes back.

In a traditional recession, you're right.

But this is, to borrow from Rogoff, a Great Contraction. We've printed and spent (they necessarily go together), and printed and spent, and we have sustained a better equilibrium than we would have otherwise. But the private sector, and the consumer, hasn't stepped in to pick up the slack.

So what do we do? Two choices. Print more and risk debasing the currency to the point it no longer remains the world reserve (China's been making a solid case for a non-dollar reserve for a long time), destroying the immense advantage we've had since Bretton Woods? Or stop printing and let the economy take some of its medicine, as Less described it.

We can't preserve equilibrium indefinitely, Ty. So tell me, where's the sunset on your Keynesianism? At what point do you say, "Enough. We have to sacrifice some future equilibrium on the employment and human side to preserve the greater equilibrium we enjoy from remaining a AAA rated state with the world's reserve currency"?

That's the problem every Keynesian has right now: They all know it can't persist indefinitely. But few, if any, of them want to admit it.