Why I stopped watching CNBC

by charvaka Wed Aug 10, 2011 11:38 am

One name: Rick Santelli. The guy is a complete idiot. Less than a year ago, he was reveling in the success of the Tea Party that his incessant ranting on CNBC indirectly sparked. Now that the Tea Party has made sure the country had its first downgrade in history, he shows no signs of slowing down. I happened to catch one more of his rants this morning in the hotel elevator. The guy needs to take some strong medication.

by Propagandhi711 Wed Aug 10, 2011 2:36 pm

I find joe kernan and michele caruso cabrera to be insufferable. I watch bloomberg - they actually have insightful interviews and dont let 'personalities' cloud financial news with shitty personal opinions. david faber is the best on CNBC.

by harharmahadev Wed Aug 10, 2011 2:46 pm

Erin is cute. She should show more cleavage. Occasionally, she wears short skirts which ride up her thigh.

by Propagandhi711 Wed Aug 10, 2011 2:49 pm

which erin? she moved out of CNBC. looks old and haggard these days.

by Hellsangel Wed Aug 10, 2011 2:55 pm

Propagandhi711 wrote:which erin? she moved out of CNBC. looks old and haggard these days.

Did you see the recent picture of Cameron Diaz without makeup?
http://www.dailymail.co.uk/tvshowbiz/article-2022616/Cameron-Diaz-looks-dazzle-goes-make-free.html

by Propagandhi711 Wed Aug 10, 2011 3:13 pm

I hate that horse face since she started looking like those old biddies on sex in the city. she looked nice in there's something abt mary but is not worthy of spilling any knuckle children anymore.

by doofus_maximus Wed Aug 10, 2011 4:52 pm

she looked good in Theres something abt Mary because there is hardly a scene in that movie where she has a bra on..in all the scenes her knockers were flying about.

by Propagandhi711 Wed Aug 10, 2011 4:54 pm

I wouldnt call them knockers - they looked like discrete old fashioned door bells from india if you know what am talking abt. they looked good tho - high up on the torso and not prone to over-saggation.

by MaxEntropy_Man Wed Aug 10, 2011 7:36 pm

charvaka wrote:One name: Rick Santelli. The guy is a complete idiot. Less than a year ago, he was reveling in the success of the Tea Party that his incessant ranting on CNBC indirectly sparked. Now that the Tea Party has made sure the country had its first downgrade in history, he shows no signs of slowing down. I happened to catch one more of his rants this morning in the hotel elevator. The guy needs to take some strong medication.

is CNBC the network that employs that guy who yells at the top of his voice as though he is going to pop a vein, whatsisface, jim kramer? that's enough for me not to watch CNBC.

i used to enjoy watching louis rukeyser. haven't found anything like that anywhere since he died.

by charvaka Wed Aug 10, 2011 9:13 pm

Yeah, Jim Kramer's another guy I can't stand. I loved it when Jon Stewart tore into him back in '08 I think.

by truthbetold Wed Aug 10, 2011 9:40 pm

Propagandhi711 wrote:I find joe kernan and michele caruso cabrera to be insufferable.

david faber is the best on CNBC.

Completely agree. Jim Kramer recently assisted in pumping and dumping "SQNS". Larry Kudlow is another preacher.

On a side note, Did Becky quick get a upper lip job? Her face looks different.

by Merlot Daruwala Thu Aug 11, 2011 1:00 am

charvaka wrote:Now that the Tea Party has made sure the country had its first downgrade in history..

Eh? S&P downgraded the US because the cuts in spending fell short of what it believes is fiscally sound. And you, who were advocating more spending last week (because populism is the essence of democracy) are now blaming the Tea Party who are the arch-advocates of spending cuts??

by Another Brick Thu Aug 11, 2011 1:11 am

Propagandhi711 wrote:they looked like discrete old fashioned door bells from india if you know what am talking abt.

hahaha @ door bells. you press the bell and the door opens?

by charvaka Thu Aug 11, 2011 1:22 am

Merlot Daruwala wrote:
charvaka wrote:Now that the Tea Party has made sure the country had its first downgrade in history..

Eh? S&P downgraded the US because the cuts in spending fell short of what it believes is fiscally sound. And you, who were advocating more spending last week (because populism is the essence of democracy) are now blaming the Tea Party who are the arch-advocates of spending cuts??

You think the S&P would have downgraded the US if Congress had simply passed a debt ceiling increase the way it did seven times during Dubyaman's presidency? It is precisely because the Tea Party established the tenuous connection between raising the debt ceiling -- something that Boehner and McConnell repeatedly voted for during their careers -- and reducing the deficit dollar for dollar that the S&P even considered a downgrade. Once they went down that ill-advised path, the acrimony in Washington made the downgrade pretty much inevitable. Had the Tea Party not chosen to play roulette with the country's credit rating and the economy, this wouldn't have come to pass.

PS: We are talking the same S&P that just three years ago used to rate an amalgamation of shitty subprime mortgages investment-grade (sometimes even AAA) just because they were pooled into a bigger pile of shit.

by Merlot Daruwala Thu Aug 11, 2011 2:32 am

charvaka wrote: You think the S&P would have downgraded the US if Congress had simply passed a debt ceiling increase the way it did seven times during Dubyaman's presidency?

Why, this looks familiar. Ask a hypothetical question, answer it in the negative and use that to justify one's opinions - is this now the Carvaka method?

charvaka wrote:It is precisely because the Tea Party established the tenuous connection between raising the debt ceiling -- something that Boehner and McConnell repeatedly voted for during their careers -- and reducing the deficit dollar for dollar that the S&P even considered a downgrade.

How is the connection tenuous? When you bring down the debt ceiling, you automatically force spending cuts. In the absence of that, everyone only pays lip service to the deficit while continuing to do the populist (arthaat essence of democracy) thing of borrowing and spending. If Obama could not implement sufficient cuts despite his avowed commitment to deficit reduction, blame him for the sovereign downgrade - not someone else for advocating highly unpopulist fiscal prudence at a time when sovereign debt default is looming all over Europe.

charvaka wrote:PS: We are talking the same S&P that just three years ago used to rate an amalgamation of shitty subprime mortgages investment-grade (sometimes even AAA) just because they were pooled into a bigger pile of shit.

I agree with you but to put it in your terms, this is an irrelevant strawman. We're not discussing S&P's merits, but whether it the Tea Party which is responsible for the S&P downgrade.

by charvaka Thu Aug 11, 2011 3:03 am

Merlot Daruwala wrote:
charvaka wrote: You think the S&P would have downgraded the US if Congress had simply passed a debt ceiling increase the way it did seven times during Dubyaman's presidency?

Why, this looks familiar. Ask a hypothetical question, answer it in the negative and use that to justify one's opinions - is this now the Carvaka method?

OK, let's play it a different way, then... when the US had a worse debt-to-GDP ratio in the past than it has today (in the late '40s after a long war fought on debt, like now after two long wars fought on debt), did the S&P downgrade the US?

The fact is that the downgrade became a possibility for the S&P only after the Tea Party established the connection between the debt ceiling and deficit reduction. For the 80 or so years the debt ceiling has been in place, there never was such a connection.

Merlot Daruwala wrote:How is the connection tenuous? When you bring down the debt ceiling, you automatically force spending cuts.

That wasn't an option on the table at all -- not even for the Tea Party. Arthaat, posing a hypothetical in the same post where you suggest that one ought not to do that.

What was on the table was the question of whether to raise the ceiling in order to pay for the obligations that Congress has already incurred (i.e. appropriated funds for), or renege on those obligations. So if Congress had failed to raise the debt ceiling, the constitutionally valid consequence would be that the President would ignore the ceiling altogether. The right way to tackle the deficit is not to renege on obligations already undertaken, but to balance revenues with expenses in future, and begin paying down the past debt, the bulk of which was taken to finance overseas wars and tax cuts for the rich.

Merlot Daruwala wrote:In the absence of that, everyone only pays lip service to the deficit while continuing to do the populist (arthaat essence of democracy) thing of borrowing and spending. If Obama could not implement sufficient cuts despite his avowed commitment to deficit reduction, blame him for the sovereign downgrade - not someone else for advocating highly unpopulist fiscal prudence at a time when sovereign debt default is looming all over Europe.

Let me ask you a question. Do you seriously believe that cutting spending is the right thing to do in a weak economy?

by Merlot Daruwala Thu Aug 11, 2011 6:39 am

charvaka wrote:OK, let's play it a different way, then... when the US had a worse debt-to-GDP ratio in the past than it has today (in the late '40s after a long war fought on debt, like now after two long wars fought on debt), did the S&P downgrade the US?

Haha..another strawman. This is like asking why the cop didn't stop you all those times last month when you drove through red lights, but is now ticketing you for not stopping at a Stop sign.

charvaka wrote:For the 80 or so years the debt ceiling has been in place, there never was such a connection.

Mosquitoes and malaria have been around for millenia and no one made the connection until Ross had an aha moment. So?

charvaka wrote:That wasn't an option on the table at all -- not even for the Tea Party....What was on the table was the question of whether to raise the ceiling in order to pay for the obligations that Congress has already incurred (i.e. appropriated funds for), or renege on those obligations.

My bad. I should have used the words "not raising the ceiling". That option was certainly there without reneging on debt, by prioritizing spends.

charvaka wrote:The right way to tackle the deficit is not to renege on obligations already undertaken, but to balance revenues with expenses in future, and begin paying down the past debt

Am I hearing right? Balance revenues with expenses?? How on earth will one pay for loan waivers, subsidies etc that is the "essence of democracy" then? Oh wait, I forgot - populist profligacy becomes the essence of democracy to be funded by us poor, third-world taxpayers in India. While in the US, OTOH, we shall be properly sensible budget hawks.

Anyway, the threat of not raising the ceiling had the desired effect of forcing the Administration to work out spending cuts - only, they didn't go deep enough to stabilize public debt by 2015 (or whatever target year) and hence the S&P downgrade. Why blame the Tea Party for forcing what you are yourself advocating as the right way?

charvaka wrote:Let me ask you a question. Do you seriously believe that cutting spending is the right thing to do in a weak economy?

Right or wrong is a matter of opinion. But what can't be contested is that federal debt is estimated to have exceeded GDP, which only happened briefly in the post-WWII years. Federal bailouts - QE1, QE2 and various other subsidies - have not achieved much beyond inflating commodities and funding an emerging markets bubble (thank you!). There's no reason to believe throwing more good money in pursuit of your essence of democracy and loading future generations with more debt will help a weak economy get stronger.

by MaxEntropy_Man Thu Aug 11, 2011 6:51 am

i agree that debt should be reined in, but there is not a single respectable economist out there right now recommending the magnitude of spending cuts that the tea party wants to undertake.

in recessionary periods like this when the private sector and individuals have totally shut their wallets closed, the only spender left who can inject some life into the economy is the government. the hope, and hope is all we can have right now, is that government spending will spur growth which will in turn spur private sector spending, jobs and eventually tax revenue.

the alternative is to have no spending and no growth leading to a lower standard of life and altered expectations for everyone. i don't think americans are ready for that yet.

and it's not like there is a dearth of projects to spend on right now. american infrastructure is aging and crumbling. addressing that right now will create lots of jobs. my own preference is to pull all american troops back home, end the two wars pronto and stop spending on defending europe (let them have their own damn defense budgets). plow all that money into infrastructure projects today.

by MaxEntropy_Man Thu Aug 11, 2011 7:03 am

by the way, reining in government spending on education is also putting the future of the younger generation at risk. i don't know why that never enters the conversation.

by MaxEntropy_Man Thu Aug 11, 2011 7:13 am

anyway the chinese in addition to loaning us money are also rebuilding our infrastructure already (http://www.nytimes.com/2011/08/11/nyregion/chinese-investment-grows-in-new-york-city.html?_r=1&hp). so i guess we can just be couch potatoes, grow fatter and happier and keep yelling at each other about how to control debt.

by Merlot Daruwala Thu Aug 11, 2011 7:48 am

MaxEntropy_Man wrote:by the way, reining in government spending on education is also putting the future of the younger generation at risk. i don't know why that never enters the conversation.

Because partisan discourse, not unlike our arguments on SUCH, is all about viewing an issue purely through the lens of ideology (or in some cases, personal fetishes), without much regard for consequences. After all, there is rarely a personal price paid for holding such fetishes - it's almost always paid by others.

by charvaka Thu Aug 11, 2011 8:45 am

Merlot Daruwala wrote:Right or wrong is a matter of opinion.

No, it is not just a matter of opinion. It is fairly clear from past recessions that the right thing to do in a weak economy is to stimulate growth. I won't repeat the points Max has made. Any benefit you get in debt reduction (as a fraction of GDP) that you get from contractionary fiscal policy during a weak economy risks throwing the economy back into recessions (as it did in 1937). That will put us in a worse place than we started -- you will reduce the numerator of the formula you need to manage, but reduce the denominator as well which has far wider consequences for the people.

Merlot Daruwala wrote:But what can't be contested is that federal debt is estimated to have
exceeded GDP, which only happened briefly in the post-WWII years.
Federal bailouts - QE1, QE2 and various other subsidies - have not
achieved much beyond inflating commodities and funding an emerging
markets bubble (thank you!). There's no reason to believe throwing more
good money in pursuit of your essence of democracy and loading future
generations with more debt will help a weak economy get stronger.

I am sorry, but you are quite simply confused. You are confusing monetary policy with fiscal policy. It is clear that printing money -- which is what those QE1, QE2 were about -- hasn't had much lasting impact beyond the bubbles you talk about. But that doesn't have much direct impact on the debt. (What impact it has is positive, because it makes future debt easier to repay in inflated dollars.) The stimulus efforts are what staved off outright Depression-level unemployment of 20+% and all its attendant problems.

BTW, I understand that you have a sour feeling about the argument we had on populism, which is fine. But expansionist fiscal policy during a weak economy is not a populism vs. principles issue. In this case, populism lines up quite nicely with sound economic principles. So you may be barking up the wrong tree.

by Merlot Daruwala Thu Aug 11, 2011 9:06 am

charvaka wrote:It is fairly clear from past recessions that the right thing to do in a weak economy is to stimulate growth.

That was ok these last fifty years because federal debt was still within manageable limits. That is not true today. So many countries are today on the verge of sovereign default, just by going down the path you advocate.

charvaka wrote:I am sorry, but you are quite simply confused. You are confusing monetary policy with fiscal policy. It is clear that printing money -- which is what those QE1, QE2 were about -- hasn't had much lasting impact beyond the bubbles you talk about.

And you are simply missing the point - which is that government spending (whether funded by debt or by printing money) does not stimulate the economy so readily the way you and every liberal economist in town believe as evidenced by the failures of QEx .

charvaka wrote:BTW, I understand that you have a sour feeling about the argument we had on populism, which is fine. But expansionist fiscal policy during a weak economy is not a populism vs. principles issue. In this case, populism lines up quite nicely with sound economic principles. So you may be barking up the wrong tree.

Perhaps, but none of these insights into my motivations explain your attributing the S&P downgrade to the Tea Party folks. Stick to the topic, shall we?

by charvaka Thu Aug 11, 2011 9:11 am

Merlot Daruwala wrote:that government spending (whether funded by debt or by printing money) does not stimulate the economy so readily the way you and every liberal economist in town believe as evidenced by the failures of QEx .

One more time: QEx is not government spending. So the rest of your argument is invalid. I suggest you look into the difference between fiscal policy and monetary policy before you try to understand the nuances of this issue.

by Merlot Daruwala Thu Aug 11, 2011 9:17 am

Ok sir. And one more time: what does all this have to do with blaming Tea Party for the S&P downgrade?

by Propagandhi711 Thu Aug 11, 2011 10:24 am

one time, not insignificant time ago, I was riding in a train from cochin to secunderabad and ran into a wise iyer man of 83 years old with multiple tenures as a medical director or some such in various andhra universities. he let me in on a profound secret for fixing all of society's maladies after expounding on what they are: "you know, the whole system should be changed, top to bottom only" and then repeated it after a couple of aaan, aaans for dramatic weight. this happened near coimbatore station and I have been an enlightened soul from that time onwards.

the same applies here: hooole system should be changed, top to bottom only.

PS: to me it's kinda stupid to advocate federal spending in a recession like we're in right now: govt spending accounts for about 20% of the economy. this belief that 3-4% of federal spending can be cut and expect private enterprise to fill in the gap is crazy. since late 90s, corportations have been cutting payrolls in the US like crazy, for various reasons: improvements in productivity, outsourcing, cost cutting measures, shrinking domestic demand etc etc. what makes these teabaggers think that they will suddenly reverse course? govt spending while looking good on paper will only increase unemployment at a time when 6-7% unemployment rate holds the key to housing and general economy recovering.

by charvaka Thu Aug 11, 2011 4:50 pm

Merlot Daruwala wrote:Ok sir. And one more time: what does all this have to do with blaming Tea Party for the S&P downgrade?

I don't know what our prior argument about populism has to do with the Tea Party downgrade either.

by Merlot Daruwala Fri Aug 12, 2011 12:20 am

charvaka wrote:I don't know what our prior argument about populism has to do with the Tea Party downgrade either.

I can help with the first part, about where populism comes in. In fact, I thought it was fairly evident to someone of your intelligence at the very start of this thread, but nevertheless, here's the simplified equation: More government spend = subsidies to favorite constituencies = populism (arthaat essence of democracy).

Now your turn to stop all the obfuscation and digressions and simply explain why Tea Party is responsible for the S&P downgrade.

by charvaka Fri Aug 12, 2011 12:25 am

Merlot Daruwala wrote:More government spend = subsidies to favorite constituencies

Not necessarily so. Government spending on infrastructure, for example, need not be a subsidy for any favorite constituency.

Merlot Daruwala wrote:Now your turn to stop all the obfuscation and digressions and simply explain why Tea Party is responsible for the S&P downgrade.

I already did. Look way above at my first response to you on this thread.

by Merlot Daruwala Fri Aug 12, 2011 12:45 am

Three words: Bridge To Nowhere.

by charvaka Fri Aug 12, 2011 1:11 am

Merlot Daruwala wrote:Three words: Bridge To Nowhere.

Why I stopped watching CNBC 20070801__20070802_A6_ND02BRIDGEJ%7Ep1_300

From The Economist, a reliably conservative voice:
America's creaking infrastructure

A bridge too far gone
The spotlight turns to deficiencies everyone would rather ignore

by Merlot Daruwala Fri Aug 12, 2011 2:08 am

charvaka wrote:
Merlot Daruwala wrote:Now your turn to stop all the obfuscation and digressions and simply explain why Tea Party is responsible for the S&P downgrade.
I already did. Look way above at my first response to you on this thread.

You still sticking to your Tea-Party-made-the-connection-and-is-therefore-to-blame line? What next? Blame Ronald Ross for causing malaria?

by Merlot Daruwala Fri Aug 12, 2011 4:38 am

charvaka wrote:
Merlot Daruwala wrote:Right or wrong is a matter of opinion.
No, it is not just a matter of opinion. It is fairly clear from past recessions that the right thing to do in a weak economy is to stimulate growth.

Haha..it's impressive how you can state opinions as if they are facts. What is fairly clear is that Japan did exactly what you're advocating through the '90s and the only thing they have today to show for all that fiscal stimulus is a debt twice their GDP, high taxes and an economy that continues to limp along. Your hope - and it can only be called a hope - that the increased government spending will take place rationally and efficiently, shows an ignorance of how public works get executed, and an entirely misplaced trust in politicians' ability to put national interest above their electoral interests. Best of luck with that.

by charvaka Fri Aug 12, 2011 9:30 am

Merlot Daruwala wrote:
charvaka wrote:
Merlot Daruwala wrote:Now your turn to stop all the obfuscation and digressions and simply explain why Tea Party is responsible for the S&P downgrade.
I already did. Look way above at my first response to you on this thread.

You still sticking to your Tea-Party-made-the-connection-and-is-therefore-to-blame line? What next? Blame Ronald Ross for causing malaria?

I don't see a clearly articulated reason to change my opinion. What I do see is some wild comparisons and a lack of understanding of the nuances of macroeconomics.

by charvaka Fri Aug 12, 2011 9:40 am

Merlot Daruwala wrote:
charvaka wrote:
Merlot Daruwala wrote:Right or wrong is a matter of opinion.
No, it is not just a matter of opinion. It is fairly clear from past recessions that the right thing to do in a weak economy is to stimulate growth.

Haha..it's impressive how you can state opinions as if they are facts. What is fairly clear is that Japan did exactly what you're advocating through the '90s and the only thing they have today to show for all that fiscal stimulus is a debt twice their GDP, high taxes and an economy that continues to limp along.

I am glad you eventually thought of Japan. The crisis broke in 1990 when BoJ abruptly increased rates and triggered the collapse of an asset bubble. As the economy was tanking, did the government provide stimulus? (Hint: this a fiscal policy question, not a monetary policy question). The answer is no. The government ran a budget surplus of 2.4% in 1991. The lesson from Japan is that monetary policy alone does not work -- as Milton Friedman argued it would. Instead, you need both monetary and fiscal policies to be expansionist when the economy is at the edge of recession (which is where we are right now.) If you wait too long to play the fiscal policy card, you will be so far down in the hole that stimulus won't have much impact beyond a temporary surge in employment. That is what happened in Japan.

Merlot Daruwala wrote:Your hope - and it can only be called a hope - that the increased government spending will take place rationally and efficiently

This is a strawman. Stimulus spending does not need to be any more rational and efficient than normal government spending for it to be effective at staving off or reversing a recession.

Merlot Daruwala wrote:put national interest above their electoral interests.

And how do you suggest we make sure politicians put national interest above their electoral interests? Are you going to define what those national interests are? If you won't, Rashmun might be interested in the job.

by Merlot Daruwala Fri Aug 12, 2011 12:07 pm

charvaka wrote:
Merlot Daruwala wrote:
charvaka wrote:
Merlot Daruwala wrote:Right or wrong is a matter of opinion.
No, it is not just a matter of opinion. It is fairly clear from past recessions that the right thing to do in a weak economy is to stimulate growth.
Haha..it's impressive how you can state opinions as if they are facts. What is fairly clear is that Japan did exactly what you're advocating through the '90s and the only thing they have today to show for all that fiscal stimulus is a debt twice their GDP, high taxes and an economy that continues to limp along.
I am glad you eventually thought of Japan. The crisis broke in 1990 when BoJ abruptly increased rates and triggered the collapse of an asset bubble. As the economy was tanking, did the government provide stimulus? (Hint: this a fiscal policy question, not a monetary policy question). The answer is no.

Aiyoo...just after a victory dance over your Krugman-assisted mastery on the nuances of macroeconomics, to stumble over basic facts...tsk, tsk. Fyi, through the 90s, the Japanese govt attempted to jumpstart the economy several times with fiscal packages. Instead of dropping names and pulling out yet another strawman -- monetary policy -- in a discussion on fiscal policy in Japan, you might want to gain some mastery on the nuances of how fiscal stimulus of the kind you advocate failed miserably in Japan through the 90s before you start prescribing it as some infallible remedy for America's difficulties. You can start with this easy read on Japan's bridges to nowhere.

by charvaka Fri Aug 12, 2011 12:43 pm

Merlot Daruwala wrote:
charvaka wrote:
Merlot Daruwala wrote:
charvaka wrote:
Merlot Daruwala wrote:Right or wrong is a matter of opinion.
No, it is not just a matter of opinion. It is fairly clear from past recessions that the right thing to do in a weak economy is to stimulate growth.
Haha..it's impressive how you can state opinions as if they are facts. What is fairly clear is that Japan did exactly what you're advocating through the '90s and the only thing they have today to show for all that fiscal stimulus is a debt twice their GDP, high taxes and an economy that continues to limp along.
I am glad you eventually thought of Japan. The crisis broke in 1990 when BoJ abruptly increased rates and triggered the collapse of an asset bubble. As the economy was tanking, did the government provide stimulus? (Hint: this a fiscal policy question, not a monetary policy question). The answer is no.

Aiyoo...just after a victory dance over your Krugman-assisted mastery on the nuances of macroeconomics, to stumble over basic facts...tsk, tsk. Fyi, through the 90s, the Japanese govt attempted to jumpstart the economy several times with fiscal packages. Instead of dropping names and pulling out yet another strawman -- monetary policy -- in a discussion on fiscal policy in Japan, you might want to gain some mastery on the nuances of how fiscal stimulus of the kind you advocate failed miserably in Japan through the 90s before you start prescribing it as some infallible remedy for America's difficulties. You can start with this easy read on Japan's bridges to nowhere.

Perhaps you were in a hurry to hit Send, or you need something, anything, to latch on to in my post. Either way, you failed to read past the line you highlighted. So let me try to see if you can read the whole thing this time:

The troubles began in 1990. The government ran a budget surplus of 2.4% in 1991. The lesson from Japan is that monetary policy alone does not work. Instead, you need both monetary and fiscal policies to be expansionist when the economy is at the edge of recession (which is where we are right now.) If you wait too long to play the fiscal policy card, you will be so far down in the hole that stimulus won't have much impact beyond a temporary surge in employment. That is what happened in Japan.

by Marathadi-Saamiyaar Fri Aug 12, 2011 12:51 pm

Propagandhi711 wrote:
PS: to me it's kinda stupid to advocate federal spending in a recession like we're in right now: govt spending accounts for about 20% of the economy. this belief that 3-4% of federal spending can be cut and expect private enterprise to fill in the gap is crazy. since late 90s, corportations have been cutting payrolls in the US like crazy, for various reasons: improvements in productivity, outsourcing, cost cutting measures, shrinking domestic demand etc etc. what makes these teabaggers think that they will suddenly reverse course? govt spending while looking good on paper will only increase unemployment at a time when 6-7% unemployment rate holds the key to housing and general economy recovering.

Except for education (which I look at it as investment for the future), health care (cut the rates for the docs, hospitals and services, allow foreign pharma to sell drugs here), and military (make the middle east pay for Iraq and Afganistan), all other subsidies to all industries - including oil companies, banks, farmers, etc - should be stopped

Give incentives ONLY to firms less than 50 or 100 or 500 employees and involved in research. treat chinese imports the way China treats US imports - slap tariffs on the chinku products.

Raise taxes for those making above 250K (even if my family may be affected as well - see how unselfish I am), reduce SS taxes tapering off with age and give ppl an option to pay into it, and remove SS benefits for all those who dont pay into the system from now on.

This is what I meant by "Changing ewwwwerything from top to bottom" when I said that to you at the Coimbatore station.

by Propagandhi711 Fri Aug 12, 2011 12:58 pm

uppili, you not a iyer..you're some sissy mary goundar

by Merlot Daruwala Sat Aug 13, 2011 1:39 am

charvaka wrote:The troubles began in 1990. The government ran a budget surplus of 2.4% in 1991. The lesson from Japan is that monetary policy alone does not work. Instead, you need both monetary and fiscal policies to be expansionist when the economy is at the edge of recession (which is where we are right now.) If you wait too long to play the fiscal policy card, you will be so far down in the hole that stimulus won't have much impact beyond a temporary surge in employment. That is what happened in Japan.

Ok. So why should it be any different now in the US? After the massive dose of fiscal stimulus in '09, two years down the line, corporate balance-sheets are stronger than ever and companies are sitting on hoards of cash but investing little. So what -- other than Krugman's pronouncements that it will be so -- makes you so certain that a more expansionary fiscal policy in 2011 will yield better results in the US than it did through the 90s in Japan?

And just so you don't get carried away by your mastery of the nuances of macroeconomics and start believing everything you read in Krugman's columns as the gospel truth or in the infallibility of his prescriptions, here's a call for some humility from someone who's spent a lifetime studying the subject:

"Macroeconomists especially have good reason to be humble, for there is a great deal we do not know. Teaching the "Principles of Economics" course at Harvard — a full-year survey — I start each year with what we economists are confident is true, and then move to material that is less and less certain as the course progresses. We look first at supply and demand, the theory of comparative advantage, profit maximization, and marginal revenue equaling marginal cost — the premises that almost every economist shares and accepts. As the course goes on, we move from micro to macroeconomics: examining classical monetary theory, growth theory, and, at the very end of the year, the theory of business cycles. This is the topic we economists understand least of all: We are still deeply divided on the validity and utility of the basic Keynesian paradigm."

by MaxEntropy_Man Sat Aug 13, 2011 7:12 am

thanks for the mankiw article. very good read.

by charvaka Sat Aug 13, 2011 11:25 am

Merlot Daruwala wrote:a more expansionary fiscal policy in 2011 will yield better results in the US than it did through the 90s in Japan?

It sounds like you haven't been following the debate in the US at all. At issue is not the choice between "do nothing" and "more stimulus;" what the Tea Party has done is hold their party hostage to force a choice between "do nothing" and "cut spending." (You have endorsed the latter, as is now clear, without an understanding of the issue at hand, perhaps in order to paint me into a corner over a previous argument.)

Anyway, it would be very appropriate to debate whether whether more stimulus would be the right thing to do right now. What is much less debatable -- even among those economists who like Friedman more than Keynes -- is that doing the opposite -- cutting spending -- at this precarious time would be bad for the economy. Even the Japan example shows how cutting spending because of debt fears put the economy right back into recession. (Read the article you posted -- fully.)

https://such.forumotion.com/t2659-gop-on-the-defensive-on-fiscal-policy#22804

PS: Thanks for reminding me about Krugman. I hadn't read his columns lately, but I will now.

by Merlot Daruwala Mon Aug 15, 2011 7:17 am

charvaka wrote:
Merlot Daruwala wrote:a more expansionary fiscal policy in 2011 will yield better results in the US than it did through the 90s in Japan?
It sounds like you haven't been following the debate in the US at all.

When did the absence of a ground-level context stop anyone from taking up strong positions on events and issues ten thousand miles away, based on personal fetishes? Anyway, my statements questioning the spend-your-way-out-of-a-recession prescription were not prompted by Tea Party rhetoric but by your certainty-filled statement, earlier in this thread.

charvaka wrote:Anyway, it would be very appropriate to debate whether whether more stimulus would be the right thing to do right now.

Ah, so it is debatable arthaat a matter of opinion after all. The certitude of your earlier statements - notwithstanding your grasp of the nuances of macroeconomics - was a little scary, spl given your recent tendency of referring to yourself in the first person plural.

charvaka wrote:PS: Thanks for reminding me about Krugman. I hadn't read his columns lately, but I will now.

Sure, I believe you. You might also want to ask one of your research assistants to run a check to see if that fellow has been plagiarizing from your work.

by CroMagnon Mon Aug 15, 2011 8:34 am

MaxEntropy_Man wrote:the alternative is to have no spending and no growth leading to a lower standard of life and altered expectations for everyone. i don't think americans are ready for that yet.

That is not an alternative, it is the future. Barring some miraculous new technological advancement which can pull US out of a slow and long decline, falling standard of living is inevitable. American workforce cannot compete in a global market and still maintain the same standard of living they are used to.

my own preference is to pull all american troops back home, end the two wars pronto and stop spending on defending europe (let them have their own damn defense budgets). plow all that money into infrastructure projects today.

Cutting down unnecessary defense spending will also end America's hegemony; something which brings a lot of money to the well connected organizations. Who has the political will do it?

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