Because we're the freest economy in the whole world, because we are both prosperous and have the lowest trade barriers, the entire world's economy depends on USA consumption; if we consume less then they sell less and the world goes into a recession.
That's why all we have to do to get the world's economy moving again is BUY BUY BUY!
Go out and buy anything you think is GOOD FOR YOU TO HAVE!
WHY DO YOU THINK THEY CALL THE STUFF YOU BUY "GOODS", ANYWAY!!?!?
It's a buyer's market out there: prices are cheap.
Take advantage of the seller's weakness AND BUY BUY BUY!
As Glenn says, "It’s up to the Retail Support Brigades, once again!"
DEDICATED TO EXPOSING DISINFORMATION AND PROPAGANDA AND TO PROMOTING UNIVERSAL HUMAN RIGHTS - WITH SHARP ANALYSIS AND BLUNT COMMENTARY. NO ADS. NO TIP-JAR. JUST THE TRUTH.
11 comments:
Just browsing around for the name "LInah Abadneh" with regard to a climate article and I came upon your web site. This was the top article at the time and I thought it was ludicrous.
The idea that consumer spending is what drives the economy is a ludicrous invention of Keynesianism.
Says law is actually correct on this.
We are in trouble right now because the FED held interest rates below their market values for around 20 years now. That's the most important problem.
That predictably caused low savings, high borrowing, asset bubbles, and a large trade deficit.
Spending and bailouts and flooding the country with currency is not the answer.
Check out the difference between Keynesian and real economics here:
http://www.auburn.edu/~garriro/macro.htm
I'm not coming back to your blog to check on any response. You can get more information at www.mises.org website.
macker u iz a wacker!
1 - the fed raised rates from 2004-1007 (17 times) and that wsa MAJOR CAUSE of the crash.
they raised rates out of fear of inflation - a totally unbased fear.
2 - keynes didn't "invent" the idea that people buying things is a major driver of the economy.
it's just a fact,
wholesale purchases are less than retail.
look it up.
- the were two bubbles: real estate, and oil.
i predicted the date and dollar amount of the oil bubble burst at this blog.
i was the only one in the entire blogosphere to put it in writing, and i was right.
4 - the real estate bubble was caused by bad lending practices spurred by the CRA and Fannie Mae.
5 - the financial crisis was caused by the fannie mae paper - their deriviatives.
this was predicted by bush in 2003 and by greenspan and snow and paulson and mccain from 2003 through 2007.
the democrats blocked reform of fannie mae; therefore the democrats are chiefly responsible for the fannie mae fiasco and the ensuing financial meltdown.
5 - there is no such thiung as a "trade deficit" - the "trade deficit" is a heuristic device invented by anti-trade factions.
FACT: when a company buy goods from china - for example - they trade a money asset for a goods asset. china trades a goods asset for a money asset.
the trade is even-steven.
the trade is balanced.
china and the usa company each get exactly what they want.
if - for example - the buyer is wal-mart, they in turn sell the goods they buy from china at a proift.
so: there is no deficit.
you do not have a deficit when you go to the grocery store and buy coffee. you give the store moiney and get coffee.
you take money from ypur moeny asset column and repolace it with coffee of the exact same monetary value and oput this in your aseet column.
assuming you wanted the coffee and that this is why you bought it YOU ARE AHEAD.
the concept of trade deficit was intended to discourage trade - which is truly one of the keys to economic growth and prosperity. it always has been.
domestic producers and workers don't like trade as much as consumers do. on any given good for sale there are almost always more consumers than producers' therefore competition from imports always benefits more people - as it forces improvements on the good and better value.
BOTTOM LINE: YOU ARE AN ASSHOLE AND A MORON AND A DUPE.
WAKE UP OR FUCK OFF.
WUOFU.
BRIAN - HERE'S MORE PROOF YOU DON;T KNOW WHAT THE FUCK YOU ARE TALKING ABOUT:
http://www.nytimes.com/reuters/business/business-us-financial.html
Asian Economies Stumble And U.S. Faces Retail Test
Article Tools Sponsored By
By REUTERS
Published: November 28, 2008
Filed at 11:03 a.m. ET
Skip to next paragraph Reuters
LONDON/NEW YORK (Reuters) - U.S. shoppers awoke early for post-Thanksgiving sales on Friday in a key test of the country's ability to lead an economic recovery as sharp production declines in Asia gave fresh evidence of the global crisis.
...
Many will be looking this weekend to the United States, where the crisis began with a collapse in the U.S. mortgage market that saddled banks throughout the world with bad debt.
America's "Black Friday" sales on the day after the Thanksgiving holiday provide a strong gauge of consumer confidence, a major driver of the U.S. economy.
...
"Consumer spending on gifts for the holiday season is going to be down considerably," said Eric Anderson, professor of marketing at the Kellogg School of Management, Northwestern University, in Illinois. "Black Friday will be the first indicator of how bad it's going to be."
Japan announced a fall of 3.1 percent in industrial output for October, more than expected, with a drop more than twice as big predicted for November. Household spending in the world's No. 2 economy fell 3.8 percent from a year earlier, also more than expected.
http://www.nytimes.com/reuters/business/
business-us-financial.html
Well, I was closing windows I had open and hit refresh to see if you had responded.
I see you are a level headed guy with this response: "BOTTOM LINE: YOU ARE AN ASSHOLE AND A MORON AND A DUPE. WAKE UP OR FUCK OFF."
I'm afraid your analysis is all off. Plenty of people predicted the housing bubble based on the lowering of interest rates alone. The vast majority of the bubble was due to the low interest rate and not due to subprime, which is a very minor portion of the problem.
Furthermore the Internet bubble was also produced by loose monetary policy. Some people were predicting that Greenspans loose monetary policy was bad for the economy long before 2003. Just look up the Greenspan Put and criticisms of that.
http://en.wikipedia.org/wiki/Greenspan_put
For example this article from 2000:
http://www.geocities.com/peronet/120801-fed-complacency.pdf
In paragraph after paragraph of your comments you show more and more ignorance of economics.
1) One can raise interest rates and still have a below market rate.
2) The opening of trade with nations lifting socialist/communist intervention in their markets is highly productivity price deflationary. It also tends to reward capitalist in the advanced country and workers in the backwards country, while doing the opposite vice versa.
Attempting to stop this deflation via price stability as Greenspan did was the height of stupidity. We saw the effects of this with the internet bubble, and now the housing bubble.
"1 - the fed raised rates from 2004-1007 (17 times) and that wsa MAJOR CAUSE of the crash.
they raised rates out of fear of inflation - a totally unbased fear.
"
The crash was the pricking of a bubble, the internet bubble. A bubble that was pointed out to Greenspan over and over long before 2000-2001. Greenspan made up excuses for the obviously unsustainable situation, calling it the New Economy. Then he continued his bad policy.
"2 - keynes didn't "invent" the idea that people buying things is a major driver of the economy.
it's just a fact,"
You've misquoted me. Obviously if no one ever bought anything you wouldn't have an economy. Problem is that causation doesn't work backwards in time. One must create something before it can be bought. Thus Says law.
In fact money is only a medium of exchange and the things being exchanged are goods, and it's these goods that were produced in the past.
In fact, money itself is a good that must be produced, FIRST.
Your rewording of my statement could be further reworded to be: "people making things is a major driver of the economy. It's just a fact"
Those are certainly not very controversial statements, either of them. You however, completely misunderstand what Keynes was saying beyond that, and what was original about his formulation.
Yes there were plenty of people before Keynes that misunderstood economics but he's the guy the packaged a whole host of fallacies into a single theory.
His ultimate fallacy being that consumers almost solely drive the economy. To the point where he recommended throwing money out of helicopters during depressions to solve them. Another ludicrous idea.
It's quite clear you are not familiar with these issues.
"- the were two bubbles: real estate, and oil."
Four bubbles, you forgot the stock market bubble, and the ongoing bond bubble.
"i predicted the date and dollar amount of the oil bubble burst at this blog."
Put your money where your mouth is.
It was pretty clear we were in a bubble due to a below market interest rate policy already. Monetary policy driven economic booms are generally about asset bubbles in commodities. That's because commodities are far from consumption and therefore highly sensitive to interest rate changes.
"5 - there is no such thiung as a "trade deficit" - the "trade deficit" is a heuristic device invented by anti-trade factions."
Nonsense, really. Murray Rothbard is about as doctrinare "free trade" as you get, yet he believes in "trade deficits". He also showed how debasing a currency will lead to trade deficits. The debasement can be perpetual as in the case of fiat seniorage or temporary as in when reserve requirements are lowered in a fractional reserve system.
Sorry to tell you this but we are running a deficit and Greenspan has been wrecking our economy all this time. He was causing us to increase the rate of consumption of our capital stock with low interest rates and also increasing the speed at which capital moved overseas due to the opening of trade.
The $7 trillion bailout is based on the Keynesian fallacy that we just need to start printing cash to get out of a downturn. The problem is that the downturn itself was caused by essentially printing too much cash.
I'm sorry that you have never read any proper criticism of the idea that consumers drive the economy. It is however a fallacy. No shame in making a mistake if you correct it once it's been pointed out to you.
SO YOU CAME BACK!
BWAHAHAHAHAHA!
YOU WANT ME TO BELIEVE THAT IF CONSUMERS BUY LESS IT HAS NO EFFECT ON THE ECONOMY.
BWAHAHAHAHAHAHA!
IDIOT.
THERE ARE SOME THINGS SO STUPID ONLY AN ASSHOLE WHO THINKS HE'S AN INTELLECTUAL CAN BELIEVE THEM!
I MEAN YOU JERKOFF!
WUOFU.
I'LL TAKE SOWELL AND WILLIAMS OVER ROTHBARD ON TRADE.
BESIDES, AN APPEAL TO AUTHORITY ISN'T NECESSARY.
MY ARGUMENT ON TRADE DEFICITS WAS LOGICAL,
YOUR'S ISN'T.
FUCKOFF YOU TURD.
BY THE BRIAN:
THE TONE OF YOUR COMMENT IS WHAT STARTED MY TONE.
I WILL GIVE IT BACK TO YOU IN SPADES MUTHAFUCKA!
WUOFU!
accept it kid; your doctrinaire bs is jus BS.
consumer spending/household spending is absofuckinglutely critical to economic grwth, and us consumer spending is critical to wroldwide economic growth.
i wouerk in an aindostry which depends on global tarde - especially in assia and they are hurting cuz we aint buying.
they need us to buy!
the left has for years criticized our consumption (as being overboard) and you - as a a weird confused libertarian asshole - have bought into a lot of leftist crap.
you strike me a a ron paul nut.
am i wrong!?!?!?
wake up or fuck off.
the weorld needs GREATERE comsumption rates and more consumers, not less.
the poor are poor becasue they don't consume/ can't afford to consume.
they need sweatshops and credit cards.
africa needs INDUSTRIALIZATION and highways and factories and sweatshops and a power grid so their people can afford fridges and stoves and so on.
and all the m,ore well-off economies need to buy the crap they make. and they will if it's decent and cheap.
this is what made japan and china and south korea etc into decent economies.
this is what saved india.
fuck: it's what made america great, too.
trade, consumption, industry.
but it all starts with consumers.
the brit empire got rich selling crap.
they only sold it cuz people BOUGHT IT.
if people stop buying sellers/makers go belly up.
now - once again - please fuck off.
No wonder you have such a low level of comments. You go crazy when anyone disagrees with you.
Silly you thinks that Sowell is on your side when his doctoral thesis was exactly on Say's law, a refutation of your position.
The current $7 trillion bailout has been brought to you by this ridiculous Keynesian economic idea that economics is solely about consumption. It can and will lead to economic hardship for the American people as our dollar goes in the toilet.
Did it ever occur to you that anyone can comment on your blog and that when you post something that is wrong that maybe, just maybe, someone might point out that it is economically ridiculous?
I understand that you don't understand how this occurs, and frankly you'll never understand if you keep telling your intellectual betters to "fuck off".
Not only aren't you aware of the backing theories but you aren't aware of the history and how Keynes was involved in overthrowing good economics.
Republicans and Democrats have bought into the same sad economic theory you have and look where it got us.
Nixon was practically a communist with his wage and price controls. Ironically the party that champions anti-communism and free markets put a guy in charge who believed in a command economy. He also took us off the gold standard to default on the monetary inflation he and his predecessors caused.
It was Carter, the democrat, who put Volcker in charge and deregulated. The fact that these things take time to play out means that Carter got blamed for Nixon's stupid plays, and Reagan got credit for some of Carter's smart plays.
I'm pretty sure all of them were pretty unaware of how badly they were managing things.
Free markets work and do not require state control over the monetary system. The Fed has no idea what to set interest rates at precisely because only the market can determine that.
You aren't for free markets. This is why Republicans are frauds when they say they are for capitalism and free markets. When in office they undermine free markets at every turn. Both Bush I and II are prime examples of this.
Only Reagan get even a modicum of respect from me of all presidents going back to and including Hoover.
Fannie and Freddy were one means by which the Fed kept interest rates below market. That you are unaware of this and think Sowell would disagree with my position just shows how ignorant you are. You don't know enough about the subject to even be competent enough to know who's on your side.
Yes, the Democrats bear most of the responsibility for that but so do Republicans. Furthermore it was a Republican who kept Greenspan in office when he should have been fired over the internet bubble.
There is plenty of blame to go around for both Republicans and Democrats.
Also, I've probably read many more books by Sowell than you have. In particular he wrote the book, "Say's Law".
Here it is on Amazon: http://www.amazon.com/Says-Law-Historical-Thomas-Sowell/dp/0691041660
In it Thomas Sowell argues for Say's Law and against Keynesian un-Consumptionism. So your ignorant even on that subject.
So, in other words, Thomas Sowell wrote an entire book pointing out that what you've posted in this article is a fallacy. I've read the book so I know.
I've also read every economic treatise written since WWII.
Also several books by Walter Williams. Judging by the fact that Williams gave a rave review of George Reisman's book Capitalism in which Say's Law, and Austrian Economics plays a pivotal role, I would also say that William's is against you also on this subject.
YOU WROTE: No wonder you have such a low level of comments. You go crazy when anyone disagrees with you.
HOW THE FUCK WOULD YOU KNOW, THIS IS THE FIRST TIME YOU EVER READ THE BLOG.
SHEESH, YOU ARE ONE FUCKING ANNOYING MR KNOW IT ALL AND EVERY TIME YOU OPEN YOUR IDIOTIC FACE YOU PROVE IT AGAIN.
YOU WROTE: I understand that you don't understand how this occurs, and frankly you'll never understand if you keep telling your intellectual betters to "fuck off".
BETTERS?? YOU!?!?
BWAHAHAHAHAHA!
I GOT A MASTERS FROM A LEADING EAST COATS UNIVERSITY IN A YEAR.
FUCK OFF MORON.
I AM FORT FREE MARKETS AND IT FUCKING OUTRAGEOUS THAT YOU - WHO HAVEN'T READ THIS BLOG MUCH AND DON'T KNOW MER TELL ME WHAT I KNW AND WHAT I SUPPORT.
THIS IS WHAT ASSHOLE DOES.
YOU ARE AN ASSHOLE.
I MERELY WROTE IN THIS POST THAT CONSUMERS SHOULD SPEND MONEY AND THIS WOULD HELP THE ECONOMY.
THIS IS PRETTY SIMPLE STUFF.
BUT EVIDENTLY TOO SIMPLE FOR ASSHOLES LIKE YOU.
BY THE WAY:
I AM 52 AND LIVED THOUGH NIXON AND DON'T NEED ANY FUCKING LECTURES FROM A TWIRP LIKE YOU ON HIM OR ANYTHING ELSE.
O O O O O O O ...
PLEASE: DON'T COME BACK!
I AM HAPPY TO GET MY 2000 A DAY WITHOUT YOU.
YOU LUDICROUS IDIOT.
ooooooooh now i get it brian:
the economy gets better if people DON'T spend money!
you are so so so so SO smart.
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