The Austrians Were Right Again

[Kruzen]

http://mises.org/daily/5512/The-Austrians-Were-Right-Yet-Again

There are hundreds, even thousands, of such articles and statements from 2008 to the present. They appear every few days, and the message is the same: This stuff is not going to work. Their green shoots are an illusion. There will be no stimulus. Let the market liquidate. Government should stop looting the private economy. The Fed should stop the money creation. No more bailouts. Let interest rates rise. Let bad banks fail. Above all: stop fighting the market! Only at that point can we have solid recovery.

It's only a matter of minutes before heeter comes and tells me I'm wrong again, so discuss while you can :p

[Dozyproductions]

they forgot the we're all going to die part.

[Wiglaf]

Yeah a lot of doom and gloom there, but nothing we haven't debated into the ground. I don't think ANYONE on this board was in favor of those bailouts in 2007 and 2008.

[Massimo]

Seems as though shit has hit the fan last few days. Has finally caught up, after the first recession and the mass bail outs and government spending I knew shit was going to get worse before it got better.

Now the market is dropping real quick again and movements have no money left to spend, to try and keep them afloat. During the first recession Australia was still in a very good position with no dept. Now we are in dept and I don't think we have the money to try and keep the Australian economy afloat. The government spent money when they should not have.

Shit does not make sense to me, our economy is fuck so lets borrow money and spend more. WTF?

[freeride53]

Hahaha, everybody's loosing so much money.
I lost $3k in college fund in the last few days, great fun.

[Farbin Kaiber]

^^Regardless of what the media says, the recession never ended.

[Ryan Stewart]

^^Regardless of what the media says, the recession never ended.

And regardless what you claim you obviously dont understand what a recession is.

[tjts1]

Maybe it was possible to be fooled in 1932, but, really, most every attentive observer should have wised up by 1936. But to then go through round after round after round of failed stimulus and still not get it? Incredible. As Bob Higgs has demonstrated, we didn't get out of the Great Depression until the government stopped trying to stimulate the economy.

I agree. Nazi Germany and the Japanese Empire were far more successful at stimulating the US economy. Now if we could just talk them into doing the same now...

[Farbin Kaiber]

I understand the concise correct term, but in the bigger picture, outside the numbers, in the real world, in peoples pocketbooks, (this should fix it) the effects of the recession never ended.

http://www.merriam-webster.com/dictionary/recession

1re·ces·sion
noun \ri-ˈse-shən\
Definition of RECESSION
1
: the act or action of receding : withdrawal
2
: a departing procession (as of clergy and choir at the end of a church service)
3
: a period of reduced economic activity
— re·ces·sion·ary adjective

See #3. And don't give me some shit about the resource I used to state my point. I'm pretty sure MW worked good enough for my educators.

[rwh11385]

And regardless what you claim you obviously dont understand what a recession is.

+1. Understanding the meaning of words is so overrated. So apparently is gaining economics education before espousing economic opinion on forums.


Stopped reading link in after first paragraph or so. Pointlessly self-assuring rhetoric that states opinion as fact.

Bailouts don't work because they prop up the demand and must continue to in order to help. If you find actual research and reports, you can find that primarily government jobs were really "created" by them and ultimately a huge waste of money and some crowding out of private growth. (Sure some infrastructure projects made construction jobs but largely not what we were sold, and majority of America did not "buy into" the bailout - but politicians wanted to seem like they could influence it, although really it's not in their power)

As much as Americans are pissed politicians aren't focusing on creating jobs, what can they do? Spend to employ people that aren't needed? Create supply of labor or services that the market doesn't want or require? It's private enterprise that creates jobs and has been doing so. Government has been cutting jobs and private sector has been hiring since Oct '10. It is in the hands of Americans to be creative and start businesses and hire their neighbors, not some people in Washington to write jobs into a bill.

The real problem is the assumption that the economy will magically "snap back" to what it was when Americans were over-extended, spending more than they made, and banks leveraged as much as they were, with value being "created" by Wall Street.

Companies are learning to be leaner with fewer people and making profits, which is a good thing. But then there is a supply of people who are waiting around for work and someone to give them a job. They need to either be starting their own businesses or going back to school. Maybe their poli sci, art history, or communication degrees weren't suitable for this economy? Companies are no longer needing just bodies in the cubicles to respond to emails and act as otherwise useless cogs in the system.

But the monetary policy must adjust the supply in order to allow the economy to have enough $ to operate. Deflation chokes growth. There is a separation between fiscal and monetary though, which most n00bs do not appreciate. Slamming interest rates back up will do nothing but discourage business investment and deadhead innovation and start-ups.

[gwb72tii]

And regardless what you claim you obviously dont understand what a recession is.

you can quote whatever inane statistic you want to prove we are in a recovery

that is, until you ask the "man on the street" which i do all the time and the "consensus" is we never left the last recession. people are still scared from the last crash, and this one will reinforce their beliefs that the obama recovery is an illusion.

keynes and his stimulus have never worked
there are no green shoots
now whatever "stimulus" worked is being withdrawn from the economy, which is bad
and then the "stimulus" has to be paid for in taxes, which is bad

the "man on the street" is smarter than any economist in the obama admin
they don't think banks and GM should have been bailed out and they're right
eliminate the chance of failure and you eliminate the chance of success

[joshh]

Is it still Bush's fault?

[mrsleeve]

yup


the magic one can do nothing wrong

[Massimo]

^^
I am no American but that is what I though all along lol

[mrsleeve]

^

I hope your sarcasm meeter is properly calibrated because the last 2 posts were dripping with it.

the roots go back much further than Bush. Just a FYI, but the last 2 1/2 years can be laid at the feet of the magic one, and his failed policy/experiment, that will (more than likely) bring even greater woes on the rest of the world.