Saturday, May 2, 2009

My exchange with libertarians

These are my responses to several libertarians from this video

What should be done about the economy?

Not all In order

kintarocrab (1 day ago) Show Hide
There are different types of investment, short, longterm, bad/good. What about government spending being apart of investment, which large portions of the bailout are, I don't think you addressed these things in your video.
Because he addressed it in other videos.

kintarocrab (1 day ago) Show Hide
Which one, there are 160 too look through.
"Um no re: how to lose a trillion dollars"
for one.

kintarocrab (1 day ago) Show Hide
That video did not address the issue that I wrote. Some types of government spending have the same effect as investment. the bailout was a type of loan, that was used to invest into the economy. It is not applicable to call the deficit G-T in the short run on that graph. The effects of the deficit spending are drawn out, as it is an attempt to improve the economy so that at that time the loan can be paid back.
I think I see what you are talking about.
But even if the bailouts were investment (which they weren't) they would have been a bad one at best because they went into failed banks...
Government spending is NOT investment though, even if its in infrastructure.
That's why they are separated.
Investment is done privately without government.

kintarocrab (1 day ago) Show Hide
As these bailouts are a new thing, I don't think that there is proper precedent to say whether or not before hand as to what there effects are going to be. I remain skeptical as to whether they are a good idea or not, but I refuse to take a presupposition in the light of the lack of evidence to support the position taken by this video.
"As these bailouts are a new thing,'
No they aren't.
I may be wrong, but I do believe the S&L crisis would be an example of this....

"but I refuse to take a presupposition in the light of the lack of evidence to support the position taken by this video."
He provided evidence, in this video, and in others.

kintarocrab (22 hours ago) Show Hide
As I remember the economy was doing quite fine during the 90's except for the dotcombubble (which was not caused by bailouts, if you have evidence that it was pls. present). The scale is also different than the S&L crisis. bad evidence is not good evidence.

Surhotchaperchlorome (21 hours ago) Show Hide
"As I remember the economy was doing quite fine during the 90's except for the dotcombubble (which was not caused by bailouts, if you have evidence that it was pls. present)."
No, it was caused by the Fed pumping too much many into the system.

"The scale is also different than the S&L crisis."
Why does this matter?

"bad evidence is not good evidence."
Tautology.
What evidence are you referring to?

kintarocrab (21 hours ago) Show Hide
Damn i wrote out a long res. but it was deleted, anyway. Dotcom bubble not caused by fed, but by bad investments, and non producing companies. The swedish bailout seemed to work out fine. The video improperly caricatures what is actually going on in the economy and is highly speculative on a subject that the author cannot change, but if the bailouts do fail I will reconsider my position. END

kintarocrab (21 hours ago) Show Hide
addon: after S&L the economy improved during the 90's that was the reason for the first sentence int he other reply.

shanedk (18 hours ago) Show Hide
"Dotcom bubble not caused by fed, but by bad investments,"

Bad investments are ENCOURAGED by the Fed's inflationary bubbles. That's how it works! The increase in the Supply of Loanable Funds results in a drop in interest rates, which makes banks and investors less risk-averse. It's been shown over and over and over again.

kintarocrab (7 hours ago) Show Hide
Irrational investments into companies that didn't produce goods or had sub par services was the reason for the bubble burst. Market speculation was irrational for that period of time due to the emergence of the new techno bubble that popped up. The fed may have made investing easier but the bad investments were still made by individual investors. Not the CAUSE but a contributing factor.

shanedk (7 hours ago) Show Hide
"Irrational investments into companies that didn't produce goods or had sub par services was the reason for the bubble burst."

And the reason for the irrational investments was the false signals sent into the market by the inflationary monetary policy.

kintarocrab (7 hours ago) Show Hide
No the irrational investments were made due to the lack of information and overconfidence in the new emergent market, the investors were making short term profits on there investments(due to pyramid scheme like companies). Once the investors realized that the companies did not produce they started pulling out.

Virgil0211 (6 hours ago) Show Hide
And the only reason they were able to do this was because of the inflationary monetary policy. Had this policy not been in place, the investments wouldn't have been made. For example, we had no recessions or depressions during the free banking era.

kintarocrab (5 hours ago) Show Hide
oh man, you would use the free banking era as evidence? you are insane. Its not even applicable to what we were discussing.

Virgil0211 (5 hours ago) Show Hide
Yes. Use an ad hominem instead of actually discussing the topic.

Yes, I would use the free banking era as evidence. You were trying to imply that our current economic crisis was not due to monetary policy. I pointed you to an example where such monetary policy wasn't present, and the result was not malinvestment.

Get over it. Our monetary policy led to this recession. It enabled, encouraged, and protected the malinvestment that caused it. To deny this is akin to denying evolution or gravity.

kintarocrab (4 hours ago) Show Hide
Ya, but I wasn't arguing for the cause of the current recession. We are not talking about the same thing. So pls. retract your original statement.

shanedk (4 hours ago) Show Hide
It is! You were talking about the dot-bomb, which has the same cause! It's all due to our inflationary monetary policy.

kintarocrab (4 hours ago) Show Hide
That is a pretty big claim to be making "All of our economic problems are due to our current monetary policy post 1862". Extraordinary claims require extraordinary evidence. Evolution is agreed upon by 99.9999% of biologists and by vast amounts of evidence. As for your claims I have never come across an economist sharing that point of view. I'm sry but if that is what you are touting I don't buy it for a second.

Virgil0211 (4 hours ago) Show Hide
Actually, we have provided evidence. We've laid out how it occurred and provided an example of how things were prosperous back during the free banking era without such monetary policy. This runs quite counter to your implication that these events would've occurred even without government intervention. If you have some evidence to prove it, go ahead and present it.

And quite a few economists DO share our position. Ignorance is not a valid defense.

Virgil0211 (4 hours ago) Show Hide
And by the way, we weren't saying that all of our economic problems were due to the current monetary policy. Just the problems in question.

Next time, try not to misrepresent your opponent's side when you develop a counter-argument. It just makes you look stupid.

kintarocrab (4 hours ago) Show Hide
"It's all due to our inflationary monetary policy." I was not taking this out of context. Don't call me stupid when you didn't even have the brains to look at what I was writing in the first place. Ya I am sure you can find some obscure economist that shares your views, just as creationists can. But you can't argue that the vast majority 98+% of all economists think having some form of a controlled monetary policy is how the economy should be run.

Virgil0211 (4 hours ago) Show Hide
A similar problem having a similar cause? Oh, perish the thought! Next thing you know, they'll be saying that the majority of AIDS cases result from an HIV infection.

It wasn't a matter of brains. It was a matter of looking at the latest comments you had made, keeping the subject of the video in question, and replying. Don't blame me for the fact that Youtube's comment system is screwed up.

Milton Friedman, Adam Smith (the man whose writings inspired Darwin's T.O.S.), Peter Schiff... (cont.)

kintarocrab (4 hours ago) Show Hide
For one, how in the hell can you take adam smith as a proponent of libertarianism? Anyway you obviously won't admit that your ideas are an extreme minority and you show the tell tale signs of extreme dogmatism towards your point of view so forget it. Believe what you want based upon shoddy evidence and bad theories. I wish you guys could get your own country to try out your economic policies so people could be done with this debate, but whatever.

Virgil0211 (3 hours ago) Show Hide
He was a proponent of limited government intervention into the market. Sound familiar?

Argument from authority? Is that all you have now?

You've asserted that these recessions would happen whether or not monetary policy was changed. This has been proven false.

You've asserted that we blame all economic problems on our monetary policy. This has been proven false.

You've asserted that our opinions are only held by a minority of "crackpot" economists. This is demonstrably false.

Virgil0211 (4 hours ago) Show Hide Ludwig Von Mises, Friedrich Von Hayek (Who, like Friedman, won a nobel prize in economics), Joseph Schumpeter, Henry Hazlitt, Murray Rothbard.

Von Mises and Milton Friedman both warned about the Great Depression some years before it happened, and Peter Schiff warned about our current recession when other economists were predicting that such a recession couldn't happen.

These are NOT obscure economists. These are brilliant men whose boots you are not worthy to kiss. Your fallacy is revealed.

Virgil0211 (4 hours ago) Show Hide

I apologize. I misinterpreted the conversation. However, replace "our current economic crisis" with "the dot-bomb" and it still applies. So, no, my original statement will not be retracted. Simply modified. Happy?

kintarocrab (3 hours ago) Show Hide
None of those points have been proven false. I never used the word crackpot, don't put words in my mouth I said minority and obscure. Argument from authority you are the one pulling out names. My position doesn't need to pull out names, since I have 100+ years of economic papers written on monetary policy for you to look through and every text book written on the subject. i don't understand why you would limit yourself to a political allegiance, why don't you try being a freethinker instead.

Virgil0211 (3 hours ago) Show Hide
Your first point was proven false through an explanation of how monetary policy affects investment and the example of the Free Banking Era.

Secondly, we never said all economic problems were caused by our current monetary policy. We stated that our monetary policy has a specific effect on our economy that leads to this cycle of expansion and recession.

Minority, maybe. Obscure, definitely not. We also have 100+ years of economic papers and several accurate predictions under our belts.

Virgil0211 (3 hours ago) Show Hide
If you knew anything about scientific theories, you would know that the purpose of a theory was to make accurate predictions. Austrian theory predicted the GD, the dot bomb, and our current recession. Keynesian theory did not. It doesn't matter how many people ascribe to a model if said model doesn't make accurate predictions.

It wasn't an argument from authority. You said it was held by an obscure minority. The names were in response to that. You challenged the authority itself.

kintarocrab (2 hours ago) Show Hide
Here's a quote for you "Austrian economists reject empirical, statistical methods and artificially constructed experiments as tools applicable to economics,." and "The main criticism of modern Austrian economics is that it lacks scientific precision." I read up on your austrian economics since it is not taught readily in schools. Some interesting things but that just poked out like a soar thumb.

kintarocrab (2 hours ago) Show Hide
"his criticism of the Austrian school is related to its rejection of the use of the scientific method and empirical testing in social sciences in favor of self-evident axioms and logical reasoning." Maybe I have found my problem with your way of thinking. The quote above kind of summed it up. But it could be a conspiracy of us monetarists plaguing your wiki page.

Virgil0211 (2 hours ago) Show Hide
Check the source from the page. It's not a quote. The terms "self-evident", "social sciences", "logical reasoning", and "axioms" don't even show up in the source referenced.

Virgil0211 (2 hours ago) Show Hide
And by the way, the paper referenced for that section was written Bryan Caplan, a member of the Cato Institute (Libertarian think tank) and a Chicago School economist, which was based on the Austrian School. He would agree that monetary policy such as ours leads to these recessions.

Virgil0211 (2 hours ago) Show Hide
Ah, yes. Wikipedia. That's a wonderfully accurate resource right there. Never mind the accurate predictions made by Hayek and Schiff. Yes, Wikipedia's "criticism of Austrian School" section is the place to get your information about how accurate it is. Did you even read the rest of the article, or did you just jump to the criticisms section scrambling for a quote to use?

Whatever the case, the fact that the theory predicted these circumstances vindicates it beyond the edit wars of wikipedia.

kintarocrab (2 hours ago) Show Hide
Nah I read the whole thing, like I said kind of interesting, but the rejection of mathematics and statistics doesn't go well for me.

Virgil0211 (2 hours ago) Show Hide
They aren't rejected outright. They're taken with a grain of salt as it's very difficult to isolate variables with economics. Watch a youtube video with Peter Schiff's appearances on CNBC and see how often statistics or mathematics come up.

kintarocrab (2 hours ago) Show Hide
Peter schiff may use mathematics but that is going against the austrian school of economics. The general principles are similar to those of ayn rand. And as for him predicting the bubble bursting, there were a lot of people who thought the economy was going to tank. I myself thought the real estate bubble was going to burst back in 2005 without even looking so much into the economic debacle.

Virgil0211 (2 hours ago) Show Hide
I repeat: Austrian school takes these with a grain of salt. It doesn't discard them entirely.

An objectivist may follow the austrian school, but one who ascribes to the austrian school may not be an objectivist.

The point is why they thought the economy would tank. The keynesian economists basically predicted that so long as the government kept spending, our economy would do well. Schiff predicted that if we kept up our monetary policy, we'd experience a recession. Guess who was right.

kintarocrab (1 hour ago) Show Hide
look again with the monetary policy thing. You do realize that "Modern" economists (Keynesian isn't applicable anymore ) argue all the time about what type of policy (expansionary contractionary) should be kept at different times right? I was going to point this out to you earlier, but not all economists (who are not libr.) think the same about when and how to adjust the monetary supply.

Virgil0211 (1 hour ago) Show Hide
Perhaps, but the general trend was to predict that the economy would do well under our current monetary system. There were some non-Keynesian economists who were also predicting prosperity. I saw an interesting debate between Schiff and Art Laffer back in 2006 over that same subject. Laffer was more of a supply-side economist in the Reagan tradition.

Virgil0211 (3 hours ago) Show Hide
Finally, it's not about a political allegiance any more than your acceptance of the Theory of Evolution is a political allegiance. It's about which model makes the most accurate predictions and best applies to monetary policy. My "allegiance", if you want to call it that, is based on the fact that the libertarian party follows this model and falls in line with what I view as appropriate social policy. Should this change tomorrow, I would change my affiliation.

Virgil0211 (3 hours ago) Show Hide
Now, you're re-asserting your original claim, accusing your opponent of being extremely dogmatic, basing conclusions on shoddy evidence, etc, when every claim you've made has been falsified, every conclusion you've presented has been wrong, and your reasoning shown to be utterly flawed.

You're behaving almost exactly like a creationist, right down to throwing insults as you leave in disgrace.

I wish you well. I hope you one day learn to apply reason to economics as well as science.

kintarocrab (3 hours ago) Show Hide
The first insult was merited as you were wrong and I properly pointed out your failure. The second insult came from you, also when you were wrong. Misuse of ad hom and misuse of arg from authority from you, that is more a kin to creationists than I am.

Virgil0211 (3 hours ago) Show Hide
Your first insult may have been warranted before I corrected myself, but not after. Any ad hominem attacks I made were in conjunction with, not instead of, my arguments. The only time I may have ventured close to "argument from authority" was when I responded to your argument that Austrian economic theory was only held by an obscure minority of economists. It was an appropriate response to that fallacious assertion. The fact that you can't or won't tell the difference says alot.


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