Austrian School

You Can Spend Your Way Out of a Recession

@Bolten, for all you negative statments about interest payments, which I generally concur, start your bike shop from savings. Instead of getting 1% nominal interest paid, you'll be growing what you seem to believe to be a viable business. Maybe you can bootstrap out of your garage, I see people advertising on Craigs list to do bike maintenance.

You Can Spend Your Way Out of a Recession

You can't spend your way out of a recession, but you can postpone and aggregate the necessary correction to a later date. If your thinking is only in the short term, like a politician, then in this twisted frame of reference, you have "solved" the recession.

But for the rest of the country, the future is much more important than today. Its really unhelpful to give any kind of academic cover to the kind of short term populist thinking that Keynesians espouse.

Some of the posts on here are entertaining to read. They say stuff like "Keynes had some good ideas, Hayek had some good ones, maybe they're both right, nobody knows..." They should just say "I don't understand this stuff, but wanted to waste people's time." Sorry, Hayek was right, and Keynes was a homersexual political aye-hole.

The really insidious thing is that the longer the postpone the necessary correction, the larger the disruption will be when it finally happens, so the greater the effort is made to postpone it. Eventually the imbalance becomes so large, even coordinated government intervention can't stop it. These things should have been allowed to correct on their own, but back then when the imbalances were small, it was all to easy to prevent their correction. But no it won't be the end of the world when some of these long over due institutions finally die, because from their ashes, comes the resources to nourish new life.

Taking an Honest Look at GDP Calculation

I want to address smcat's ealier comments since he seems to be the one poster defending the current state of affairs:

First, people can't stop spending money even if they think prices in the future will be less because they are get hungrey, their cars fall apart, their wife keeps getting pregnant, etc. The type of spending you're talking about that they can choose to put off in the future is largly just discretionary consumption spending. Like buying a big screen TV, or a Hummer. We don't need to more of this kind of wasteful spending. At the place we are in our economy, we need more saving, and production for sale to our foreign creditors.

Claiming that these kinds of credit easing regimes have helped solve a large number of problems and will solve this one is the same kind of reasoning that getting a another hit of dope, will solve the sick feeling a dope addict gets when he isn't able to get the drug he has become dependant on. All it does is POSTPONE the eventual comedown, or kill eventually person. Or put another way, its like saying the best way to avoid a hangover is to never stop drinking. You can do this for a while, I know people that have tried, but eventually the body just can't take it any more.

The Case for Higher Interest Rates and Lower Home Prices

Sam, why should everyone have bail out people that over extended themselves. Leave me out of this. The system only works when people and organizations suffer the results of their bad decisions.

This article is spot on. Its only blasphemy to morons.

I'd go so far as to say that in our so called capitalist system, the price of capital should be set by the market. Bye bye, Federal Reserve, you won't be missed. Don't let the door nob hit you where the dog should have bit you.

Thank Goodness for Government … Work

Bad sign when government jobs are growing while private jobs are shrinking.

The Benefits of a Standardized MicroUSB

All this stuff is subsidized by the subscription price so the end user, these items are free. They have no problem tossing this stuff in the garbage after a year or 2 use. They should unbundle the phone from the subscription so that you can have a lower bill if you don't take the free phone or bring a phone you already own into the contract.

Housing Gets Even Worse

It wouldn't have worked in 1929 either, this is where the Fed and Bernanke has it all wrong. They believe their own hype. The time to stop corrections is before the bubble forms in the first place. By now its too late.

They should just let the freaking thing correct and learn there lesson that a series of booms and busts fostered with bad public policy does more harm that good in aggregate. They're beating the hell out of the middle class for the benefit of the people who make their living in financial system.

Any Homeowners Bailout Will Be Unfair

We already have a system to handle these situations. It involves the foreclosure and bankruptcy process. We need to just let these work. They aren't doing anything for the people anyway because for every family that moves out of a foreclosed house, another moves in. The amount if idle time for that house depends on the amount of bureaucracy and other intervention the government puts in the way.

Gift This Book: The Return of Depression Economics, by Paul Krugman

I haven't read the book either but if you like the Keynesian approach then you'll love Krugman.

Personally I don't understand how a problem caused by spending money we don't have will be cured by spending money we don't have.

Desire for Safety Has Made the Financial World Risky

Good article. Great comment by another poster that said the net effect of financial regulation was to get the flies to trust the spiders.

Excess liquidity creates situation of more money chasing less opportunities. Worse and worse investments made as an example. Answer isn't more regulation on whats a fair investment, answer is less liquidity.

A Fed Rate Hike Won't Solve the Current Crisis

This is an article that says you can help a drunk by keeping him in booze. You know, if you try to make him stop drinking he's likely to get very sick, so do the right thing and keep him drunk.

I agree with the previous poster in that inflation doesn't have to be in the form of higher wages. It could be that its just making everybody poorer (the money you have buys less of the things you need to live).

Low interest rates below what the level of savings would have naturally dictated is like taking human growth hormone. You can only get certain amoutn fo healthy growth, beyond that the HGH just creates tumors and other cancers. We've gotten to the point where the tumors have been able to buy enough influence in congress that they can keep the flow of HGH coming. Also, many people can no longer tell the difference between what is tumor and the original organism. So when the tumor shrinks they exclaim "our growth is stagnating, protect the growth"

Author lacks any sense of economic justice, all about how to keep a messed up system teetering along. I've venture to guess he doesn't know what a healthy system is supposed to look like, and just knows what he's experienced in his lifetime.

What the SEC Really Accomplished with Its New 'Short-Sell' Rule

The rumor is just the trigger, the mismanaged company is the real cause.

Why the Housing Bill Won't Help the Housing Market

gaels- The number of people living in a house can vary wildly. Take my neighbors.... please! Seriously, take my neighbors, when times where good, the kids moved out and rented apartments, when times are bad like they are now, they move home with mom and dad.

How Dumb Does the NAR Think Homebuyers Are?

Wht does buiders cost have to do with anything? They sell it for as much as they can whether that means a 25% markup or 25% below their cost.

Nobody really needs to own a house, the utility of renting one is nearly the same. Sure there are times that it would be advantagious to own, but not now.

The Future for the Mortgage GSEs

You're way to generous, they should be abolished. They've proved to be unstable and impossible to regulate.