The General Economics Thread

Just Google China Keynes, and you'll end up with a bunch of articles about China using Keynes to stave off the 2008 or 9 recession.

Since some people feel the urge to defend Keynes, please note that I distinguish between good Keynes and bad Keynes.

There's also so many interpretations of Keynes, including marriages with other economic theories.

Plants are aliens, and fungi are nanomachines.

They do have been investing in their internal market, but they are having issues with it creating an upper class that demands higher wages, isn't politically complacent with the party and the logistical constrains of having more than hundreds of millions moving from the country side to already cluttered cities.

All that along said middle class not growing fast enough to create a demand good enough to absorb their exports.

Those measures only served to delay their internal crash and crisis not avert it.

edited 24th Aug '15 11:09:09 AM by AngelusNox

Inter arma enim silent leges

. Well, I also call bad Keynes " kick the can down the road Keynes".

I do wish that Keynes was more about cleaning up govt. corruption and waste rather than increase this, increase that.

Plants are aliens, and fungi are nanomachines.

He was an economist, not a politician, those goals should come as the default for any government.

Inter arma enim silent leges

. Which is why I prefer austerity for governments with high levels of corruption. Keynes + corrupt government is never ending increasingly bigger problem.

There's a 2010 nytimes article wherein the author proposes that Keynes would be disappointed that China is following his theories more than the west.

Plants are aliens, and fungi are nanomachines.

China has a liquidity glut in investment, too much money going into investment, not enough into consumption.

In China's case, this is due to poor social safety nets. People feel the need to take their money and pump it into the stock market because that's the only way they'll be able to provide for their future, which combines with their constant stimulus spending to create badly overheated markets.

The important point of Keynes was that you could spend ad infinitum when you were in a slump, if you were a sovereign currency issuer, not that you could spend ad infinitum indefinitely, as that becomes pro-cyclical, not counter.

China is also pretty damn bad at figuring out where to put their infrastructure projects. They ignored most of the populated rural parts of the country and built an entire city in the north of the country that no one wants to live in, because there's nothing there and there was no incentive to move there.

Not Three Laws compliant.

How is that supposed to help the people of the country? Austerity is never for governments; they get paid no matter what. Austerity is telling the people: "Make do with less because you chose poor leaders." It's starving the serfs for the misdeeds of their feudal lords.

"If you want food and jobs and security, overthrow your government and choose a better one, but be sure to pay off its debts no matter what!" Funny how that never works.

edited 24th Aug '15 12:37:07 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

Corruption gets factored in in any case: it undermines productivity by stealing off the top and spending it in a way that doesnt benefit the tax payers being stolen from. That's why they are called the "Rent Seeking" class- they take out of the system more than they put back in.

Austerity just makes that problem worse- now they are stealing out of a shrinking pie. Accountability is the only real answer.

It's easier to find the holes when the pie is smaller. This is why (bad) Keynes gets accused by some economists of propping up dictatorships.

Austerity isn't perfect by any means, but neither is Keynes.

Again, I don't have a problem with (good) Keynes. Note that I've only been critical-snarky about it when (bad) Keynes is applied. China (and Greece) has high corruption levels.

Plus, I certainly don't mind when Keynes (even bad Keynes) is applied in green technology. Even nowadays with the oil glut, I hope they (China included) keep on pouring money into solar, wind, etc.

Plants are aliens, and fungi are nanomachines.

I wouldn't have a problem with your assertions if you didn't keep misrepresenting what Keynesian theory is. First, it's a macroeconomic theory, not a microeconomic theory. Investments in solar energy, for example, may serve a broadly Keynesian purpose in that they are stimulatory by nature, but they are not "Keynesian" in and of themselves.

There seems to be this conflation with Keynesianism and "government doing stuff with your money", which is not even the slightest bit true.

If people are saying stupid shit and calling it Keynesian, that's not the fault of Keynes any more than it would be the fault of George Steinbrenner if someone walked into Fenway Park and started playing football (either kind).

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

Woah, you think I'm blaming Keynes - the person?

If yes, you're making this too personal.

When I snark about Keynes, it's more like when I (used to) snark about Intelligent Design.

Plants are aliens, and fungi are nanomachines.

Hint, the internet sucks for conveying snarking and sarcasm.

China cuts interest rates

I Bring Doom,and a bit of gloom, but mostly gloom.

@probablyinsane: No, he thinks that your description of "Bad Keynes" reflects a misunderstanding of what Keynesian theory is. What you're describing isnt "Badly implemented Keynesianism" any more than my pathetic attempts to play football are "Bad Tom Brady". It's something else entirely.

I would not even be able to rank economic theories' applications by their level of correctness, much less by its oKeyness

edited 25th Aug '15 12:07:22 PM by Aszur

It has always been the prerogative of children and half-wits to point out that the emperor has no clothes

Sorry not sorry about the double post but

Have ya guys read this before?

It has always been the prerogative of children and half-wits to point out that the emperor has no clothes

"...Mr. Berwick and two partners called their community Galt’s Gulch Chile (GGC), a nod to that freedom-seeking character and enclave depicted in Atlas Shrugged, the classic libertarian novel by Ayn Rand. The partnership secured land, sketched out designs, subdivisions and property lots, and then sold the heck out of it to freedom-starved folk up north."

Sounds like a right-wing utopian community.

And now it's going wrong.

Feel that schadenfreude? Feels good.

Oh really when?

Planned communities never work. It has little to do with the ideology involved, and more to do with basic human social dynamics.

But aren't most communities planned in some way? Zoning, stuff like that?

Keep Rolling On

Most communities surge around something. Wether it be a source of jobs (mining, plantations, for example) or ready access to resources, communities tend to not do well if they do not establish themselves for a productive reason.

In this gulch thing they seem to have set up this very important economic difference as a secondary thing.

Look at the example of the Gold Fever expansion in the U.S and check out how many cities were born and died when productivity rose or declined

edited 26th Aug '15 7:50:57 AM by Aszur

It has always been the prerogative of children and half-wits to point out that the emperor has no clothes

Idealized Libertarian societies inevitably devolve into anarchies dominated by the biggest assholes.

edited 26th Aug '15 8:10:32 AM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

Utopian communities in general fall apart, which is less about ideology and more about human nature. Some of the earliest (pre-Marx) socialist experiments took the form of planned communities, and never worked out well (like Robert Owen's attempted "New Harmony" in Indiana).

Well the Quakers worked out fine. So did the Muslims, to a degree. And the Mormons.

Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.