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I'm not sure what you mean. Allow the system to crash in hopes of changing the status quo. The status quo is to muddle through, causing a prolonged and unnecessary decline.
Decades of austerity >> Austrian economics
or
Austrian economics now
I'd choose the latter. And continue from there. Perhaps the best way to get rid of TINA is to destroy the economy and the illusions that went with it.
"I can't say I disagree with allowing the system to crash instead of bailing it out."
Probably, but the outcome is probably bad. Expect any resemblance to whatever is left of a democracy gone and full embracing of fascism, maybe even a new civil war between "freedumb" libertardians types and "corporate fascists".
But the only chance for some real leadership raising may happen under those extreme circumstances, like in the past. The current continuous decline won't have a good outcome that for sure, as people gets used to it or just goes and self-destructs itself (as the current trends of an over-medicated and depressed society with worsening living standards show off).
Japan wasn't that bad, but is an edge case as it's an highly cohesive and collectivist society (no obsession over "free markets", "American Dream", "capitalism" etc over there). Most economists are obsessed over nominal growth because they are idiots who don't understand demographics, or anything really, but Japan barely has unemployment, purchasing power has increased relatively to costs etc. It has other social diseases though... but reducing it all to economics is dumb.
In any case it cannot be replicated at worldwide scale, as Japan had two decades of growing international context to 'export themselves to prosperity' so the typical malaises of the polluted mainstream economists could be adverted somehow. The context now is different... even for Japan itself.
Well I laughed..... Because all Japan has to do is print more money and spend like a drunken sailor.......until inflation gets too uncomfortable then they will have to back off.
I really hope they do one day, because I really want to see how the debt to GDP ratio can go before inflation gets uncomfortable.
Then again I think inflation has a lot to do with how you accelerate spending and who gets the money. Giving poor folks money being more inflationary for RPI than giving money to billionaires (which will inflate asset prices).
"Then again I think inflation has a lot to do with how you accelerate spending and who gets the money."
Inflation is to do with how many projects are trying to get done at the same time with the same resources. There are lots of ways of serialising contention - primarily by refusing to raise the price you pay for something and letting it not happen instead - or banning the alternative.
Putting aside the argument that the 'Austrian Way' will somehow pull the economy out of contraction (without any cogent discussion of where demand will come from), what impresses me most about people like Schiff is the unspoken assumption that they would personally survive their hoped-for catastrophe - the smug assumption that one of their many sheeple wouldn't look them up and beat the living crap out of them for the snake oil they pushed.
Having been forced by conscription to participate in we-had-to-burn-the-village-to-save-it of another time, I have no time for these mucho Austrian equivalents of NeoCon chickenhawks - Schiff and the other sissy boys would be the first to go when the food riots break out.
I can see how a Government can try to control prices by refusing to pay for contractors price rises. Contractors won't bid on unprofitable jobs either. Once domestic consumers have the money it's a bit harder not to buy necessities like food, petrol and toilet paper. When there is a shortage of necessities and too many customers have the ability to pay, prices will rise until rationing is achieved.
Isn't this what happens in Argentina and Venezuela, private enterprises prefer to raise prices rather than invest in new capacity, because a shortage is good for profits margins. If the government tries to sell e.g. cheaper toilet paper in its government stores, stocks run out and dirty it bum time until new capacity comes online.
The right wing then claim the expected bad outcomes of capitalism are the fault of the damn socialists... bingo!
This comment has been removed by the author.
ReplyDeleteI can't say I disagree with allowing the system to crash instead of bailing it out.
ReplyDeleteIt's not either/or, which is based on assuming "there is no alternative" (TINA).
ReplyDeleteIt's the laissez-faire or communism POV that underlies naïve Austrian economics and Libertarianism.
This is the logical fallacy of the excluded middle, aka false dichotomy, false dilemma, false choice, polarization, and black and white thinking.
It's either stupid, or used as a rhetorical device to dupe the rubes.
I'm not sure what you mean. Allow the system to crash in hopes of changing the status quo. The status quo is to muddle through, causing a prolonged and unnecessary decline.
ReplyDeleteDecades of austerity >> Austrian economics
or
Austrian economics now
I'd choose the latter. And continue from there. Perhaps the best way to get rid of TINA is to destroy the economy and the illusions that went with it.
Honest question. How bad off is Japan since the early 90's? Are they doing more than muddling through?
ReplyDelete"I can't say I disagree with allowing the system to crash instead of bailing it out."
ReplyDeleteProbably, but the outcome is probably bad. Expect any resemblance to whatever is left of a democracy gone and full embracing of fascism, maybe even a new civil war between "freedumb" libertardians types and "corporate fascists".
But the only chance for some real leadership raising may happen under those extreme circumstances, like in the past. The current continuous decline won't have a good outcome that for sure, as people gets used to it or just goes and self-destructs itself (as the current trends of an over-medicated and depressed society with worsening living standards show off).
Japan wasn't that bad, but is an edge case as it's an highly cohesive and collectivist society (no obsession over "free markets", "American Dream", "capitalism" etc over there). Most economists are obsessed over nominal growth because they are idiots who don't understand demographics, or anything really, but Japan barely has unemployment, purchasing power has increased relatively to costs etc. It has other social diseases though... but reducing it all to economics is dumb.
ReplyDeleteIn any case it cannot be replicated at worldwide scale, as Japan had two decades of growing international context to 'export themselves to prosperity' so the typical malaises of the polluted mainstream economists could be adverted somehow. The context now is different... even for Japan itself.
Fucking Schiff.
ReplyDeleteWell I laughed..... Because all Japan has to do is print more money and spend like a drunken sailor.......until inflation gets too uncomfortable then they will have to back off.
ReplyDeleteI really hope they do one day, because I really want to see how the debt to GDP ratio can go before inflation gets uncomfortable.
Then again I think inflation has a lot to do with how you accelerate spending and who gets the money. Giving poor folks money being more inflationary for RPI than giving money to billionaires (which will inflate asset prices).
"Then again I think inflation has a lot to do with how you accelerate spending and who gets the money."
ReplyDeleteInflation is to do with how many projects are trying to get done at the same time with the same resources. There are lots of ways of serialising contention - primarily by refusing to raise the price you pay for something and letting it not happen instead - or banning the alternative.
Putting aside the argument that the 'Austrian Way' will somehow pull the economy out of contraction (without any cogent discussion of where demand will come from), what impresses me most about people like Schiff is the unspoken assumption that they would personally survive their hoped-for catastrophe - the smug assumption that one of their many sheeple wouldn't look them up and beat the living crap out of them for the snake oil they pushed.
ReplyDeleteHaving been forced by conscription to participate in we-had-to-burn-the-village-to-save-it of another time, I have no time for these mucho Austrian equivalents of NeoCon chickenhawks - Schiff and the other sissy boys would be the first to go when the food riots break out.
Neil,
ReplyDeleteI can see how a Government can try to control prices by refusing to pay for contractors price rises. Contractors won't bid on unprofitable jobs either. Once domestic consumers have the money it's a bit harder not to buy necessities like food, petrol and toilet paper. When there is a shortage of necessities and too many customers have the ability to pay, prices will rise until rationing is achieved.
Isn't this what happens in Argentina and Venezuela, private enterprises prefer to raise prices rather than invest in new capacity, because a shortage is good for profits margins. If the government tries to sell e.g. cheaper toilet paper in its government stores, stocks run out and dirty it bum time until new capacity comes online.
The right wing then claim the expected bad outcomes of capitalism are the fault of the damn socialists... bingo!