Comments by "Wojtek The Bear" (@wojtekthebear4958) on "The Plain Bagel"
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@atari7001 1. Fractional reserve banking has existed way before central banks. Kind of surprised I really needed to say that.
2. Stimulus and QE ended a long time. 2012-2014 was when the programs were wound down and ended. Economic growths after that have nothing to do with either program
3. Globalization exists independently of central banking. The US globalized before it even had a central bank.
4. The Fed HAS helped market stability. Before the Fed, the US had a recession every few. The US had a recession in 1901, 1903, 1907 - the recession which was so devastating that it forced government action -, 1911, and then in 1914. Ironically the Fed was created to keep the financial power out of private hands as, while beneficial in the 1907 recession, seeing how much influence financiers like JP Morgan had worried many Americans. Since the creation of the Federal Reserve, economic downturns in the United States have been less frequent, less severe, and don't last nearly as long.
There's a handy graph that shows just that, but I'm having trouble locating it. If I do, I'll put it up. For now, this paper goes into the Federal Reserve's expert handling of crises in recent decades: https://files.stlouisfed.org/files/htdocs/publications/review/04/03/Neely.pdf
You can also just look at USD inflation too: http://4.bp.blogspot.com/-NQAuKUEl4Y0/T3EjXaTS-2I/AAAAAAAABUQ/k21b2SrBnZQ/w1200-h630-p-k-no-nu/U.S.+Yearly+Inflation+Since+1900.jpg
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@karl5722 I'm not a Keynesian, nor is mainstream economics. That being said, economics has taken the things Keynes has been found to be right about: sticky wages, the fiscal multiplier, say's law not always holding true, etc, and incorporated them, just like economics has incorporated ideas from Monetarism, Keynesianism's biggest rival.
So why have you argued for Say's Law? Because you're arguing that the economy quickly recovers from a downturn, which just isn't true. Specifically for the Great Depression, the economy faced a supply glut. The economy was able to produce a lot of goods, but few people were willing to buy them, so the economy crashed. According to Say's Law, this isn't possible.
Similarly, Say's Law argues that the labor markets should always lean towards full employment, something the Great Depression obviously proves false, and Keynes proved even more false with his theory on sticky wages and prices.
So you argued for Say's Law by saying the economy would quickly be able to recover from an economic downturn, something proven false by the fact that no global economy quickly recovered from the Great Depression.
Ignoring all of that though, economic analyses on the subject show you are just wrong. Below I have listed three of the most famous and highly accredited academic papers and book on the subject. All come to the conclusion that the fiscal policy of the United States had a positive effect on the US' recovery during the Great Depression.
https://www.nber.org/chapters/c6888.pdf
https://www.cambridge.org/core/journals/journal-of-economic-history/article/what-ended-the-great-depression/2A7B32F9B7FBA233528B8FDA4E0ABF9D
and, of course, A Monetary History of the United States by Milton Friedman
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@karl5722 Oh, you're restating your argument like that somehow makes it right. Does that mean all I have to do to refute you again is restate my argument? Doesn't help that the cause of the Great Depression was monetary policy issues linked to the international gold standard. That's not something an economy can easily recover from, as shown by the fact that no economy easily recovered from it.
Anyway, at least your not completely economically illiterate, though how you think immigration isn't an economic issue is beyond me. You don't think our level of consumer demand, the levels of our skilled and unskilled labor forces, our balance of cash flows, etc are economic issues? Economic experts have even written tons of literature on immigration due to its economic nature (literature you must not have read given your anti-immigration stance). Yes, yes, I know it's anti ILLEGAL immigration, but let's be honest here, it's just anti-immigration. If we made the illegal immigration into the US perfectly legal, that being there were next to no restrictions on crossing the Mexican-US border, you'd still have fault with the policy. It's not the fact that they're breaking some law that grinds your gears, its because you seem them in an inherently negative light.
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@victoriassecretisluv Actually the US' trade deficit with China is equal to about half of the US' total trade deficit ($375 billion out of $600 billion total). Why this matters in the first place I have no idea. Trade deficits in and of themselves are no bad. They merely show consumer preferences.
Moreover, that is NOT how tariffs work at all, and your ignorance in the matter is why we're in the position in the first place. The tariffs paid are not paid by China, and especially not the Chinese government. They are paid on any good coming into the US from China. Whether the goods come from an American company or otherwise. In fact most of the companies paying the tariff are American. And let's remember that businesses aren't the sole entities eating up these tariffs. Much of the cost of the tariffs are passed on to the consumer, meaning consumers have less money in real terms to spend on goods.
Apparently you don't care about fucking over American consumers though, especially the poor, because, what? These tariffs create jobs in America?
That's a load of shit. First, the US doesn't need new jobs, Our unemployment rate is below 5%, what is considered the natural rate of unemployment. Generally anyone who wants a job has one. It's not like people are still struggling to get a job. Second, China wasn't even the reason the US lost many of its jobs in the first place, automation was. Don't believe me? Here's proof: https://1.bp.blogspot.com/-QQkK0hs8Lb4/T5revMy9zNI/AAAAAAAARWA/YV60eLcyrfo/s1600/mfg1.jpg
While manufacturing jobs have jumped off a cliff in recent decades, American manufacturing output has only been on the up and up.
Also it's glad to see that you care about Chinese currency manipulation! You must've been a huge supporter of the TPP then, right. After all, the main goal of the TPP was to punish China for its currency manipulation by creating a free trade zone with everyone around China, excluding China itself, so that they could trade more with each other and not China. Too bad Trump killed the TPP in the name of protectionism, right?
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