Keynes VS Hayek

[csgators]

A businesses could make a huge investment and have it fail on them, making them crash down.

Or a businesses could become too big to the point that government can't do anything but help them.

Sound familiar?

 

The Hayek argument is you let them fail. Bad business practice must have consequences. As the video states, Capitalism is a profit and loss system. The loss is just as important as the profit. By bailing out these companies we are reward the worst companies and punishing the companies that did it right creating no intensive to adhere to sound business practices.

The thing is, they are too big to fail.

 

If certain businesses crash the entire economy will come with it.

 

Businesses can grow to a point that they control the government, we can't let that happen.

 

Show me an example of one business failing and killing the entire economy. Sure it will have an impact but we have bankruptcy laws for a reason. Any assets of value will be bought up by others and the failure and loss will show other companies what not to do. The competitors of the failed business will benefit by gaining the customers of the failed venture and are rewarded for doing things the right way.

If the bailouts did not happen the entire economy may not of crashed, but it very well could of led to it. It would have effected almost all companies on a global scale.

 

It would have been painful but fast, the medicine having been taken the market could move on. All we are doing is delaying the problem and in fact making many more problems as a result. Larry Kudlow has announced the return of stagflation. Welcome back Carter. You see to pay for those bailout and all the other little goodies people like the government to provide we have to borrow and print money. We are approaching the end of QE2 (Qualitative Easing) witch is a perverted way the FED makes new money (that we pay interest on if you can believe it.) So now we have a dollar that is dropping like a rock, making everything more expensive and wiping out savings via inflation.

[marharth]

A businesses could make a huge investment and have it fail on them, making them crash down.

Or a businesses could become too big to the point that government can't do anything but help them.

Sound familiar?

 

The Hayek argument is you let them fail. Bad business practice must have consequences. As the video states, Capitalism is a profit and loss system. The loss is just as important as the profit. By bailing out these companies we are reward the worst companies and punishing the companies that did it right creating no intensive to adhere to sound business practices.

The thing is, they are too big to fail.

 

If certain businesses crash the entire economy will come with it.

 

Businesses can grow to a point that they control the government, we can't let that happen.

 

Show me an example of one business failing and killing the entire economy. Sure it will have an impact but we have bankruptcy laws for a reason. Any assets of value will be bought up by others and the failure and loss will show other companies what not to do. The competitors of the failed business will benefit by gaining the customers of the failed venture and are rewarded for doing things the right way.

If the bailouts did not happen the entire economy may not of crashed, but it very well could of led to it. It would have effected almost all companies on a global scale.

 

It would have been painful but fast, the medicine having been taken the market could move on. All we are doing is delaying the problem and in fact making many more problems as a result. Larry Kudlow has announced the return of stagflation. Welcome back Carter. You see to pay for those bailout and all the other little goodies people like the government to provide we have to borrow and print money. We are approaching the end of QE2 (Qualitative Easing) witch is a perverted way the FED makes new money (that we pay interest on if you can believe it.) So now we have a dollar that is dropping like a rock, making everything more expensive and wiping out savings via inflation.

I am not even sure we could of stopped the bailouts anyways.

 

The root of the problem is that big businesses do what they want without anyone to say otherwise.

 

I am not saying the government has to be the one to fix this, I am saying it needs to be fixed somehow.

[csgators]

A businesses could make a huge investment and have it fail on them, making them crash down.

Or a businesses could become too big to the point that government can't do anything but help them.

Sound familiar?

 

The Hayek argument is you let them fail. Bad business practice must have consequences. As the video states, Capitalism is a profit and loss system. The loss is just as important as the profit. By bailing out these companies we are reward the worst companies and punishing the companies that did it right creating no intensive to adhere to sound business practices.

The thing is, they are too big to fail.

 

If certain businesses crash the entire economy will come with it.

 

Businesses can grow to a point that they control the government, we can't let that happen.

 

Show me an example of one business failing and killing the entire economy. Sure it will have an impact but we have bankruptcy laws for a reason. Any assets of value will be bought up by others and the failure and loss will show other companies what not to do. The competitors of the failed business will benefit by gaining the customers of the failed venture and are rewarded for doing things the right way.

If the bailouts did not happen the entire economy may not of crashed, but it very well could of led to it. It would have effected almost all companies on a global scale.

 

It would have been painful but fast, the medicine having been taken the market could move on. All we are doing is delaying the problem and in fact making many more problems as a result. Larry Kudlow has announced the return of stagflation. Welcome back Carter. You see to pay for those bailout and all the other little goodies people like the government to provide we have to borrow and print money. We are approaching the end of QE2 (Qualitative Easing) witch is a perverted way the FED makes new money (that we pay interest on if you can believe it.) So now we have a dollar that is dropping like a rock, making everything more expensive and wiping out savings via inflation.

I am not even sure we could of stopped the bailouts anyways.

 

The root of the problem is that big businesses do what they want without anyone to say otherwise.

 

I am not saying the government has to be the one to fix this, I am saying it needs to be fixed somehow.

 

I think we pretty much agree that corporate interference in Washington is one of our biggest problems. Washington interfering with just about everything is another and they are related in some ways.

[Harbringe]

The problem with the Invisible Hand of Adam Smith is that without regulation it can be manipulated.Example : When the American economy tanked in 07 - 08 it created weakness in the stability of the American dollar (confidence) ,that confidence for a time went to the Euro strengthening it.American financiers such as JP Morgan ,Lehman Brothers ,Bank of America etc etc in order to buoy their own faltering holdings went looking for weaknesses in the European economy and Greece was its weakest .They then dumped a bunch of money ( taxpayer provided bailout money) into leveraged securities against the Greek economy , so once the markets seen that money was being placed against the Greek economy it all tanked ,same happened with the Irish economy .These same people then turn in their securities making themselves a nice profit because the Greek economy didn't meet its margins (basically didn't perform as they projected it would) its called reflexivity (also applies in other areas).

 

In simple terms its the same as beating the spread in a sport such as horse racing , except for certain horses you put weights in their shoes so the desired outcome would happen and you show up at betting window with winning ticket.

 

Another is the act of auto trading ( computerized systems set up beside stock exchanges to trade the same stock over and over again , generating fees),a few years back think it was around 2004 , someone got caught skimming off the top .When Congress caught wind of this they realized there were irregularities in the act of auto trading itself as detailed in SEC rules and regulations .So what did these Corporations do ,they lobbied Congress to have the rules changed and now the biggest Corporations have set up banks and banks of computerized trading terminals.So while volume on the stock exchanges has been going down over the last 3 years , certain stocks keep going up creating the appearance of demand and value as per the invisible hand ,while really it is just the manipulation of that hand.

 

There are many more examples of how they do this from debt swaps ,toxic debt , to a myriad of derivative schemes and I'm sure many more that I don't even know about

 

These are just some examples why the Invisible Hand of Adam Smith doesn't truly work because once you become so large , you can through organizations such as World Bank ,IMF , WTO ,GATT and your Congress and its various governmental agencies and make the rules up , so in effect you becomes the Invisible Hand.

Edited May 1, 2011 by Harbringe

[csgators]

The problem with the Invisible Hand of Adam Smith is that without regulation it can be manipulated.Example : When the American economy tanked in 07 - 08 it created weakness in the stability of the American dollar (confidence) ,that confidence for a time went to the Euro strengthening it.American financiers such as JP Morgan ,Lehman Brothers ,Bank of America etc etc in order to buoy their own faltering holdings went looking for weaknesses in the European economy and Greece was its weakest .They then dumped a bunch of money ( taxpayer provided bailout money) into leveraged securities against the Greek economy , so once the markets seen that money was being placed against the Greek economy it all tanked ,same happened with the Irish economy .These same people then turn in their securities making themselves a nice profit because the Greek economy didn't meet its margins (basically didn't perform as they projected it would) its called reflexivity (also applies in other areas).

 

In simple terms its the same as beating the spread in a sport such as horse racing , except for certain horses you put weights in their shoes so the desired outcome would happen and you show up at betting window with winning ticket.

 

Another is the act of auto trading ( computerized systems set up beside stock exchanges to trade the same stock over and over again , generating fees),a few years back think it was around 2004 , someone got caught skimming off the top .When Congress caught wind of this they realized there were irregularities in the act of auto trading itself as detailed in SEC rules and regulations .So what did these Corporations do ,they lobbied Congress to have the rules changed and now the biggest Corporations have set up banks and banks of computerized trading terminals.So while volume on the stock exchanges has been going down over the last 3 years , certain stocks keep going up creating the appearance of demand and value as per the invisible hand ,while really it is just the manipulation of that hand.

 

There are many more examples of how they do this from debt swaps ,toxic debt , to a myriad of derivative schemes and I'm sure many more that I don't even know about

 

These are just some examples why the Invisible Hand of Adam Smith doesn't truly work because once you become so large , you can through organizations such as World Bank ,IMF , WTO ,GATT and your Congress and its various governmental agencies and make the rules up , so in effect you becomes the Invisible Hand.

 

You point to some great examples and I do think *some* regulation is needed but honestly the most recent crises started in the housing markets is directly related to the government. You can thank Barney Frank and Chris Dodd for the most part. The federal requirements regarding loans and the government protected/run banks known as Freddie Mac and Fannie Mae are the main culprits. Essentially the government forced banks to make bad loans and then the now "toxic debt" was sold into bundles to disperse the loses by the banks or the bad debt was forced into Freddie Mac and Fannie Mae for the government to absorb. Much of it goes over my head bu the recent problems where a failure of government regulations, not the lack of.

[SpellAndShield]

The problem with the Invisible Hand of Adam Smith is that without regulation it can be manipulated.Example : When the American economy tanked in 07 - 08 it created weakness in the stability of the American dollar (confidence) ,that confidence for a time went to the Euro strengthening it.American financiers such as JP Morgan ,Lehman Brothers ,Bank of America etc etc in order to buoy their own faltering holdings went looking for weaknesses in the European economy and Greece was its weakest .They then dumped a bunch of money ( taxpayer provided bailout money) into leveraged securities against the Greek economy , so once the markets seen that money was being placed against the Greek economy it all tanked ,same happened with the Irish economy .These same people then turn in their securities making themselves a nice profit because the Greek economy didn't meet its margins (basically didn't perform as they projected it would) its called reflexivity (also applies in other areas).

 

In simple terms its the same as beating the spread in a sport such as horse racing , except for certain horses you put weights in their shoes so the desired outcome would happen and you show up at betting window with winning ticket.

 

Another is the act of auto trading ( computerized systems set up beside stock exchanges to trade the same stock over and over again , generating fees),a few years back think it was around 2004 , someone got caught skimming off the top .When Congress caught wind of this they realized there were irregularities in the act of auto trading itself as detailed in SEC rules and regulations .So what did these Corporations do ,they lobbied Congress to have the rules changed and now the biggest Corporations have set up banks and banks of computerized trading terminals.So while volume on the stock exchanges has been going down over the last 3 years , certain stocks keep going up creating the appearance of demand and value as per the invisible hand ,while really it is just the manipulation of that hand.

 

There are many more examples of how they do this from debt swaps ,toxic debt , to a myriad of derivative schemes and I'm sure many more that I don't even know about

 

These are just some examples why the Invisible Hand of Adam Smith doesn't truly work because once you become so large , you can through organizations such as World Bank ,IMF , WTO ,GATT and your Congress and its various governmental agencies and make the rules up , so in effect you becomes the Invisible Hand.

 

Dolar needs to be backed by hard assets.

[Harbringe]

Not that many of you will watch this but if you do this is why Hayek will win and you will loose.

 

http://www.youtube.com/watch?v=eb1n1X0Oqdw&feature=relmfu

 

http://www.youtube.com/watch?v=E4ez21OItqQ

 

And for you who have watched both video's ,don't worry we Canadians will be buying out the States along the border (as many as we can) for pennies on the dollar , when things go poof for you.

[csgators]

Not that many of you will watch this but if you do this is why Hayek will win and you will loose.

 

I'm not sure what you mean by Hayek will win. His theory has been losing as far as influencing government policy. All the things I saw in an initial viewing if the first video ignores the Kayek view and doubles down on Keynes. If you mean Hayek's theory is reality and he predicted most of this years ago you are correct. Did you notice the boxing match in the second video I posted where Hayek knocks out Keynes but the ref awards Keynes the win...it's happening everyday The politicians and the voters ignore the truth and double down on stupid. I'll try and watch the whole video(s) later but honestly the intro is a turn off with the annoying noises and quick media cuts. I can cut second long clips to say anything I want.

[marharth]

Not that many of you will watch this but if you do this is why Hayek will win and you will loose.

 

I'm not sure what you mean by Hayek will win. His theory has been losing as far as influencing government policy. All the things I saw in an initial viewing if the first video ignores the Kayek view and doubles down on Keynes. If you mean Hayek's theory is reality and he predicted most of this years ago you are correct. Did you notice the boxing match in the second video I posted where Hayek knocks out Keynes but the ref awards Keynes the win...it's happening everyday The politicians and the voters ignore the truth and double down on stupid. I'll try and watch the whole video(s) later but honestly the intro is a turn off with the annoying noises and quick media cuts. I can cut second long clips to say anything I want.

I think it is clear that Hayek's theory is in practice in the USA.

 

 

Sure, we did the bailouts. That had nothing to do with economics though. That happened because the banks told the government what to do.

Edited May 4, 2011 by marharth

[csgators]

Not that many of you will watch this but if you do this is why Hayek will win and you will loose.

 

I'm not sure what you mean by Hayek will win. His theory has been losing as far as influencing government policy. All the things I saw in an initial viewing if the first video ignores the Kayek view and doubles down on Keynes. If you mean Hayek's theory is reality and he predicted most of this years ago you are correct. Did you notice the boxing match in the second video I posted where Hayek knocks out Keynes but the ref awards Keynes the win...it's happening everyday The politicians and the voters ignore the truth and double down on stupid. I'll try and watch the whole video(s) later but honestly the intro is a turn off with the annoying noises and quick media cuts. I can cut second long clips to say anything I want.

I think it is clear that Hayek's theory is in practice in the USA.

 

 

Sure, we did the bailouts. That had nothing to do with economics though. That happened because the banks told the government what to do.

 

Did you mean that it's clear that Keynes theory is in practice? Hayek would mean no bailouts and decreased regulation, definitely not happening.