I have the pleasure here of having a discussion with Mr. Ron Berg who has a Masters Degree from Columbia University with an emphasis in Economics and Finance. He is an advocate for Keynesian Economics and he sees the Federal Reserve as having a vital role in the strength of our economy. (Probably over 95% of all Economists do.) He is liberal in his thinking, but is kind enough to have an ongoing discussion with me concerning such things. Obviously, I am more the Libertarian and see large government as the problem, not the solution.
I plan to seriously consider Ron's ideas and see if there are any holes in my theories. I hope he will do the same.
I am not a professional economist. I am more the serious student, but I tend to have a contrarian view on most things in life. I hope to have a better understanding of both his and my point of view by doing this. For me, all that matters is the truth.
Hi Jon,
ReplyDeleteI don't like your politics, and I don't like your paintings. But I do like you. I met you about two weeks ago but didn't let on that I knew who you were. When you walked in to where I work, I expected you to be smug and a little arrogant like your online persona can be sometimes. I was pleasantly surprised to find out that you are humble and sincere and earnest in the way you actually are in real life. I feel ashamed that I judged you as a person based on your art and the ideas you express in it.
So while I don't agree with your opinions, I admire you for having them. While I don't like the way you express them, I respect that you are willing to take a stand for your beliefs. I am proud to be part of a church with people of your dedication.
From one person trying desperately to be like our Savior to another, keep it up. I don't think we'd ever persuade each other to agree with our overall political philosophies. But I do think that we could be friends and, in the end, that's all that matters anyhow.
-Matt
Matt, we all can be guilty of judging others at times. Thank you for the kind words.
ReplyDeleteJon,
DeleteWhat is most often mislabeled is the use of the term "Liberal" what I have discovered through much research is that these people who are categorized as "liberal" are in fact not liberal in their thinking at all, they are in fact, Zealots.
Your painting Via Dolorosa completely symbolizes this fact. What is the common thread among all those who hate Christ and want him gone for human discussion? You will find your answer in the comments of the apostle Paul (acts 17 and Colossians 2:8), and the persons who exist in your painting who are just in front of Christ and just behind him (although you did paint a few on the left)such as Mau, Lenin and Obama. But the ones on the right bear the common thread, that doctrine which is the same. that doctrine which Paul warned of and which Christ hated. These are not liberals, they are as Zealot today as they were in Paul's time. Paul engaged two of their main sects, the Epicureans and the Stoick's.
The remainder who hate Christ are defined in John chapter 8, where Christ himself identified them and your painting projects them clearly.
Ok Jon, thanks for the introduction.
ReplyDeleteFirst, let me state that my posting on this site is simply about having a conversation (call it a debate if you like); it is not about convincing anyone that a particular opinion (point of view) is right, or the truth.
How do we benefit from such conversations? Well, as Jon implied, it will advance one's knowledge and understanding. And this will lead to independent thinking; to think for yourself rather than have someone think for you.
What do I mean by "have someone think for you"? When you simply listen to "messaging" sources (sites, groups, programs, etc.) that present statistics to support their agenda, and you base your opinion simply on these sources, then imo you have abdicated independent thought. Btw, there's a saying: you can torture statistics to say anything you want.
Having discussions with those of opposing opinions is the first step towards independent thought (I often refer to it as "critical thinking").
You will benefit most by supporting your opinions with links to supporting data, articles, studies, etc.; else, your opinion is simply rhetoric. Btw, non-partisan sites are far more convincing than partisan sites (to eliminate the agenda bias). You will benefit because it will force you to do the research (much like adding footnotes to a term paper).
And second, if there's a label I subscribe to it's "pragmatist"; what works best for society.
Jon has described me as a Keynesian. Keynesian economics takes a macroeconomic view (both monetary and fiscal); it does not address microeconomics which needs to be considered as well.
In economics, there are lots of tools in the tool chest. The choice of tools, or combination thereof, will determine the effectiveness of economic policy employed to address current economic issues. In other words, there is no one school of economic thought that is applicable to all economic environments.
The one constant in all economies of industrialized nations worldwide is the benefit of a "managed" economy; that governments play an important role in minimizing the extremes of the market place.
The one economic school of thought (the oldest school) that does not adhere to a managed economy is the Austrian School (which the Libertarian ideology subscribes to). Austrian economists favored a diminished role of government, and reliance on a free-market. The Austrian school also supports a gold or silver standard.
To understand the impact of this approach (an unmanaged economy), one only needs to review economic history during the 19th and early 20th centuries, when the economy experienced boom & bust cycles every 20-30 years (like clock-work). During this period, we did NOT have a central bank (it was abolished by President Andrew Jackson, and was not established again till 1913 with the Federal Reserve).
I do not advocate for an unmanaged economy, which is why I do not advocate for the Libertarian ideology.
Is the benefit of a managed economy truly a benefit? For whom exactly? The notion that one person or some powerful group has sufficient knowledge to manage an economy is suspect. Keynes argued "in the long run we're all dead" as a justification for government interference. That long run is now the present. The "managers" have managed to amass an absurdly high national debt and even higher unfunded liabilities. The Fed is asked to serve two masters. It cannot. Those who understand the contributions of public choice theory realize politicians are people who will do what is best for themselves. They rationalize their actions. The Peters getting from the Pauls support them. Some of the Pauls are too young to vote but will pay the price. That we can solve our problems by massive borrowing or massive printing of money doesn't pass the sniff test. That foul odor we smell is the stench of a failed Keynesian ideology.
ReplyDeletePART 1 - Sowellman
ReplyDeleteOk Sowellman. I'll be brief, since I've already provided the details.
Your first point: for whom does a managed economy benefit? Society benefits from a managed economy, by reducing the boom & bust cycles of a free, unmanaged economy. As I pointed out, you only need to review economic history of the 19th and early 20th centuries (to the Great Depression) for proof. Imagine going thru a depression 2 or 3 times during your lifetime, in which you lose everything, including your savings as banks fail. I haven't experienced that at all during my lifetime, and I suspect neither have you.
Your second point: one person or some powerful group has sufficient knowledge to manage an economy is suspect. Implied is the notion that we need to micromanage the economy; that is not the case. A car is a complex system, yet one only needs to acquire basic skills to properly control it. As with most systems, a small number of variables are sufficient for control.
Your third point: The "managers" have managed to amass an absurdly high national debt and even higher unfunded liabilities. This is an interesting point, since our managers (specifically the politicians) had removed (made ineffective) some of the controls (regulations) that would have avoided this situation. This is due to poor management selection (I'm referring to the Bush Jr. Administration). This gave us a hint to how the economy would react if it were left to the discretion of our corporate leaders (CEOs). The small amount of stimulus (starting with Bush, and continued by Obama) is a Keynesian tool (used at an appropriate time) that has kept us out of a depression. What makes this interesting is how can we avoid poor selection in the future from causing a recurrence. Imo, the experience with the Federal Reserve, which controls monetary policy, provides a good model for controlling fiscal policy.
Btw, after WW2 our debt to GDP ratio exceeded 120%; our marginal tax rate exceeded 90%; and Keynesian policy led to the largest prosperity our country has ever experienced (we became a consumer oriented economy, with a large middle-class). Keynes' remark "...In the long run, we are all dead" was directed at classical economists who preferred to let the market place bring us out of the Depression. Keynes advocated for government "intervention" (not interference) to stimulate the economy when the private sector was not. While Nixon proclaimed to be a convert to Keynesian economics, does this mean it's appropriate to employ thru all economic conditions? No.
PART 2 - Sowellman
ReplyDeleteYour fourth point: The Fed is asked to serve two masters; it cannot. Actually, it has done quite well imo (I'm sure you disagree). Its two masters are (serving the interests of) the general public and private banks. Both need to be addressed, and it is far more efficient to have these interests represented in the FOMC rather than kept separate (or worse, only represent one side).
Your fifth point: public choice theory realize politicians are people who will do what is best for themselves. One can certainly make that argument for CEOs, as we've witnessed recently. I can argue the limitations of "public choice theory", but this was done already by two of its strongest advocates, James Buchanan and Gordon Tullock, in their work "Calculus of Consent". It's just a theory with little application.
Your sixth point: The Peters getting from the Pauls... This is really the basis of the Libertarian argument: Why should the wealthy contribute more than the rest of society? In total dollars this is true; as a percentage of income they don't. But the response has not waivered: Because it improves the economy for all (including the wealthy). Jeffersonians have always weighed in on society's side over the individual, and railed against the wealthy merchants and bankers controlling government policy (which is the Libertarian view).
And your last point: That we can solve our problems by massive borrowing or massive printing of money doesn't pass the sniff test. We have to deal with the problems facing us, and the approach (albeit too little imo) we take today is the same applied when we faced the same issues after WW2. The more interesting question is how we spend the money to help grow the economy; and by doing so, eliminate the deficit and pay down the debt. European countries are trying the austerity program (your approach), and it is not improving their GDP; however, China and Russia are spending money on infrastructure (a Keynesian approach) and their economies are doing far better.
I suspect you're a Thomas Sowell fan (the anti-intellectual intellectual). If so, my feelings regarding Sowell are similar to this blogger's response to Sowell's IBD interview. See http://drezner.foreignpolicy.com/posts/2010/03/05/public_intellectual_says_really_stupid_things_to_prove_point_about_intellectuals