sceptical economics.

[jonb]

Is this a good time to start re-evaluating everything
Could it be said academic economics have failed. Not because there is anything wrong with the art of economics, but that economists are so wedded to theory that they are ignoring the basics.
Where does a town grow in a place where resources and communications make it an advantageous place to live. In economic terms cheep. Why are economies failing? Because economists and the governments they advise are making ordinary lifestyles too expensive in the developed world to compete with the rest of the world, and the markets are not developed enough in the rest of the world to replace the failing developed markets.
The solution put forward by governmental bodies is to drive down the wages of the average people in the developed world. However this damages the markets in the developed world, as consumer spending power is directly damaged, and also it damages governments because it affects the government’s ability to tax, and thus provide the developed markets infrastructure. Governments have borrowed to support their own markets, but in the downward drive they are arriving at the stage where they will be unable to increase the borrowing because they will not be able to pay it back.
Is there anybody here that would disagree with the above, if so please say why.

[KichigaiNeko]

Let me think on it but seriously I would consider you to be on the right track. Unless some other "market forces" come into play this whole senario is going down the tubes. GDP of nations is diminishing from what I can see (albeit a very limited view)

[jonb]

In the fifties, the economic model for the economy that was in common usage was a system of plumbing.

http://conversableeconomist.blogspot.co....llips.html

Hydraulic Models of the Economy: Phillips, Fisher, Financial Plumbing
Part of the lore of earlier economists as it was passed down to me around the campfire back in the Neolithic era is the story of how Alban William Housego (Bill) Phillips, the originator of the famous 1956 paper that drew the "Phillips curve" tradeoff between unemployment and inflation, also built a hydraulic economic model: that is, a physical model of the economy in which flows of consumption, saving, investment and other economic forces were represented by liquid moving through tubes and pipes. What I hadn't known until more recently is that Irving Fisher also created an hydraulic model of the economy.

Problems with the economy would show up in this model, as bottle necks, where wealth would build up in some parts and not flow out properly thus reducing the general flow rate.

The solution to this came about with the idea that bottle necks could be overcome by facilitating easy access to borrowing. Thus if one part of the system was short of finance the banks could draw from reserves where there had been a build up and direct finance to areas which had a shortage. In doing this the general flow should be unaffected.

This was used by many governments as a template in the seventies, to drive down workers wages to make the individual goods more competitive, but to facilitate more general lending in the form of credit cards, and looser controls on credit to redress the balance.

Personally what I have identified to be the problem is that the banks role is not seen as part of the system, but external to the model. This simply cannot be. Debt and borrowing must affect the model. Current economists will no longer use the model, in fact there is no longer a coherent model used in economics, just partial explanations for individual interactions.

When teaching university level economics, issues of debt are dismissed in the very first lessons and it is shown that debt can basically be ignored as having a general effect on the economy.

Paul Mason Interviews Steve Keen Critic of Economics

Keen argues that if we keep the parasitic banking sector alive the economy dies. Steve Keen is professor of economics and finance at the University of Western Sydney in Australia

http://www.scribd.com/doc/96161468/Paul-...-Economics

When Steve Keen and others have pointed out that this dismissal of debt as an issue, cannot work they are dismissed with what he terms 'effortless superiority'. That there is a refusal to even question whether the current theory could need adjustment.

Now it might seem odd that I should be posting this stuff upon an atheist forum, but doesn't the refusal to question, dismissal of evidence, and pig headed continuance with a dogma against knowledge of the real world as we are experiencing it look a lot like religion?

[HorribleOffensiveScouser91]

I agree with your statement, governments cut the disposable income of the majority and then they wonder why so many businesses are failing and why the markets are slumping! They then use this as an excuse to cut more from the bottom, it doesn't make sense. I think economists need to be honest with themselves and stop thinking in monetary and fiscal terms and instead just admit this economic crisis has gone so far now that neither they or anybody else has a fucking clue how to solve it.

[KichigaiNeko]

Have to agree and it isn't just economics that is turning to fundamentalism blindness. I look at the general and business new and come away thinking "we're skrewed big time" The worst is the IMF followed by the World Bank then all the way down to government treasurers playing fiscal, monetary and income games with the countries figures...I think it is called "creative accounting"

Get's rather depressing

[Darth]

So they can't be trusted, even if they did know what on earth they were doing? Wonderful arguments for just leaving everything and everyone alone imo. Glad we're in agreement, on utilitarian grounds at least :3

[KichigaiNeko]

Just between you and me mate....

I WANT TO SEE THE BOOKS!