Austrian economics ftw!

[theVOID]

http://www.youtube.com/watch?v=MnekzRuu8...playnext=1

[DeistPaladin]

Conservative myth about the housing bubble:

"We didn't want to give mortgages to all those scummy poor people who couldn't afford them but the liberals in the government made us do it."

Here's a myth-busting moment for you:

Bush in 2004 (Fast forward in the video to 3:24)

Another priority for a new term is to build an ownership society, because ownership brings security and dignity and independence.
...
Thanks to our policies, home ownership in America is at an all- time high.
(APPLAUSE)
Tonight we set a new goal: 7 million more affordable homes in the next 10 years, so more American families will be able to open the door and say, "Welcome to my home."

Today: Who us? Promote the housing bubble? No no no, that was the fault of the bleeding-heart liberals!

[theVOID]

Umm... Did you watch the video or are you trying to score points? Because you hit the wrong target - If anything you just clarified my point.

This isn't a liberal Vs Conservative issue, and it's not just Bush - The artificially inflated US economy and housing markets has been getting by on crutches of debt for decades. I think a good case can be made for fiat currency being the cause.

Encouraging people to buy property by way of subsidies leading them to borrow money to invest in a market that is being artificially inflated by massive speculation is a fucking bad idea, because when the bubble bursts the value of the assets that people have borrowed money with interest to purchase plummet in value. People were borrowing tons of money to purchase assets that they were told would continue to rise in value - All they were left with was properties worth a quarter of what they were worth an a ton of liabilities in the form of foreign debt.

Who were the people who saw the crash coming? The people using models from the Austrian school of economics. That is the point of this post and the video.

And I'm not a freaking conservative!

[TheDarkestOfAngels]

The artificially inflated US economy and housing markets has been getting by on crutches of debt for decades. I think a good case can be made for fiat currency being the cause.

... and I could make the case that it was more related to an unregulated marketplace (thanks to conservative economics) combined with a group of con-men who worked to earn billions of dollars by conning people and the government out of money.
Having watched both your video and Minimalists, I don't see where you're getting that 'fiat money' being the cause of this problem more than unmitigated greed and a gulible/corrupted politicians and audiences.

[theVOID]

Sure that was a bad situation that contributed to the whole problem, but the inflated value of assets was what made the corruption possible. You can't generate gold between banks, but a fiat currency? Just print more! Overvaluing the movement of assets and betting on it via derivatives? Well there is no tangible basis for value so we can decide upon the value between us! What happens when the bankers realise that they've been selling each other bullshit back and forth for a decade or more? They dump it on the people who ultimately have the liability, and that's us.

What's the Obama solution? Give the exploitative fuckers more cash! What did Bush do in 2001? Cut taxes raised spendign! America went on a spending spree and got themselves into trillions of dollars of debt, savings went into the negative, everyone started borrowing money for housing because their value had been inflated by the bush stimulus that was in it's self a recovery package for the dot com bubble created under Clinton. What economic model would have let the system take a hit and balance it's self the first time? The Austrian model.

You know what model would have seen Freddie, Fanny, Goldman etc get their asses handed to them via bankruptcy? The Austrian model. Instead the US govt spends another trillion dollars trying to coax the economy and further fucking up equilibrium getting the country further into debt, all to bail out the same fuckers who, with government security guarantees generated by imaginary value, started buying up bundles of toxic assets, getting their friends to give them AAA credit ratings. Everyone knew they were fucked, but the government was a guarantor, so unlike a free market where nobody would have touched these fucking things because they would have bee risking their own capital, they were gambling with the base value of the dollar and taxpayer money!

You would accept under other circumstances that the predictive power of a model is representative of it's efficacy no? Yet when it's an economic model that seems to best account for economic balance even under a different system it's like the predictive power of the model doesn't matter one fucking bit.

And let's be perfectly clear here, the US hasn't run anything like an Austrian model since Regan who destroyed it along with the Gold standard, it's been the Keyensian model the whole time.

Every move any regulator makes changes the balance between supply, demand, expenditure, savings and assets etc. It's not necessarily bad, some economic regulation is necessary, mostly in terms of judicial measures for those found to be misleading or fraudulent, but what you end up inevitably doing is obfuscating the real value of the economy, creating bubbles, lowering production and you go from boom to bust all while increasing foreign debt and requiring you send inflation skyward to recoup which it's self is a domino effect.

The US now owes 14 Trillion fucking dollars because they were spending under the illusion of inflated values created by a lack of a tangible comparison. Yeah the greedy fuckers need to be dealt with, but you might as well fix the plainly broken monetary model while your at it, and why not use the model that has had the most success in predicting the rise and fall of and relationship between the various factors? Economies are a fine balance that swing back and forth, it's only when you put strenuous pressure on one aspect that the balance throughout becomes effected and equilibrium is lost.

http://www.youtube.com/watch?v=EgMclXX5m...re=related

[Autumnlicious]

It is silly to switch economic systems when things are not solid and healthy enough to tolerate change.

Has any country switched to this economics system and thrived?

And I mean thrive.

[Jaysyn]

It is silly to switch economic systems when things are not solid and healthy enough to tolerate change.

Has any country switched to this economics system and thrived?

And I mean thrive.

The US was officially on a gold standard from 1900 till 1933, which we abandoned to stop the boom & bust cycles that were occurring. Private gold ownership was outlawed, with the exception of jewelry. We then went to the Bretton-Woods system that Keynes helped develop. After a few decades of that Nixon ended the fixed trading of gold which created the original "disconnect" between our currency & something tangible to back it.

"Because economies under the gold standard were so vulnerable to real and monetary shocks, prices were highly unstable in the short run. A measure of short-term price instability is the coefficient of variation, which is the ratio of the standard deviation of annual percentage changes in the price level to the average annual percentage change. The higher the coefficient of variation, the greater the short-term instability. For the United States between 1879 and 1913, the coefficient was 17.0, which is quite high. Between 1946 and 1990 it was only 0.8."