Friday, January 9, 2009

Zimbabwe Ben on Steroids

The monetary base (MB) was $1,658,848 million on 17 Deccember 2008 and $843,841 on 10 September 2008, a 96.58% increase in 14 weeks, which compounds to a 1,131% annualized rate. The MB increased $191,119 in the two weeks ended 17 December or 13.02%. Hey Zimbabwe Ben, give it a rest. Deflation? What are the deflationistas talking about?


Anonymous said...

That's what I say Z. Ben Bernanke... all machines need downtime for maintenance... especially printing presses...

This isn't gonna end well...

Junior said...

All you have to do to understand that he's pro-helicopter is read his 2003 "Some Thoughts on Monetary Policy in Japan" speech where he railed on BOJ for not printing enough money, believing somehow by creating inflation systemic crisis could be cut off before it becomes overwhelming.

Maybe under normal operating conditions that kind of logic would work... doesn't Uncle Ben realize that we are not operating under normal conditions?!

VoiceFromTheWilderness said...

I'm not an economist, and don't have a strongly held view for or against Keynesianism, however, this self serving diatribe from Schiff certainly doesn't count in my book as an element in a 'worthy debate'.

If you are going to blast Keynes the least you can do is present his argument properly. It is simply false to claim that Keynes argued for 'printing money'.

Further, since 'free markets' is belief with out the slightest shred of evidence of it's validity, and since Peter Schiff is personally benefiting from this fact, his entire argument amounts to, as I said, a self serving diatribe.

Why are 'free markets' not a valid economic theory? Well, that is easy: all of it's basic assumptions, from rational actors, to equal information flows, to 'ethical behavior' are absent from the real world. There are a host of well known additional 'complications' to the 'free market' ideology, such as externalities, that proceed entirely from within the confines of the theory. Going outside of the domain of the theory, to the real world, one encounters still more complications.

One needs to ask what the 'free' in free markets means? We are supposed, by the adherents of this 'theory' to believe that it means 'lack of intervention by government', but quite obviously that 'free'-ness ignores intervention by other powerful actors. Do we suppose that the takeover of the US government by (large) corporate interests represents 'freedom'? Freedom for whom? do we suppose that in a 'free' market, those with the ability to intimidate, coerce, manipulate, con, cheat, steal will simply dry up and blow away? History, both recent and ancient makes extremely clear that this is false.

Economics is in general plagued by the problem that it's subject matter is not orthogonal to realities in other domains such as psychology, law, and sociology, meaning quite simply that without understanding the general behavior of the actors in a system (both individual and collective) one cannot understand their economic activity.

It should be obvious that one (but by no means the only) problem with 'free market' ideology is the issue of the tendency among humans to criminal behavior. If there is no government, or no government intervention, then people become free to operate in 'non-market' ways on their own -- the government does not have mystical powers, their non-market behavior arises from a clear and straightforward source: their non-economic power, both military and otherwise.

For free market ideologues to prance about pretending that the current situation has nothing to do with the steady rise to power of their ideology over the last 30 years is self serving at best, socially and politically destructive at worst.

The reality is that 'free market' ideology has been found wanting by every major economic thinker until the late 20the century. If you think Karl Marx would be surprised at the ensuing collapse of corporate structures, and massive waves of consolidation you don't understand Marx.

'Free Markets' has always been a con-job prepetrated by the powerful for their own benefit. Those who 'believe' in 'free market' ideology are a) their pawns -- suckers supporting a cause that has no intention of returning the favor, and b) have a basically 'religious' mind set -- intent on 'believing' despite the obvious failings of their ideology both as a matter of experiential fact, and as matter of formal theory.

Economics is a fundamentally non-linear science, and necessarily self-referential (the worst kind of non-linearity). Our mathematical abilities pale besides the complexities this problem presents, and our empirical methods (science) are utterly incapable of dealing with a subject matter where experiments cannot be performed and the outcomes of theorizing affect the system they attempt to theorize about.

Believe all you like, that don't make it so. In the meantime powerful people, including Peter Schiff are laughing all the way to the bank, and society is paying the bill.

Effective markets that serve the general populous depend in a deep way on the stable society that 'free market' Capitalism is deeply antithetical to.

Any Society that refuses to believe in and act for societal benefit is a society that will not long endure.

Independent Accountant said...

Have you read Keynes? I have read three of his books. Keynes not only advocated printing money, he even at one point advocated "stamped money". In my opinion, Keynes was a crackpot who just recycled exploded mercantilist fallacies. I am in Schiff's corner. I am familiar with everything you wrote, so? You might acquaint yourself with "public choice theory" from the George Mason school. Suggested reading for you: 10 Harvard Law Review 457 (1897), "The Path of the Law", Oliver Wendell Holmes. Holmes considered your arguments over 100 years ago. Also "The Politics of Industry", 1957, C. Walton Hamilton. Not only are you not an economist, your not much of a historian either.