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QE3 decision today

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    kenneth
    Junior Member

  • kenneth
    replied


    I stand corrected! Thanks for the info

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  • Alex
    Varsity Member

  • Alex
    replied


    @Kenneth - False. It's called "seasonal adjustment" &, while it's always been done, it's extremely outdated in the estimation method. I found the below in about two minutes, so take with a grain of salt.


    http://economix.blogs.nytimes.com/20...eport-of-july/

    http://economix.blogs.nytimes.com/20...sted-slowdown/

    http://www.zerohedge.com/news/season...atistical-jobs

    http://abcnews.go.com/Business/july-...ry?id=16915685

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  • kenneth
    Junior Member

  • kenneth
    replied


    @Alex - The "new jobs" figures have not been adjusted. That number refers to the amount of new jobs added during a certain time. The unemployment rate is adjusted.

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  • ryan3
    Junior Member

  • ryan3
    replied


    QE3 in action:


    http://i274.photobucket.com/albums/j...y/bernanke.gif

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  • chetsteadman
    Junior Member

  • chetsteadman
    replied


    That was supposed to be "don't live in a swing state", which makes more sense.


    I actually agree with most of the general ideals and end goals of the Green Party, but it's as if nobody associated with the entire group has ever read an Economics textbook. Abstract values are great, but so many of their key propositions would effectively repress the poor and make the well-positioned richer.


    But with that said, it takes all kind, and if you're into the Green Party, I definitely encourage you to vote for them over the big two parties.

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  • kenneth
    Junior Member

  • kenneth
    replied


    Psh, if you're not going to vote the typical dichotomy, vote Jill Stein! #greenparty

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  • chetsteadman
    Junior Member

  • chetsteadman
    replied


    In light of the political overtones of this discussion, I just want to point out that, if you live in a swing state, you have a greater probability of making a difference if you vote independent.


    So, you know. Cast some ballots for my main man Gary Johnson, and let's at least make a statement.

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  • ryan3
    Junior Member

  • ryan3
    replied


    The point I was making about deflation is that it is not a Doomsday scenario that so many depict. There is not a strong connection between all depressions/recessions and deflation.

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  • BB
    Dappered Veteran

  • BB
    replied


    Sorry, just couldn't resist. Ryan, you wrote: "Deflation is not devastating. If you read the analysis I posted, the only depression/recession in history in which there was deflation was the Great Depression. All other depressions/recessions were inflationary." You seem to be forgetting, among many others, the most important recession in recent years -- the Asian crisis that started in 1997. Which was clearly deflationary and a recession. I'm sorry to say this, but you need to be sure you're dealing with facts, not ideology. And, with that, I solemnly swear never to post here about deflation again. [edited to make the tone more clear].

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  • Alex
    Varsity Member

  • Alex
    replied


    FWIW unemployment is only at 8% if you ignore everyone underemployed & the hundreds of thousands who've left the job market. Most people I talk to don't realize that the "New Jobs" figures have been adjusted down ~1 week after the initial report, & that's been occuring for most of the past year.

    It's also important to note that less than 50% of tax filers have a net tax burden; that's pretty unsustainable in the long run.


    As far as Keynes, Hayek, Friedman, etc., I (personally I guess) don't think anyone will be converting anyone to their side through these arguments. There are simply too many outside factors (congress, the Fed, government agencies, stocks, tax avoidance, etc.) on too big a scale for most economists to come to solid a consensus regarding their preferred method (as such, we try new methods periodically...sort of).


    All of these discussions are very important & relevant to voter knowledge, but there are ample websites/discussion-forums where they are already being argued. I'm not sure we need to argue them on the front page of our style forum.


    Thanks & carry on.

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  • ryan3
    Junior Member

  • ryan3
    replied


    Deflation is not devastating. If you read the analysis I posted, the only depression/recession in history in which there was deflation was the Great Depression. All other depressions/recessions were inflationary. Deflation gets a bad stigma from the Great Depression (and rightfully so) but like I stated earlier, you cannot ignore the Gilded Age where we had the greatest economic growth in our nation's history and we had prolonged deflation.


    Also, it was not Keynesian economics that got us out of the Great Depression, it was Keynesianism that prolonged it. Look at our recovery from the Great Depression. It was not the New Deal or WW2 that got us out of the Great Depression. Recovery did not start until after the war, after many of the wartime controls/regulations were repealed, after government drastically cut spending, after the war when most of the resources being consumed by government were now back in the private market, etc. The war itself did not get us out of the Great Depression. War, death, and destruction does not create economic prosperity. Robert Higgs wrote a book talking about how WW2 got us out of the Great Depression but that is simply not true.


    The official unemployment rate did fall (from 14.6 percent in 1940 to 1.2 percent in 1944), but it did so overwhelmingly because of military mobilization rather than because of improvement in the economy’s performance. As economist Robert Higgs wrote about the war years, “Official unemployment was virtually nonexistent, but four-tenths of the total labor force was not being used to produce consumer goods or capital capable of yielding consumer goods in the future.” So it’s not surprising that, according to Higgs’s estimates, personal consumption per capita in 1945 was only a paltry 2.5 percent higher than it was in the still-deeply-depressed year of 1940.


    Also, it was not the free marketeers that caused the current debacle we are in today. It was loose monetary policy at the Federal Reserve that created the housing bubble. The was the single most important action in the creation and collapse of the housing market and current recession. If the Federal Reserve did not alter interest rates below what the market would've normally set them at, then we would not have seen such a massive expansion of the bubble in the housing market. Then were many other factors that did take place in the housing market i.e. Community Reinvestment Act, sub-prime mortgages, mortgage-backed securities, etc. But the monetary policy of the Fed was the fuel for the fire.


    The first two QEs did not work, what is to make us believe that anymore will do it? Unemployment has not budged since the collapse, it was around 8% then and is around 8% now following 2 rounds of QE. Bernanke has stated he plans on using QE3 to purchase mortgage-backed securities, a move that is simply re-inflating the housing bubble inviting future collapse.


    ps- I do not mean for my tone to be offensive. I am very passionate about this topic and I do mean respect, even though you are all Keynesians

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  • BB
    Dappered Veteran

  • BB
    replied


    Sorry, yes, given present company and the context of these threads, this isn't likely to be a helpful conversation (though I think it's an important one).

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  • nicholascrawford
    Varsity Member

  • nicholascrawford
    replied


    Youre self-aware about your own tone, but I would ask that you and others just leave out the jabs at each other.

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  • BB
    Dappered Veteran

  • BB
    replied


    Between 1870-90 we were in the process of rapidly industrializing, which is why productivity increased. Not sure how we can industrialize again... Look at the UK, an already industrialized nation, during that time period. It was devastating -- what happened to farmers? Deflation is a terrible thing to almost everyone, except super wealthy investors and old folks on fixed incomes. And those countries who happen to be in the process of industrialization.

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  • kenneth
    Junior Member

  • kenneth
    replied


    It's unfortunate that you evidently didn't read or understand Jack's post at all.


    "It decreases available loanable funds to the private economy." Yeah, which is why we HAVE the QE3. The entire point of quantitative easing is that is frees up more funds for lending and encourages banks to do so with even lower interest rates.


    "QE3 will be nothing more than another failed Keynesian attempt to 'stimulate' the economy." Ah, yeah, because Keynesian economic policy never got us anywhere (except the booms under Clinton, the overcoming of the Great Depression, etc etc etc. In contrast, supply-side economics a la Hayek, von Mises, and Friedman et al. got us where we are today.)


    Libertarian ideological promulgation of these kinds of ideas is unfortunately as ubiquitous as it is reactionary and regressive, next we'll hear about the need to return to the gold standard.


    It may be useful to simply close this thread, as I really don't see this going anywhere useful and the level of decorum (myself included) seems to be deteriorating.

    Leave a comment:

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