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Originally Posted by u-Bob
1. nation-x: I'm glad to see you are making a distinction between what you call "market entrepreneurs and political entrepreneurs." I hope you realize that those corporatists (political entrepreneurs) aren't just in bed with members of the GOP but with politicians of all parties. While they may be targeting a different audience, there is in essence no difference between a republican or a democrat. They all want more power to be able to implement what they think is best and neither of them will really oppose the other one when the other one 's in power and expanding the power of the state because he knows (or hopes) that one day he'll be the one pulling the strings and be able to use that position of power.
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You are correct in your assumption that all parties service political entrepreneurs. However, there is a distinct difference between the parties... The Republicans have made it a religious doctrine to do everything in their power to support political entrepreneurs while the Democrats are the sole sponsors of legislation to limit their influence on government. Now, that said... it's never really black and white because each member of Congress has their own issues... however, you need look no further than Jack Abramoff and Tom DeLay for a perfect and unequivocal example. In addition, I would point you to the fact that Boehner revived the K Street Project as soon as he became speaker.
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Originally Posted by u-Bob
2. nation-x: Redistribution of wealth doesn't make anyone wealthier. Redistribution of wealth amounts to a redistribution of capital and thus consumption and destruction of capital. The important thing to understand here is that capital is not just money. Capital or capital goods are goods that are intended to be used in the production of consumer goods or other capital goods. Redistributing capital only leads to decreased production and higher prices (because supply will be down).
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Bullshit... what do you think caused the financial meltdown? If you say Fannie and Freddie you need to spend some more time educating yourself about what really happened. Take a couple of hours and watch "Inside Job". these false assumptions on your part are why you think that Austrian economics even applies because Austrian Economists think that housing caused the crisis. At this point, it is clear that fraud on the part of the big investment banks and insurance companies caused this problem and not interest rates.
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Originally Posted by u-Bob
3. nation-x: from several of your posts I get the impression that you believe the Keynesian (or Marxist or another of the consumptionist theories) view that demand (=spending) is what drives the economy. It's not. What drives the economy is entrepreneurship.
Government intervention in the economy hinders entrepreneurship. Central banks (government sanctioned institutions) adjusting the interest rates are what causes mallinvestments.
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First of all, I can tell by this part of your post that you don't have the first clue as to what Hayek's theory is OR it's limitations (and why no real economist would apply it to the US economy). You certainly don't understand Keynes theory either. I will elaborate more later on in this post.
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Originally Posted by u-Bob
4. If the stimulus had worked than we would have seen spectacular growth by 2010 like the neo-Keynesians such as Kruggman predicted and there wouldn't have been any need for a second round of quantitative easing (which is coming to an end right now) and there wouldn't be any need to talk about a possible third round of quantitative easing to be started in September.
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That isn't even close to true either. Really, exactly what Barack Obama said would happen has happened. They stabilized job losses and added more than 2.4 million jobs in the private sector. If you read the OP you would see that we lost almost 8.5 million jobs... so we have a ways to go yet. In addition. Krugman (and Milton Friedman - The father of "Trickle Down") called for additional stimulus... so your assertion about what he said is purely false.
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Originally Posted by u-Bob
6. instead of typing some more I'll let Keynes defend government spending and Hayek defend the free market:
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Here is the falsehood of that video and in your assumptions about Hayek's theory. You said "Government intervention in the economy hinders entrepreneurship." and Hayek agreed with that, however, the flaw in Austrian economics is monopoly. This is a well known flaw. In addition, Austrian economics is not even a proven theory and even Austrian School economists will tell you that. The reason for it is that the theory is based on Praxeology AND the fact that we have a central bank. That is the Achilles heel of all arguments that Republicans make when it comes to Hayek's theory and really is indicative of most of their arguments about almost anything... They love to pick out the part they like and ignore the part that they don't like OR pick out the part that they don't like and ignore the part that they like.
Republicans love to espouse Hayek's theory but vehemently but oppose regulation just as vehemently. That is where the flaw in their logic lies.
Keynes, on the other hand, IS a proven theory that says when the private sector is unable to sustain itself due to lack of demand, or unnatural market influence that has caused an interruption of the market, it is necessary for the public sector to stimulate demand by encouraging cash flow AND you have just seen it work as I demonstrated in the OP.