The supply isn't greater than demand.

 

If you pay peanuts, all you get will be monkeys, people will move onto higher paying jobs and it costs money to fill vacancies.

The supply isn't greater than demand.

Of course it is. There are more people willing to work as cleaner than the demand for cleaners, and that's why the wages are low.

 

If you pay peanuts, all you get will be monkeys, people will move onto higher paying jobs and it costs money to fill vacancies.

I have no idea what you meant to say in this sentence. Maybe because English is not my mother tongue.

Wages, like everything in the market, are ruled by supply and demand laws. If the demand for workers in a profession is higher than the supply, the prices will go up until an equilibrium is reached; if the demand for workers in that profession is lower than then supply, the prices will go down until an equilibrium is reached.

 

Setting a minimum wage generates unemployment. Some will get a raise, of course, but others will be deemed unworthy of a raise and will end up getting fired.

 

I'm not sure I gave the best explanation I could, I'm not fluent in English.

I understood what you meant, I'm familiar with that macroeconomics mechanism :)

 

It's the endless liberalism vs keynesian point of view debate. I can never choose a side, because both present huge downsides that we see in today's world (no job security, risks of extreme poverty vs weight for the companies, state deficit) :sick:

We've also seen what austerity has done to Greece. Not so great. But as I said earlier, not very clever of Democrats to propose to raise the minimum wage NOW.

It's the endless liberalism vs keynesian point of view debate. I can never choose a side, because both present huge downsides that we see in today's world (no job security, risks of extreme poverty vs weight for the companies, state deficit) :sick:

There are no upsides in keynesian economics. Absolutely none. Credit expansion caused both the Great Depression (and was aggravated by the New Deal) and the Great Recession. Frédéric Bastiat, in his famous essay "What is Seen and What is Unseen" explained brilliantly how it's simply impossible for the government to create jobs.

There are no upsides in keynesian economics. Absolutely none. Credit expansion caused both the Great Depression (and was aggravated by the New Deal) and the Great Recession. Frédéric Bastiat, in his famous essay "What is Seen and What is Unseen" explained brilliantly how it's simply impossible for the government to create jobs.

Yes there are upsides. There are upsides and downsides in both approach, virtuous and vicious cycles.

 

The Keynesian approach isn't just about the government creating jobs, you know it's also about boosting consumption and investment, by injecting more money into the economy. Demand increases, therefore companies produce more, invest and hire more people. This makes for more revenue for the government and everybody wins. See, upside!

It's just that reality never is exactly like the theoretical model.

 

Also, take Wall Street, take the sub-prime crisis from 2007-8! Have you watched Inside Job ? It greatly explains how so little government control on the market (and therefore liberalism at its summit) allowed banks and investment banks and insurance companies to go completely wild with people's money, creating complicated schemes made of toxic loans, developing a terrifying speculative bubble and when it all burst BAM Biggest crisis since 1929 :cheesy:

Other example is Greece. Huge spending cuts (liberalism's approach to solve debts problems) haven't actually had positive effects on its economy, and people are hungry (and angry).

 

Both systems have upsides and downsides, that's what History shows.

The Keynesian approach isn't just about the government creating jobs, you know it's also about boosting consumption and investment, by injecting more money into the economy. Demand increases, therefore companies produce more, invest and hire more people. This makes for more revenue for the government and everybody wins. See, upside!

Credit expansion might work for some time, but it always ends up creating a crisis.

 

Also, take Wall Street, take the sub-prime crisis from 2007-8! Have you watched Inside Job ? It greatly explains how so little government control on the market (and therefore liberalism at its summit) allowed banks and investment banks and insurance companies to go completely wild with people's money, creating complicated schemes made of toxic loans, developing a terrifying speculative bubble and when it all burst BAM Biggest crisis since 1929 :cheesy:

It makes no sense whatsoever to blame the Great Recession on the liberalism because there is no liberalism. Interventionism reigns all over the world. If you really want to known what caused the 2007-08 crisis, watch THIS documentary. I could also recommend you some great books on the subject, but there are too many, so I'll recommend you read about Austrian Economics. Start with Ludwig von Mises or Friedrich Hayek.

 

Also, these two videos are great and also very funny.

 

[ame]www.youtube.com/watch?v=d0nERTFo-Sk[/ame]

 

[ame]www.youtube.com/watch?v=GTQnarzmTOc[/ame]

Credit expansion might work for some time, but it always ends up creating a crisis.

 

It makes no sense whatsoever to blame the Great Recession on the liberalism because there is no liberalism. Interventionism reigns all over the world. If you really want to known what caused the 2007-08 crisis, watch THIS documentary. I could also recommend you some great books on the subject, but there are too many, so I'll recommend you read about Austrian Economics. Start with Ludwig von Mises or Friedrich Hayek.

 

Also, these two videos are great and also very funny.

 

 

My point was: sticking to one approach (whether it's liberalism or Keynesian) and going too far with it, that's what leads to crisis. That's a historical fact, that both approaches have been tested, and that it has always ended up in crisis.

I'm not going to engage in the endless debate whether which approach is the best. You think Liberalism is the way to go, and you do have good points. I'm just saying it's a point of view, an opinion, and not a fact.

 

Democrats and Republicans need to be reasonable if they don't want their country to bankrupt.

Yes there are upsides. There are upsides and downsides in both approach, virtuous and vicious cycles.

 

The Keynesian approach isn't just about the government creating jobs, you know it's also about boosting consumption and investment, by injecting more money into the economy. Demand increases, therefore companies produce more, invest and hire more people. This makes for more revenue for the government and everybody wins. See, upside!

It's just that reality never is exactly like the theoretical model.

 

Also, take Wall Street, take the sub-prime crisis from 2007-8! Have you watched Inside Job ? It greatly explains how so little government control on the market (and therefore liberalism at its summit) allowed banks and investment banks and insurance companies to go completely wild with people's money, creating complicated schemes made of toxic loans, developing a terrifying speculative bubble and when it all burst BAM Biggest crisis since 1929 :cheesy:

Other example is Greece. Huge spending cuts (liberalism's approach to solve debts problems) haven't actually had positive effects on its economy, and people are hungry (and angry).

 

Both systems have upsides and downsides, that's what History shows.

 

Keynesian economics don't work as we have seen. Yes it's a nice idea to add more money into the economy, but in the long run it hurts the economy. The more you print money the less valuable it becomes. So today for example, the real value of say milk or bread is what it has always been, but it costs more because the currency is worth less. If you look back in history, ever since the inception of the Federal Reserve in 1913, the dollar has lost nearly 96% of it's purchasing power!

 

The problem with the US is that when an economic problem arises such as the 08 crisis people think the solution is more government intervention. These banks made horrendously bad investments, and even knew they were bad. Why should they have been bailed out? If any one of us did the same thing we would lose everything and go to jail.

 

You have to also remember that the sub-prime loans started with Clinton who wanted to essentially give every American the opportunity to buy a house. It's a nice idea for everyone to own a house, but people who can't afford one shouldn't buy one. So Clinton really helped for this to spiral out of control.

 

Also if you look in the past things like the Great Depression, even all of FDR's New Deal plans didn't get us out of a recession and it wasn't until after WWII that things were really prosperous for the US. However in 1922 there was a depression and we were able to get out of it fairly quickly because President Harding didn't interfere.

My point was: sticking to one approach (whether it's liberalism or Keynesian) and going too far with it, that's what leads to crisis. That's a historical fact, that both approaches have been tested, and that it has always ended up in crisis.

This doesn't make any sense whatsoever. The government either intervenes in the economy (Keynesianism) or it doesn't (liberalism). There's no middle ground.

 

I'm not going to engage in the endless debate whether which approach is the best. You think Liberalism is the way to go, and you do have good points. I'm just saying it's a point of view, an opinion, and not a fact.

Read Ludwig von Mises. Start with "Economic Policy: Thoughts For Today And Tomorrow". You'll change your mind.

 

Keynesian economics don't work as we have seen. Yes it's a nice idea to add more money into the economy, but in the long run it hurts the economy. The more you print money the less valuable it becomes. So today for example, the real value of say milk or bread is what it has always been, but it costs more because the currency is worth less. If you look back in history, ever since the inception of the Federal Reserve in 1913, the dollar has lost nearly 96% of it's purchasing power!

 

The problem with the US is that when an economic problem arises such as the 08 crisis people think the solution is more government intervention. These banks made horrendously bad investments, and even knew they were bad. Why should they have been bailed out? If any one of us did the same thing we would lose everything and go to jail.

 

You have to also remember that the sub-prime loans started with Clinton who wanted to essentially give every American the opportunity to buy a house. It's a nice idea for everyone to own a house, but people who can't afford one shouldn't buy one. So Clinton really helped for this to spiral out of control.

 

Also if you look in the past things like the Great Depression, even all of FDR's New Deal plans didn't get us out of a recession and it wasn't until after WWII that things were really prosperous for the US. However in 1922 there was a depression and we were able to get out of it fairly quickly because President Harding didn't interfere.

T H I S

You have to also remember that the sub-prime loans started with Clinton who wanted to essentially give every American the opportunity to buy a house. It's a nice idea for everyone to own a house, but people who can't afford one shouldn't buy one. So Clinton really helped for this to spiral out of control.

Clinton did help, obviously, he didn't stop anything (LOL US ARE GOING OFF THE CHARTS KEEP UP THE GOOD WORK GUYS !1!! :awesome: ) but it all started with Reagan, not Clinton. He fully supported the de-compartmentalization of Wall Street first.

And yes, you can get out of crisis fairly quickly when you don't have intervention. However, those crisis are usually really really bad. That's another choice governments make: are we ready for a short, but super violent crisis, or do we prefer a longer but less violent crisis ?

 

It amazes me, that after the huge betrayal banks did to thousands and thousands of people, people still trust banks more than the government. I just can't understand that. Banks did bad investments on purpose, even bid against loans and insurances they gave to people, they paid quotations agency so that they could get good grades and invest all that toxic money, i mean how is that not messed up and perverted, how ?! They just haven't bad investment and knew they were: they made on purpose because on the moment it brought them huge profit. Economists said it was a ticking bomb, yet nothing changed. And they haven't been punished, they still rule the world as if nothing happened.

You're telling me that even knowing that all of that happened, there shouldn't have been some intervention from the government ?! Well there was already, because people running Federal Reserve and such have been the same people responsible for these schemes, and came back to it quickly, but you mean that there shouldn't be anyone to stop them ?!

That's just beyond me and I can't continue the discussion.

 

This doesn't make any sense whatsoever. The government either intervenes in the economy (Keynesianism) or it doesn't (liberalism). There's no middle ground.

So, just a little intervention and we're in Keynesianism and it's always gonna end up in crisis ? See, that's the problem: no reasonable decisions. I'm saying they have to make sacrifices, they have to raise taxes a little and they have to make cuts. They have to do both. They can't go full-on liberalism or full-on Keynesianism, or too many people will suffer for too long. That's all I'm going to say.

Our budget isn't a political issue, really, it's a mathematical issue in the end. It's mathematically impossible to keep the spending we're doing up.

Clinton did help, obviously, he didn't stop anything (LOL US ARE GOING OFF THE CHARTS KEEP UP THE GOOD WORK GUYS !1!! :awesome: ) but it all started with Reagan, not Clinton. He fully supported the de-compartmentalization of Wall Street first.

And yes, you can get out of crisis fairly quickly when you don't have intervention. However, those crisis are usually really really bad. That's another choice governments make: are we ready for a short, but super violent crisis, or do we prefer a longer but less violent crisis ?

 

It amazes me, that after the huge betrayal banks did to thousands and thousands of people, people still trust banks more than the government. I just can't understand that. Banks did bad investments on purpose, even bid against loans and insurances they gave to people, they paid quotations agency so that they could get good grades and invest all that toxic money, i mean how is that not messed up and perverted, how ?! They just haven't bad investment and knew they were: they made on purpose because on the moment it brought them huge profit. Economists said it was a ticking bomb, yet nothing changed. And they haven't been punished, they still rule the world as if nothing happened.

You're telling me that even knowing that all of that happened, there shouldn't have been some intervention from the government ?! Well there was already, because people running Federal Reserve and such have been the same people responsible for these schemes, and came back to it quickly, but you mean that there shouldn't be anyone to stop them ?!

That's just beyond me and I can't continue the discussion.

 

So, just a little intervention and we're in Keynesianism and it's always gonna end up in crisis ? See, that's the problem: no reasonable decisions. I'm saying they have to make sacrifices, they have to raise taxes a little and they have to make cuts. They have to do both. They can't go full-on liberalism or full-on Keynesianism, or too many people will suffer for too long. That's all I'm going to say.

Wall Street decentralization was started w/ Reagan, but the housing bubble (what Clinton created), was probably the biggest mess. Yet of course it's great how no one remembers about with that w/ Clinton except that the economy was donig great (believed to just be the .com bubble).

 

The problem is that as each economic crisis hits, the Gov't does something to help it, which is a temporary solution for a bigger problem. It's like if you had leaky pipes, rather than replace the pipes you'll just put tape over it to stop the leak. The more an longer we continue this path, the harder the fall is going to be.

 

I think there's equal blame to go around. The banks made poor investments, the gov't didn't give any harsh consequences (but rather bailed out banks who subsequently afterwards made record profits while millions of americans lost their jobs for their actions), and the media didn't help to report all of the malinvestments to keep people informed. My point is if you can't run a business or bank or whatever properly then you shouldn't get bailed out by the Gov't. And then that opens up a whole other can of worms. Well what if a major company fails, what if some utility fails, etc. Are we going to start bailing out those things too?!

 

As quoted below from Nick we can't continue on the path that we're on. I mean first of all it's impossible to ever pay back the debt which the Gov't knows, but if there was some inkling of wanting to do it there would have to be most importantly massive spending cuts across the board.

 

Our budget isn't a political issue, really, it's a mathematical issue in the end. It's mathematically impossible to keep the spending we're doing up.

Well look who finally decided to chime in. Took you long enough...

I'm working on a research paper for effective treatments for Major Depressive Disorder in children. My brain can't switch gears easily to economics while i'm writing about Citalopram and other drugs.

It amazes me, that after the huge betrayal banks did to thousands and thousands of people, people still trust banks more than the government. I just can't understand that. Banks did bad investments on purpose, even bid against loans and insurances they gave to people, they paid quotations agency so that they could get good grades and invest all that toxic money, i mean how is that not messed up and perverted, how ?! They just haven't bad investment and knew they were: they made on purpose because on the moment it brought them huge profit. Economists said it was a ticking bomb, yet nothing changed.

 

I am confused - you speak as if you trust the government and their intervention more than the banks...

 

And they haven't been punished, they still rule the world as if nothing happened.

 

...isn't this the job of the government intervention you so advocate, or am I mistaken?

I am confused - you speak as if you trust the government and their intervention more than the banks...

 

 

 

...isn't this the job of the government intervention you so advocate, or am I mistaken?

Yes, I was saying that on this point, the us government should have done something. I'm not saying the us government is perfect, that they haven't done anything wrong, that it's not their fault at all etc. I was saying that i don't understand how you can trust the banks more than the government, when both have failed tremendously but the initiative originally went from the banks.