Neokeynesians vs. Postkeynesians | 214 comments (214 topical, editorial, 0 hidden)

Re: Neokeynesians vs. Postkeynesians (none / 0)

Nothing wrong with the state having to take an equity position in banks during a crisis. The shares can be sold 10-30 years later, likely at a considerable profit.

The Euro crisis is certainly not a good example of this: it stems not from equity injections in broke banks but rather from the lack of a competent central bank. After all, if a state lacks the funds to inject equity into its banks, that equity can be created by the central bank with just the stroke of a pen, or rather the click of a button on a keyboard. If you have a competent central bank, that is.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Jul 4th, 2012 at 01:18:15 PM EST
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Re: Neokeynesians vs. Postkeynesians (none / 0)

Helping people pay down their debts creates moral hazard, and it is also unfair to those who were prudent enough not to borrow more than they could afford. If this can be avoided, it's a good thing.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Jul 4th, 2012 at 01:19:53 PM EST
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Re: Neokeynesians vs. Postkeynesians (none / 1)

Paying people sensibly instead of cynically cutting their income and forcing them into debt works better than either option.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jul 4th, 2012 at 01:37:51 PM EST
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Re: Neokeynesians vs. Postkeynesians (none / 0)

But if you pay people they may spend it and inflate away our savings. We can't have that!

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jul 4th, 2012 at 02:39:28 PM EST
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Re: Neokeynesians vs. Postkeynesians (4.00 / 4)

That is a point Keen's debt jubilee avoids since if you were prudent you get cash to spend as you like, but if you have loans you get cash that must go to pay back loans. So same sum, but more freedom for the prudent.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Wed Jul 4th, 2012 at 02:22:08 PM EST
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Re: Neokeynesians vs. Postkeynesians (none / 1)

Yeah, because governments and central banks haven't been engaging in massive moral hazard to the benefit of the TBTFs over the past 5 years.

Moral hazard is the last refuge of the scoundrel.

Between moral hazard and mass unemployment, I choose moral hazard every time.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jul 4th, 2012 at 02:38:46 PM EST
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Re: Neokeynesians vs. Postkeynesians (none / 1)

Debt writedown is what you do when your predecessors have neglected to do the responsible thing. Which is to maintain a bank of shovel-ready public works which can be begun immediately, and which would pay the debtors money to pay down their debts in exchange for goods and services of durable value.

However, such projects cannot be conjured forth on demand, they must be prepared ahead of time. And in the absence of such preparation, the alternative to debt writedown is make-work. Which is not without problems of its own.

In a properly regulated financial system, such moral hazard creating events would be rare, because in a properly regulated financial system lenders are prevented from lending to overextended borrowers, speculators and Ponzi merchants.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jul 4th, 2012 at 03:09:16 PM EST
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Re: Neokeynesians vs. Postkeynesians (none / 1)

No, if you want to be really responsible after your irresponsible predecessors, the thing to do is to dust off vagrancy laws, open debtors' prisons, and save up your hard-shat gold ingots.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jul 4th, 2012 at 03:16:17 PM EST
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Re: Neokeynesians vs. Postkeynesians (4.00 / 2)

Thus illustrating the value of having an active political party which articulates the revolutionary alternative to capitalism.

Not because such an alternative is desirable, but because it sets a lower bound on the decadence to which capitalism can fall. A lower bound which would otherwise, judging by historical experience, be wholly absent.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jul 4th, 2012 at 03:21:10 PM EST
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Re: Neokeynesians vs. Postkeynesians (none / 1)

After price crash in housing market it's also a moral hazard to leave only the debtor to foot the bill.

by kjr63 on Sun Jul 8th, 2012 at 05:36:46 PM EST
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Re: Neokeynesians vs. Postkeynesians (none / 1)

Don't be silly, it's only moral hazard if the poor benefit.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sun Jul 8th, 2012 at 06:16:34 PM EST
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Re: Neokeynesians vs. Postkeynesians (none / 0)

Yeah. He is the speculator.

by kjr63 on Tue Jul 10th, 2012 at 07:54:08 AM EST
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Re: Neokeynesians vs. Postkeynesians (none / 1)