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[–] novictim [S] ago  (edited ago)

Keynesian economics worked well when USA was the only industrialized nation not ruined by war

This is the "special case" argument. I hope you see that. Sweden (not destroyed) and Germany (destroyed) have both done well pursuing the Keynesian approach. You have basically fallen for a sophisticated lie that you, yourself, have all the tools needed to unravel.

yet we all see how producing goods does not generate any profit

I rebutted that notion with these facts. -> https://voat.co/v/news/comments/964009 Producing your own goods has the benefit of closing the loop on wealth re-circulation as does using your own natural resources. They may be bought for less cost outside of the system but the leakage of wealth by chasing the penny costs the whole system a pound.

here in Europe all banks are bust

Europe is barely producing except in Germany and Sweden and even that is limited. That is the core problem.

Let me ask this. Why do gulf countries and other oil states face ruin when the price of oil collapses? Lack of production as a means of wealth generation is part of the answer. The other part is a lack of domestic consumers/middleclass. If they instituted tariffs and brought a lot more of production back, made labour relatively scarce so as to drive up wages, then things would inevitably turn around. You need to get money into peoples pockets through work and then that jump starts a virtuous cycle. The more activity then the more wealth is generated.

problem is political rather than economic,

Correct. What we are facing is, therefore, a political crisis of a few wealthy interests holding back the prosperity of the majority. The notion of globalization has simply led to the consolidation of wealth and the devaluing of labour and thus the constraining of consumer demand. Politics is creating a economic crisis where a ideology of efficiency = cheap labour has undermined what we should all recognize as a consumer-worker driven economy. It does not need to happen this way.

capitalism can not work in controlled/rigged markets

Wait! You had it right when you said this was a POLITICAL PROBLEM. Don't back away from that. This is about politics and an ideology that is driving politics. And we should know that collusion is inevitable, right? Free markets are just an ideal and we should not pretend they are magical or create things by will of a creator or what not. That would be naive.

There is nothing wrong with capitalism and capitalism is not a political system. Capitalism is just what happens when people have ownership and participate in a market. Capitalism does not say anything about NOT regulating the market or NOT regulating how capital is incentivized to move. We just need the right politics to get things back on track. If we stop strangling the Golden Goose of Worker-Consumerism through busting down wages via globalized labour then we can re-pump up the economy.

I hope you read that Matt Tiaibi article: https://voat.co/v/politics/comments/966972 Collusion is automatic.

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[–] alalzia 0 points 1 point (+1|-0) ago  (edited ago)

Apologies that it took me so long .

This is the "special case" argument. I hope you see that. Sweden (not destroyed) and Germany (destroyed) have both done well pursuing the Keynesian approach. You have basically fallen for a sophisticated lie that you, yourself, have all the tools needed to unravel.

I guess you do know that both Germany and Sweden keep their bankrupt or next to bankrupt public enterprises outside the public books not to mention that Germany is loaning the entire European south to buy their goods .

Europe is barely producing except in Germany and Sweden and even that is limited. That is the core problem.

Let me ask this. Why do gulf countries and other oil states face ruin when the price of oil collapses? Lack of production as a means of wealth generation is part of the answer. The other part is a lack of domestic consumers/middleclass. If they instituted tariffs and brought a lot more of production back, made labour relatively scarce so as to drive up wages, then things would inevitably turn around. You need to get money into peoples pockets through work and then that jump starts a virtuous cycle. The more activity then the more wealth is generated.

I am not entirely oppose this but thing is that for 30 or more years "supply side" economics have destroyed the purchasing power of the middle class worldwide and as a result there is no demand . I guess you have noticed how the QEs hoard money to the banks where they vanish , this is because nobody will take a loan to open a business because there will be no customers . If you remember during the summer a ship full of iron from China was valued as much as dirt .

Oh and before going farther in case you are not European think that the EU is paying farmers to not cultivate their fields , why? because potatoes from Morocco are much cheaper anyway .

Free markets are just an ideal and we should not pretend they are magical or create things by will of a creator or what not. That would be naive.There is nothing wrong with capitalism and capitalism is not a political system. Capitalism is just what happens when people have ownership and participate in a market. Capitalism does not say anything about NOT regulating the market or NOT regulating how capital is incentivized to move. We just need the right politics to get things back on track. If we stop strangling the Golden Goose of Worker-

Free markets are not an ideal and capitalism is not when people have ownership but only when some of them do. Corruption , capitalism and representative regimes go hand to hand and you cannot have one without the other . The faster we get rid of all three the better for all of them .

Now where i stand? i propose a mix of things : communist - those who work the means of production own the products , capitalist - free markets control pricing, supply and demand without tolls, taxes and subsidies , anarchist - direct democracy so nobody is either privileged or marginalized and everyone places his individual goals together with the prosperity of the society.

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[–] novictim [S] ago 

both Germany and Sweden keep their bankrupt or next to bankrupt public enterprises outside the public books not to mention that Germany is loaning the entire European south to buy their goods .

Ah. This seems emotion based rather than fact based as there are glaring internal contradictions.

Do you want to have the cake or do you want to eat the cake? Does Sweden and Germany loan money because they are wealthy or do they hide their bankruptcy because they are poor and broke? Choose. You cannot have it both ways. Once you decide which position to take then I can google the facts concerning Northern Europe's very successful Keynesian economic approach and present them to you.

Mind you, we are talking about economics and I have grave concerns about the current EU/Brussels/Stockholm/Berlin programs to flood the EU what amounts to a foreign army but that is not our current discussion.

30 or more years "supply side" economics have destroyed the purchasing power of the middle class worldwide

Hmm. My position is that the USA has been embarked for four decades of Supply Side economics while the Northern States of the EU have been embarked on a Keynesian approach since WWII. Southern Europe's tax dodging malfeasance has essentially been replicating the USA model of trickle down/supply side economics and that is why they are not doing well.

There is a case for stimulating/incentivizing production depending on where a country is in its development but what we see in Europe's southern states is just corruption and tax dodging combined with crony capitalism of the supply-side variety. Special laws that provide extra protect from taxation for politically well connected producers is a symptom of USA-style political corruption spilling directly into the economic system.

I guess you have noticed how the QEs hoard money to the banks

Absolutely. It is supply side economics, not Keynesian monetarism. As I said, you cannot take half of Keynes and call it Keynesian. You have to take the whole program, monetary and fiscal and wise policy to use tariffs and target high earning production jobs and services.

nobody will take a loan to open a business because there will be no customers .

That is 100% correct.

All that money from QE went into a liquidity trap. Producers see the broke and over extended credit of the consumer and decide that the problem is not insufficient production but insufficient consumption. And they are correct. Why would you "stimulate" the economy with more manufacturing jobs when the public is broke?? Makes no sense and that is why QE does little to nothing to spur growth.

There is no argument for a Supply Side approach without both 1) the consumer having money to spend and 2) tariffs ensuring that QE is focused on generating US manufacturing jobs. This should make sense to anyone.

Free markets are not an ideal "Free markets" are certainly an ideal. It is the goal of libertarian idealists. I am just saying that this ideal can never be realized so trying to achieve it in its "pure" form is a waste of time. Thus, we have to accept regulated markets.

and capitalism is not when people have ownership but only when some of them do.

Everyone has some ownership. Labour is a form of capital. Everyone has control over that to some degree. And we regulate that market for labour because we are civilized and think that the economy's ultimate beneficiary must be We the People.

Corruption , capitalism and representative regimes go hand to hand and you cannot have one without the other

"Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.…" -Winston Churchill.

"If I had to sum up the immediate future of democratic politics in a single word I should say “insurance.”

"My idea of it is that the plain, humble, common man, just the ordinary man who keeps a wife and family, who goes off to fight for his country when it is in trouble, goes to the poll at the appropriate time, and puts his cross on the ballot paper showing the candidate he wishes to be elected to Parliament—that he is the foundation of democracy. And it is also essential to this foundation that this man or woman should do this without fear, and without any form of intimidation or victimization. He marks his ballot paper in strict secrecy, and then elected representatives and together decide what government, or even in times of stress, what form of government they wish to have in their country. If that is democracy, I salute it. I espouse it. I would work for it.”"

https://richardlangworth.com/worst-form-of-government

i propose a mix of things :

Well, that is exactly what Keynesian economics provides. It is flexible and responds to the needs of the economic cycle to maximize the wealth generated through the system. The goal is low unemployment, meeting material needs, and providing increasing wealth through consumerism all within a capitalist market economy.

But you are right that if we get the political system wrong (corruption) then Keynes or no Keynes, the situation will be bad for the public. So really, this all starts and ends with the voter and what the voter knows and wants. Corruption is just the inevitable tension of the haves from the have-nots. It will always be there but there is no system that that will not be the case with as well. (Maybe a computer run economic system might be something we try in the future?)