The Problems with Keynesian Solutions to the Current Depression | Robert P. Murphy

[@capitalistsamurai]

Dr. Murphy is a rock star!

[@BMANZZS]

Dr. Murphy is such a boss. If Krugman actually decides to debate him I might jizz in my pants.

[@randominternetguy1499]

same

[@dissatisfiedphilosophy]

it still has not happened

[@pretorious700]

None so blind as those who choose not to see. This talk is packed with useful insight.

[@Polumetis]

Now that I've actually watched one of Murphy's videos, I can see why people like him. He is hilarious.

[@philmickraken2]

Wow this was really good lecture on the Austrian critiques of Keynesian solutions. This really puts a lot of the contemporary economic debate into perspective.

[@exponentialhorse]

One of the best stand up show's I've ever seen 👍

[@PeterKraus1]

Murphy is the man!

[@prakashramanarayan6476]

The Problem with Keynesian economics is the over reliance of Mathematical calculations is determining how humans live and spend in the economy. Mathematics can never understand the mental make up of a human mind and using models to announce stimulas only increases government debt but never solves the problem of declining economic growth and unemployment.

[@CrimzenTide]

I'm considering going to the Von Mises institute in Auburn for grad school. Great video!

[@TheFremenChick]

The Keynsian hypotheses is so often falsified and yet they cling to it. Cognitive Dissonance is certainly powerful.

[@BracingBloom]

It is truly amazing to see how the adherents of Keynes do not have much constructive and progressive arguments when we discuss about the problem of inflation when our government expands the already inflationary monetary base.

[@robertmainville4881]

This undisputidly qualifies as the most insane response I ever got on KZbin.

[@kuldeepdongre3209]

thanks, great intricacies pointed out. It would have been also great to hear on what exactly are the suggestions / solutions proposed according to this school of thought. Moreover, is there a theory that can predict this kind of a meltdown (like "Fault Lines" by Dr.R. Rajan) consistently ?

[@TheRosa63]

difference between gov spending and private is the private must borrow it and proviede collatrol and pay it back themselves they cannot rob others to do so, gov just robs others to pay it back, if I borrow money Ican't go to my neighbor with a gun and take their money to pay my loan back, gov does just that, they have forced the citizens to be cosigners to the loans they have not approved of. you cn't just print up money either, if I did that it would be counterfieting gov does it it is a called quantiative easing, semantics used as a weapon of warfare. private individuals have to win the favor of consumers who voluntarily buy their product or service, others just use gov force to make consumers to buy their stuff when they don't want it.

[@simonpurist4499]

i.e. private spending has built-in accountability, while the King can do no wrong.

[@soapbxprod]

It's spelled "collateral", but agreed! Way to explain it. :)

[@Tigerfire75]

That is a nice pic of Dr. Strangelove (Peter Sellers) he keeps showing.

[@misesvonhazlitt8166]

Great stuff, as always. Evidence for believing Keynes 100% sincere in calling (in THE BOOK) for "a full socialization of investment." It's never enough so-called "stimulus" for his acolytes like Krugman, yet that's NOT what he was endorsing, right? Not seriously, that is. Christ! On another note, Bob is such a witty guy, it's a shame that year's talk appears to have been given before a gathering either of morticians or their clients. That, or in front an oil painting. Great job anyway, professor!

[@MrLenzi1]

Of course, but Krugman is one of the most prominent figures of the Keynesian School, Bob Murphy has critizised and refuted a lot of his work on his blog, and there is quite a lot of pressure on him because of the $75,000 pledge.

[@christopherday5701]

Great video. Will Krugman ever man up and debate this guy?

[@NecessariusVerum]

Reading Murphy's Politically incorrect guide to FDR's new deal and the great depression is the epitome of the success of the Austrian theory and it's case against the wasteful Keynesian theory even before Keynes was known about. I'm glad I read that book!

[@ukipwarrior]

krugman was calling for a housing bubble in 2002 to replace the nasdaq bubble and we all know where that led.

[@jamiekloer6534]

chris hob that’s the point keep going cause I’m the end we’re all dead

[@zxcv73]

Great talk I just put $50 towards debating Krugman.

[@JNClaffey]

A funny economist! who knew?

[@jerrypolemica7641]

CONTINUES "What this means is that Austrian is, at best, applicable to fixed fx but in no case applicable to floating fx. That is, it's applicable in HK and Bulgaria, but not the US, UK, Japan, Eurozone, Canada, etc. etc. etc. Bob had no answer, and gave every appearance of passive acceptance. This also happened with several other of his points. John Carney, the moderator, did not officially declare a winner, but does agree with the above" Warren Mosler

[@zofe]

Adding Quarantine, i.e. a production shut-down, diminishes the purchasing-power of money - thus resetting the entire financial system.

[@Max-nc4zn]

Choosing means for an end is not rational or irrational. It is arational.

[@ilovelamp61]

I don't believe that entertainment value is the reason Murphy and others are calling for the debate although I do agree it would be much more interesting, especially with Murphy's wit and humor. I believe it has more to do with taking to task someone who has a lot of clout with the media and policy makers, and showing those people who have so much stock invested in his work how ridiculous and wrong he is.

[@aliadeeb4011]

Don't we already have full employment, not in terms of jobs, but in terms of spending. If we took everyone off welfare(12.8 million) and gave them public works jobs, the spending would be the same. The only thing I can think of is that welfare/food stamps doesn't pay enough to get spending high enough. It just seems like we already have the effect of full employment spending from jobs, welfare, food stamps, social security, and private charity. b/c people who don't spend money die from starvation.

[@RPFS2008]

Not sure why Murphy would want to debate anthropology...

[@rationalCrash]

but the intelligent ones love Ron Paul.

[@christo930]

I know he said it should have been bigger, but did he give an actual number? Like did he say "$787B isn't enough, but $1.5T is"? I don't he think he did, I never heard him give any number, just bigger. Of course the Austrians say the same thing, taxes should be lower, but never give an appropriate rate (I am talking about Austrians and Libertarians who want a state, not anarchists).

[@reefpirate]

I thought he did a good job demonstrating how the federal economists were way off with their predictions of what would happen if they intervened.

[@DavidByrne85]

*sigh* I'll try to be positive. Murphy is a pretty likeable guy - he's affable and he seems to make some effort to be intellectually honest. I'm looking forward to his debate with Mosler.

[@MrLenzi1]

I don't think that's ever going to happen. Krugman's clearly afraid.

[@ilovelamp61]

Also, I understand he has nothing to gain, but he does have something to lose. People are going to really start wondering why, if he is so confident in his work, he has not responded. Especially with charity money on the line for only an hour's worth of his time.

[@robertmainville4881]

To say that you obiously did not read the Web page I invited you to visit, because in there it says that Krugman was dead right. Anyway, now is your turn to supply a list of predictions mades by keynesian economists who were as wrong as austrian/chicagoan/freshwateran economists.

[@buttp0under420]

He sounds like Burnie Burns

[@wesleyburkhart]

lol That first graph

[@SchrodingersCat8813]

Anyway, I agree mainstream Keynesian policy is flawed. It is not effective, and would become inflationary. to be fair, supply side policies also fail for the same reason: it is trying to coax resources out of whats not there. They think through magic, companies will create more jobs if you cut their taxes even if there is no work to be done. Or that the well off, who have enough to save, will spend more just because they have more $ Yeah, so this is why the Post Keynesian school is correct. There should be a gov funded, locally administered, jobs program. Find useful work for people to do, for those who want one at the wage, which should be the min wage. This wont try to swell up the private sector, thus either producing inflation or just failing, it would be building up the economy from the bottom by employing that idle labor. If at a decent wage, much of our welfare spending could be reduced or eliminated, and this spending would be directly to the people. Unideal to Austrians but what's better? Welfare or putting people to work?

[@soapbxprod]

"Find useful work for people to do, for those who want one at the wage, which should be the min wage"? Define "useful". You've run up against the marginal utility/subjective value wall.

[@Tenebrousable]

Cutting taxes increases purchasing power of the citizen and that will boost production, because that will reduce the amount government is wasting resources . Any and all job programs will take away work from the entrepreneur or is a waste of work, I think you'll find, if thinking spesifically what work those programs could invent. Just "some work" does not suffice. And you will be funding them with taxes all the while when tax revenue is going down because entrepreneurs going idle for artificial supply outcompeting them. Even they can not compete against free labor. Anything Keynesian is fucking crazy stupid, full stop.

[@nier3218]

That only applies when we're at full employment, which we obviously weren't straight after the crisis. Many still argue that we still aren't, as real interest rates are low and businesses still aren't investing and we have a lot of unused capital. And you only need to look at the EU to see that you're wrong. They cut government spending, and the debt increased more than it did in the US, as their economies shrank more than proportionally. But sure, as long as we ignore reality you might be correct. So you have that going for you.

[@soapbxprod]

There is nothing "real" about interest rates. They are artificially low. You don't know very much about the Federal Reserve, do you? as to businesses not investing... LOL! Have you looked at the Dow and the Nasdaq recently? Have you seen the announcements of new auto plants being started all over the US by Toyota and Fiat/Chrysler? Sorry, commie. It's Trump world for the next 8 years...

[@robertmainville4881]

This is getting better. Art Laffer, father of the infamous and non-sensical "Laffer curve", Reagan's chief economist or something, also got it all wrong. Just Google "Art Laffer denies the housing bubble". Amazing.

[@robertmainville4881]

The fact that you don't remember the last time a valid prediction based on keynesianism does not disprove Keynes's theory, but rather suggest that you need to exercice your memory a little more.

[@robertmainville4881]

Sources please.

[@Ethercruiser1]

Looks like we have some Keynesian, witchdoctor spammers here.

[@nonagressionist]

1) Doesn't make any sense for Krugman to debate because there is nothing for him to possibly gain. 2) Personally, Krugman has nothing interesting to say. They are intellectual arguments and each are available to read. Krugman only makes sense to people that believe in consensus and doesn't understand, or care to understand, economics. There are interesting people to listen to, even people that may contradict Murphy, but Krugman isn't one of them. He might as well debate Miss Cleo.

[@robertmainville4881]

This guys is basically saying: "On one hand, I have an apple; on the other hand, I have an orange. In total, I have two fruits. See, the maths just doesn't work!" What I mean to say is that he constantly displays slides and statistics that obiously demonstrates that keynesianism works, only to conclude...that it does not work. Best case of cognitive dissonance I've ever seen.

[@jerrypolemica7641]

"...I pointed out that that is true for fixed fx regimes, where govt. rates are market determined as the currency/banking is always inherently reserve constrained, but not with floating fx, where the currency/banking is, alternatively, not inherently reserve constrained. In fact, the absence of govt. intervention (no tsy secs, no interest on reserves, etc.) with floating fx is a 0% term structure of 'risk free' rates" TO BE CONTINUED....

[@MrGiggity890]

anybody familiar with the cafr and collective government fascism?

[@robertmainville4881]

The most comical part of his presentation begins at around the 31 minute mark, when he adresses WW2 economics. He says roughly this: "Government spending went way up, real GDP exploded, we had full employment for 30 years or so afterward, hence it was a failure". Huh? In my world (which includes the fact that the governement debt was brought down from 120% or so in 1946 to roughly 25% in 1980), I call that a success....

[@aretlev]

Mhm.

[@DoctorMandible]

That witch doctor picture was a really poor choice. Lost a lot of respect for Tom Woods for that. I still agree with his economic reasoning, but I'm certainly not going to share this video with anyone.

[@sirellyn4391]

Saying that it's impossible to measure if your theory is wrong, but never admitting that isn't a substantive critique?

[@CARBIDETV]

Keynesian solutions were far more complex than you have presented. The results of the economic activity implemented during that period were considered a success. Current attempts to stimulate the economy do not have the correct demands of increasing tax revenue from wealth disparity and corrupt globalization factors.

[@soapbxprod]

You're a collectivist communist second rater. Tant pis...

[@Tenebrousable]

Your excuse implies the solution is fine but the circumstances are wrong. Wrong. Your solution created the circumstance. Keynes should go fuck himself and you too.

[@pipem4n]

QE infinity, and it's going to get worse ...

[@douglashogg4848]

The problem is not Keynesian economics which hasn't happened in 30-40 years. It's Milton Friedman type of economics. Turning everything over to market driven forces.

[@MrAceman82]

:), since Keynesian economics all recessions has prolonged in long run. Before that, all recessions are completed in short period. No one talks about 1921 recession which lasted only 9 month, while 1933 with Keynesian economy lasted over 4 year, even lasted until the end of WWII. Thanks to his philosophy, the politicians plays as saints at someone else expense, causing exponentially grow of debts. Now, look at all Western countries adopted Keynesian economy, now are all in big trouble - aka big debt and high taxation causing low birth rate and expensive life.

[@robertmainville4881]

Many keynesians called for a $3000 billion stimulus, the idea being that the federal government can borrow at around 0% interest rate, so the borrowing cost would be nearly nil. They also said that the Obama stimulus would work modestly, because it was a modest effort. And that turned out to be correct, the US economy is now huffing and puffing its way out of the depression, something that should have happened much more quickly. Anyway, look in Europe: austerity is a big failure.

[@nier3218]

It's a shame he was unable to provide a substantive critique of keynesian economics. Was hoping to see something compelling and concrete.

[@robertmainville4881]

Also, its around the 31 minute mark this guy makes the most comical statements, when he adresses WW2 economics. Basically he says: governement spendings went way up, unemployement went way down (for 30 years or so), hence it was a failure. In my world, I call that a success. What he says to dismiss this success (our standard of living would go down to 1984 and insane stuff like that) is simply a straw man rhetorical gadget, as no one is suggesting that.

[@Pyrrhic.]

ABCT tells you what happens in a business cycle when there is unsustainable boom. But it tells you nothing about the precise factors, timing, slow recovery, and sticky prices. Its like saying that "if humans continue to use oil, global warming will exacerbate and there will be a day when we run out of oil". Ok, you explain what has will occrur if a specific activity continues, but you provided no solution or explanation. Dont get me wrong I support ABCT, but I also have to criticize it.

[@advisorypoly]

… This didn’t age well. But, then again, Mises hasn’t aged well, has he?

[@Individual_Lives_Matter]

I guess we’ll see.

[@jerrypolemica7641]

Robert P. Murphy totally owned by Warren Mosler... Austrian school = Correct only at Hong Kong and Bulgaria MMT= Correct in the rest of the Wolrd with Variable Sovreign Fiat Currency.

[@akasteve03]

Jerry Polemica i watched that "debate mmt uses funny math pondzy scheme like" counting fed owned bonds/securities as privite savings is not accurate as the fed is a government agency. as people state look at the labor force participation rate they havent done a good job of controling employement thats a falicy

[@robertmainville4881]

Just Google: "The Unofficial List of Pundits/Experts Who Were Wrong on the Housing Bubble" All austrian/chicagoan/freshwateran economists...

[@EvansEasyJapanese]

It's funny when his joke bombs around 15:30, and then, instead of continuing to the next frame, he tries to make sure that everyone knows why his joke was actually funny.

[@gnolhsobners]

HaHa Troll much?

[@SchrodingersCat8813]

He's funny, he's snarky, has a biting sarcastic wit but not much else. Typical Austrian, saying a lot to not say much (it's always as simple as: slash gov) and using straw men. It also lumps all Keynesians into one group, which is not true: Current strand is called New-Keynesian, and more obscure is Post-Keynesian. These differences are big, the Post-Keynes school has a theory of recessions and economy that make way more sense than the mainstream. It also grossly misunderstands the stimulus, much of it went to tax relief and aid to state and local gov, to slow down the bleeding of jobs. It wasn't really a stimulus as more of a slow the bleeding, and it was a flawed bill. Again tons of Post Keynesians have argued against the stimulus on a number of grounds. Keynesianism also says that "stimulus" "agg demand boosting" whatever should be done during recession/stagnation and that is anything gov should shrink when the economy expands! He asks why make that distinction? Because when people lose jobs, wages fall, all the negatives of recession gov spending helps keep it afloat, it temporarily may put people to work. This is why we "flip it" this is why we advocate gov spending during recessions. Austrians/Libertarians/harder free marketers have it backwards, they seem to want lower taxes and more gov spending during good times, then raise taxes/cut spending during a slump. I know Austrians ALWAYS want gov slashed but Im being general here. Conservatism wants to basically put the pedal to the medal going down hill, then start riding the brakes going uphill!

[@Mafhiw]

+Brian Lopez >Because when people lose jobs, wages fall, all the negatives of recession gov spending helps keep it afloat Except it doesn't. Just look at the labor force participation rate, which is falling in US and has hit a thirty something year low, whilst the government is keeping interest rates at zero and injecting tons of money on the economy. Your argument is based on the false premise that the government spending achieves what it intends to, which it doesn't. As the Austrians explain, it just keeps the bubble going.

[@nier3218]

The idea is spending when the bubble bursts, not to keep it going.

[@millerkyle888]

Lets face it, Robert Murphy is a horrible orator. He is completely correct regarding his positions, but still, he is very hard to listen to sometimes.

[@ambroseportis4334]

I actually listen to his videos over other Austrians because I like his style, I really don't get what you mean. Sometimes he backtracks a little bit, but that's because his audience varies in ideology and education so he has a lot of different misconceptions to clear up.

[@soapbxprod]

Let's face it- you know nothing about him. he's a totally wonderful lecturer and a true wit! Just like his best buddy Dr. Thomas Woods.

[@soapbxprod]

Agreed! he's a totally wonderful lecturer and a true wit! Just like his best buddy Dr. Thomas Woods.

[@soapbxprod]

Agreed! he's a totally wonderful lecturer and a true wit! Just like his best buddy Dr. Thomas Woods. And he goes to PorcFest and parties down... like Jeffrey Tucker. :)

[@soapbxprod]

I've looked you up. You are a TROLL.

[@robertmainville4881]

Just a bunch of straw man arguments. I stopped watching after 8 minutes.

[@LucidDream101]

*HUGS*

[@brutuscassius1647]

Of course. Why would you watch more than 8 minutes? You'd be in severe danger of being exposed to powerful arguments & might even be convinced to open your mind a little. Worse yet, you might even be forced to _change your mind_ about some things. Oh, horrors! Good thing you stopped watching so quickly.

[@soapbxprod]

***** YEAH, babay! Tell it like it IS! Arguing with Rousseauian imbeciles like "Robert Mainville" is like shouting at a wall- the real problem is that there are millions like him, and a handful of rational people like you (and I?)- the Tyranny of the Majority of Morons... Welcome to the Monkey House! :)

[@soapbxprod]

Ad hominem emptiness. What "Straw Man"? Elaborate, please.

[@robertmainville4881]

Right away, in the first minutes, this guy makes up stuff. NO ONE, on my side of the issue, ever said that the 800G$ stimulus plan would be enough. Actually, many called for a 3000G$ stimulus, saying that the 800G$ one would, at best, be barely enough to curb the rate at which jobs were being lost then. It's exactly what happened, as was predicted by keynasian economists, and this guy calls keynasianism a failure! Go figure! So yes, this guy makes a straw man argument in trying to portray the 800G$ stimulus plan as something keynesian economists wanted, which is not true, because most called instead for a 3000G$ stimulus plan.