tag:blogger.com,1999:blog-4073216153962700110.post4658428964994697714..comments2023-07-15T04:51:17.650-04:00Comments on Smiling Dave's Blog of Psychology, Economics, and Gentle Sarcasm.: Reddit buries Austrian Economics in a pile of links, they think.Smiling Davehttp://www.blogger.com/profile/12898802942529057872noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4073216153962700110.post-62508092839598412012011-06-23T10:49:59.705-04:002011-06-23T10:49:59.705-04:00Thank you for commenting, LK. I'll devote a wh...Thank you for commenting, LK. I'll devote a whole post to your comment here, watch for it. In the meantime, I'll edit the previous blogs to credit you, not Cynicus.Smiling Davehttps://www.blogger.com/profile/12898802942529057872noreply@blogger.comtag:blogger.com,1999:blog-4073216153962700110.post-41760770428615155852011-06-23T05:12:49.604-04:002011-06-23T05:12:49.604-04:00I am not sure why you call me "Cynicus Econom...I am not sure why you call me "Cynicus Economicus". He is a blogger on a totally different blog, but anyway:<br /><br /><i>"It is true that in Say's day the money was gold and silver, and that he therefore did not address explicitly the situation where there is fiat money.</i><br /><br />In Say's time, there was ALSO fractional reserve banking creating fiduciary media unbacked by commdity money, that was nevertheless accepted by the community a means of payments and medium of exchange - so the difficulty remains. Money IS created endogenously by <i>real world</i> capitalism.<br /><br /><i>"Animal spirits [=darned if I know], says Keynes. Exactly the same vague notions as the adventurers"</i><br /><br />Animal spirits is essentially an irrelevant term used by Keynes' describe why we act. You can dispense with it TOTALLY and still have his fundamental insight: that because of uncertainty (thatis non-calculable) we have subjective expectations. This idea is also held by the Austrian radical sujectivists who follow Ludwig Lachmann. That is why the investment is subject to instability and fluctuation, why investment will <i>not</i> necessasrily equal loanable funds supply.<br /><br /><i>""But when the govt prints new fiat money, and the banks create new money through fractional reserve banking, and all the other things you mentioned in your blog, those things cause inflation."</i><br /><br />(1) large deficits matched $for$ by bond issues are not creating new money.<br /><br />(2) in an economy in a recession or depression, it is PRECISELY when there are significant idle resources, unused capacity at plants and factories, idle labour and available resources.<br /><br />Keynesian stimulus is about getting the private sector to create wealth by increasing capacity utilization and using idle resources (including labour), just as <i>private</i> investment, <i>private</i> bank credit, and <i>private</i> payment of wages to workers by businesses would do the same thing if there was a recession.<br /><br />You make the same mistake as Anderson:<br /><br />http://socialdemocracy21stcentury.blogspot.com/2011/05/william-l-anderson-flunks-keynesian.htmlLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.com