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Being an economics major in college, I have to say it's not BS, but it's tactical, not strategic in it's thinking. Politics and greed will keep the worst case

Being an economics major in college, I have to say it's not BS, but it's tactical, not strategic in it's thinking. Politics and greed will keep the worst case scenario's from happening. A crash of the level he's talking about wouldn't take down just the US, it would effectively trash the entire world economy; possible, but highly unlikely.

david927 19y ago
I disagree (without the economics pedigree, so forgive me if I'm missing something). Politics and greed aren't all powerful and they certainly existed in the 30's. But I think he's exaggerating some aspects. In 1971, the US went completely off the gold standard not from bankruptcy but because it could. And it worked. In a sense it was a coup because it enabled unprecedented growth. The problem is that letting government completely control inflation (an invisible tax that rewards investment and punishes hoarding cash) is like letting the kid in the candy store -- with similar binging consequences. In the end, I agree with the author that we'll see a downturn worse than the 30's. Most people didn't see that one coming either.
pohart 19y ago
As another Eco Major I think I agree with you. The problem is that runs on banks are like a giant prisoner's dilemma. Everyone is better off getting out if there is a problem, and no worse off if there is not. What he is talking about is similar, and even if the politicians from the other countries realize what is happenning, they will probably be more likely to do what the people want so they can an keep there jobs and be on top during the depression than to try and save the world economy and end up out of office.
- dejb 19y ago
  I agree that it is like a prisoner's dilemma. Perhaps more like the iterated version which does actually allow for cooperation to be the optimal solution. I think countries holding large amounts of US dollars have a large incentive to talk up its value while quietly selling it off. However those countries can probably use their influence over the US dollar to influence US policy and perhaps that is a benefit they have factored into to their currency holdings. I'd say the chances of a collapse are unlikely unless the US decides to play 'chicken' with its creditors and is unwilling to align its spending and earnings.
hcaulfield 19y ago
It's not BS? Really? Did you happen to notice any of his citations? You know, videos on YouTube, counterpunch articles, other reliable sources like that. You're also probably not including the part in the comments where he says Federal spending has to be cut 134% to "balance the economy," citing an article he read somewhere but can't seem to track down right now. And then the part where he repeats the unsourced, unexplained claim. C'mon. The guy's a crank, and not even a Jude Wanniski-caliber crank. Just because he hates WIPO doesn't mean he's right about anything else.

david927 19y ago

I disagree (without the economics pedigree, so forgive me if I'm missing something). Politics and greed aren't all powerful and they certainly existed in the 30's. But I think he's exaggerating some aspects. In 1971, the US went completely off the gold standard not from bankruptcy but because it could. And it worked. In a sense it was a coup because it enabled unprecedented growth. The problem is that letting government completely control inflation (an invisible tax that rewards investment and punishes hoarding cash) is like letting the kid in the candy store -- with similar binging consequences. In the end, I agree with the author that we'll see a downturn worse than the 30's. Most people didn't see that one coming either.

pohart 19y ago

As another Eco Major I think I agree with you. The problem is that runs on banks are like a giant prisoner's dilemma. Everyone is better off getting out if there is a problem, and no worse off if there is not. What he is talking about is similar, and even if the politicians from the other countries realize what is happenning, they will probably be more likely to do what the people want so they can an keep there jobs and be on top during the depression than to try and save the world economy and end up out of office.

dejb 19y ago
I agree that it is like a prisoner's dilemma. Perhaps more like the iterated version which does actually allow for cooperation to be the optimal solution. I think countries holding large amounts of US dollars have a large incentive to talk up its value while quietly selling it off. However those countries can probably use their influence over the US dollar to influence US policy and perhaps that is a benefit they have factored into to their currency holdings. I'd say the chances of a collapse are unlikely unless the US decides to play 'chicken' with its creditors and is unwilling to align its spending and earnings.

hcaulfield 19y ago

It's not BS? Really? Did you happen to notice any of his citations? You know, videos on YouTube, counterpunch articles, other reliable sources like that. You're also probably not including the part in the comments where he says Federal spending has to be cut 134% to "balance the economy," citing an article he read somewhere but can't seem to track down right now. And then the part where he repeats the unsourced, unexplained claim. C'mon. The guy's a crank, and not even a Jude Wanniski-caliber crank. Just because he hates WIPO doesn't mean he's right about anything else.