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Boom & bust cycles seem to be a built in “feature” of market economies. The architects are not trying to create booms and busts per se, but they are trying to m

Boom & bust cycles seem to be a built in “feature” of market economies. The architects are not trying to create booms and busts per se, but they are trying to manage them so they aren’t as devastating as 1929.

next_xibalba 4y ago
Whereas permanent poverty is a built in feature of non-market economies. Seems like an easy choice to make.
- vkou 4y ago
  Permanent poverty is also a defining feature of feudalism, which is the end game of any unmanaged market economy. That's another reason markets get a little bit of steering.
- kennywinker 4y ago
  Permanent poverty is built into this economy for all but a very very lucky few. We can do better, and framing the options as market-economy (what we have) and non-market-economy (everything else) is a false dichotomy. Markets can exist without the second-guilded-age capitalism we're in right now.
beaconstudios 4y ago
indeed, this is broadly acknowledged and studied in macroeconomics: https://en.wikipedia.org/wiki/Business_cycle https://en.wikipedia.org/wiki/Business_cycle
acchow 4y ago
But they're booming much harder and busting much harder... Should the fed have stepped in to prevent a flash freeze in liquidity in March 2020? Probably. Did they go way way way too far? Maybe. Did they go way way too far in Aug 2020 and Nov 2020 and Dec 2020 and Jan 2021, etc? Definitely.
- moistly 4y ago
  Did they ever fix the problems that led to the 2008 crash? I don’t think so.
timtas 4y ago
Viewing boom-bust cycles as "something that just happens, we have no theory to explain why" is the great failure and embarrassment of mainstream (that is to say Keynesian) economics. But a comprehensive theory exists. It won Friedrich Hayek the Nobel Prize in 1974. You should at least be familiar with it. https://mises.org/library/austrian-theory-business-cycle-7 https://mises.org/library/austrian-theory-business-cycle-7

next_xibalba 4y ago

Whereas permanent poverty is a built in feature of non-market economies. Seems like an easy choice to make.

vkou 4y ago
Permanent poverty is also a defining feature of feudalism, which is the end game of any unmanaged market economy. That's another reason markets get a little bit of steering.
kennywinker 4y ago
Permanent poverty is built into this economy for all but a very very lucky few. We can do better, and framing the options as market-economy (what we have) and non-market-economy (everything else) is a false dichotomy. Markets can exist without the second-guilded-age capitalism we're in right now.

beaconstudios 4y ago

indeed, this is broadly acknowledged and studied in macroeconomics: https://en.wikipedia.org/wiki/Business_cycle https://en.wikipedia.org/wiki/Business_cycle

acchow 4y ago

But they're booming much harder and busting much harder... Should the fed have stepped in to prevent a flash freeze in liquidity in March 2020? Probably. Did they go way way way too far? Maybe. Did they go way way too far in Aug 2020 and Nov 2020 and Dec 2020 and Jan 2021, etc? Definitely.

moistly 4y ago
Did they ever fix the problems that led to the 2008 crash? I don’t think so.

timtas 4y ago

Viewing boom-bust cycles as "something that just happens, we have no theory to explain why" is the great failure and embarrassment of mainstream (that is to say Keynesian) economics. But a comprehensive theory exists. It won Friedrich Hayek the Nobel Prize in 1974. You should at least be familiar with it. https://mises.org/library/austrian-theory-business-cycle-7 https://mises.org/library/austrian-theory-business-cycle-7