I don't think the fundamental principle of living within ones means and minimally relying on credit has changed. It just seems to have been forgotten.

David

Alan
I've read your links and just as I suspected, they don’t prove your case at all, they prove mine. Those authors are just doing what you’re doing – assuming that government creates net benefits for society by stimulus spending.

Also the OECD reports contradicts you in that governments clearly are using “aggregate demand” and “boosting demand” as their criterion, so we're back to the idea that burning down houses makes society richer because it increases “aggregate demand” for housing.

The argument so far looks like this:

As to the data:
JKJ: How do you know Keynesian stimulus policies work to create a net benefit to society? How do you know they don’t just loot A to satisfy B, making society as a whole worse off?
AA: Because. The authorities say so.
JKJ: Well how do you know they’re right?
AA: Because. The data prove it.
JKJ: How do you know?
AA: Because. The authorities say so.

As to the theory:
JKJ: How do you know Keynesian stimulus policies create a net benefit for society?
AA: Because. The data prove it.
JKJ: How do you know?
AA: They prove it because they prove it.
JKJ: By what standard?
AA: 3.3 %
JKJ: How do you know? By what theory?
AA: They just prove it.
JKJ: Well Keynes said even spending on pure destruction or waste would create net benefits for society, so according to your theory, blowing up whole cities would also make society richer?
AA: We’re not using that theory any more.
JKJ: Well what theory are you using?
AA: The theory that the data prove it.

And so on. It’s like a joke. The basic argument is only this: “We are right, because we are right.” It’s groupthink.

Let’s get this straight. The data, of themselves, are just a huge heap, and wodge, and pile, of numbers. To reach any conclusion about what they mean, let alone whether policy is indicated, requires analysis, which requires theory.

Alan essentially asserts that the data speak for themselves. (cont.)

To prove this he refers off to other people all sharing the same belief system, but at no stage do any of them actually consider whether it’s true in the first place: they just assume their conclusion in their premises!

Consulting the data is valid only IF the theory you’re using to analyse them is not riddled with fallacies. But if it’s just an amalgam of demonstrable fallacies, like Keynes’s and Alan’s and Stiglitz’s and Krugman’s, this fundamental defect cannot be remedied by dressing it up in mathematical and statistical operations. This is just a fetishism of science.

Just think: what would you have to believe, in order to believe that printing paper creates actual real net wealth for society?

To translate it out of its false scientific, and into its real superstitious cast, it looks like this:

High priest: Throwing virgins into the volcano increases crop fertility.
Rationalist: How do you know it works?
High priest: Because. All the high priests say so.
R: How do they know?
HP: Because the data tell them so.
R: What data?
HP: The increase of crop fertility that happened after we threw virgins in.
R: How do you know that was because of throwing ‘em in?
HP: Because. All the high priests say so.
R: How do you know they’re right?
HP: Because the data tell them so.
R: What data?
HP: Google it – (links to opinions of high priests).

And then we have the Saltpetres of the world, the ordinary punters who can’t follow the chains of reasoning involved, chiming in with “Why are you opposed to increasing crop fertility?”

It’s pathetic. Obviously if you don’t count the cost, anything will seem a benefit!

And notice how all of the authorities that Alan refers to *just happen* to get their income from the river of treasure thus diverted in their direction? "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!".

Bazz, Geoff
Energy prices are rising. So what?

Jardine rhymes with Sardine.

A Sardine is a small fish with limited intellect destined to be forced into a small can. The common man has a similar destiny.

Take your money out of the bank and put it under your mattress.

You've been warned! Ignore at your peril.

Hi again JKJ,

Re: “Those authors are just doing what you’re doing – assuming that government creates net benefits for society by stimulus spending.”

Not at all. No-one has said that. Wealth and income are created by many sectors working together. No-one is “assuming that government creates” anything by itself.

Re: “I've read your links and just as I suspected, they don’t prove your case at all.”

Hmmm. Not sure, JKJ. Have you read the links and posts with a view to understanding what is said? Or just with the intention to refute? There is a difference.

Most of your objections seem to reflect wilful misunderstanding.

Re: “Also the OECD reports contradicts you in that governments clearly are using “aggregate demand” and “boosting demand” as their criterion, so we're back to the idea that burning down houses makes society richer because it increases “aggregate demand” for housing.”

Just nonsense, JKJ. The OECD is not advancing that idea. Neither am I, nor Saltpetre nor anyone else. This is another example of what seems to be deliberate misinterpretation. No?

Re: “JKJ: Well Keynes said even spending on pure destruction or waste would create net benefits for society, so according to your theory, blowing up whole cities would also make society richer?”

Another example of same. Nobody believes this any more, JKJ. No-one ever did. It has been explicitly rejected on this thread x times, where x is a measurable quantity.

By repeating this assertion endlessly you are reinforcing that you are not open to listening.

Re: “The data, of themselves, are just a huge heap, and wodge, and pile, of numbers. To reach any conclusion about what they mean, let alone whether policy is indicated, requires analysis, which requires theory.”

Correct. The analysis and theory are readily understandable by those who wish to understand.

Re: “They [people sharing the same belief system] at no stage actually consider whether it’s true in the first place: they just assume their conclusion in their premises!”

Not true. Conclusions are based on data measured by the ABS and equivalent bodies abroad. Refer above.

Cheers, AA

Alan,

You have the patience of a saint. In this quotes you sum it up:

"By repeating this assertion endlessly you are reinforcing that you are not open to listening."

I learn from what you say and I think some others do as well, even if I do not always agree. But really, you are wasting your time trying to persuade JKJ of anything that he does not already agree with.

How about some insights into how Hollande is miserably failing to grasp the issues in France. How Jean-Luc Melenchon was right all along. And how Sarkozy must have learnt the art of brown paper bag donations from the late unlamented Bjelke Peterson.