Underconsumption Is Not the Problem

Campaign for Liberty ^ | 2010-03-17 | William Anderson

[rabscuttle385]

fyi

[rabscuttle385]

*Ping!*

[familyop]

""What's limiting employment now is lack of demand for the things workers produce."

Heh. "$40 worth of gas, a Slushie and a TV dinner. Would you like anything else with that?"

[HiTech RedNeck]

The supply siders were right. It’s intuitive that if there were no money and only barter, a society that could produce more would be wealthier than a society that was limited to produce less. Money is only the medium.

[americanophile]

The minute I see Krugman, I change the channel.

[RSmithOpt]

I admit that I just briefly scanned the article, however, I think the article fails to mention America is no longer producing much of what it consumes.

IOW, there's been a tremendous outflow of American dollars to foreign manufacturers producing textiles, electronics, furniture, what-nots, etc.

That's money that is taken out of circulation and manufacturing jobs as well, which, in essence, reduces our domestic 'speed of money'.

The other big glaring hole in the logic of the article fails to mention the money being pi$$ed away at record rates by the growth of goobermint and unfunded liabilities.

[familyop]

Good piece, BTW. Now let’s quit buying so much and take out the frivolously employed, appointed and elected parasitic trash.

[uglybiker]

Deah ain't 'nuff consumin' goin' on out deah!

[HiTech RedNeck]

Need to scale our buying to what we can produce.

[rabscuttle385]

IOW, there's been a tremendous outflow of American dollars to foreign manufacturers producing textiles, electronics, furniture, what-nots, etc.

I went to Wal-Mart recently and found U.S.-manufactured furniture.

Scary, eh?

[familyop]

"Need to scale our buying to what we can produce."

That's fine. Abolish communistic anti-competition zoning laws against new, small manufacturing operations, and I'll start buying something. Otherwise, all of the currently government-employed bums and special interests will starve.

[iopscusa]

Rab thamks for the Hazlitt! post. One of the great Economic thinkers of the last 200 years. Free on-line read of “Economics in one Lesson”: http://jim.com/econ/contents.html

[Arthur McGowan]

The fallacy of Marxism/Keynesianism/Krugmanism/Obamaoism is easy to show:

Suppose you had given a bunch of Neanderthal Men a big wheelbarrow with $100,000,000 in it, and told them: “Go buy yourselves some nice clothes and some cars, and something nice for the wife?”

What would they have been able to buy?

People who are too stupid to follow this argument are:

Obama Voters!

[element92]

the problem with supply side economics...

over-success

.......................

the US now has a fifty year supply of,

vacant commercial real estate
houses without owners
empty factories

[meadsjn]

In the myopic tunnel vision of Ivy League economists on both sides of this argument, there is no overlap in the sets of people who provide labor for products and services, and those who consume/purchase the products and services.

[muir_redwoods]

This is the thought process that led to the Great Depression being needlessly extended by a decade or more.

Read The Forgotten Man by Amity Shlaes

[The Comedian]

The idea that an economy operates only if workers are paid "enough to buy back the product"

The fallacy is so plainly stated here that even a Democrat journalist should be able to understand it.

Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

[CharlesThe Hammer]

Thanks for posting about Jean Baptiste Say, patron saint of supply side theory, and author of Say’s Law: “Supply constitutes Demand.” Perhaps Herr Krugman could better understand that this elegant truth devastates his assertion of proletarian, buy back, consumerism if he knew this parable:

The Crusoe Effect
Robinson Crusoe is stranded alone on an island and he is hungry, starving in fact. All he can think about is food. He longs for a fish dinner. Demand is therefore high. Yet, there will be no fish dinner unless he is productive and sets about catching a fish to cook. Without a supply of fish, Crusoe’s intense demand is irrelevant.

As always, the Marxists neglect productivity in their tyrannical calculus.

[RipSawyer]

I have only recently begun to fully appreciate how much people used to learn by simply growing up on a small farm. Most of us who grew up that way just don’t buy into a lot of the crap the politicians are selling. We may not always be able to eloquently verbalize our objections but we know the difference between a hen’s cackle after producing an egg and a rooster bragging that he is busily making the sun rise.