The Swedish model

This is what happened in Sweden following the GFC:

When Europe’s finance ministers meet for a group photo, it’s easy to spot the rebel — Anders Borg has a ponytail and earring. What actually marks him out, though, is how he responded to the crash. While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden’s finance minister, his mission has been to pare back government. His ‘stimulus’ was a permanent tax cut. To critics, this was fiscal lunacy — the so-called ‘punk tax cutting’ agenda. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result.

Three years on, it’s pretty clear who was right. ‘Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus,’ he says. ‘Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.’ Tax-cutting Sweden, by contrast, had the fastest growth in Europe last year, when it also celebrated the abolition of its deficit. The recovery started just in time for the 2010 Swedish election, in which the Conservatives were re-elected for the first time in history.

‘Everybody was told “stimulus, stimulus, stimulus”,’ he says — referring to the EU, IMF and the alphabet soup of agencies urging a global, debt-fuelled spending splurge. Borg, an economist, couldn’t work out how this would help. ‘It was surprising that Europe, given what we experienced in the 1970s and 80s with structural unemployment, believed that short-term Keynesianism could solve the problem.’ Non-economists, he says, ‘might have a tendency to fall for those kinds of messages’.

He continued to cut taxes and cut welfare-spending to pay for it; he even cut property taxes for the rich to lure entrepreneurs back to Sweden. The last bit was the most unpopular, but for Borg, economic recovery starts with entrepreneurs. If cutting taxes for the rich encouraged risk-taking, then it had to be done. ‘In most cases, the company would not have been created without the owner,’ he says. ‘There would be no Ikea without [Ingvar] Kamprad. We would not have Tetra-Pak without [Ruben] Rausing. They are probably the foremost entrepreneurs we have had in the last few decades, and both moved out of Sweden.’

But they were not rich, I say, when they were starting out. ‘No, but they were becoming rich. If you have a high wealth tax and an inheritance tax, people emigrate because it becomes too costly to own a company. Ownership is a production factor. Entrepreneurs are a production factor. Yes, these people are rich and you can obviously argue that we want to encourage social cohesion. But it is also problematic if you drive out entrepreneurs from your country, because they are the source of job creation.’

What even Borg did not expect was that his tax cut for the low-paid would increase economic growth so much that it has almost entirely paid for itself. Borg had created something that Osborne’s critics say does not exist: a self-financing tax cut. ‘There was some criticism at the time that we were borrowing to finance tax cuts,’ he says. But Sweden could do it, because it was expecting to return to surplus soon; Britain has no such luxury, he says. His main advice to Osborne is: ‘Keep on dealing with the deficit, because deficits destroy everything else.’

This ought to be game, set and match. Perfect policy, entrepreneurially based and no fiscal stimulus. It should become the model for everyone else but for reasons seriously unknown will not prove to be.

With thanks to Abu Chowdah for drawing this to our attention in an earlier thread.

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66 Responses to The Swedish model

  1. Scott

    Not according to the polylogist’s found in most economic faculties these days.

  2. Some people have been making this point for some time, look at the things that Sweden did to make the welfare state work, or at least stay afloat, thus far.

    Free trade, property rights, work ethic etc.

  3. m0nty

    And now Sweden’s dipping into recession, with no sign of the extra 2% in unemployment they added in the GFC being wiped off. I don’t think Steve did the homework on this one. Sweden is about to be a poster child for his opponents.

  4. .

    Really minty? They are dipping into recession because of this? Not because of their trading partners? Please explain how stimulus in open market economies would help them.

  5. m0nty

    Nice straw man you’ve got there, Dot. I am not implying that the coming recession/flatness is due to austerity. The lack of action to stop unemployment going up is on Borg, though.

  6. .

    It’s not a strawman, answer the fucking question you dolt.

  7. Woolfe

    Dot,
    Obviously mega overpriced COLA’s would have saved the Swedish economy as they did ours. :-\

  8. m0nty

    No, the recession is not due to domestic austerity, Dot. Like Australia, Sweden has been enjoying a boom due to Chinese demand for exports, but exchange rate and other international pressures are putting the squeeze on.

    Please explain, Dot, how continued Swedish austerity is going to improve their unemployment rate, considering it has remained at around the post-GFC spike level throughout the two years since.

  9. papachango

    Things must be really screwy in the rest of Europe if Sweden is now a shining light of free markets and economic laissez-faire.

    What happened to the poster child for social democracy so beloved of the Left – the country they all threatened to move to?

  10. .

    Dot, how continued Swedish austerity is going to improve their unemployment rate

    Because public sector spending is less productive than private sector spending. This is actually mentioned in most public economics or economic geography texts, even written from a social democrat perspective.

    You stupid fuck.

  11. m0nty

    Because public sector spending is less productive than private sector spending. This is actually mentioned in most public economics or economic geography texts, even written from a social democrat perspective.

    That does not mean employment will go up though, Dot. In fact, it might mean the opposite, if productivity means requiring less labour input.

    Your insults against my intelligence would mean a bit more if your own arguments weren’t so loose.

  12. JC

    That does not mean employment will go up though, Dot. In fact, it might mean the opposite, if productivity means requiring less labour input.

    FFS, Monster. Will you please stay out of economic discussions as it’s seriously painful.

    You were thrown out of Monash Economics for a good reason. You aren’t any good at it. Period.

    Doofus, if productivity means less employment you really have to fucking explain what’s been going on since the industrial revolution.

    Your insults against my intelligence would mean a bit more if your own arguments weren’t so loose.

    He’s not insulting you. He’s being honest and upfront which is something this site reveres. You idiot.

  13. .

    That does not mean employment will go up though, Dot. In fact, it might mean the opposite, if productivity means requiring less labour input.

    You have no fucking idea.

    Productivity is essentially the demand for labour. You are extrapolating a static model of labour markets with no consideration of falling wages or wage rigidities.

    You dumb fuck.

  14. JC

    Fair, but not tough enough Dot. You need to go harder on him as he thoroughly deserves it.

  15. m0nty

    Productivity is essentially the demand for labour. You are extrapolating a static model of labour markets with no consideration of falling wages or wage rigidities.

    You are extrapolating infinite demand by consumers. China is not going to demand more Volvo trucks from Sweden no matter how many labour units went into each truck. They only need so many trucks.

    Tell me why this program of austerity by Borg hasn’t budged the unemployment rate at all. Don’t give me that “they haven’t been austere enough, really” crap either. You lot are holding them up as your paragon of virtue, own it. Justify the fact that Borg has not solved the rise in unemployment.

  16. .

    You are extrapolating infinite demand by consumers.

    You are talking shit. Fuck off.

  17. JC

    Monster,

    The composition of demand isn’t static, you fucking idiot. We don’t demand as many horse buggies as we sued to for instance.

    As Dot said. Just STFU as you’re really becoming annoying now.

  18. gbh

    You’ve missed half the story. The other half is that the Swedish central bank moved aggressively to pump liquidity into the system, which pushed interest rates effectively negative and – because Sweden retains its own currency – it caused a massive devaluation of the kroner, which fuelled an export boom.

    The other thing you reveal if you want to paint this as a refutation of Keynes is that you don’t understand Keynes. Tax cuts are as much part of the Keynesian arsenal of fiscal stimulus as spending. Sweden went into the crisis with a huge budget surplus. It shifted the fiscal balance into a deficit to stimulate demand, at the same time as it pulled all of the monetary policy levers it had at its disposal. It’s a pretty Keynesian model.

  19. pete m

    monty, the rate is not currently rising:

    link

    It has sewpt up and down but is much lower than GFC highs above 10%.

    Now please explain why countries which went on a massive spending splurg do not have 1% unemployment.

  20. JC

    Permanent tax cuts are mist certainly not the Keynesian model at all, GBH. Stop talking garbage.

    If that were the case Bush wouldn’t have received and still gets Keynesian cranks attacking him for lowering taxes after the tech crash which saved the US economy at the time.

    The Keynes model has never been about tax cuts. It’s about demand management. go away.

  21. .

    Tax cuts are as much part of the Keynesian arsenal of fiscal stimulus as spending

    Show me a Keynesian who holds office who has done this.

    Sweden went into the crisis with a huge budget surplus. It shifted the fiscal balance into a deficit to stimulate demand, at the same time as it pulled all of the monetary policy levers it had at its disposal. It’s a pretty Keynesian model.

    It’s also something Mundell and Fleming would approve except you would cut spending to retain a balanced budget and go harder on liquidity. Public sector spending is less efficient than private sector spending so this is a good thing.

  22. Alex Pundit

    Dear Borg,

    Please assimilate the rest of Europe. And warn them that resistance is futile.

  23. m0nty

    monty, the rate is not currently rising:

    It has sewpt up and down but is much lower than GFC highs above 10%.

    I didn’t say it was rising, pete m, just that it was not falling down to pre-GFC levels. And it never got above 10%, it hasn’t been at that level in 15 years.

  24. .

    monty, the rate is not currently rising:

    Minty is lying? Well well well whod think it. nly if he raed a littel moar.

  25. gbh

    JC – apart from being a rude prick, you don’t understand Keynesian economics at all. Unfortunately – but not surprisingly – that’s a pretty common characteristic of the people who most adamantly assert that Keynes is wrong/outdated/irrelevant.

    Most comically of all, you conclude with the assertion that Keynesian economics is all about demand management, as if that rebuts what I wrote. Well, duh – the point I was making was about the range of tools that Keynes suggested could be used to manage demand, which include monetary policy and fiscal policy – including both changes in spending and tax rates.

    . – are you asserting that no government has ever cut taxes to stimulate demand in a downturn?

  26. JC

    LOl. I’m not a rude, prick, GBH, you’re just a fucking imbecile, that’s all. And I have little tolerance for imbeciles.

    Unfortunately – but not surprisingly – that’s a pretty common characteristic of the people who most adamantly assert that Keynes is wrong/outdated/irrelevant.

    Yea, wacthing the western world get in the hock for 4.5% of GDP and then watching everything turn to shit causes me to think the Keynesian multiplier worked fabulously. In fact it was the most successful economic intervention we’ve ever seen. Oh hang in, no it wasn’t. haahahahhaha

    Most comically of all, you conclude with the assertion that Keynesian economics is all about demand management, as if that rebuts what I wrote.

    What I suggested to you is that you have a serious problem, you moron. Bush cut taxes in 03/04 as a result of the tech crash and every Keynesian loon including St. Paul Krugman has been hanging shit on him for doing so. You were claiming that permanent or semi permanent tax cuts are part of the Keynesian mix of policy options. Therefore your argument isn’t with people here. Go take it up with other Keynesian cranks.

    the point I was making was about the range of tools that Keynes suggested could be used to manage demand, which include monetary policy and fiscal policy – including both changes in spending and tax rates.

    Keynes was never for permanent tax cuts. The monetary policy he peddled was inflationary which is not the monetary policy Friedman or monetarists suggested. He was also preferring closed economies as he knew open ones would have blown his ideas sky high.

    . – are you asserting that no government has ever cut taxes to stimulate demand in a downturn?

    No, I’m asserting that you have an issue with your crank friends if you supported the Bush tax cuts. Tax cuts are of course selective and The Right is never allowed to suggest them as it’s giving money to da rich.

  27. gbh

    Ah, so the distinction you think that you’ve found is permanent vs temporary tax cuts. It’s not much of one really, because a tax cut is “permanent” only until someone changes it, which is to say, it’s a meaningless distinction at this stage, because neither of us know whether the Swedish tax cuts will prove to be temporary or permanent.

    In other words, you’ve still failed to rebut my basic point that the Swedish government used the set of tools that Keynes recommended in these circumstances.

    The last part of my previous post was directed at the commenter who calls himself “.”

    As for you manners, well, along with the truism that the most belligerent critics of Keynes are those that understand him least, let me add another: grown men who feel the need to bully and curse on internet fora are always those who are trying hard to hide that they don’t know what they are talking about.

  28. brc

    It doesn’t really matter what Keynes said or didn’t say – he is dead.

    What matters is all the stupid decisions that are made and actioned and done in his name.

    Like borrowing billions + trillions and wasting it on stupid projects that do not add to a nations wealth or prosperity.

    Like idiots who point to any unemployment or falling growth in an economy which doesn’t swallow all the Keynesian kool-aid and say ‘aha! if only you borrowed and spent more, you’d be ok’. They say this, even though all the model Keynesian countries have even worse unemployment and economic growth, plus a whole pile of unsecured, unproductive debt hanging over any future growth.

    Recessions happen. They can’t be prevented because you can’t prevent people from making bad business and spending decisions. When wealth gets destroyed through bad luck or bad management, there’s nothing magical you can do to get it back. You have to build it up again by being productive.

    The important thing to deal with in a recession is to not make stupid mistakes and dig the hole from a mild recession into a full blown depression a couple of years later.

  29. JC

    Ah, so the distinction you think that you’ve found is permanent vs temporary tax cuts.

    No, there are also others too which I mentioned, but obviously your comprehension abilities leave a lot to be desired.

    It’s not much of one really, because a tax cut is “permanent” only until someone changes it, which is to say, it’s a meaningless distinction at this stage, because neither of us know whether the Swedish tax cuts will prove to be temporary or permanent.

    And you could also be 10 heat beats away from death and so could I. Behavior pal. Behavior is what is important as any half decent economist will tell you. People will behave differently if a tax cut is considered permanent or temporary. Stop being a moron suggesting nothing in this world is permanent. Of course it isn’t but people behave differently to different signals like you would if you knew 10 beats away and you’d be flat as a pancake on the floor.

    In other words, you’ve still failed to rebut my basic point that the Swedish government used the set of tools that Keynes recommended in these circumstances.

    I wasn’t necessarily talking about Sweden. I was talking specifically to the shit you were peddling.

    As for you manners, well, along with the truism that the most belligerent critics of Keynes are those that understand him least, let me add another: grown men who feel the need to bully and curse on internet fora are always those who are trying hard to hide that they don’t know what they are talking about.

    Not true. You’re lying.

    So I take it you never had a problem with the Bush tax cuts as they were Keynesian? Ummm?

  30. Rococo Liberal

    Why are Keynsians so much like Marxists?

    For example:

    ‘Real communism (stimulus) has never been tried.’

  31. JC

    RL

    Scott Sumner does give some plausibility to the idea that the stimulus didn’t work, not because it was too small as nutballs like St Paul of Krugman suggest, but because the Fed at the time had monetary policy settings that worked against it. In other words the Fed was so tight that the stimulus was drowned.

    Now this doesn’t really make much of a case for fiscal stimulus but more importantly shows the potential for monetary stimulus and just how much more powerful it really is.

    Now I’m not ascribing to this view as I don’t really know, but it’s an interesting theory. It also collapses the Krug’s argument and other like minded idiots. It wasn’t that it wasn’t big enough, it failed because more important policy settings weren’t aligned.

  32. Rococo Liberal

    To hear GBH talk, you’d think that any action is Keynsian and any action can be a stimulus. COuld it be that Keysianism is really a group of policy ideals mixed together anf that if a government only takes on some of the ingredients then what they are doing is not Keynsiann?

    Flour and water mixed together form paste, but if you add a few other ingredients you get cake. In the GFC we needed classical liberal paste to hold the economy together, Keynsians said, like so many modern Marie Antoinettes, “no let them eat stimulus cake,” and then cocked up the recipe so what we got was horrible, taseless schemozzle.

  33. m0nty

    Why are Hayekians so much like Marxists?

    For example:

    ‘Real communism (austerity) has never been tried.’

  34. JC

    Well yea, all of that, RL..

    Keynesians also believe that the central bank is powerless at zero, which is mindbogglingly stupid as they ignore the fact that the CB has numerous other tools to raise NGDP.

    That’s why it’s basically crank economics.

  35. JC

    It has been tried and shown to succeed, monster, you Darth Vader of economics.

    A study by two economists suggests that fiscal retrenchment works better than opening the fiscal spigot.

    the most famous case is the Clinton Administration’s attempt in the early 90′s when the Administration worked closely with the Fed.

    In any event all this is academic, doofus. The US debt to GDP level is at 100%. Greece cannot borrow money from the open markets for example. Where the fuck are say the PIIGS going to get any money unless they cut their deficits. Would you lend them? Ummm

    Go away, as you failed economics so have no business talking about this shit.

  36. .

    As for you manners, well, along with the truism that the most belligerent critics of Keynes are those that understand him least,

    This isn’t a truism at all. You are just making shit up because you are a vulgar, ill educated imbecile that wants FREE MONEY!

    Like I said earlier today (with minor edits):

    “It’s a hoax. It has no microfoundations. It falls apart in the Keynesian derived IS-LM model when it is rewritten in an alternative manner. The General Theory is full of mistakes in algebra. The empirical evidence is clear, it does not work. Arguments for Keynesianism at this point soon collapse into MMT crankery and twaddle. You can see now in Australia the paper gains (of zero, theoretically impossible to be higher since the spending multiplier on the handouts dropped so much) were paid for now by lower output (1st time we’ve had a net increase in unemployment in two decades, horrible productivity growth since unemployment came back on hours worked after the downturn).

    The whole package is full of lies. Rudd and Swan were like the fishermen who lied about catching a tiddler and ended up bullshitting about taxidermist’s dream. First of all it was 43 bn to save 120 000 jobs. $357 000 for each job saved. To make this look better, they doubled and tripled the estimates when convenient. Really, in a resource rich nation, during a global financial crisis seeing the evaporation of cheap capital, installing roof installation and building school canteens that are faulty at up to 10 times the normal cost is going to stop us from a recession, rather than 250 bn AUD worth of gifts to our resources sector from the Chinese (their rail and construction stimulus) whilst we have a 33% devaluation of our currency and accommodation of bank liquidity? Such utter bullshit. Most people are immune to this puerile vulgarity until they jump the hoops to learn Macroeconomics 1 which is frankly a joke in all universities.

    Kill it with fire.

    It’s amazing isn’t – the whole thing goes down in an instant crapshoot with open market economics (vis a vis the virtue of not being a closed economy anymore) – and yet people still bang on about this theory as though it is something proveable and useful like nuclear physics.”

    I just don’t understand what Keynes wrote, I understand what it means.

  37. .

    JC – Clinton’s success with Rubinomics shows how vulgar, “pure”, Neoclassical, Neo or New Keynesianism is a heap of shit.

    The cut spending and accomodated, whilst putting time limits on welfare and opening up trade. They followed the Washington consensus and it was very successful.

    Bush and Obama didn’t, now America is a basket case.

  38. gbh

    People will behave differently if a tax cut is considered permanent or temporary.

    And how exactly do you convince people that a tax cut will never be reversed? Jedi mind tricks?

    So I take it you never had a problem with the Bush tax cuts as they were Keynesian? Ummm?

    I think the 2001 cuts were arguably Keyensian. The economy was entering recession right around then (and the events of September 11 only made things worse). I don’t think the 2003 ones were at all. It was the wrong time of the cycle, and they pushed the fiscal balance into structural deficit right when it should have been returning to surplus. Remember that interest rates were already very low, and there were pretty clear signs of growth already.

  39. .

    gbh,

    Do you believe that Howard had a structural deficit?

  40. JC

    And how exactly do you convince people that a tax cut will never be reversed? Jedi mind tricks?

    Stick a right wingers in government that believe in low tax rates and actually mean it. People will get the message.

    I think the 2001 cuts were arguably Keyensian. The economy was entering recession right around then (and the events of September 11 only made things worse). I don’t think the 2003 ones were at all.

    Doofus the tax cuts were one and the same. the timing was simply different because the the lag between enactment and delivery.

    It was the wrong time of the cycle, and they pushed the fiscal balance into structural deficit right when it should have been returning to surplus.

    Stop being a complete moron. No government could possibly fine tune shit the way you cranks suggest.

    Remember that interest rates were already very low, and there were pretty clear signs of growth already.

    Low interest rates mostly define economic stress. Furthermore the inflation rate was more than well behaved, so i take issue with the argument that rates were too low for too long in the US. The long bond was not stressed out and the curve was in decent shape.

  41. mike a.

    gbh is right though to point out the changing tax levels can be used in a “Keynesian” fashion. Its just that these days its just so uncommon. Most governments would prefer to splurge on a stimulus. In the 1960s if the government wanted to stimulate demand it would cut taxes, likewise if it wanted to dampen demand it would have raised them.

  42. JC

    In the 1960s if the government wanted to stimulate demand it would cut taxes, likewise if it wanted to dampen demand it would have raised them.

    Okay, examples of when this happened showing the policy was being implemented for economic reasons with both rises and falls in income tax levels please. Go!

  43. .

    And how exactly do you convince people that a tax cut will never be reversed? Jedi mind tricks?

    Rocardian equivalence, which, unfortunately for your religion, does exist.

    You stop spending and make it difficult to raise spending or taxes.

    A TABOR helps, as would banning unfunded liabilities.

  44. brc

    ‘Real communism (austerity) has never been tried.’

    Never mind the meaningless term ‘austerity’ but a proper, small government, free economy approach has been tried. In fact this model has dominated civilisation for millenia before socialists came along and tried to convince everyone they couldn’t wipe their bottoms without a hand from the government.

    Read up on the post 1948 German economy. That was an experiment with limited government, no special rules for interested parties, and a commitment to low inflation.

    Then compare it to it’s East German neighbour, who convinced their citizens (at the point of a gun and barbed wire fence) that letting the government do all the spending would result in a better economy and endless economic growth.

    Don’t try that Marshall Plan crap on as an excuse for Keynesian theory either. For a start it was smaller than the recent school halls building bonanza, for a second it was applied to many western european nations, not just west germany.

    It’s time to face facts for all involved : stimulus measures to already indebted countries do not work, and are counterproductive as the debt then further weakens the economy.

    You cannot steal my TV, give it to my neighbour, and then try and convince me that economic growth has occurred.

    People are so in love with magic puddings they can’t see common sense. Someone otherwise rational who would scoff at diet pills or crystal powers somehow transcends rationality and things you can get something for nothing just by taking things from one group of people and giving it to another. All because someone printed it in a textbook.

    Keynes himself had no answer for what happens in the long run by giving the famous and famously lame excuse ‘in the long run we are all dead’. Sucks to be the next generation, doesn’t it JMK?

  45. .

    Ireland, Sweden etc, are hardly engaging in austerity. The tax hikes and bailing out of “too big to fail” does the damage, not the spending cuts. Private sector productivity is higher and thus boosts the demand for labour, in turn increasing real wages and employment.

  46. m0nty

    Never mind the meaningless term ‘austerity’ but a proper, small government, free economy approach has been tried. In fact this model has dominated civilisation for millenia before socialists came along and tried to convince everyone they couldn’t wipe their bottoms without a hand from the government.

    I hate to come over all Dennis the Constitutional Peasant on you, but the Dark Ages were pretty dark.

  47. brc

    The Dark Ages were dark because people didn’t have capitalism, free speech and free enterprise. It wasn’t until the dreaded bourgeoisie got going did the dark ages end.

    That sort of own goal would get you death threats in South America.

  48. .

    minty you dullard,

    The dark ages were Government excess and regulated labour markets par excellence. Do you know what plunder means or how villeinage was finally entered into, you illiterate fuck?

  49. Abu Chowdah

    Why are Keynsians so much like Marxists?

    For example:

    ‘Real communism (stimulus) has never been tried.’

    Zeno’s paradox. It’s a perfect scam. A Keynesian can never be wrong because he can always argue the stimulus wasn’t as big as he had hoped. And that’s why it failed – not because it’s stupid economics but because you didn’t give us enough money!

    Rinse. Repeat.

  50. Jarrah

    “Zeno’s paradox. It’s a perfect scam”

    And one used by Keynesians, Austrians, liberals, conservatives, communists, fascists… in fact I’m yet to come across any ideologue who hasn’t used the argument.

    Thing is, sometimes it’s true, and sometimes it’s not. It all depends on the actual circumstances.

  51. Steve of Ferny Hills

    brc

    You cannot steal my TV, give it to my neighbour, and then try and convince me that economic growth has occurred.

    That’s not what happened. They gave your neighbour a free new TV and assigned the HP contract to you.

  52. Splatacrobat

    Did you know black Saab’s are two inches longer than white Saab’s?

  53. steve

    I’m not clear what point Steve kates was trying to make. Isn’t Sweden still close to the highest taxing country in the world?

  54. badm0f0

    I hate to come over all Dennis the Constitutional Peasant on you, but the Dark Ages were pretty dark.

    The Dark Ages were dark because people didn’t have capitalism, free speech and free enterprise. It wasn’t until the dreaded bourgeoisie got going did the dark ages end.

    That sort of own goal would get you death threats in South America.

    The dark ages were Government excess and regulated labour markets par excellence. Do you know what plunder means or how villeinage was finally entered into, you illiterate fuck?

    It’s hard to pick which is the dumbest of these astoundingly stupid comments but I’m blaming m0nty for kicking it off.

  55. WadeJ

    GBH, you seem to be new here. The locals are quite aggressive to those of us that haven’t seen the Austrian light.
    It’s a pity really, because this site is one that does some really tough/good analysis on the Australian government.
    Regarding Sweden, you pretty much nailed it earlier. Sweden’s “success” is not one of austerity but one of very loose monetary policy (Keynesian) and devaluation through a floating currency. But hey, with the UK, Ireland, Latvia, Estonia and other austerian’s failing they have to look somewhere for some kind of ray of hope.

  56. JC

    GBH, you seem to be new here. The locals are quite aggressive to those of us that haven’t seen the Austrian light.

    Not true, you’re lying again Wade. It’s bad form. I for instance prefer Friedman’s line of smaller government and an effective central bank.

    It’s a pity really, because this site is one that does some really tough/good analysis on the Australian government.

    Of course it is.

    Regarding Sweden, you pretty much nailed it earlier. Sweden’s “success” is not one of austerity but one of very loose monetary policy (Keynesian) and devaluation through a floating currency

    That’s monetarism, you dimwit. It’s not Keynesian.

  57. Oh come on
    GBH, you seem to be new here. The locals are quite aggressive to those of us that haven’t seen the Austrian light.

    Not true, you’re lying again Wade. It’s bad form. I for instance prefer Friedman’s line of smaller government and an effective central bank.

    I don’t think he’s lying, JC – I think it’s more likely he simply doesn’t know there’s any difference.

  58. .

    The dark ages were Government excess and regulated labour markets par excellence. Do you know what plunder means or how villeinage was finally entered into, you illiterate fuck?

    It’s hard to pick which is the dumbest of these astoundingly stupid comments but I’m blaming m0nty for kicking it off.

    Hey mofo fuckface, tell me what is stupid with my comment, make a critque of substance or just fuck off.

  59. JC

    Of course he’s lying, OCO. Anyone that suggests they are Keynesian are sceptical of monetary policy having any determinant effect. But here’s Wade, a junior Keynesian telling us that Sweden’s easier monetary policy is a Keynesian policy.

    These fucking idiots would suggest that having sex is Keynesian if they thought they could get away with it. The reason Keynes thought monetary policy had any use was in order to push loanable funding to the real economy from the banking system. He didn’t understand the importance of monetary policy and such things like quantitative easing. And liquidity preference is a bunch of shit from what I recall.

    The junior Keynesian needs to apologize. GBH is a bigger moron that Wade.

  60. JC

    OCO

    These turkey’s actually resemble the climate alarmists is so many ways.

  61. Abu Chowdah

    That’s monetarism, you dimwit. It’s not Keynesian.

    Haha. Clearly Wade isn’t coming here for the hunting.

  62. badm0f0

    Hey mofo fuckface, tell me what is stupid with my comment, make a critque of substance or just fuck off.

    No problem dummy; your assertion that “the dark ages were Government excess and regulated labour markets par excellence” is anachronistic tosh. The model you’re trying to retrofit has zero descriptive value or relevance to the modes of social and political organisation you’re applying them to.

    That’s not even going into the fact that the notion of the “dark ages” has been largely discarded by historians because it is both misunderstood, misused and misleading as a description of European societies in Late Antiquity & the Middle Ages. Hence m0nty gets the blame for starting the “dark ages” idiocy but you can have a special gong for being a clown.

  63. sdfc

    That the Fed has run tight monetary policy during the crisis is surely one of the most ridiculous propositions on offer.

    If the private sector only responded to permanent stimulus then temporarily easier monetary policy would also be ineffective on all occasions.

    So high spending, high taxing Sweden is an example of austerity? Speechless.

  64. steve

    Hey mofo fuckface, tell me what is stupid with my comment, make a critque of substance or just fuck off.

    Hahaha, that’s a critique of substance if ever I heard one!

  65. JC

    That the Fed has run tight monetary policy during the crisis is surely one of the most ridiculous propositions on offer.

    Absolute rate is not a sign of easy policy, SDFC. If it was you yourself like all other Keynesian cranks wouldn’t be so hung up about zero as a limitation.

    Low interest rates are a big sign of economic weakness.

    I thought you would have understood that by now.

    If the private sector only responded to permanent stimulus then temporarily easier monetary policy would also be ineffective on all occasions.

    temporary, incremental monetary policy won’t work either. Markets need to see that the policy is sustainable.

  66. sdfc

    JC

    The fed funds was at close to zero by December 2008, unless your transmission mechanism is impaired that should be more than ample. They also doubled the money base in short order, once again a sign the Fed had the pedal to the metal.

    A private sector that has already gorged itself on credit and is consequently soaked with debt is not fertile ground for monetary policy.

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