How Money Works

[Schneibster]

Here's an inconvenient question about the lie that Fanny Mae and Freddie Mac caused the recession: did all these countries have Fanny Mae?



H/t to bonddad. Source.

"When the US sneezes, the rest of the world catches a cold."

I'm not seeing evidence for cause and effect there.

Just sayin'.

[Schneibster]

I found this article more enlightening.

Yet economists prefer their elliot waves and charts to the real cashflow economy. I guess they've a blind spot for reality? Schneider will now explain how economists have missed the largest franchaise and it's impact out of their charts?

[Schneibster]

The greedy sociopath party got in there and spent it all on tax breaks for themselves and their pals and an unnecessary war and a fake scheme supposed to reduce drug costs that actually funneled money to more of their cronies. It's not crony capitalism, it's crony thievery.

This, of course, is crystal-clear revisionist idiocy.

It wasn't the Republicans who raided the SS trust fund,

What are you blathering about? Where the money went is obvious. Iraq, the Medicare prescription drug program, and the Bush tax cuts. That was the Bush administration. Every one of those three things was Bush's choice.

Talk about revisionist history, Bush didn't do the Bush tax cuts? OK. Whatever.

Once again, the raids on the SS Trust Fund began LONG before Bush took office,

Iraq, Medicare drug program, Bush tax cuts.

Show me the money. Duh.

[Schneibster]

Your cynicism makes you a tool of the sociopathic rich.

[Hermit]

Here's an inconvenient question about the lie that Fanny Mae and Freddie Mac caused the recession: did all these countries have Fanny Mae?



H/t to bonddad. Source.

"When the US sneezes, the rest of the world catches a cold."

I'm not seeing evidence for cause and effect there.

The graph looks to me like indicating that, with the exception of Spain, all other real estate bubbles that burst, did so after the downturn in the USA.

[Schneibster]

Correlation is not causation. I'm still not seeing evidence for cause and effect.

[Hermit]

Correlation is not causation. I'm still not seeing evidence for cause and effect.

You got me there, mainly because correlation is all we have if David Hume is correct, which I believe he is.

[Schneibster]

Mechanism.

Hume didn't know enough physics to say.

[Seth]

The greedy sociopath party got in there and spent it all on tax breaks for themselves and their pals and an unnecessary war and a fake scheme supposed to reduce drug costs that actually funneled money to more of their cronies. It's not crony capitalism, it's crony thievery.

This, of course, is crystal-clear revisionist idiocy.

It wasn't the Republicans who raided the SS trust fund,

What are you blathering about? Where the money went is obvious. Iraq, the Medicare prescription drug program, and the Bush tax cuts. That was the Bush administration. Every one of those three things was Bush's choice.

Talk about revisionist history, Bush didn't do the Bush tax cuts? OK. Whatever.

Once again, the raids on the SS Trust Fund began LONG before Bush took office,

Iraq, Medicare drug program, Bush tax cuts.

Show me the money. Duh.

None of the money for Iraq came from the SS trust fund, nor do tax cuts come from the SS trust fund. As for the Medicare drug program, what's your problem, that's socialized medicine at work.

[apophenia]

[Atheist-Lite]

Try telling people that today and see where it get's you?

[Hermit]

Correlation is not causation. I'm still not seeing evidence for cause and effect.

You got me there, mainly because correlation is all we have if David Hume is correct, which I believe he is.

Mechanism.

Hume didn't know enough physics to say.

So, how do we know there is a necessary connection between event A and event B?

[Schneibster]

None of the money for Iraq came from the SS trust fund, nor do tax cuts come from the SS trust fund. As for the Medicare drug program, what's your problem, that's socialized medicine at work.

They're counting T-bills the SSTF holds as if they're money now. That started in 2005.

[Schneibster]

Correlation is not causation. I'm still not seeing evidence for cause and effect.

You got me there, mainly because correlation is all we have if David Hume is correct, which I believe he is.

Mechanism.

Hume didn't know enough physics to say.

So, how do we know there is a necessary connection between event A and event B?

What do you mean by "necessary connection?" We're talking about cause and effect. That's what causation is.

If all you use is correlation to establish that, you run the risk that you've confused effect with cause, or that you've confounded unrelated phenomena. When you have repeating phenomena, you can just crank the correlation up- but you still run that risk.

When you can show a mechanism by which one causes the other, then a) you're sure you didn't get it wrong way 'round, b) you're sure they're not random unrelated phenomena that coincidentally happened at the same time, and c) you can establish causation without repetition.

So, by what mechanism do you propose that US housing prices influenced some European housing prices but not others? The housing prices fairy?

[Hermit]

Correlation is not causation. I'm still not seeing evidence for cause and effect.

You got me there, mainly because correlation is all we have if David Hume is correct, which I believe he is.

Mechanism.

Hume didn't know enough physics to say.

So, how do we know there is a necessary connection between event A and event B?

What do you mean by "necessary connection?" We're talking about cause and effect. That's what causation is.

You can't have causality without a necessary connection between cause and effect. How do we know there is a necessary connection between sunrise and daylight? Yes, we have observed the correlation billions of times, but at what point - and how - can we prove a necessary connection that would turn a correlation into causality? I put it to you that the observation of a correlation will never prove a necessary connection as such. We are basically sophisticated inductivist turkeys.

When you have repeating phenomena, you can just crank the correlation up

Correct.

When you can show a mechanism by which one causes the other, then a) you're sure you didn't get it wrong way 'round, b) you're sure they're not random unrelated phenomena that coincidentally happened at the same time, and c) you can establish causation without repetition.

A bit circular - as highlighted, but yes, agreed. I am just saying there is no such mechanism.

So, by what mechanism do you propose that US housing prices influenced some European housing prices but not others? The housing prices fairy?

I would expect local factors to have affected outcomes in the others. The graph indicates they are in the minority. We are not talking about as simple and uniform as the theory of gravity here, are we?