In praise of The New Yorker

Despite the fact that The New Yorker regards itself as the “best magazine that ever was,” I rarely get around to actually reading it. I guess after the New York Times and the New York Review of Books, I feel that I’ve consumed enough spinach, er, East Coast sophisticated modern liberalism.

In any case, The New Yorker’s James Surowiecki has an excellent new article on the myth that easy money is hurting savers.  (Of course I’d say it’s excellent, he relies heavily on quotes from me.)  I’ve been a fan of Surowiecki’s since I first read “The Wisdom of Crowds.”

I’d like to also praise the fact checker at The New Yorker, who does an outstanding job.  She went over every single point in James’s interview, to make sure I was quoted accurately and also that all the facts were correct.  Because there are lots of subtle nuances in monetary economics, and because I often speak rather loosely, it’s easy for reporters to get the wrong idea.  In any case, James got it right the first time, but it was nice to be asked.

PS.  I still think The Economist is the best magazine that ever was.  But then I’m an economist, not a New Yorker.


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87 Responses to “In praise of The New Yorker”

  1. Gravatar of Geoff Geoff
    2. April 2013 at 14:45

    The author didn’t actually refute the argument that monetary policy is hurting savers.

    He essentially just claimed that wage earners who go into debt and consume, are more important, and so their interests must be primary.

    Then he claimed that easy money could “possibly” make us all wealthier, which of course isn’t saying anything about whether or not it actually is, nor how.

    Then he claimed that because he doesn’t see any “signs” that monetary policy is loose, the concern over inflation is unjustified. He offers that “the money supply is not growing rapidly, and inflation is trivially low”, both of which are, interestingly enough, rejected by MMs as the proper guages of monetary policy, and, even more interestingly, many of those concerned about inflation.

    Then there is the common “heads I win, tails you lose” stance: “Bernanke’s critics like to point to the still weak job market as evidence that the Fed’s policy hasn’t worked. It’s far more likely evidence that the Fed hasn’t gone far enough.” Well golly! You can never be wrong when you reason from the weak job market that monetary policy isn’t loose enough!

    Then he ends with clamouring for more inflation.

    Do any of these “excellent” writers ever mention economic calculation or the capital structure of the economy?

    Crickets…

  2. Gravatar of Daniel Daniel
    2. April 2013 at 15:09

    Geoff

    You were more entertaining when you were accusing market monetarists (don’t ya just love labels?) of being militarists.

    Now you’re just an annoying troll.

  3. Gravatar of CA CA
    2. April 2013 at 15:10

    I think Geoff actually is Major Freedom.

  4. Gravatar of CA CA
    2. April 2013 at 15:16

    Two tweets from Miles Kimball:

    @mileskimball: .@cthorm @NeilBerrecloth There are two issues with NGDP targeting. (1) The ZLB can still get in the way of keeping on the target.

    @mileskimball: .@cthorm @NeilBerrecloth Issues with NGDP targeting: (2) The NGDP target needs to be adjusted whenever there is a technology shock.

  5. Gravatar of Geoff Geoff
    2. April 2013 at 15:31

    Daniel:

    “You were more entertaining when you were accusing market monetarists (don’t ya just love labels?) of being militarists.”

    When did I say that? Oh that’s right, never. What I did say, which is apparently going over your head so high that it is landing on Mt. Everest, was the NGDPLT does not preclude militarism. It accepts as equally “stimulative” as spending on any other thing. NGDPLT is the sum total of all spending on final products. This includes hamburgers, t-shirts, and yes, missiles, drones, tanks, and aircraft carriers.

    MM theory does not distinguish among various forms and iterations of NGDPLT. The final 4.5% is what matters. That of course implies that MM theory welcomes inflation and spending in the form of militarism.

    “Now you’re just an annoying troll.”

    That’s right, better to call people names than engage their arguments.

    CA:

    “I think Geoff actually is Major Freedom.”

    This makes probably around 5 or 6 people who have said that to me. It’s the weirdest thing happening to me on the blogosphere. Where does he post?

  6. Gravatar of Becky Hargrove Becky Hargrove
    2. April 2013 at 16:01

    Geoff,
    NGDPLT is a lot more free than constantly pulling out the rug from your neighbor’s business or job, all for the sake of unnecessarily tight money. And yes over time you seem to be slipping into Major Freedom’s habits, more and more.

  7. Gravatar of W. Peden W. Peden
    2. April 2013 at 16:03

    Wait- are you guys telling me that you’ve only just worked out that Geoff and Major Freedom are the same person?

  8. Gravatar of Geoff Geoff
    2. April 2013 at 16:21

    W. Peden:

    Guess that makes 7 people.

    For the millionth time, for the record, I am not Major Freedom. Not that I can even prove it, but I have to protect my integrity, such as it is.

  9. Gravatar of Geoff Geoff
    2. April 2013 at 16:22

    Becky:

    “NGDPLT is a lot more free than constantly pulling out the rug from your neighbor’s business or job, all for the sake of unnecessarily tight money.”

    Slavery is a lot more free than torture to death.

    What’s your point? Since when was setting a low bar justification for the thing itself? Any policy can be defended by imagining a worse scenario, short of total annihilation of the human race of course.

    “And yes over time you seem to be slipping into Major Freedom’s habits, more and more.”

    Did anyone evade his points the way they evade mine?

  10. Gravatar of Seymour Seymour
    2. April 2013 at 16:35

    “NGDPLT is a lot more free than constantly pulling out the rug from your neighbor’s business or job, all for the sake of unnecessarily tight money. And yes over time you seem to be slipping into Major Freedom’s habits, more and more.”

    I think this Major_Freedom fellow said he was going to start posting on this blog again this month! If “Geoff” is really Major_Freedom, then he already must have broken his promise a long time ago. How pathetic!

  11. Gravatar of ssumner ssumner
    2. April 2013 at 16:42

    CA, No, the zero bound is not a problem for NGDPLT. And no, it doesn’t have to be adjusted whenever there is a technology shock, which is indeed the whole point of NGDPLT.

  12. Gravatar of Geoff Geoff
    2. April 2013 at 16:44

    Seymour:

    “I think this Major_Freedom fellow said he was going to start posting on this blog again this month! If “Geoff” is really Major_Freedom, then he already must have broken his promise a long time ago. How pathetic!”

    For the millionth and FIRST time, I’m not Major Freedom.

  13. Gravatar of David Kagan David Kagan
    2. April 2013 at 17:03

    Scott, I’m not an economist. But what are people like Joe Stiglitz and Glenn Hubbard to do? Are they New Yorkers first, or Economists?

  14. Gravatar of Lucas Lucas
    2. April 2013 at 17:12

    “I’d like to also praise the fact checker at The New Yorker, who does an outstanding job. She went over every single point in James’s interview, to make sure I was quoted accurately and also that all the facts were correct.”
    I dream of the day that this will become the standard for serious journalism.

  15. Gravatar of Seymour Seymour
    2. April 2013 at 19:14

    Geoff, we’re just trying to make sure. There have been other accounts that have been suspected of being MF’s possible sock accounts. Various postings on Reddit and your posts have many similarities to his ramblings. Usernames like “David” and “Pete PetePete” have also been suspected of being MF’s socks. Is it a coincidence that you have had “5-6” people tell you that you’re a Major_Freedom sockpuppet or that you seem to be insistent on peddling your Austro-libertarian views on others that don’t agree with you.

    http://www.reddit.com/r/TrollAlert/comments/cexi6/captain_freedom_aka_sage_advice_private_freedom/

    Are you a Rothbardian anarcho-capitalist? Answer the question.

  16. Gravatar of CA CA
    2. April 2013 at 20:20

    Yikes! That Reddit post is very illuminating.

  17. Gravatar of John Thacker John Thacker
    2. April 2013 at 20:30

    Doesn’t the Economist refer to itself as a newspaper, not a magazine, speaking of labels? (Though it walks like a duck, and quacks like a duck.)

  18. Gravatar of Tyler Joyner Tyler Joyner
    2. April 2013 at 20:54

    Greg Ransom is a troll. Geoff is not, nor do I think MF was. Scott is much more rude than Geoff, by anyone’s measure.

    I don’t really have a dog in this fight, as economics is not my profession but rather my interest, but frankly the pattern seems to be that Geoff politely and persuasively argues his point, and when Scott or the commenters can’t actually refute his logic, they switch to ad hominem attacks. It’s absurd to call Geoff a troll when Scott is unfailingly the first one to throw insults.

    Geoff, you can Google “scott sumner major freedom” or “money illusion major freedom” to peruse some of MF’s old posts. I for one found him quite interesting to read, particularly because many commenters share Scott’s assumptions and carry on conversations based on them, whereas you and MF do not. I like to read both, for obvious reasons.

  19. Gravatar of dirk dirk
    2. April 2013 at 22:25

    I couldn’t make any sense of the relevance of that bear cartoon.

  20. Gravatar of John S John S
    2. April 2013 at 23:14

    If the “Wisdom of Crowds” is right, we’re in trouble in the next few years:

    “According to a recent YouGov/Huffington Post survey:

    75 percent of respondents said that it’s either very or somewhat likely that the country could have another financial crisis in the near future. Only 12 percent said it was not very likely, and only 2 percent said it was not at all likely.”

    HT: http://azizonomics.com/2013/04/02/ben-bernanke-must-be-hoping-rational-expectations-doesnt-hold/

  21. Gravatar of Ben J Ben J
    2. April 2013 at 23:34

    Tyler;

    “Greg Ransom is a troll.”

    I get the thrust of what you’re saying, but to me, a troll is insincere. Greg is not, he is sincere. I got that impression when in October last year he was calling everyone who thought Obama would win the election a fool, and was arguing that a massive swing in the polls was clearly moving in Romney’s favour.

    Geoff is intelligent and engaged, which is great, but when he said what he did in the last post, which was that from his own epistemological viewpoint he has evaluated his own views as a priori correct, I realised he was just the same as Major Freedom. Maybe not the same person, but the same for all intents and purposes.

    His posts will have the same effect on the debate as Major Freedom, which is to say no effect. He will view this as a result of the close minded nature of the rest of us, I will view it as a demonstration that his arguments are unconvincing.

  22. Gravatar of Daniel Daniel
    3. April 2013 at 02:40

    Tyler & Geoff

    No one is engaging those “arguments” since they are not arguments. They are unfalsifiable statements that rely mainly on circular logic.

    To give an example.

    “You can never be wrong when you reason from the weak job market that monetary policy isn’t loose enough!”

    Of course, it would be all too easy to point out that the very low inflation and weak labor market are in fact a sign of insufficient aggregate demand (that is, tight money).

    And then he would probably say something along the lines of – “since we don’t have free banking, all definitions of easy money are statist and arbitrary, and therefore irrelevant” (yes, he has made that argument before).

    One would have to be an idiot to engage such “arguments”.

    And since he is not contributing to the discussion and only serves to derail it – he does fit the definition of a “troll”.

  23. Gravatar of In praise of The New Yorker | Fifth Estate In praise of The New Yorker | Fifth Estate
    3. April 2013 at 03:45

    […] See full story on themoneyillusion.com […]

  24. Gravatar of marcus nunes marcus nunes
    3. April 2013 at 04:03

    JS is late to the argument:
    https://www.themoneyillusion.com/?p=7398

  25. Gravatar of Geoff Geoff
    3. April 2013 at 04:05

    Daniel:

    “No one is engaging those “arguments” since they are not arguments. They are unfalsifiable statements that rely mainly on circular logic.”

    The argument that true knowledge can only come from falsifiable propositioning, is itself an unfalsifiable proposition. The argument that my arguments are unfalsifiable and hence cannot be true, is itself an unfalsifiable proposition.

    Nobody can escape this logic that I submit is fundamental to economic knowledge.

    “To give an example.”

    “You can never be wrong when you reason from the weak job market that monetary policy isn’t loose enough!”

    “Of course, it would be all too easy to point out that the very low inflation and weak labor market are in fact a sign of insufficient aggregate demand (that is, tight money).”

    This is the same form of argument that can never be proven wrong. If price inflation is low and if employment is low, inflation is therefore insufficient. There can never be the possibility that inflation is too much and is a reason for the low employment, low output, and hence high cash preference and hence low price inflation, at least in the short run.

    “And then he would probably say something along the lines of – “since we don’t have free banking, all definitions of easy money are statist and arbitrary, and therefore irrelevant” (yes, he has made that argument before).”

    Neat.

    “One would have to be an idiot to engage such “arguments”.”

    Sounds like you’re just unwilling due to a mental block.

    “And since he is not contributing to the discussion and only serves to derail it – he does fit the definition of a “troll”.”

    Derailing presupposes that your intended discussion is the only discussion allowed. I see you don’t know what a troll is either.

    Seymour:

    “Is it a coincidence that you have had “5-6″³ people tell you that you’re a Major_Freedom sockpuppet or that you seem to be insistent on peddling your Austro-libertarian views on others that don’t agree with you.”

    Peddling? What, am I selling cheap goods on the street corner whereas you are in the Jedi temple?

    Why do 5-6 people say the same thing? That’s what I am interested in knowing.

  26. Gravatar of W. Peden W. Peden
    3. April 2013 at 04:21

    Geoff,

    “The argument that true knowledge can only come from falsifiable propositioning, is itself an unfalsifiable proposition.”

    A proposition is not an argument, in the normal sense of “argument”. Nor is it unfalsifiable: it would be falsified by an unfalsifiable piece of knowledge.

    If it were part of a definition i.e. that part of the meaning of ‘knowledge’ as a word is that it is falsifiable, then it would be true that it was falsifiable. That’s not, I think, what is going on here though.

    Also, knowledge implies truth, so you don’t have to add “true” to “knowledge”.

    “The argument that my arguments are unfalsifiable and hence cannot be true, is itself an unfalsifiable proposition.”

    (1) That is a proposition, not an argument.

    (2) Is anyone claiming that what is unfalsifiable is false?

    (3) It is not an unfalsifiable proposition, since 2+2=4 is (i) unfalsifiable and (ii) true.

    Anyway, as regards your identity, I wasn’t asking you. Given that you share a writing style with Major Freedom, share views on every subject from philosophy to economics, posted substantively the exact same argument as him at the same time (as ‘Major Freedom’ on WCI and as ‘Geoff’ here), appeared roughly immediately after Major Freedom disappeared, and given Major Freedom explicitly said he likes to reinvent himself under different handles and planned to do so in the near future, I’m afraid it’s past the point where denying it is relevant.

    It doesn’t bother me: shared pretense, as opposed to dishonesty, amuses me e.g. it was hilarious to recommend Human Action to you. If you’d made a real effort to hide your identity, that WOULD be contemptible, but to your credit you didn’t really try.

    More importantly, it’s fun to have some variety around: I disagree with Scott’s neo-pragmatist foundations just as much as I disagree with your Rothbardian foundations. Echo-chambers are such dreary places…

  27. Gravatar of Geoff Geoff
    3. April 2013 at 04:57

    Daniel:

    “A proposition is not an argument, in the normal sense of “argument”.”

    No, a proposition is the content of a meaningful declarative sentence. Meaningful, declarative sentences are arguments.

    If you don’t like the word “proposition”, then the same response to your argument applies:

    The argument that true knowledge can only come from falsifiable argumentation, is itself an unfalsifiable argument.

    You’ve been caught in a contradiction, and you are attempting to get out of it through semantic quibbling.

    “Nor is it unfalsifiable: it would be falsified by an unfalsifiable piece of knowledge.”

    No, the argument that true knowledge comes only from falsifiable arguments is unfalsifiable because it admits no unfalsifiable arguments into consideration as potentially true knowledge. It a priori rejects and excludes all unfalsifiable arguments. That is why you said it. You thought that because I was offering unfalsifiable arguments, that there is no reason to even consider them, because it isn’t a valid means to acquiring true knowledge anyway.

    Now you seem to realize you’re offering the same type of arguments to me, only you’re doing it implicitly. So if you believe that your argument can in principle be potentially falsified by a true unfalsifiable argument, then we don’t even have to “test” your argument at all, we can conclusively regard it as false. You cannot hold both arguments at the same time. The argument that ONLY unfalsifiable arguments can be true knowledge, and the argument that it is POSSIBLE for there to be unfalsifiable true knowledge, contradict each other. If you hold the latter, which you seem to have done in your latest post, then you have abandoned the former as false.

    “If it were part of a definition i.e. that part of the meaning of ‘knowledge’ as a word is that it is falsifiable, then it would be true that it was falsifiable.”

    How would you go about establishing true unfalsifiable knowledge?

    “That’s not, I think, what is going on here though.”

    What do you think is going on here?

    “(1) That is a proposition, not an argument.”

    Arguments are propositions.

    “(2) Is anyone claiming that what is unfalsifiable is false?”

    Good.

    “(3) It is not an unfalsifiable proposition, since 2+2=4 is (i) unfalsifiable and (ii) true.”

    Is what not an unfalsifiable proposition?

    “Anyway, as regards your identity, I wasn’t asking you. Given that you share a writing style with Major Freedom, share views on every subject from philosophy to economics, posted substantively the exact same argument as him at the same time (as ‘Major Freedom’ on WCI and as ‘Geoff’ here), appeared roughly immediately after Major Freedom disappeared, and given Major Freedom explicitly said he likes to reinvent himself under different handles and planned to do so in the near future, I’m afraid it’s past the point where denying it is relevant.”

    You sound like a private investigator.

    “It doesn’t bother me: shared pretense, as opposed to dishonesty, amuses me e.g. it was hilarious to recommend Human Action to you. If you’d made a real effort to hide your identity, that WOULD be contemptible, but to your credit you didn’t really try.”

    I am not Major Freedom. Is that a contemptible enough already? This is incredible.

    “I disagree with Scott’s neo-pragmatist foundations just as much as I disagree with your Rothbardian foundations. Echo-chambers are such dreary places…”

    Well my foundations are not “Rothbardian”, whatever that means, so I guess there’s that.

  28. Gravatar of Geoff Geoff
    3. April 2013 at 04:58

    Sorry, that was addressed to W. Peden.

  29. Gravatar of Daniel Daniel
    3. April 2013 at 05:02

    A model’s strength consists not in what it allows, but in what it forbids.

    If both X and non-X can fit the model – then the model is worthless.

    In the light of this, it fair to say that Geoff/Major_Freedom is not interested in advancing knowledge.

  30. Gravatar of Major Freedom Major Freedom
    3. April 2013 at 05:19

    It is I, Major Freedom. This “Geoff” is clearly not me as, here we are, in the same forum at once! I challenge any of you to debate me on the reality of this incontrovertible evidence.

    Sincerely, Major Freedom.

  31. Gravatar of W. Peden W. Peden
    3. April 2013 at 05:28

    Geoff,

    “The argument that true knowledge can only come from falsifiable argumentation, is itself an unfalsifiable argument.”

    Yet it’s propositions that are falsifiable or unfalsifiable. Arguments are composed of propositions: an argument, in the logical sense, is a series of propositions aimed to establish a conclusion.

    Anyway, you haven’t proven this assertion, no matter how you phrase it.

    “No, the argument that true knowledge comes only from falsifiable arguments is unfalsifiable because it admits no unfalsifiable arguments into consideration as potentially true knowledge. It a priori rejects and excludes all unfalsifiable arguments. That is why you said it. You thought that because I was offering unfalsifiable arguments, that there is no reason to even consider them, because it isn’t a valid means to acquiring true knowledge anyway.”

    (Naturally, most of what you’ve written is misdirected.)

    If there was a falsifiable argument that there are unfalsifiable argument, then that argument would falsify the argument that all good arguments are falsifiable. Consequentally, the argument that all good arguments are falsifiable would itself be falsifiable.

    One can compare this with fallibilism (the position that all beliefs are fallible) which is itself a fallible principle.

    Personally, I’m not a fan of falsificationism or Karl Popper generally. However, the problem with falsificationism is not that it’s unfalsifiable; there isn’t a parallel here with (naive) verificationism. I’m just enjoying getting some practice at a philosophy tutor’s interventions into these kinds of discussions.

    “So if you believe that your argument can in principle be potentially falsified by a true unfalsifiable argument, then we don’t even have to “test” your argument at all, we can conclusively regard it as false.”

    Wouldn’t looking for true unfalsifiable arguments be just the kind of testing that a falsificationist would think would be appropriate in this case?

    “How would you go about establishing true unfalsifiable knowledge?”

    Much depends on how one cashes out ‘falsifiable’, which sadly has been neglected thus far in the discussion.

    “What do you think is going on here?”

    Mistaken identity, for one thing.

    “Is what not an unfalsifiable proposition?”

    “The argument that my arguments are unfalsifiable and hence cannot be true”

    “Arguments are propositions.”

    Yes, in the same way that societies are persons. So, just as Robinson Crusoe is not a society, a single proposition is not an argument. If I say, “Philosophers have only interpreted the world; the point is to change it!” I have not given you an argument.

    “You sound like a private investigator.”

    That’s kind, but it overstates how much attention I’ve put to this.

    “Well my foundations are not “Rothbardian”, whatever that means, so I guess there’s that.”

    If you don’t know what ‘Rothbardian’ means, how do you know that your foundations are not Rothbardian?

  32. Gravatar of W. Peden W. Peden
    3. April 2013 at 05:40

    * consequently.

  33. Gravatar of John John
    3. April 2013 at 05:45

    Rothbard’s foundations are the same as Mises’ which are the deductive logic of the Austrian School in general. It’s basically the idea that real world happenings are the result of extremely complex chains of events and therefore observation cannot refute economic theory. Scott goes off of Milton Friedman and Irving Fisher’s ideas which are based on induction and observation instead. It’s difficult to find any type of epistemology in Keynes.

  34. Gravatar of W. Peden W. Peden
    3. April 2013 at 06:03

    John,

    There are quite a few important differences between Mises and Rothbard. In both cases, they faced the issue of how to get normative knowledge out of economics if one (rightly) rejects cardinalist utilitarianism. For Mises, the foundation was something like modern preference utilitarianism. For Rothbard, it was natural law.

    With Keynes, it’s important to distinguish his methodology from his epistemology: “A Treatise on Probability” locates him firmly within the inductivist empiricist tradition, along with Friedman and Fisher, but his method emphasised deductions from “psychological laws” and rigorously defined theoretical principles, rather than statistical tests. In that respect, he’s more like John Stuart Mill im methodology. (Confusingly, Mill was a deductivist empiricist in epistemology: see his “System of Logic” for the beginnings of systematic philosophy of economics.)

  35. Gravatar of W. Peden W. Peden
    3. April 2013 at 06:07

    * he’s more like John Stuart Mill in methodology. This may have been a direct influence, though a full study of this connection would probably also involve looking at Marshall and his influence on Keynes and indeed all British economics since the late 19th century.

  36. Gravatar of Geoff Geoff
    3. April 2013 at 06:56

    W. Peden:

    Sets of propositions, are propositions. Arguments that are sets of propositions, are propositions.

    “Arguments are composed of propositions: an argument, in the logical sense, is a series of propositions aimed to establish a conclusion. Anyway, you haven’t proven this assertion, no matter how you phrase it.”

    It was not my intention to prove that particular assertion. My only intention was to show that Daniel’s rejection of unfalsifiable statements depended on them, and that true statements (knowledge) aren’t all falsifiable.

    “If there was a falsifiable argument that there are unfalsifiable argument, then that argument would falsify the argument that all good arguments are falsifiable.”

    “Consequentally, the argument that all good arguments are falsifiable would itself be falsifiable.”

    Not if the premise of the falsifiable argument following the “If there was a…”, is itself unfalsifiable, and as a corrolary, not if the initial if statement is itself not possible. You basically just added another layer of falsifiability and created a compound argument, and made it appear as though you are presenting some sort of challenge to the argument I am making that relates to the implicit argument in falsifiable propositioning itself. Your initial “If” statement is the only one that is relevant to what I am arguing.

    I assume that by “falsifiable argument” above, you intended to mean it is an argument with fidelity to reality, i.e. “true.” Given that we assume the initial falsifiable argument is true, my argument comes into play here such that I will ask how do you know that the initial falsifiable argument is itself true?

    “Personally, I’m not a fan of falsificationism or Karl Popper generally. However, the problem with falsificationism is not that it’s unfalsifiable; there isn’t a parallel here with (naive) verificationism.”

    Well, not having a parellel with verificationism was the entire point of falsificiationism. If it were a parallel, it would sort of defeat the purpose.

    The problem of falsificationism is that it is self-refuting. So I guess I will disagree with you about the signficance of falsificationism not being itself falsifiable.

    “I’m just enjoying getting some practice at a philosophy tutor’s interventions into these kinds of discussions.”

    It’s philosophically interesting to consider how people who want to engage in philosophy, to imagine themselves in a strictly defined role, superior or inferior, rather than a plurality of roles.

    “Wouldn’t looking for true unfalsifiable arguments be just the kind of testing that a falsificationist would think would be appropriate in this case?”

    I don’t see how that’s possible without that person abandoning falsificiationism. In my view, a true falsificationist would only admit falsifiable arguments into consideration as potential candidates of true arguments. That’s the whole point of falsificationism. It’s a filter. “That argument is not falsifiable, hence it cannot be regarded as valid knowledge even in principle.”

    “Much depends on how one cashes out ‘falsifiable'”

    Much? Not all? If not all, what is the other part?

    “which sadly has been neglected thus far in the discussion.”

    Well, speak for yourself.

    “What do you think is going on here?”

    “Mistaken identity, for one thing.”

    Well, I did immediately post “Sorry, that was addressed for W. Peden” right after. Did you miss it?

    What ELSE do you think is going on here, content-wise?

    “Is what not an unfalsifiable proposition?”

    “The argument that my arguments are unfalsifiable and hence cannot be true”

    Ah, well, that argument is unfalsifiable.

    Your response was that it is not unfalsifiable, and you provided 3, I guess reasons. The third one is the pertinent one. You said

    “It is not an unfalsifiable proposition, since 2+2=4 is (i) unfalsifiable and (ii) true.”

    Whether or not 2+2=4 is unfalsifiable and true on the one hand, has no bearing on whether or not “The argument that my arguments are unfalsifiable and hence cannot be true” is unfalsifiable and true on the other.

    The latter argument admits no possibility of true unfalsifiable arguments. It argues that the arguments CANNOT be true. That makes it unfalsifiable, not not unfalsifiable as you suggested.

    “Arguments are propositions.”

    “Yes, in the same way that societies are persons.”

    “So, just as Robinson Crusoe is not a society, a single proposition is not an argument.”

    But an argument is still a proposition.

    “If I say, “Philosophers have only interpreted the world; the point is to change it!” I have not given you an argument.”

    If you said that, it can rightly be regarded as an argument, since it is an attempt by you to persuade others that the world ought to be changed, not merely interpreted.

    Meaningful attempts to persuade, are most certainly arguments.

    “You sound like a private investigator.”

    “That’s kind, but it overstates how much attention I’ve put to this.”

    OK, private investigator trainee.

    “Well my foundations are not “Rothbardian”, whatever that means, so I guess there’s that.”

    “If you don’t know what ‘Rothbardian’ means, how do you know that your foundations are not Rothbardian?”

    I guess I should have said “whatever you mean”.

    At any rate, my foundations date to work done prior to Rothbard’s life, so that alone is sufficient for me to know that my foundations are not Rothbardian, even if I don’t know what Rothbardian means.

  37. Gravatar of J J
    3. April 2013 at 07:14

    Geoff:

    I am not sure that your confidence is appropriate. Scott is the blogger, so we come here, as readers, to ask him questions and hear what he has to say. You, on the other hand, are just another reader. If you want to simply claim that your statements are a priori correct and are not subject to being falsified by evidence, then you should start your own blog. It doesn’t seem that you are interested in furthering your own knowledge or in engaging in a meaningful discussion. You just want to write longer and longer blog posts until other people agree with exactly what you say.

  38. Gravatar of Ben J Ben J
    3. April 2013 at 07:16

    “But an argument is still a proposition.”

    And in Rand McNally, Hamburgers eat people.

  39. Gravatar of Geoff Geoff
    3. April 2013 at 07:24

    J:

    I should not be confident about a relatively small number of arguments that I cannot consciously regard as anything other than irrefutable?

    I am not just another reader. I am a reader AND other things.

    I don’t think it follows from readers knowing things that they must start their own blog.

    Just consider what you are doing, or what you think you’re doing. You say you are coming hear to ask questions…to achieve what? Merely answers? Or answers that you regard as true? If you regard the answers you get as true, then that means you believe you have knowledge. Well, wouldn’t that behoove you to start your own blog as well? You’re no longer just a reader. You are also someone who integrated what he has read into his own set of knowledge.

    Or are you saying Dr. Sumner is just blowing smoke? If that’s the case, why are you here?

    You say I just want people to agree with me. That’s only partially correct.

    You seem to want everyone to agree with Dr. Sumner. You seem to want everyone here to sit at his feet, never seriously question, never think independently, and to just…sheesh I can’t even get through finishing that sentence it’s making me ill.

    Ben J:

    “But an argument is still a proposition.”

    “And in Rand McNally, Hamburgers eat people.”

    And in philosophy, statements that affirm or deny something, are propositions as well as arguments.

  40. Gravatar of J J
    3. April 2013 at 07:38

    Geoff:

    I think that discussions are important. People should not just believe everything Scott says, but they shouldn’t read his blog unless they think he says something worth listening to. It seems that you come to this blog just to state your own views on the topics chosen by Scott, and not to hear what Scott or anyone else has to say. When you know, a priori, that other people’s opinions are wrong, then your only purpose can be to convince others of your ideas and to see how the other side argues. You can’t, by definition, be genuinely interested in other people’s arguments or points.

  41. Gravatar of Ben J Ben J
    3. April 2013 at 07:44

    Geoff,

    I congratulate you on your ability to define words to mean anything you like, and look forward to argument proposition shoe blue bicycle recondite booth.

  42. Gravatar of Geoff Geoff
    3. April 2013 at 07:57

    J:

    Would you agree that the activity of reading someone’s blog, presupposes, or implies, the blog to be worth reading in that reader’s judgment?

    Would you agree that on any blog, if a reader knows they’re right about something, that it is not a problem for that reader if they said what they think is right?

    Ben J:

    Actually I am just using the commonly accepted definitions of argument and proposition. They’re not all that controversial.

    Ulaimtely though, even if you’re using unconventional definitions, I won’t fault you for that because definitions are subjective rules that can be anything anyone wants them to be, not arguments that are (or at least ought to be) grounded in objectivity.

  43. Gravatar of J J
    3. April 2013 at 08:43

    Geoff:

    The people suggesting you are Major Freedom are suggesting that you have other reasons for reading this blog and writing comments: to annoy everyone. You just seem to know that you are right an incredibly large percentage of the time. I don’t think that is conducive to furthering knowledge. Obviously, you do. You think that arguing about questions — to which you know the answers — is a waste of time. I wonder what you think are the questions that we should move on to. Or do you understand all of economics?

  44. Gravatar of W. Peden W. Peden
    3. April 2013 at 09:04

    Geoff,

    “I assume that by “falsifiable argument” above, you intended to mean it is an argument with fidelity to reality, i.e. “true.” Given that we assume the initial falsifiable argument is true, my argument comes into play here such that I will ask how do you know that the initial falsifiable argument is itself true?”

    (1) Not all falsifiable arguments are true.

    (2) By “initial falsifiable argument”, do you mean falsificationism?

    “It’s philosophically interesting to consider how people who want to engage in philosophy, to imagine themselves in a strictly defined role, superior or inferior, rather than a plurality of roles.”

    Who brought superiority or inferiority into it?

    “Whether or not 2+2=4 is unfalsifiable and true on the one hand, has no bearing on whether or not “The argument that my arguments are unfalsifiable and hence cannot be true” is unfalsifiable and true on the other.”

    It has all the bearing in the world: the statement “Any argument that is unfalsifiable is false” is contradicted by an argument that is unfalsifiable and true. Therefore, if there was an argument that is unfalsifiable and true, then the statement “Any argument that is unfalsifiable is false” must be false.

    Anyway, this is all the dreary matter of examining the innards of a strawman, since Daniel’s original charge concerned (a) the claim to basing one’s position on unfalsifiable statements and (b) whether or not it was sensible to ignore people who make such a claim and regard them as trolls.

    “The latter argument admits no possibility of true unfalsifiable arguments. It argues that the arguments CANNOT be true. That makes it unfalsifiable, not not unfalsifiable as you suggested.”

    Hmm, I’ve never known anyone to take the position that all unfalsifiable arguments are false.

    “If you said that, it can rightly be regarded as an argument, since it is an attempt by you to persuade others that the world ought to be changed, not merely interpreted.”

    I don’t think that all attempts at persuasion qualify as arguments.

    “I guess I should have said “whatever you mean”.”

    Out of the frying pan, into the fire: if you don’t know what I mean, then you can hardly know whether or not I am wrong.

    “At any rate, my foundations date to work done prior to Rothbard’s life, so that alone is sufficient for me to know that my foundations are not Rothbardian, even if I don’t know what Rothbardian means.”

    Rothbard’s foundations date to work done prior to Rothbard’s life, yet he was presumably a Rothbardian.

  45. Gravatar of Geoff Geoff
    3. April 2013 at 10:05

    J:

    Well, if that’s the reason people are thinking I’m Major Freedom, then welcome to the internet.

    To answer your concerns, I don’t think I’m the only one here who thinks they’re right the majority of the time, I don’t think that arguing questions of which I know the answer is a waste of time, and I certainly don’t understand all of economics.

    Sounds like you are projecting your own feelings of inadequacy and inferiority onto me and trying to make me feel guilty or something. The only change I can see that is possible for me, considering what you are saying, is for me to become unsure of my own convictions, so that your convictions stand in a more strong light. You want to reverse places with me it seems.

    W. Peden:

    “I assume that by “falsifiable argument” above, you intended to mean it is an argument with fidelity to reality, i.e. “true.” Given that we assume the initial falsifiable argument is true, my argument comes into play here such that I will ask how do you know that the initial falsifiable argument is itself true?”

    “(1) Not all falsifiable arguments are true.”

    “(2) By “initial falsifiable argument”, do you mean falsificationism?”

    I don’t see these as reasonable responses. I will address them, but then hopefully you will respond to my question of how do you know that the initial falsifiable argument you were referring to, is right.

    (1) Agreed.

    (2) I mean the falsifiable argument following the “If there is a…”.

    “It’s philosophically interesting to consider how people who want to engage in philosophy, to imagine themselves in a strictly defined role, superior or inferior, rather than a plurality of roles.”

    “Who brought superiority or inferiority into it?”

    The tutor did.

    “Whether or not 2+2=4 is unfalsifiable and true on the one hand, has no bearing on whether or not “The argument that my arguments are unfalsifiable and hence cannot be true” is unfalsifiable and true on the other.”

    “It has all the bearing in the world: the statement “Any argument that is unfalsifiable is false” is contradicted by an argument that is unfalsifiable and true. Therefore, if there was an argument that is unfalsifiable and true, then the statement “Any argument that is unfalsifiable is false” must be false.”

    You’re conflating statements that contradict each other in the logical sense, with statements that falsify each other in the methodological sense. They’re not the same thing. When you contradict an argument with another argument, and your contradicting argument is true, it doesn’t mean you are “falsifying” a “falsifiable” argument. Falsificationism isn’t the art or intellectual method of forming “false” statements versus “true” statements.

    Falsificationism is a method of separating arguments (mostly theories) that cannot be regarded as true or false even in principle, from arguments (and theories) that can potentially be regarded as true or false in principle.

    When I said that the statement “The argument that my arguments are unfalsifiable and hence cannot be true”, I am saying that this is an unfalsifiable argument not because I think it is true, or even false, but rather because it admits no possibility of being regarded as true or false in principle. It contains the implicit argument concerning the truth status of ALL unfalsifiable statements, namely, that any and all unfalsifiable statements cannot even in principle be true.

    Now yes, I agree that 2+2=4 is unfalsifiable and yet true, but isn’t an argument that “falsifies” what you believe is an “unfalsifiable” argumement. It contradicts it. And, because you attach the label true to it, it follows that the argument above is false. But then you infer from that truth, that the argument above is falsifiable. That doesn’t follow.

    Consider these statements:

    1. God exists (one of the most obvious, if not the most obvious unfalsifiable statement there is).

    2. God does not exist (assume for the sake of argument that this second unfalsifiable statement is true, the same way you regard 2+2=4 as true).

    Now, does the fact that the second statement contradict the first statement, and does the fact that regarding the second statement as true imply the first statement is false, does any of this imply that the first statement is a falsifiable argument? No, it doesn’t.

    It’s the same thing with the argument I say is unfalsifiable. While it can be contradicted, while proposing a true statement may imply the argument is wrong, these are not sufficient to concluding the argument is falsifiable.

    “Anyway, this is all the dreary matter of examining the innards of a strawman, since Daniel’s original charge concerned (a) the claim to basing one’s position on unfalsifiable statements and (b) whether or not it was sensible to ignore people who make such a claim and regard them as trolls.”

    Right, the first charge concern you are referring to is what I was addressing. Basing one’s “opinion”, or judgment, on unfalsifiable statements is not a flaw as Daniel made it out to be. That’s all I wanted to really show. I did it somewhat differently than you did, but I think we both get the rather obvious fact that not all knowledge is derived from falsificationism.

    “The latter argument admits no possibility of true unfalsifiable arguments. It argues that the arguments CANNOT be true. That makes it unfalsifiable, not not unfalsifiable as you suggested.”

    “Hmm, I’ve never known anyone to take the position that all unfalsifiable arguments are false.”

    That isn’t what is implied, so no worry! To say that unfalsifiable arguments CANNOT be true, is not the same thing as saying they’re all false. The lack of truth does not imply presence of falsity. What is intended is that unfalsifiable arguments that cannot be true are to be regarded as incoherent, meaningless, psychological babble, dillitantism, and so on. They don’t even get through the front door of the true and false employment office.

    “If you said that, it can rightly be regarded as an argument, since it is an attempt by you to persuade others that the world ought to be changed, not merely interpreted.”

    “I don’t think that all attempts at persuasion qualify as arguments.”

    That’s why I made sure to include *meaningful*. Try to make an attempt at a meaningful persuasion, any topic will do, without it being an argument.

    “I guess I should have said “whatever you mean”.”

    “Out of the frying pan, into the fire: if you don’t know what I mean, then you can hardly know whether or not I am wrong.”

    I didn’t say you were right or wrong about what Rothbardianism is, which I don’t know, and which you could very well know. I said you were wrong about me, because I know I’m not Rothbardian.

    “At any rate, my foundations date to work done prior to Rothbard’s life, so that alone is sufficient for me to know that my foundations are not Rothbardian, even if I don’t know what Rothbardian means.”

    “Rothbard’s foundations date to work done prior to Rothbard’s life, yet he was presumably a Rothbardian.”

    So we’re all Rothbardians because we all have Platonic/Aristotelean foundations as did Rothbard?

    Having the same root as someone else doesn’t mean you’re the same branch as that someone else.

  46. Gravatar of Daniel Daniel
    3. April 2013 at 10:50

    Geoff,

    I am very impressed by your ability to pat yourself on the back.

    Meanwhile, I’ll have to repeat what I already said above, since you were too busy redefining concepts.

    A model’s strength consists not in what it allows, but in what it forbids.

    If both X and non-X can fit the model – then the model is worthless.

    For example, let’s talk about “aggregate demand shortfall”.

    The theory of sticky wages makes the prediction that a fall in aggregate spending would cause unemployment and a drop in output. Prediction confirmed.

    Were someone to say “we are lacking in AD” in an environment of both inflation AND unemployment – it would be more than fair to say that his macro model is flat out wrong. This is called FALSIFICATION.

    You, on the other hand, either take a nihilist approach – “your talk of easy money reveals your statism” – or say self-contradictory stuff like “high inflation is the cause of low inflation”.

    In other words – “heads I’m right, tails you’re wrong”. Every possible fact is a confirmation of your theories.

    So you’re either a troll or an obscurantist. Either way, unworthy of further “engagement”.

  47. Gravatar of Brian Donohue Brian Donohue
    3. April 2013 at 10:51

    Scott,

    You’re right for the wrong reason. Current monetary policy is hurting savers- 2% inflation in an environment of 0% nominal rates is a 2% annual inflation tax on cash- which is basically what we’ve had for the past four years.

    It’s all good, though, since this is mostly hitting baby boomers who were counting on turning wealth into income at better terms right about now, since y’all haven’t paid enough in regular taxes over the past dozen years, as evidenced by the $17 trillion in debt.

  48. Gravatar of W. Peden W. Peden
    3. April 2013 at 10:55

    Geoff,

    “The tutor did.”

    I don’t recall that.

    ” When you contradict an argument with another argument, and your contradicting argument is true, it doesn’t mean you are “falsifying” a “falsifiable” argument.

    From dictionary.com:

    “verb (used with object)

    1. to make false or incorrect, especially so as to deceive: to falsify income-tax reports.

    2. to alter fraudulently.

    3. to represent falsely: He falsified the history of his family to conceal his humble origins.

    4. to show or prove to be false; disprove: to falsify a theory.

    verb (used without object)

    5. to make false statements.”

    The relevant sense for falsification is clearly 4. So if one presents a proposition P that we know to be true and which logically contradicts another proposition Q, then one has falsified P.

    “Falsificationism is a method of separating arguments (mostly theories) that cannot be regarded as true or false even in principle, from arguments (and theories) that can potentially be regarded as true or false in principle.”

    If an argument is falsified, then it follows that it is falsifiable.

    “When I said that the statement “The argument that my arguments are unfalsifiable and hence cannot be true”, I am saying that this is an unfalsifiable argument not because I think it is true, or even false, but rather because it admits no possibility of being regarded as true or false in principle. It contains the implicit argument concerning the truth status of ALL unfalsifiable statements, namely, that any and all unfalsifiable statements cannot even in principle be true.”

    None of that establishes that it is unfalsifiable.

    “1. God exists (one of the most obvious, if not the most obvious unfalsifiable statement there is).”

    Unfalsifiable in what sense?

    I suppose, in the interests of candour, I should explain what I consider problematic in falsificationism: (i) if it means “logically incompatible with some fact”, then just about every proposition is falsifiable, including “God exists”.

    (ii) If it means “logically incompatible with some observation-statement” (Karl Popper’s version) then it rules out almost every proposition in science, since my EXPERIENCING a white raven is logically compatible with the scientific proposition “All ravens are black”, even if it makes that proposition less likely.

    (iii) If it means “logically incompatible with some knowable fact”, then it relativises science intolerably: it would imply that know that Marxism is unscientific now, but in the future, who knows? Hardly attractive.

    “To say that unfalsifiable arguments CANNOT be true, is not the same thing as saying they’re all false.”

    A fair point, but I don’t think that Daniel was saying that all unfalsifiable propositions are meaningless i.e. neither true nor false. Perhaps he was.

    “That’s why I made sure to include *meaningful*. Try to make an attempt at a meaningful persuasion, any topic will do, without it being an argument.”

    I’m not sure what ‘meaningful’ means here.

    “I didn’t say you were right or wrong about what Rothbardianism is, which I don’t know, and which you could very well know. I said you were wrong about me, because I know I’m not Rothbardian.”

    “Right or wrong” meaning “right or wrong that you are a Rothbardian”.

    “So we’re all Rothbardians because we all have Platonic/Aristotelean foundations as did Rothbard?

    Having the same root as someone else doesn’t mean you’re the same branch as that someone else.”

    No, but agreeing them on just about every substantive principle across the range of subjects for which they are known suggests that you’re a leaf on their branch.

    If you have any disagreements with Rothbard, feel free to say so. As I noted, it is very possible to be part of the Austrian School without being a Rothbardian, since Mises was an Austrian if anyone is and he disagreed with Rothbard on some very fundamental issues; Hayek even moreso.

  49. Gravatar of marcus nunes marcus nunes
    3. April 2013 at 10:59

    Scott
    It certainly goes against your libertarian nature, but to everything there must be a limit. So some suggestions.
    Neither Scott nor anyone else answers/elaborates on Geoff´s comments (even if they run to 1200 words like the last one). Hopefully he ‘gives up’like M_F did (that´s if Geoff is not a reincarnation).
    If you want to be more drastic, put him down as ‘SPAM’. A 1200 word ‘comment’ certainly qualifies.

  50. Gravatar of Daniel Daniel
    3. April 2013 at 11:06

    What I am saying is that, in the search for answers, a theory that fits all sort of contradictory facts is useless.

    Think of Freud’s psychoanalysis – it predicted nothing and allowed for anything. Useless for practical purposes.

    Same with macro-economics. Either the model makes specific predictions – or it’s useless.

    If both X and non-X can fit your model – then it’s worthless.

  51. Gravatar of Geoff Geoff
    3. April 2013 at 11:40

    Hey where are the complaints of W. Peden’s long posts? (not that I am complaining!)

    “The tutor did.”

    “I don’t recall that.”

    Who said you were the tutor? Haha, See?

    “ When you contradict an argument with another argument, and your contradicting argument is true, it doesn’t mean you are “falsifying” a “falsifiable” argument.”

    “From dictionary.com:”

    D’oh, I cringed. Philosophical definitions != Dictionary definitions.

    “Falsificationism is a method of separating arguments (mostly theories) that cannot be regarded as true or false even in principle, from arguments (and theories) that can potentially be regarded as true or false in principle.”

    “If an argument is falsified, then it follows that it is falsifiable.”

    Contradicted contradictable arguments are not falsified falsifiable arguments.

    “When I said that the statement “The argument that my arguments are unfalsifiable and hence cannot be true”, I am saying that this is an unfalsifiable argument not because I think it is true, or even false, but rather because it admits no possibility of being regarded as true or false in principle. It contains the implicit argument concerning the truth status of ALL unfalsifiable statements, namely, that any and all unfalsifiable statements cannot even in principle be true.”

    “None of that establishes that it is unfalsifiable.”

    Agreed. It is an outcome of it.

    “1. God exists (one of the most obvious, if not the most obvious unfalsifiable statement there is).”

    “Unfalsifiable in what sense?”

    In the sense that it cannot be tested against observations.

    “(ii) If it means “logically incompatible with some observation-statement” (Karl Popper’s version) then it rules out almost every proposition in science, since my EXPERIENCING a white raven is logically compatible with the scientific proposition “All ravens are black”, even if it makes that proposition less likely.”

    Regarding (ii), how is your experiencing a white raven logically compatible with the proposition all ravens are black?

    “To say that unfalsifiable arguments CANNOT be true, is not the same thing as saying they’re all false.”

    “A fair point, but I don’t think that Daniel was saying that all unfalsifiable propositions are meaningless i.e. neither true nor false. Perhaps he was.”

    He was definitely attacking them. Why attack what could potentially be true?

    “That’s why I made sure to include *meaningful*. Try to make an attempt at a meaningful persuasion, any topic will do, without it being an argument.”

    “I’m not sure what ‘meaningful’ means here.”

    Try the semantic/linguistic definition for kicks.

    “No, but agreeing them on just about every substantive principle across the range of subjects for which they are known suggests that you’re a leaf on their branch.”

    Perhaps, but it could also suggest that you only notice the leaves during the night, while during the day, they are sufficiently different such that it is more accurate to regard them as not on the same branch, but you’re just not there to see it at that time.

    “If you have any disagreements with Rothbard, feel free to say so.”

    I guess I need to first learn the definition of Rothbardianism.

  52. Gravatar of Geoff Geoff
    3. April 2013 at 11:49

    Daniel:

    “I am very impressed by your ability to pat yourself on the back.”

    Likewise!

    “Meanwhile, I’ll have to repeat what I already said above, since you were too busy redefining concepts.”

    I already showed that I am just using the commonly used definitions and that you are seemingly using unorthodox definitions. Which is fine, but it’s weird to read you claiming the reverse.

    “A model’s strength consists not in what it allows, but in what it forbids.”

    “If both X and non-X can fit the model – then the model is worthless.”

    “For example, let’s talk about “aggregate demand shortfall”.”

    “The theory of sticky wages makes the prediction that a fall in aggregate spending would cause unemployment and a drop in output. Prediction confirmed.”

    The theory of “Blimey!” makes the prediction that an anticipated and/or actual rise in unemployment would cause a fall in aggregate spending and drop in output. Prediction confirmed.

    The theory of “Jinkies!” makes the prediction that reductions in AD is in part caused by reductions in savings and investment, which then causes unemployment. Prediction confirmed.

    The theory of “Arggghhhh!” makes the prediction that a rise in the number of pirates would cause a rise in global temperature. Prediction confirmed.

    Having a prediction confirmed by correlated historical evidence doesn’t necessarily imply you’re advancing a true argument about the world.

    “Were someone to say “we are lacking in AD” in an environment of both inflation AND unemployment – it would be more than fair to say that his macro model is flat out wrong. This is called FALSIFICATION.”

    You mean the 1970s? Oh that’s right, you’re just blowing smoke, because we can always explain away contrary evidence as the result of ommitted variable bias, etc, etc, etc. The theory shall not be infringed!

    “You, on the other hand, either take a nihilist approach – “your talk of easy money reveals your statism” – or say self-contradictory stuff like “high inflation is the cause of low inflation”.”

    How about neither.

    “In other words – “heads I’m right, tails you’re wrong”. Every possible fact is a confirmation of your theories.”

    Likewise!

    “So you’re either a troll or an obscurantist. Either way, unworthy of further “engagement”.”

    Neither again.

    You sound really mad.

  53. Gravatar of Daniel Daniel
    3. April 2013 at 12:01

    Yes, what about the 1970s ? Did I (or anyone else here) claim the 1970s were marked by an AD shortfall ?

    Sit down, troll-boy. Your shtick is growing old.

  54. Gravatar of Geoff Geoff
    3. April 2013 at 12:01

    Daniel:

    Also, you seem to have to learn the important lesson, that I learned, that everyone should learn, that historical data in the social sciences always always always have mutually contradictory theories that are consistent with the historical data.

    This is a well known problem in the philosophy of science, and it basically means that you can’t just sit back and believe that because one theory is consistent with the data, that you’ve discovered “the” explanation between the variables.

    The problem with the theory as you laid it out, concerning AD and sticky wages, is that spending on final goods is not spending on wages. They can and do move in different directions. Whether or not there is a correlation is irrelevant, as irrelevant as there being a correlation between pirates and global warming.

    True and false theories in economics aren’t established by historical experience. History is unique, never to be repeated. You’re fooling yourself if you believe that because there is a correlation between AD and wages, that increasing the former can increase the latter.

  55. Gravatar of Geoff Geoff
    3. April 2013 at 12:12

    Daniel:

    “Yes, what about the 1970s ? Did I (or anyone else here) claim the 1970s were marked by an AD shortfall?”

    It was a period of high inflation and high unemployment, which is a falsification of the theory you proposed (but didn’t realize it), which is that unemployment is reduced by increasing AD via inflation.

    Saying that given sticky wages, declining AD will increase unemployment, is the same thing as saying that increasing AD will decrease unemployment.

    The 1970s is a falsification of the theory IMPLIED by the theory you proposed, but you didn’t have the wits to see it.

    “Sit down, troll-boy. Your shtick is growing old.”

    Nice patronization and insults, uh, insecure-boy.

  56. Gravatar of Geoff Geoff
    3. April 2013 at 12:15

    marcus:

    “Neither Scott nor anyone else answers/elaborates on Geoff´s comments (even if they run to 1200 words like the last one).”

    I see that falsified, yet clinged to theories abound in the blog threads.

  57. Gravatar of J J
    3. April 2013 at 12:23

    Geoff:

    I think you are kidding yourself to believe that you do not use any historical data.

    Why do you think your logic makes any sense? Probably because throughout your life your logic has led you to empirically testable and correct conclusions: in school you thought that 2+2=4 made sense and, lo and behold, that was the correct answer, etc.

    Moreover, can you accept that the logic behind your economic ideas is not perfect? I don’t know enough about what you say to claim that your logic is wrong, but, presumably, if your logic were absolutely solid (as solid as a proof that the square root of 2 is not a rational number) then more people would agree with you. That doesn’t mean you are wrong. It just means that your logic is not irrefutable. This suggests a couple points. First, your personal experiences have influenced which arguments seem persuasive to you. This is a form of using historical data. Second, even if using historical data is not perfect, it can help to shape our opinions along with arguments not based on historical data.

    If we truly used no empirical data, then we could believe anything about economics. I could claim that hyperinflations can’t happen because people simply don’t like to raise prices or wages very quickly. You need some form of empirical evidence, such as the existence of hyperinflations, to refute this.

  58. Gravatar of Daniel Daniel
    3. April 2013 at 12:27

    Geoff

    http://tutor2u.net/economics/revision-notes/as-macro-aggregate-supply_clip_image001.gif

    Try harder, troll-boy.

  59. Gravatar of Geoff Geoff
    3. April 2013 at 12:33

    Daniel:

    That’s just a theoretical assertion.

    You try harder.

  60. Gravatar of Geoff Geoff
    3. April 2013 at 12:49

    J:

    “I think you are kidding yourself to believe that you do not use any historical data.”

    There is a universe sized difference between using historical data, and grounding one claim to economics knowledge on historical data.

    You’ll never “see” the law of marginal utility in historical data, for example.

    “Why do you think your logic makes any sense? Probably because throughout your life your logic has led you to empirically testable and correct conclusions: in school you thought that 2+2=4 made sense and, lo and behold, that was the correct answer, etc.”

    Actually, it was through YEARS of university and post university study of economics, philosophy of science, history, ethics, mathematics, and logic.

    But go on thinking it’s nothing but kindergarten level, if that is the level required to make you feel adequate.

    “Moreover, can you accept that the logic behind your economic ideas is not perfect?”

    Show me errors.

    “I don’t know enough about what you say to claim that your logic is wrong, but, presumably, if your logic were absolutely solid (as solid as a proof that the square root of 2 is not a rational number) then more people would agree with you.”

    That is a gross miscalculation. Probably one of the worst anyone can ever make.

    Consider the start of human civilization, to today. How many years in total were people of the (wrong) impression that the thunder roared because the Gods were angry? Or that everything was made of fire or water? Or that the Earth was flat?

    To go against what the majority think in any age is what every true statement has ever done.

    “That doesn’t mean you are wrong. It just means that your logic is not irrefutable.”

    I don’t see how that follows. How is disagreeing with the majority imply one’s argument is not irrefutable?

    “This suggests a couple points. First, your personal experiences have influenced which arguments seem persuasive to you. This is a form of using historical data.”

    At the same time I have influenced historical data. So it’s not just one way. History isn’t the full story.

    “Second, even if using historical data is not perfect, it can help to shape our opinions along with arguments not based on historical data.”

    Define “shape”.

    “If we truly used no empirical data, then we could believe anything about economics.”

    This is not correct. Even if you forgot everything you ever learned, you would still be equipped with knowing that you have to act if you want to accomplish your desired ends. You would still be equipped to knowing the logical categories of thought, which most philosophers call intuition. You would still know what space and time are.

    If you didn’t have THIS knowledge, then empirical history would appear as a random collection of chaos with no meaning.

    “Using” historical data requires the existence of a pre-existing mental state, or theory, with which to understand the data.

    The reason why you are looking at wage data, and aggregate spending data, and so on, is because of a pre-existing theory that makes sense of that data and guided you to look at it rather than something else in the first place.

    “I could claim that hyperinflations can’t happen because people simply don’t like to raise prices or wages very quickly. You need some form of empirical evidence, such as the existence of hyperinflations, to refute this.”

    Hyperinflation is an empirical event. It is not an economics theory. I am only talking about economics theories.

    The economics theories that relate to hyperinflation are theories on the quantity theory of money, marginal utility, and other theories.

    Hyperinflation is not something that my logic can predict a priori. So please don’t make me out to be someone who is inside a black box, or sitting at an arm chair, believing that predictions of hyperinflation “follow logically” from my principles.

  61. Gravatar of Bill Ellis Bill Ellis
    3. April 2013 at 13:48

    Very cool.

  62. Gravatar of Paul Andrews Paul Andrews
    3. April 2013 at 13:54

    Watching you central-planners in free-market-clothing try to bring Geoff down with your twisted logic is very entertaining.

    In other news, Bitcoin has hit $145USD. This is normal. If it crashes from here, that will likely be because it “plunged far below fair market value”. I learnt this kind of logic from reading Scott’s blog.

  63. Gravatar of maynardGkeynes maynardGkeynes
    3. April 2013 at 14:03

    Seems to me that what the New Yorker article overlooked is that there was an alternative to lower interest rates on safe investments as means to stimulate demand and address unemployment. That was through spending increases. Perhaps we could have had some of each, but instead, our political system ended up with a “solution” that entirely impacted savers, at least in the short run. Taxpayers (mostly future taxpayers, because increasing taxes now would be counterproductive) have not been asked to sacrifice at all. I suspect that the tax code is more progressive than using the Fed interest rate policy. So, Carney’s essay really misses the point, even if it is true that in the long run savers will be better off. There was another way to make them better off, that would not have extracted as much current income, which for all one might say in theory, is experienced as deprivation by those affected, and who know what the source is — the political system, which made a choice in favor of taxpayer — not only that — future taxpayers, who would have time to prepare, unlike savers in the retirement years.

  64. Gravatar of Bill Ellis Bill Ellis
    3. April 2013 at 14:12

    Geoff,

    Regarding the “Geoff is Major Freedom” topic… Hilarious. Seriously funny.

    I too… almost immediately… Got a Major Freedom vibe from you. But I am still not sure.

    MF had a very identifiable writing style. Your style seems different, to me. More conversional. More amiable maybe? There is a Consistently different quality to Geoff’s posts . If you are MF than I applaud your ability to change styles.

    I have nothing against on-line performance art… done a bit of it myself.

    So Geoff… are you a purist libertarian, advocate of MiniArchy like MF ?

  65. Gravatar of Bill Ellis Bill Ellis
    3. April 2013 at 14:34

    Geoff says…” Not that I can even prove it”

    That does not sound like MF to my ear. He would have left out the “even.”

  66. Gravatar of Edward Edward
    3. April 2013 at 14:52

    Geoff,

    The 1970’S were a refutation of “Old Keynesian” dogma. New Keynesians allow for an altered theory that has negative supply shocks, and Monetary Neutrality. Speaking of monetary neutrality, it was Milton Friedman who made the public statement that the Phillips Curve was not ultimately stable, and greater and greater injections of money would not lower unemployment. He was proven right. He made this statement, in ADVANCE of the coming inflation, in a speech in 1968 to the AEA. So you can’t accuse the friedmanites, and new Keynesians of simply adding epicycles. The true test of a theory is its ability to explain and predict BEFORE an event takes place. Friedman did so. HIS version of AD theories were confirmed
    Friedman NEVER said that the SHORT term philips curve did not exist or was not worth pursuing. He said that the Fed didn’t inflate ENOUGH during the depression, if you might recall.
    The Friedmanite/New Keynesian theory allows for different responses to different situations, not the one size fits all, idiotic, Austrian solution of tighter money, always, everywhere all the time.No NK worth his salt would EVER recommend anything like easier money for, say Latin American countries that experienced hyperinflation. Read what Jeffrey Sachs helped do with regards to Bolivia.(Hint: it wasn’t to say, the stimulus was too small!)There is absolutely NO contradiction between’s Friedman’s critique of the Fed in the 30’s and his critique of the Fed during the 70’s.
    That you could say that the 70’s somehow “disproved” AD theories only reveals your sad ignorance.
    You say that NGDP and spending on wages are different things, fine, EVERYONE acknowledges this. If I recall correctly, Scott once said that wage level targeting was the best, but because of political reasons, it couldn’t b implemented.
    And I believe he also said that NGDI is a more accurate reading, that finalized spending. (Right Scott?) Oh, and by the way, there is nothing wrong with a self- reinforcing causality loop. The Fed targeting NGDp will raise it by a certain amount, which will then increase employment, which will then increase NGDP by more and so on.
    Finally, lets get to the falsifiability aspect of NGDPLT. I will demonstrate to you how its truly scientific and falsifiable. NGDP falls in country x by 10%. Country X has been targeting for a while now at 4.5%. Scott’s theory would be for the Fed to target the futures market of expected NGDP by 14.5 percent, to make up for lost ground, and to get back to trend. (Not one iota more, so you can’t accuse him of being some wild eyed dove) If NGDP rises in the form of 13% inflation and 1.5% real growth, then we KNOW for a fact that X’s problems ARE NOT demand related, but supply related, so they have to do reforms. If, on the other hand, 13% of the growth of NGDP comes in the form of REAL growth, and only 1.5% inflation, then we know for a fact that X’s problems ARE demand related, and the stimulus was successful.

    Either way Scott’s theory is confirmed in its universal sense BECAUSE IT IS SO EXPANSIVE AND WE KNOW THE GOALPOSTS. He doesn’t keep moving them around in his theoretical models like the Austrians do. In specific terms, however, if Scott made predictions one way or the other about where the split will lie, then will have subjected himself to a falsifiability test, and he’ll be honest enough to say he was wrong is he actually, rather than saying ” economic theories cannot be proven on the basis of historical data!”

  67. Gravatar of W. Peden W. Peden
    3. April 2013 at 15:10

    Geoff,

    “Regarding (ii), how is your experiencing a white raven logically compatible with the proposition all ravens are black?”

    I might experience a white raven in a dream or a hallucination, which obviously wouldn’t disprove the proposition that all ravens are black.

    “Who said you were the tutor?”

    Not me. 😉

    “Try the semantic/linguistic definition for kicks.”

    I would, but-

    “Philosophical definitions != Dictionary definitions.”

    – and I couldn’t possibly know which or what you mean here.

    “I guess I need to first learn the definition of
    Rothbardianism.”

    Very good. I’ll define it this way: the principles of ethics, politics, economics, methodology, and musical theory enunciated by Murray Rothbard. (The last isn’t quite necessary for being a Rothbardian.)

  68. Gravatar of W. Peden W. Peden
    3. April 2013 at 15:11

    Ugh, “quite necessary”? That should really just be ‘necessary’.

  69. Gravatar of ssumner ssumner
    3. April 2013 at 15:27

    Tyler, You said;

    “It’s absurd to call Geoff a troll when Scott is unfailingly the first one to throw insults.”

    I’m polite with commenters until they start with the snark. I don’t have a problem with unintelligent commenters, most people are not particularly intelligent. It’s when they are unintelligent, and they ramble on for hours taking up all the comment space, and they cop a snarky attitude, then I have a problem. One, or maybe even two is acceptable. But not all three.

    As far as being unable to refute his arguments, that made me smile. I read until I come across the first absurdity, shoot it down, and don’t both reading the rest. Life is too short. I had entirely given up on MF by the end–I’m not quite there with Geoff yet.

    There are commenters that I’m not able to refute, and I treasure those commenters. I learn from them.

    Paul, The bubble theories of bitcoin have already been falsified. The bubble theorists said was supposed to be a bubble at $30. It shows that bubble theories are useless, no one knows where the fair market value is.

    Contrary to the bubble view, a sharp price decline is not evidence that there was a bubble. Efficient markets are volatile when the true value is difficult to discern.

    Maynard, I think we all agree that the wrong policy was adopted.

  70. Gravatar of Paul Andrews Paul Andrews
    3. April 2013 at 16:37

    Scott,

    It all depends on definitions. Perhaps we can find some common ground as follows:

    Do you agree that sometimes people buy assets purely because they are increasing in price?

    If you agree with that, do you agree that a positive feedback loop is sometimes created: people buy because price is going up -> causes price to increase further -> more people buy because price is still going up -> etc. ?

    If you agree with that, do you agree that eventually the stock of such people who are liable to the described behavior with respect to the particular asset will run out?

  71. Gravatar of Saturos Saturos
    3. April 2013 at 20:24

    It’s nice to see the New Yorker endorse NGDP targeting, but on the whole I think the article just serves to encourage the interest-rate fallacy. And what does Scott think of this sentence: “That’s why interest rates are low across most of the developed world””even in countries where central bankers haven’t been buying up assets the way the Fed has.”?

  72. Gravatar of Daniel Daniel
    4. April 2013 at 02:54

    I just love it when the same people who make accusations of “central planning” proceed to bash the EMH (in the same paragraph, ideally).

    Paul Andrews, I’m looking at you.

  73. Gravatar of Paul Andrews Paul Andrews
    4. April 2013 at 05:03

    Daniel,

    Free markets are the best way to maximize efficiency. They aren’t perfect but there is no better alternative for achieving real growth. Bubbles occur but there is no way to stop them, and they should just be accepted.

    The monetary policies in use by today’s central banks tend to increase the amplitude of bubbles and extend their life, by further incentivizing the purchase of assets whose prices are rising. Because the amplitude is greater, the crashes, although less frequent, are larger and more damaging. This crucial fact is by-and-large ignored by most central bank economists.

    Scott along with most of the commenters on this blog not only deny this but promote policies that would make the exacerbation more severe. Thus they are central planners at heart, in both the literal and the pejorative sense.

    Any market in which certain privileged agents act for purposes other than profit diverges from a true free market. To the extent that the EMH is true, it becomes less true in proportion to that divergence. The Fed of today is acting more than it ever has before, and so markets are less efficient than they have been in the past. Scott and his supporters want the Fed to do even more and so would decrease that efficiency further.

    I fail to see a conflict in the above.

  74. Gravatar of Daniel Daniel
    4. April 2013 at 06:04

    Paul Andrews,

    Nice use of circular logic. Anything you don’t like is a bubble, everything a central bank does fuels said bubble and when the central bank tightens unnecessarily – the resulting recession is seen as evidence of “bubbles” (of course, said bubble can only be identified in retrospect).

    And anyone who disagrees is “a central planner”.

    Neat world-view.

    PS – I am in favor of free banking.

  75. Gravatar of Market Monetarists, Like Ogres, Have Many Layers Market Monetarists, Like Ogres, Have Many Layers
    4. April 2013 at 13:11

    […] inflation is trivially low.” Scott Sumner was interviewed for the article, and on his blog praised its excellent fact-checking. This puzzled me, since the monetary base has risen 206% since […]

  76. Gravatar of Paul Andrews Paul Andrews
    4. April 2013 at 14:36

    Daniel,

    “Nice use of circular logic. Anything you don’t like is a bubble,…”

    Please point out where I stated that anything I don’t like is a bubble.

    “…everything a central bank does fuels said bubble and when the central bank tightens unnecessarily – the resulting recession is seen as evidence of “bubbles”…”

    If a central bank does fuel a bubble, and then removes the fuel, then the bubble may collapse. There is no circular logic here. I didn’t say that central banks are always wrong. You don’t need a recession as evidence of a bubble – the evidence is there in the price charts of particular asset classes, and in the actual words and deeds of people that are buying the asset during the ramp-up in prices, as well as in simple logical deduction from some empirical facts about human behavior.

    “…(of course, said bubble can only be identified in retrospect).”

    Please point out where I stated this. (PS I worked for a Nasdaq-listed tech firm in 1999 and identified a bubble based on what people inside the firm were saying. Almost to a man they thought the company’s stock price was never going to stop rising. Anyone considering selling was considered a fool. I sold as soon as my stock vested).

    If you are in favor of free banking, why defend central planning?

    I am unclear as to whether you are in Scott’s camp as to the existence of asset price bubbles.

    I asked Scott the following questions above in an attempt to find some common ground:

    “Do you agree that sometimes people buy assets purely because they are increasing in price?

    If you agree with that, do you agree that a positive feedback loop is sometimes created: people buy because price is going up -> causes price to increase further -> more people buy because price is still going up -> etc. ?

    If you agree with that, do you agree that eventually the stock of such people who are liable to the described behavior with respect to the particular asset will run out?”

    Scott has yet to respond – where do you stand on these questions?

  77. Gravatar of ssumner ssumner
    4. April 2013 at 17:20

    Paul, I agree with all three statements, but don’t think they imply the existence of bubbles. There are irrational people everywhere.

    Saturos, I believe that is accurate. Interest rates are low almost everywhere, except where default risk is high.

  78. Gravatar of Paul Andrews Paul Andrews
    4. April 2013 at 18:08

    Scott,

    Great, so you agree that the phenomenon I have described exists. You don’t like the term bubble, but I presume you’re happy for us to coin another term to refer to the phenomenon, just to aid discussion? How about “positive feedback episode”?

    Then I have a further question to try to find exactly where we diverge in our opinions.

    Consider a positive feedback episode under a constant money supply regime. Now consider the same episode under an increasing money supply regime. Would you agree that the increasing money supply results in a more rapidly increasing nominal price of the asset in question during the episode, compared to the rate of increase under a constant money supply?

    If so, do you think that this would reinforce the positive feedback, causing the episode to last longer?

  79. Gravatar of Daniel Daniel
    5. April 2013 at 04:14

    Paul Andrews,

    All this talk of “bubbles” boils down to – “at some undetermined point in the future, the price will go down by an uncertain amount”.

    While true, such a statement contains no useful information (all the talk of the importance of falsifiability must have gone completely over your head).

    So you start off assuming the existence of bubbles (an unfalsifiable proposition) – and then, since pretty much anything can be seen as evidence of such a vague concept, claim vindication of your views.

    If that isn’t circular logic, I don’t know what is.

  80. Gravatar of Geoff Geoff
    5. April 2013 at 04:39

    Daniel:

    “I just love it when the same people who make accusations of “central planning” proceed to bash the EMH (in the same paragraph, ideally).”

    I just love it when those who observe EMH bashing, actually believe the bashers are bashing the free market.

    Most free market economists hold EMH as flawed/false.

    You don’t need to hold EMH as valid in order to call yourself anti-central planning. Don’t let the words in the term EMH mislead you.

  81. Gravatar of Geoff Geoff
    5. April 2013 at 04:39

    Edward:

    Your post looks eerily familiar.

  82. Gravatar of Geoff Geoff
    5. April 2013 at 04:51

    Dr. Sumner:

    “I’m polite with commenters until they start with the snark. I don’t have a problem with unintelligent commenters, most people are not particularly intelligent. It’s when they are unintelligent, and they ramble on for hours taking up all the comment space, and they cop a snarky attitude, then I have a problem. One, or maybe even two is acceptable. But not all three.”

    “As far as being unable to refute his arguments, that made me smile. I read until I come across the first absurdity, shoot it down, and don’t both reading the rest. Life is too short. I had entirely given up on MF by the end-I’m not quite there with Geoff yet.”

    “There are commenters that I’m not able to refute, and I treasure those commenters. I learn from them.”

    So I’m unintelligent, constantly refuted, and not in the same class as these mysterious commenters of whom you declare you can’t refute.

    Hmmm…well, I’ll take that as signalling I’m intelligent, rarely refuted, and the sole member of that mysterious class.

    I’ll try to not be snarky from now on, but admittedly it’s difficult to do, because, well, I’m snarky by nature, and also I pick up on your snark, which IMO is some of the best snark on the econ blogosphere, and too often I just can’t resist. It’s fun to be snarky with snarky people. It’s nothing personal. For all I know you’re a swell guy. I guess I like to test people’s limits. As much as I am riviled here, I think you have to admit, I am like the stone that hones your guy’s swords. You’re getting lots of practise making your case, adding, subtracting, and so on and so forth.

    At the end of the day, strong theories stand the test of criticisms, so if you’re confident in your theory, I shouldn’t be that much of a nuisance.

  83. Gravatar of ssumner ssumner
    5. April 2013 at 10:49

    Paul, Yes, it would result in a faster nominal price increase, but only if it led to faster inflation. But no, I doubt it would create any real effects like feedback mechanisms.

    In any case, if that’s your theory of bubbles, why do they often happen when inflation is low?

  84. Gravatar of Paul Andrews Paul Andrews
    5. April 2013 at 18:24

    Scott,

    “In any case, if that’s your theory of bubbles, why do they often happen when inflation is low?”

    Let’s forget about the word “bubble” – I’m happy not to use it. For me, bubble == positive feedback episode, but for you that’s not the case, and I’m happy to simply discuss the phenomenon that we both agree exists.

    You’ve agreed that you can see how a positive feedback episode can come about, whether there is inflation or not, so I’m not sure why you need further explanation of why they often happen when inflation is low.

    They can happen regardless of the rate of increase of money supply – negative, zero or positive.

    In my opinion, an increasing money supply increases their longevity, their amplitude, and therefore the dislocation caused at the end of each episode. You disagree with that, and I don’t see that as massively unreasonable. I am content with knowing that this where my opinion diverges from yours, and am happy that we were able to see where the common ground is.

    To reiterate:

    Sometimes people buy assets purely because they are increasing in price.

    A positive feedback loop is sometimes created: people buy because price is going up -> causes price to increase further -> more people buy because price is still going up -> etc.

    Eventually the stock of such people who are liable to the described behavior with respect to the particular asset run out.

    The above can happen regardless of the monetary policy stance at the time.

    Obviously there is some “ignition” phase at the start – some price rise from other causes, which people notice and then latch on to. This can be an improvement in fundamentals, or a series of “random walk” moves that just happen to be positive, or an injection of money (e.g. OMO), or a sudden loosening of credit pertaining to the asset class, or any of a number of other causes.

  85. Gravatar of Paul Andrews Paul Andrews
    5. April 2013 at 18:33

    Daniel,

    “So you start off assuming the existence of bubbles”

    That’s not correct. I believe that the phenomenon exists because of what I have observed in human nature, backed up with a simple logical explanation for why it occurs. It is falsifiable as follows: if everyone in the human race goes through their entire life, having never purchased an asset because its price was rising, the theory is falsified.

    Where do you stand on the questions I asked that Scott has now responded to?

  86. Gravatar of Daniel Daniel
    6. April 2013 at 08:36

    Paul Andrews,

    if everyone in the human race goes through their entire life, having never purchased an asset because its price was rising, the theory is falsified

    In other words – EVERYTHING IS A BUBBLE. Good to know.

    You really don’t get how this “falsifiability” thing works, do you ?

    But then again, I shouldn’t be surprised – I am arguing with someone who thinks the likes of Geoff (“high inflation is the cause of low inflation”, “the hyper-inflation of 1923 brought Hitler to power in 1933”) is on to something, after all.

  87. Gravatar of Paul Andrews Paul Andrews
    6. April 2013 at 16:56

    Daniel,

    Do you agree that sometimes people buy assets purely because they are increasing in price?

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