If Obama is this powerful, can he suspend the first law of thermodynamics for us? That would solve our energy crisis. How about the law of gravity? That would fix NASA's budget problems.
If Obama is this powerful, can he suspend the first law of thermodynamics for us? That would solve our energy crisis. How about the law of gravity? That would fix NASA's budget problems.hehe, ok. They are broken. Fortunately for you others are in charge who understand this and will work to restore them so you can happily have them back in time.
If Obama is this powerful, can he suspend the first law of thermodynamics for us? That would solve our energy crisis. How about the law of gravity? That would fix NASA's budget problems.
The economy suspended the laws of economics? WTF are you smoking?Not Obama, the Economy.
The economy suspended the laws of economics? WTF are you smoking?
I already answered your question. It is Yes, they do not Hold.
The whole reason the Recession is happening is because they stopped Holding. Until things are reorganized they will not hold.
What the hell are 'laws' of economics? That's an abuse of the word to compare it to 'laws of science'. Economics is largely a sociological topic. You can choose to burn money, you can't to violate gravity.
Economics can make a lot of pretty accurate predictions as a sociological field, but it's not some deductive set of hard laws that lend themselves to saying 'the law of economics says x, therefore people will y' past a certain point of probablity. Economics trieds to take a very complicated set of behaviors partly involving human choices and identify 'rules' about what happens.
There will be truth to them - like the 'law' of 'suppply and demand', but you can hardly explain the economics of someone burning a dollar bill by deducing their behavior from 'economic laws'.
To use the sociology analogy, in he 1930's, tens of millions of Germans followed a leader into a devastating war for the planet and themselves. You can make all kinds of sociological observations abwhy certain things happened - but in 1925, you would not be able to use sociiologiy to say "in the 1930's, the German nation will launch a disastrous war". Trying in 1925 to say 'laws of sociology prove the war will happen' is abusing the word 'laws', just as overextending the 'laws' of economics does.
The question isn't 'do the laws of economics apply in a recession' - there are no such thing as laws of economics analogous to laws of physics. Yes, they apply, just as laws of sociology apply in war.
The point is that it's exaggerating what they say to pretend they're like the law of gravity that can be used to plot a moon shot.
Almost a century after the great depression, not only is there still economic debate about some of the causes and effects of policies, there isn't even agreement on the goals. What IS the right level of incomine inequality, say as a GINI level. according to the 'laws of economics'? You probably get a very different answer from a billionare than a middle class or poor person.
When you introduce a Hitler, sociology is stretched. When you introduce an economic crisis, economics is stretched, if it's pushed too far to try to use ideology to oversimplify an inflict an ideological plan.
There are valuable economics lessons for economic crises, but there are limits to its usefulness. Some of the best economists are the first among them to say those limits are there, while ideologues don't.
The economy suspended the laws of economics? WTF are you smoking?
The "laws" of economics may not give absolute mathematical predictions, nor may they be derived from first principles. The laws of thermodynamics are also not derived from first principles: they are derived from empirical experience. Thus, just as the laws of thermodynamics always hold in a quantitative sense, the laws of economics always hold in at least a qualitative sense: no one will ever pay more than what something is worth to them, nor sell something for less than what they think it's worth, except in cases of coercion.Economics is a social science. I hold it with as much regard as I hold sociology or psychology. Don't lump economics with physics.
Good point. In fact it's actually funny that we don't even have a clear goal in mind so it's almost impossible to make the right choice to achieve it because there isn't actually a goal.Almost a century after the great depression, not only is there still economic debate about some of the causes and effects of policies, there isn't even agreement on the goals. What IS the right level of incomine inequality, say as a GINI level. according to the 'laws of economics'? You probably get a very different answer from a billionare than a middle class or poor person.
The "laws" of economics may not give absolute mathematical predictions, nor may they be derived from first principles. The laws of thermodynamics are also not derived from first principles: they are derived from empirical experience. Thus, just as the laws of thermodynamics always hold in a quantitative sense, the laws of economics always hold in at least a qualitative sense: no one will ever pay more than what something is worth to them, nor sell something for less than what they think it's worth, except in cases of coercion.
Coercing someone doesn't change the fact that the equilibrium of the economic system in the absence of this interference is governed by the laws of economics. Coercion simply alters the dynamics of the system while this interference is in play. It adds uncertainty to markets because government (the source of coercion in this case) is not a rational operator and, therefore, its effects on the markets cannot be rationally predicted. This leads to volatility, artificial peaks (i.e. "bubbles"), and a host of other undesirable behaviors that we have all witnessed over the past few years. Government thinks minorities should be given housing loans even when banks think they're too risky --> housing bubble --> epic failure of the housing markets. This is just one example which I use because this is the one relevant to this thread. In this case, government disrupted the market by coercing banks to give loans they did not see fit to give. Obama has now decided to continue disrupting the market by floating the recipients of these loans, thereby artificially inflating housing prices beyond their natural equilibrium values. What good can possibly come of this? Hasn't he done enough already?
The van der Waals equation isn't a law of thermodynamics, nor is it the basis for the ideal gas equation of state (EOS) - the kinetic theory of gases is the basis for the ideal gas EOS. The van der Waals EOS is a more general form of the ideal gas EOS which is a degenerate case of the method of virial coefficients. I have a PhD in chemical engineering and have taught thermodynamics to the next generation of chemical engineers at two different universities, but thanks for your concern. I'd recommend starting by reading up on what "quantitative" and "qualitative" mean, perhaps starting with the difference between linear and nonlinear models. Econometrics generally deals with linear models, whereas physics models are largely nonlinear in nature. This allows predictions which are qualitatively correct even under non-ideal conditions. Arguing against this is arguing that the axioms of economics are fundamentally incorrect and will spend more than what something is worth to them or sell something for less than what they could sell it for.Haha are you serious? Heres the difference between thermodynamics and economics.
You have an equation, lets say van der waals equation which describes the behavior of an ideal gas. Then you are presented with a non-ideal gas. What would a physicist do? He would test and experiment with the gas until he could come up with an equation that modeled the gas almost perfectly.
Now how would an economist respond if he were asked how the non-ideal gas would behave? He would treat the non ideal gas as an ideal gas and then describe what an ideal gas would do and leave it at that. Thats why I group economists with psychologists and sociologists.
Selective assistance:thumbsdown:
If you're one (not you specifically Vic) believes that people according to what their monthly budget allows (putting aside those who specualtes etc) you'll find in times of lowr interest rates more of that monthly payment is allocated to principal. When interest rates high, more of that monthly mortgage payment goes to interest.
The way the math works out, lower rates therefor tend to drive up homes' value (loan principal). Higher interest rates drive them down.
I think may deserve some mention in the equation as well.
Fern
I'd recommend starting by reading up on what "quantitative" and "qualitative" mean, perhaps starting with the difference between linear and nonlinear models. Econometrics generally deals with linear models, whereas physics models are largely nonlinear in nature. This allows predictions which are qualitatively correct even under non-ideal conditions.
I guess you've never seen a black Friday ad.Arguing against this is arguing that the axioms of economics are fundamentally incorrect and will spend more than what something is worth to them or sell something for less than what they could sell it for.
Where did I say Van Der Waals equation was a law of thermodynamics? And yes, Van Der Waals equation DOES describe the behavior of an ideal gas. You just said it yourself in the bold. In your lust to prove me wrong, you have made yourself look foolish.The van der Waals equation isn't a law of thermodynamics, nor is it the basis for the ideal gas equation of state (EOS) - the kinetic theory of gases is the basis for the ideal gas EOS. The van der Waals EOS is a more general form of the ideal gas EOS which is a degenerate case of the method of virial coefficients. I have a PhD in chemical engineering and have taught thermodynamics to the next generation of chemical engineers at two different universities, but thanks for your concern.
The housing boom was caused by the steady long-term drop in interest rates. This is the primary cause they led to all other causes.
Are you suggesting that the underlying axioms of economics are fraudulent or, at least, incorrect - that no correlation between supply and demand exists, that the price of a sale is uncorrelated with its value? If so, I don't think I can bother to discuss it any further, as we no longer have any common ground for discussion. If not, then the models will qualitatively hold and we don't need to discuss it any further. You either agree that cause and effect exist or you disagree with this assertion.You assume that the economic models are accurate. There is no way to test if these models are accurate. If your model is wrong, there is no way you can be qualitatively correct.
And I guess you can't see past the end of your nose.I guess you've never seen a black Friday ad.
The van der Waals equation is capable of describing an ideal gas, but that is different than saying the van der Waals equation describes an ideal gas, as it is capable of describing some non-ideal behaviors. In your lust to sound intellectual and make me out to be an idiot, you've simply demonstrated the opposite.Where did I say Van Der Waals equation was a law of thermodynamics? And yes, Van Der Waals equation DOES describe the behavior of an ideal gas. You just said it yourself in the bold. In your lust to prove me wrong, you have made yourself look foolish.
The Government is broken.
Agree 100%...making Greenspan the primary culprit in the housing and credit bubble and its subsequent collapse. Bernanke's policy of keeping rates exceptionally low is continuing to lead to distortions and prolonging the day of reckoning.
Sorry folks who bought houses from 2003 - 2008...but you paid too much. And if you bought in a bubble, when stupid people were trying to buy in hot markets, even if you thought you got a good deal, you likely paid too much. I don't know why so many people feel they are entitled to own an asset (like a home) that doesn't drop significantly in value.
Depressions/recessions can and do cause mispricings on the downside, much as bubbles cause mispricings on the upside. Eventually the market straightens things out if left alone to correct. Yes there will be suffering, and desperate sellers picked off by speculators and low bids during this corrective phase but it HAS to happen to make the market stronger in the long run. I just wish people would allow this to happen.
People like Sandorski in this thread apparently feel the suffering of these poor overlevered/unemployed souls is just too much for his conscience to bear....to which I say Too Bad. You're entitled to nothing in this world. And that's life. Sorry...
There's no doubt of this IMO. A borrower who can qualify for a $200,000 mortgage at 5% can only qualify for a $160,000 mortgage at 7%. And so forth.
The housing boom was caused by the steady long-term drop in interest rates. This is the primary cause they led to all other causes.
The ARRA had like 75 billion in it to do just such a thing. Very few qualified or took advantage of it.
Obama gonna pay my mortgage!
When the government runs out of other people's money.When will this stop.
You bought so you pay for it. Or are you a worm?