The idea of deregulating the economy, removing government presence, as well as taxes, in the free market, and the overall removal of government being the best way to run the economy has been proven wrong by the recent economic recession, and yet senators are still yelling out libertarian rhetoric like nothing ever happened. This had me thinking: Does libertarianism/radical conservatism acknowledge periodic depressions as a part of their system? Every time we take a step towards removing regulation, the economy skyrockets for a decade or so, followed by a crushing recession in which the government must take action to get the economy going again. But if we had a libertarian president, would they simply allow recessions to happen and not do a thing to help, using the ensuing depression as a lesson to the free market? If there are any actual republicans/libertarians/conservatives in general, please weigh in on this so we can get the actual point of view of the party itself.

In a perfectly libertarian, idealist market, there are so many suppliers and so much demand that there is price stability and everything hums along happily forever although with no innovation or new products. It is impossible.

In a perfectly libertarian, practicable market, booms and busts are part of an inevitable cycle. Technically the government doesn't have to intervene to sort them out, but they do accelerate the process.

I'm not sure there are many people left in the world who still support completely libertarian points of view.

Much of the U.S. senate, along with almost every Fox News TV pundit, seems to want the government 100% out of the economy, while at the same time blaming the recent recession on anything but the deregulated economy that every president since Ronald Reagan has slowly been building up. What with the massive sway in the GOP towards radical conservatism and borderline libertarianism, it's only fair that they either outline their alternative plan to government regulation, or simply admit that huge crashes are part of their economic system.

Quote from Dinomut

or simply admit that huge crashes are part of their economic system.

must of the republicans(myself included) do see that huge crashes are part of the overall economic system...why you say part of their economic system?

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must of the republicans(myself included) do see that huge crashes are part of the overall economic system...why you say part of their economic system?

Because if we reinstated the economic oversight that was put into place after the Great Depression, then the frequency and severity with which we have economic crashes would be ridiculously low in comparison to the last 30 years. Instead, we have the extreme right trying to deregulate the economy even as crashes become more frequent and more damaging (this last one was almost a 2nd depression had we allowed the auto industries and banks to fail). What we need now is to change course from our current one, which is seemingly leading to 100% deregulation of the economy, and revert back to our post-depression regulation and restrictions if we want to change our constant cycle of massive booms followed by massive crashes.
However, many radical republican senators, pundits, and citizens are vouching for more deregulation, which will subsequently lead to a more destabilized economy and more frequent crashes. What I'm asking is: Do conservatives acknowledge that adopting their style of government, while more supportive of the "free market", will lead to harder and more frequent economic crashes?

I consider myself to be a Libertarian, a fairly extreme one at that, and I'd have to say that I do consider economic booms and busts to be part of an inevitable cycle. I personally despise all forms of government involvement in private affairs and believe the best government is that which governs least and therefore the best government is that which governs nothing at all, to paraphrase Thoreau.

I personally believe and find history to support the idea that Great Depression economics were all failures and the only thing that pulled us from said Depression was the US entry into the Second World War. The war pushed the US into an overdrive of sorts and reduce unemployment to almost nothing as everyone was either fighting in the military or working in any of the war supporting industries. Therefore I find it hard to put faith in any government programs designed to stabilize and regulate the economy as it has never quite worked before.

Truth be told, I don't believe that a government can regulate a free market. It's sort of an all or nothing deal. You either let the businesses and people sink or swim, or you allow the government to socialize the entire process. Don't get me wrong, I'm not using socialize as the curse word that most Right Wing ignorants toss around. I'm simply using it to describe any act or instance in which a government takes over for the sake of "the public good".

Quote from ReyRey

I consider myself to be a Libertarian, a fairly extreme one at that, and I'd have to say that I do consider economic booms and busts to be part of an inevitable cycle. I personally despise all forms of government involvement in private affairs and believe the best government is that which governs least and therefore the best government is that which governs nothing at all, to paraphrase Thoreau.

I personally believe and find history to support the idea that Great Depression economics were all failures
You mean the government oversight put into place that kept us from having another recession for a good 40 years? And even then that recession wasn't because of our economy. The first domestically created recession happened after Reagan started removing the "Great Depression Economics".
and the only thing that pulled us from said Depression was the US entry into the Second World War. The war pushed the US into an overdrive of sorts and reduce unemployment to almost nothing as everyone was either fighting in the military or working in any of the war supporting industries. Therefore I find it hard to put faith in any government programs designed to stabilize and regulate the economy as it has never quite worked before.
The government ran WW2. They singlehandedly organized a MASSIVE war effort, and spent massive amounts of money in the free market, completely taking control of it for war purposes. That sudden contribution, or "stimulus", was what lifted us out of the depression, and then, almost 70 years later, the same strategy that kept us from collapsing into a second one. WW2 is a perfect example of government programs working where the private sector couldn't.

Truth be told, I don't believe that a government can regulate a free market. It's sort of an all or nothing deal. You either let the businesses and people sink or swim, or you allow the government to socialize the entire process.
Once again, refer to our 40 years of economic stability until we started deregulating again. The SECOND we started deregulating, recessions became massively more frequent, to a point that we basically have them twice a decade currently.
Don't get me wrong, I'm not using socialize as the curse word that most Right Wing ignorants toss around. I'm simply using it to describe any act or instance in which a government takes over for the sake of "the public good".

They did that in WW2, which, as you mentioned, completely lifted us out of the depression. And also, look at Sweden (or Norway, or Switzerland etc. etc.): they have socialized medicine, higher taxes, and more economic regulation. And you know what? They have a consistently higher quality of life there. Their economies still flourish in the private sector, and (domestically caused) crashes are almost nonexistent. Their college graduation rates are also consistently above America's. That in and of itself seems to prove that it is possible, if not better, to only moderately socialize the economy.

On the subject of World War II being entirely organized by the government, I couldn't agree more. War is one of the few things that I have no problem with government control on. I believe that the defense of the nation from exterior threats is the federal government's primary responsibilty. Therefore I have no quarrel with acknowledging that the government ended the Great Depression through war. However I do not believe that they ended, or even really helped the situation with their New Deal policies.

Perhaps it's just an ideological difference that we will not overcome, but I consider myself somewhat of a Social-Darwinist. I believe that helping people is an honorable and noble thing to do, but only when it is optional. compulsory charity such as the myriad of New Deal spawn social welfare programs sort of defies the purpose. People should be free to help others as they choose, not as is chosen for them.

Also, I'm not quite sure what 40 years of stability you are referring to as there have pretty much been recessions in every decade, though the severity of said recessions varies. There's a natural cycle to most human phenomena and the economy is no different.

I understand that my laissez-faire beliefs conflict with many as they by no means lead to a quick fix. Removing all government ties to the free market will undoubtably make things worse before they get better, but I contend that it is the best way in the long run to secure absolute freedom. As such, you are free to disagree in any manner that you please. Gotta love libertarianism...

EDIT: Also, I seem to have missed your comment on moderate socialized economies such as those in Switzerland and some Scandinavian nations. Perhaps it is the quickest and cleanest fix to the economic troubles, but I personally do not wish to go down such a road. As per the values of my libertarian nature, I prefer to have the least amount of government inteference and regulation as possible. It's sort of a princibility issue, as I no doubt have mentioned before.

Alrighty then, case closed. I'm doubtful that things would eventually pan out well, but really there's never been a situation in which we just completely and 100% left it to the free market to solve everything. I mean, in this case, after all the auto companies and bad banks fell, sure we'd have a gigantic economic collapse for at least a decade or so, but then new emerging businesses, knowing that the government won't save their asses if they ever start doing the reckless shit the banks were doing earlier, will be forced to play it safe by the free market, and therefore eliminate our problem.

If only we could fast forward through that decade or so of deep, deep depression. If we could then I'd agree with you, but that's just too much of a cost as our current economy is so skewed and so far from the perfect free market economy that zero government involvement for a very extended period of time would bring. Still, I see where you're going, and maybe we could find a way of creating some sort of backup economy that's heavily regulated that would keep things running while the unregulated market completely collapsed in on itself and rebuilt itself into an actual idealistic Darwinian economy.

Backup Economy, eh? That would be nice, wouldn't it...

I know what the sig says but I always have time for an economics debate.

Crashes happen as part of a standard cycle:

1. Displacement - something new leads to opportunity which companies capitalise on.

2. Euphoria - where high expected profits leads to overtrading and soaring share prices.

3. Mania - the prospect of making huge short term gains on rising share prices, rather than long term ones on profits, attracts huge amounts of investment and further share price rises. It also leads to con artists entering the market to take advantage whilst doing no work and making up the numbers (see enron).

4. Distress - insiders begin to realise that the current share price is completely unjustified by profits and get out sharpish.

5. Revulsion - People see the dip in share prices and the lower than anticipated profits and panic. Everyone sells. Share prices plummet.

Government intervention comes in at the euphoria stage and prevents the market from being filled with people who are driving up share prices above their market values and raising peoples expectations ludicrously high. As such there is much less potential for crashes and when they happen they are smaller. On the books it may look like regulation is slowing growth, but that's just because the regulation prevents the books from showing numbers which are higher than the actual growth rate should be.

((Incidentally, if you're interested, stage 6. is when the fall in share price leads to a dry up in available capital which leads to a halt in all capital investment. Stage 7. is where cost cutting and unemployment set in - they are later because of the increased cost of rehiring if it all blows over - and 8. is where companies discover that there is no longer any way to function without investment because their machinery is breaking and outdated. This is where the recovery starts as firms spend again.))

But if, let's say, there was a gigantic depression in which all the companies which took advantage of stage 3 crash and fall apart, then only the like minded companies that kept themselves grounded would survive. This would lead to only those companies emerging from the depression, which allows the economy to be dominated by the companies that can maintain themselves and stabilize themselves.

However, this process would be a catastrophic one, and would end up destroying many many economies before companies that could remain uncorrupted even when they dominate the market emerge in enough quantity to make the economic process stabilize and manage innovations in a safe way.

The trouble is that the collapse tends to hit everyone equally, whoever caused it. This current one's been especially bad because the banking industry is so heavily intertwined with everything else in the economy, but even more isolated ones will hit the entire industry rather than just a few firms as the majority of the shareholders will be ill-informed and so they'll sell everything in that industry when they see the industry failing rather than just the failing parts of said industry.

Yup. That's why the cost of letting companies go and crash themselves, bringing everyone down with them, is much greater than just having economic regulation.