No, check the video again and you will see that he says its "a" fallacy of composition, not "the" fallacy. Keynes' Paradox of Thrift is the most famous example of such a fallacy within the field of economics, and the video is blatantly showing that very (very famous) paradox.

Irrespective of that, you are missing the point anyway. Go to the point where he says "precisely because", then look at what he says next. That fallacious bit of logic was what I was objecting to, not the bit about the paradox of thrift.

FYI, I don't specifically have an economic problem with Blythe's analysis. It states as fact things which are of course contended, but that's standard practice in a phony science. It's the logical presentation that disturbs me. I cannot unlearn the habit, when looking at any 'therefore' or 'because' statement, of first checking if the thing that follows can actually be caused by the thing that precedes it. People seem to find this habit alarming, but from inside my head, I find it strange that other people don't do the same very often.

That's a pretty big claim, and of course it's complete nonsense.

http://www.economist.com/node/14530093 (1st August 2009)
"Like Japan's bubble years, the years that led to the global financial crisis have left a heavy legacy of debt on the balance-sheets of banks and households, especially in Britain and America. It is this legacy that allows past losses to depress future gains."


http://www.economist.com/node/14742159 (Nov 13th 2009)

Indeed, Japan serves as a warning: it takes a long time to recover from balance-sheet recessions, and policymakers have to pull off some difficult tricks. Fighting deflation first, but keeping an eye on inflation; cleansing the banks rapidly, but keeping credit lines open; providing fiscal stimulus, but spelling out a way to cut public debts. Do all these things well and the recovery could be more v-shaped; get them wrong and a w soon appears. Given the record of central banks and treasuries thus far—a little slow and clumsy, but far more systematic than Japan in the 1990s—the best bet is somewhere in that dull heavy middle. Western economies will grow, but struggle with large deficits, heavy public debts and stubborn unemployment.

NO I do not hold that view. I was saying that if you read many of the forecasts from three or four years ago they were predicting 3% growth now. As far as I was concerned I realised that it was a balance sheet recession so would be a decade or two of pain. Japan is the model that we are following but with the UK government adding austerity the results will not be anywhere near as pleasant. Japan never avoided the deflation. It was just spread over 20 years. It never really cleaned up the banks and they are still shrinking. I agree that the Western economies will struggle with the debts, and permanent unemployment but there will insignificant growth.

What you said is what I quoted you as saying. It included the words "economists are still dumbstruck as to why the recession is still carrying on"

Everybody knew long ago what form of recession it was. Everybody knew the general implications for the rate of recovery. Nobody is dumbstruck.

Shockwaffle, I take it your position is that austerity measures will in fact work for us, despite a lot of evidence that it frequently doesn't work?

My position, frequently stated, is that I am not in favour of hurried austerity. Another of my frequently stated positions is that it is more complex than that though, and there are grounds for honest well informed people to feel that earlier / deeper cuts are justified.

Another position, also multiply stated, is that the notion that austerity has been tested and shown to be right or wrong for our current situation is blatantly fallacious. For one thing, it relies on an absurdly simplistic misunderstanding of what constitutes an experiment. It also assumes a method for deciding what makes an economic policy actually good or bad that is in reality a chimera. It relies on claims about the counter-factual that are impossible to verify. It requires the fraudulent assumption that austerity is a single well defined object rather than a general heading for a group of policy types that are applied to different purpose and under different circumstances every time.

In short. I cannot make this a simple subject for you, and whenever anyone else says they can achieve that feat you should mistrust them on the grounds that they have opened with a lie.