The best way I can think of to be in a position to refute the arguments of the likes of Lord Keynes is to keep on doing what you’ve been doing, which is to engage them on this site, where you’ll probably get some help, or on other economic forums where you may be on your own, and keep on reading and learning. And when you are proven wrong on something, there is not harm in admitting it. LK would gain some credibility here if he could bring himself to do that.

IMO, the best way to understand what’s wrong about Keynesian economics and its OPM addicted descendants is to read three books, all available on the web: Keynes, GENERAL THEORY OF EMPLOYMENT, INTEREST AND MONEY, Henry Hazlitt, THE FAILURE OF THE NEW ECONOMICS, and Henry Hazlitt (editor) THE CRITICS OF KEYNESIAN ECONOMICS. The latter is a compilation of articles by some of the world’s leading economists of the Keynes era brilliantly refuting various aspects of Keynes’ GT.

I found something interesting Rothbard had to say on the issue of production.

“Much error would have been avoided if economists had heeded the words of Arthur Latham Perry:

Every man who puts forth an effort to satisfy the desire of another, with the expectation of a return, is . . . a Producer. The Latin word producere means to expose anything to sale. . . . We must rid ourselves at the outset of the notion . . . that it is only to be applied to forms of matter, that it means . . . to transform something only. . . . The fundamental meaning of the root-word, both in Latin and in English, is effort with reference to a sale. A product is a service ready to be rendered. A producer is any person who gets something ready to sell and sells it.” – MESPM, 2009, pp 646, Footnote 8

So much for your question ‘What commodity is the house producing”.

Just wanted to confirm that you are a moron.

For the record, I’m sure other people, e.g. a non-Austrian hedge fund analyst I know, were able to see the crisis coming.

“For what it’s worth though, their argument that for someone flipping homes a home can be a capital good seems right. But it seems like it doesn’t matter.”

Glad our arguments seemed reasonable to you; they do follow pretty quickly and simply from basic definitions. The fact that Lord Keynes is unable to admit the obvious should tell you something about his intentions though.

Now he’s not even arguing but just repeating stuff we’ve already disproved (as if doing that will make it true). If Ned hadn’t mentioned he took himself seriously, I would have judged him a troll. Speculation boogeyman is probably more accurate.

http://mises.org/journals/qjae/pdf/qjae1_4_1.pdf

On the issue of who predicted the housing bubble and crisis of 2008, see the discussion here:
http://krugman-in-wonderland.blogspot.com/2010/10/robert-murphy-takes-on-krugmans.html

For what it’s worth though, their argument that for someone flipping homes a home can be a capital good seems right. But it seems like it doesn’t matter.

“You bought them as a consumer good. You hold them as a commodity.”
True.

“If you sell them, you sell them as a speculator on commodity prices – the holder of apples or houses holds consumer goods/a commodity in the case of apples, and a consumer good/asset in the case of the house.”
Production and speculation are not exclusive. That’s the basic mistake in your thinking.

“Commodity speculation is not production.”
Again, yes it is. See previous arguments.

“Neither the apples nor the house is a capital good.
False.

“Elementary, my dear Watson.”
Yes, I suppose it’s pretty elementary to keep repeating your mistakes instead of thinking things through.

And that is where it completely falls down.
The apples are not a capital good – which is the central point of the whole argument.
You bought them as a consumer good. You hold them as a commodity. If you sell them, you sell them as a speculator on commodity prices – the holder of apples or houses holds consumer goods/a commodity in the case of apples, and a consumer good/asset in the case of the house.
Commodity speculation is not production.
Neither the apples nor the house is a capital good.
Elementary, my dear Watson.

Again, this asset is a good. And when combined with certain labor (the owner or an agent) it creates a commodity for sale. There’s a difference between a house not for sale and one that is. It takes labor to convert it.

“Anyone who buys a good, keeps it as an asset without any production whatsoever, and then sells that asset is an asset speculator.

There is production. A house not for sale is not a product available in the marketplace until someone takes the time and effort to do so. He is still an asset speculator but that is irrelevant.

“It ‘s only the real estate agent who is in the business of selling houses. He is actually producing a commodity (service).”

Nope. A real estate agent needs a house to sell. The agent does provide a service but that service can be provided by the owner.

“The owner of the house has produced nothing from his house, and is not in the real estate business.”
Actually he has as I’ve shown you previously. A salable house. If I buy some especially tasty apples and decide to resell them anticipating a profit, I’m in the apple business. If I buy a house I thinking I can resell it for a profit later, I’m in the real estate business. Pretty basic stuff.

Labor is combined with the house and produces a “house for sale”.

It ‘s only the real estate agent who is in the business of selling houses. He is actually producing a commodity (service). The owner of the house has produced nothing from his house, and is not in the real estate business.
Again, easily disposed of.
Thanks
The house is not used by the

Of course your critique is insufficient because homes can be sold by the owner. It doesn’t matter if it is the labor of an owner or the labor employed by the owner. Labor is combined with the house and produces a “house for sale”.

“The owner is not in a business, he isn’t engaged in production, the house is not a producers’ good.”

The owner has combined labor (his or an agent’s) to produce a house for sale. That is production; it is a producers’ good. Too easy.

So, when I buy stock, I buy ownership

But you do not buy a capital good.

I get rights to present and future income that derives from application of higher order goods towards the manufacture of present goods.

You get an income stream by dividends from the company.
Your financial asset is not a capital good.
That it gives you a share of ownership of the company does NOT mean that financial asset itself is a capital good.

They represent ownership of producers’ goods that entitle the holder to a claim on future goods, i.e., money in the future.

They are not producers’ goods. A house in such circumstances is an asset.
Its sale gives you the money – the house has produced NOTHING.

Only a perfect economic ignoramus (and you are that) will insist that a house is always and forever for everyone a consumers’ good.

A ridiculous straw man. I never said any such thing.
Read my comments above:

If the house was bought to rent out to other people, it is a capital good.
But as you can see perfectly well in Figure 3 of this book (Brookings Papers on Economic Activity: Fall 2008, p. 81 and also p. 83), loans to non-owner-occupiers did not significantly rise in 2000s housing bubble and in fact stayed flat.

Asset speculation is indeed a form of production.

This is truly laughable. Asset speculation is not production, and never will be.
Production requires creation of goods; The asset speculator produces/creates no good or service. He takes an asset from already existing stock of used assets and sells it.

The asset speculator makes goods produced and offered for sale at 1 point in time available to another buyer who wishes to buy the same good at a later point in time

No, he doesn’t. The asset speculator makes/produces NOTHING.
He merely sells an asset he already owns.

The asset speculator does the job of making goods available in the market at the time when the buyer is ready to take ownership and possession.

Nope.
He doesn’t engage in production to offer his house for sale: he uses the services of a real estate agent.
The owner is not in a business, he isn’t engaged in production, the house is not a producers’ good.

” As a durable consumer good to the owner-occupiers is isn’t a capital good. ”

Looks like you can only do ex-post analysis.

” In other words, you should not expect ABCT to “explain all business cycles” – the mistake you are making here. ”

How do you manage to assume that everyone else is as stupid as you are? Where did anyone at all say that they expect ABCT to explain all cycles. Even if they felt that way, saying that ABCT explains this crisis by no means translates into your statement.