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[unomas]

Obviously it depends on the job. I'm not disparaging the utility of factory jobs, but you are implying that teachers, construction workers, road workers--the types of jobs promised in additional stimulus spending--are worthless, when in reality the types of capital they create are crucial for the function of many businesses.

My implication is misunderstood because of my poor choice of words, but my main point still stands that you simply can't have an economy running massive trade deficits with it's economy heading in a direction of pure consumption. All those jobs that have been lost to other countries are jobs that could be here if we had less regulation and a friendlier rate of taxation for small businesses. The giant corporations don't need breaks, it's the little guy that does.

 

[teh_pwn]

I hate that people have this ridiculous FEAR of inflation. Inflation would actually ease a lot of the debt burden that's weighing down both the private and public sectors. But noooo the gold bugs and tea partiers treat inflation like a dirty word.

Exactly. 3% inflation does well for the economy because it punishes people for sitting on wealth. It should be invested or spent, not put under a mattress or used to buy material that does nothing.

 

[Ragnarok]

To just slightly derail;


Could somebody recommend me some economic podcasts that aren't by delusional libertarian crackpots? I seriously can't find many.

 

[dojokun]

I don't pretend to be an economic expert, so spare me the condescending remarks from both the left and right, but doesn't printing more dollars decrease the value of each dollar? And thus people who have their assets primarily in cash will see their total worth go down? And isn't it true that it's the lower and lower-middle classes that tend to have most of their assets in cash?

 

[KHarvey16]

To just slightly derail;


Could somebody recommend me some economic podcasts that aren't by delusional libertarian crackpots? I seriously can't find many.

Planet Money is usually pretty interesting.

 

[Mgoblue201]

Sure it can create jobs, congratulations, but at what cost? And how permanent and valuable are those jobs? Do those jobs create good that can be sold or are they just more government jobs? You clearly have zero understanding of what types of jobs are valuable to the economy compared to others.

Maybe he was invited to testify before congress because ding fucking ding he's been right on some of the biggest things affecting this economy? Nobody is right all the time, but he's been right a hell of a lot more than the economists who never saw any of this coming.

It also says quite a bit about you that you aren't even going to watch the videos, sad that your political views get in the way. Pathetic really.

He doesn't say anything in the video that is particularly convincing. His first mistake is conflating mere government spending with spending on stimulus to increase demand within a liquidity trap. Companies are unwilling to spend right now. Actual surveys have born out that demand is the problem, not taxes or regulations. Also, "stimulus" did not force private financial institutions to create derivatives or make loans in mortgages that were not subprime in nature. His fire analogy is completely flawed.

 

[unomas]

Exactly how stupid are you? I just want to know how far we have to go before we reach the bottom of this well.

A notch below your level of stupidity? Which makes me more intelligent and less dense.

 

[unomas]

Something like this is what I'm looking for:

Source:
http://en.wikipedia.org/wiki/Inflation_rate

Is that core CPI or real inflation? Because in the real world we have to deal with rising food and energy prices.

 

[thekad]

http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html

Yeah, at a cost of $278,000 per job. So you want more stimulus jobs that cost that much to produce each job?

Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.

...That's not what that means.

 

[KHarvey16]

A notch below your level of stupidity? Which makes me more intelligent and less dense.

Well let's see...

Is that core CPI or real inflation? Because in the real world we have to deal with rising food and energy prices.

Nope!

(here is a hint...the prices of food and energy are not merely dependent upon the value of our money!)

 

[teh_pwn]

Is that core CPI or real inflation?

Define real inflation. Give specific numbers and methodology. Math, science, and financials are not religion. Something is or it isn't. Give details.

 

[unomas]

Define real inflation. Give specific numbers and methodology. Math, science, and financials are not religion. Something is or it isn't. Give details.

Real inflation doesn't exclude food and energy prices, the core CPI excludes food and energy because of their "volatility", so if your chart is based off the exclusion of food and energy it basically means nothing to people that are barely scraping by that need to eat and drive to work.

 

[unomas]

Well let's see...



Nope!

(here is a hint...the prices of food and energy are not merely dependent upon the value of our money!)

Congratulations junior economist! They have to do with other things as well, but why don't you look up the value of the dollar 10 years ago and the value of the dollar now? Notice anything almighty one?

 

[Evlar]

I don't pretend to be an economic expert, so spare me the condescending remarks from both the left and right, but doesn't printing more dollars decrease the value of each dollar? And thus people who have their assets primarily in cash will see their total worth go down? And isn't it true that it's the lower and lower-middle classes that tend to have most of their assets in cash?

Lower and middle classes in the US tend to have very little in assets at all. Their balance sheets are dominated by debts... which also shrink in an inflationary environment. Inflation hurts their ability to continue consumption at the same rate, since they lose purchasing power, assuming wages do not rise at the same time.

I'm not arguing we need high inflation- perish the thought. I AM arguing that we need to avoid deflation at all costs, since that INCREASES the burden of financing those debts. For example... when the housing bubble popped the price of real estate fell across the country, right? But the dollar value of the loans taken out on that real estate did NOT decrease. Therefore people were left 'upside down'... owing more than the underlying asset is worth. General deflation has similar consequences between all debts denominated in the deflating currency and wages.

 

[Ragnarok]

Is that core CPI or real inflation? Because in the real world we have to deal with rising food and energy prices.

the CPI doesn't exclude those things just to make things look better. The value of commodities like food and energy tend to be volatile in nature.

 

[KHarvey16]

Congratulations junior economist! They have to do with other things as well, but why don't you look up the value of the dollar 10 years ago and the value of the dollar now? Notice anything almighty one?

I notice that stable inflation is a sign of a healthy economy. You want manageable inflation.

 

[ViperVisor]

Merchants of Doubt: How a Handful of Scientists Obscured
the Truth on Issues from Tobacco Smoke to Global Warming (2010)
by Naomi Oreskes & Erik M. Conway

• Quote from page 261: Again we turn to Milton Friedman's Capitalism and Freedom where he claimed that "the great advances in civilization, in industry or in agriculture, have never come from centralized government". To historians of technology, this would be laughable had it not been written (five years after Sputnik) by one of the most influential economists of the second half of the twentieth century.
• NSR Comment: So here are just a few examples of great advances done by, or paid for, centralized government:
  • Requiring machines to manufacture interchangeable parts (for the American Civil War's munitions industry). Using machines to produce products is what really kicked-off the industrial age.
  • Aircraft (sponsoring commercialization of the Wright Brothers initial design; sponsoring mail plane service, military development of bombers and jets which fed back into the commercial aircraft industry)
  • RADAR + SONAR
  • Nuclear power
  • Space craft (including weather and communications satellites)
  • Computers (initially developed for computing artillery trajectories)
  • Interstate Highway System (Dwight D. Eisenhower)
  • Transistors
  • Integrated Circuits also known as chips. For 10 years the American government was the only customer willing to take a chance with chips:
    1. guidance systems for Minuteman missiles.
    2. Onboard electronics for the Gemini and Apollo spacecraft
  • Internet (originally called ARPAnet because funding came from ARPA which was later renamed to DARPA; ARPA was established during 1958 in response to the Soviet launching of Sputnik)
  • World Wide Web (graphic applications running on the internet; web-servers and web-browsers are just two examples)
  • Solid matter computer displays (LED, LCD, Plasma)
  • Antibiotics
  • Genome Sequencing including the start of the human genome project (which was finished with public-private cooperation). BTW, since the public portion of this project was distributed to universities around the world, this effort required: the internet, computers, and sequencing robots which were all based upon chips.

When someone does not admit any shade of gray they are a fucking quack with a capital Q before Fuck You.

 

[dojokun]

Lower and middle classes in the US tend to have very little in assets at all. Their balance sheets are dominated by debts... which also shrink in an inflationary environment.

I'm not arguing we need high inflation- perish the thought. I AM arguing that we need to avoid deflation at all costs, since that INCREASES the burden of financing those debts. For example... when the housing bubble popped the price of real estate fell across the country, right? But the dollar value of the loans taken out on that real estate did NOT decrease. Therefore people were left 'upside down'... owing more than the underlying asset is worth. General deflation has similar consequences between all debts denominated in the deflating currency and wages.

So seeing what little they have going down in value affects them disproportionately higher. If I have only $5k in the bank, the value of that $5k going down surely matters to me more in terms of survival way more than if I had $500k, cause if I had $500k I know I'd be fine.

 

[teh_pwn]

Real inflation doesn't exclude food and energy prices, the core CPI excludes food and energy because of their "volatility", so if your chart is based off the exclusion of food and energy it basically means nothing to people that are barely scraping by that need to eat and drive to work.

Food is cheap. At least the stuff most Americans eat that's made of subsidized corn and soy.

But even then, I can get a whole chicken already baked for me for $6. A pound of beef for $3.50. Months worth of rice for mere dollars.

The problem with your critique of energy and food is that they are volatile. Just in 2007 gas was about what it was now. There has been no change since then, but in between there was a period where it was nearly $1.20ish. So how is it not volatile? That's the very definition of volatile. Food also fluctuates due to weather, like Texas this year for instance. It doesn't mean that the dollar is weak, it just means that there's less supply with the same amount of demand.

 

[thekad]

Real inflation doesn't exclude food and energy prices, the core CPI excludes food and energy because of their "volatility", so if your chart is based off the exclusion of food and energy it basically means nothing to people that are barely scraping by that need to eat and drive to work.

What does that have to do with fiscal expansion? Are you really suggesting food and gas prices are rising (above the rate of inflation) because of the supply of money? And not the supply of food and oil?

 

[unomas]

I notice that stable inflation is a sign of a healthy economy. You want manageable inflation.

Stable inflation as measured by the CPI? So in your opinion we need more stimulus, but we know that by "printing" more dollars they will be worth less, that's a chance you're willing to take? At what point do we stop printing? How low does the value of the dollar need to be? Do you believe other countries will continue to devalue their currencies just to appease us?

 

[unomas]

Food is cheap. At least the stuff most Americans eat that's made of subsidized corn and soy.

But even then, I can get a whole chicken already baked for me for $6. A pound of beef for $3.50. Months worth of rice for mere dollars.

The problem with your critique of energy and food is that they are volatile. Just in 2007 gas was about what it was now. There has been no change since then, but in between there was a period where it was nearly $1.20ish. So how is it not volatile? That's the very definition of volatile. Food also fluctuates due to weather, like Texas this year for instance. It doesn't mean that the dollar is weak, it just means that there's less supply with the same amount of demand.

So why is gas at $88 a barrel now around $3.70 a gallon when back then it took $147 a barrel oil to reach prices of $4? Are you going to blame this purely on speculation? Where do you think gas will be per gallon if oil hits $147 a barrel again? Certainly not $4 a gallon.

 

[KHarvey16]

Stable inflation as measured by the CPI? So in your opinion we need more stimulus, but we know that by "printing" more dollars they will be worth less, that's a chance you're willing to take? At what point do we stop printing? How low does the value of the dollar need to be? Do you believe other countries will continue to devalue their currencies just to appease us?

Until we're not in a recession any more? You and those like you have been predicting crushing inflation for years and years and we haven't seen anything. We won't see anything because that isn't how it works. How can you cling to an ideology that has so consistently proven itself incompatible with reality? Predictions were made and they failed...return to the drawing board, you have work to do.

 

[unomas]

Lower and middle classes in the US tend to have very little in assets at all. Their balance sheets are dominated by debts... which also shrink in an inflationary environment. Inflation hurts their ability to continue consumption at the same rate, since they lose purchasing power, assuming wages do not rise at the same time.

I'm not arguing we need high inflation- perish the thought. I AM arguing that we need to avoid deflation at all costs, since that INCREASES the burden of financing those debts. For example... when the housing bubble popped the price of real estate fell across the country, right? But the dollar value of the loans taken out on that real estate did NOT decrease. Therefore people were left 'upside down'... owing more than the underlying asset is worth. General deflation has similar consequences between all debts denominated in the deflating currency and wages.

How are their debts going to sink when their wages aren't increasing?

 

[thekad]

So why is gas at $88 a barrel now around $3.70 a gallon when back then it took $147 a barrel oil to reach prices of $4?

Supply and demand for gas.

 

[unomas]

Until we're not in a recession any more? You and those like you have been predicting crushing inflation for years and years and we haven't seen anything. We won't see anything because that isn't how it works. How can you cling to an ideology that has so consistently proven itself incompatible with reality? Predictions were made and they failed...return to the drawing board, you have work to do.

Ever heard of Zimbabwe?

 

[Ragnarok]

Letting the dollar fall in value a bit would also help exports, making us more competitive in the global market. But inflation fear mongers don't consider that either.

 

[KHarvey16]

Ever heard of Zimbabwe?

Yes. Ever heard of Japan?

 

[teh_pwn]

So why is gas at $88 a barrel now around $3.70 a gallon when back then it took $147 a barrel oil to reach prices of $4? Are you going to blame this purely on speculation? Where do you think gas will be per gallon if oil hits $147 a barrel again? Certainly not $4 a gallon.

So which of the following seems more plausible:
1. Oil has halved in value due to deflation and then subsequent 200% inflation.
2. Businesses do not consume as much oil during recessions. Construction, manufacturing, logistics. They all froze during the recession.

 

[unomas]

Supply and demand for gas.

Demand is down, but the dollar index has been on a steady decline which means our dollars buy less regardless.

 

[teh_pwn]

Ever heard of Zimbabwe?

I'm out. You have a faith based position of inflation in America. What a ridiculous comparison without evidence.

 

[unomas]

Yes. Ever heard of Japan?

Yup, they went through a rare deflationary period, congrats! Our monetary policy doesn't involve deflation, the Fed is hellbent on preventing deflation.

 

[Ragnarok]

How are their debts going to sink when their wages aren't increasing?

Wages aren't increasing right now. Inflation is also low. You think that if we expanded money supply through stimulus and experienced some significant GDP growth that wages wouldn't rise?

 

[unomas]

I'm out. You have a faith based position of inflation in America. What a ridiculous comparison without evidence.

I'll keep counting my gold and silver, but thanks for playing.

 

[Evlar]

How are their debts going to sink when their wages aren't increasing?

He asked specifically about the impact of printing money.

 

[dojokun]

How are their debts going to sink when their wages aren't increasing?

I was actually wondering this. It seems to me that only the well-to-do would have an easier time getting rid of debt after inflation occurs, because they can just sell other non-cash assets for higher amounts of cash to pay it off. If you have debt and you're poor (and thus you can't just sell a bunch of non-cash assets since you don't have them) you can't do that. Meanwhile, the paycheck you are getting is losing buying power so you need to spend more of it to get by, and thus have less left over to pay off debt.

 

[unomas]

Wages aren't increasing right now. Inflation is also low. You think that if we expanded money supply through stimulus and experienced some significant GDP growth that wages wouldn't rise?

Wages have been stagnant for years, increasing the money supply does cause some inflation minimal or not, so if those wages did go up via miracle they would have to be higher than the rate of inflation. More than likely, they wouldn't be.

 

[teh_pwn]

I'll keep counting my gold and silver, but thanks for playing.

Enjoy.

 

[Ragnarok]

Yup, they went through a rare deflationary period, congrats! Our monetary policy doesn't involve deflation, the Fed is hellbent on preventing deflation.

As they should be in a debt-based economy. Hmm what happened the last time that money supply contracted during an economic downturn? Oh yeah, the Great Depression.

 

[KHarvey16]

Yup, they went through a rare deflationary period, congrats! Our monetary policy doesn't involve deflation, the Fed is hellbent on preventing deflation.

Uhh...we are simultaneously hellbent on preventing deflation yet it is not a part of our monetary policy? I think that well is getting a little deeper.

 

[IrrelevantNotch]

Yup, they went through a rare deflationary period, congrats! Our monetary policy doesn't involve deflation, the Fed is hellbent on preventing deflation.

....

Japan is in the midst of a 17 year long recession. They borrow money at about 5 times the rate we do.

 

[unomas]

Enjoy.

I will, sitting at $1800 an ounce and hasn't plummeted, nor will it anytime soon, and neither will silver, but enjoy your stocks that aren't doing anything worthwhile.

 

[unomas]

Uhh...we are simultaneously hellbent on preventing deflation yet it is not a part of our monetary policy? I think that well is getting a little deeper.

Printing trillions of dollars doesn't seem like a deflationary way to handle monetary policy.

 

[gcubed]

Even Gaborn bailed

 

[Evlar]

Printing trillions of dollars doesn't seem like a deflationary way to handle monetary policy.

It isn't. Obviously. It could be seen as a desperate attempt to AVOID deflation.

EDIT: The only way I can understand your last series of posts is that you have triumphantly provenstated that Japan went into deflation, we're doing everything to prevent doing the same, and... for some reason we SHOULDN'T?

 

[thekad]

Demand is down, but the dollar index has been on a steady decline which means our dollars buy less regardless.

wat

Gas prices are high because that's how much people are willing to pay for it.

 

[unomas]

As they should be in a debt-based economy. Hmm what happened the last time that money supply contracted during an economic downturn? Oh yeah, the Great Depression.

We aren't in a depression now? Really?

 

[dojokun]

Enjoy.

I don't even back the gold standard and I can see how this chart is flawed because it stops conveniently in '06.

 

[Mgoblue201]

Stable inflation as measured by the CPI? So in your opinion we need more stimulus, but we know that by "printing" more dollars they will be worth less, that's a chance you're willing to take? At what point do we stop printing? How low does the value of the dollar need to be? Do you believe other countries will continue to devalue their currencies just to appease us?

QE is unconventional monetary policy and is not the same thing as printing money. It's explicitly intended to work when short term interest rates are close to zero. One of the problems is that it might prove ineffective if the banks still do not loan out the money. There was talk that, by lowering the dollar, it might increase exports, but I have not seen much evidence that this has been particularly effective. I'm generally not too excited about the chances of QE3 because it's less and less likely to work, but there are other unconventional policies that the Federal Reserve could try. Mostly, however, I think that the onus is on Congress to act in stimulating the economy and not the Fed.

 

[KHarvey16]

Printing trillions of dollars doesn't seem like a deflationary way to handle monetary policy.

It is part of what we're trying to avoid, therefore, it is rather central to our monetary policy.