• Do you think America is doomed, or that it hit a bump in it's progression as a nation?
    607 replies, posted
[QUOTE=Noble;37379366]Well again, it's the standard of living that matters, not the wealth disparity. The poor are not going to revolt just because rich people have more money than them, they'd revolt if they had a truly deplorable standard of living.[/QUOTE] this is true only if humans are rational actors, which we are not. certain quirks of human psychology mean that income inequality actually is an issue separate from absolute standards of living.
[QUOTE=DainBramageStudios;37379934]this is true only if humans are rational actors, which we are not. certain quirks of human psychology mean that income inequality actually is an issue separate from absolute standards of living.[/QUOTE] True, some people do care more about income inequality than standards of living, but that does not mean they would revolt. Even members of the Occupy Movement (who's main problem is income inequality) aren't going to organize a protest anytime soon. [editline]23rd August 2012[/editline] [QUOTE=Sobotnik;37378230]That is however what Noble is suggesting, as Noble is seemingly for a system in which the government barely exists. (If at all)[/QUOTE] yes, I guess he is. But I stand by the idea that standards of living are more important than income inequality.
[QUOTE=The Kakistocrat;37380324]True, some people do care more about income inequality than standards of living, but that does not mean they would revolt.[/QUOTE] how do you know? all it would take is one good demagogue
[QUOTE=Sobotnik;37374502]How did you manage this leap in logic? A was created as the result of B, yet A caused B in the first place. What compelled you to think that it caused it when it didn't even exist? Furthermore, can you explain how it caused it? But we have had decades of study and experimentation and Keynesian economics seemed to work well enough to the extent that it was a popular economic theory up until the 1970s. (And is seeing some resurgence in popularity today.) It was very much successful at helping to end the Great Depression. What made you choose this arbitrary number?[/QUOTE] The Great Depression created monetary policy as we know it. Early on in the great depression the federal reserve contracted the money supply, denying loans to small central banks short on money. Less money is available to the public, less loans are made and bankruns ensue. This worsened the great depression. Since firms can only hire additional workers using profit, the higher taxes used to pay for the fed's funding of public works projects once the money printer started rolling supposedly strained economic growth during the great depression. Recession is supposed to be sorta a realigning of the economy. Firms step back production on negative expectations, try to stay profitable, then step up production once they are sure enough they can make profit. Somewhere along the line, a bad mass investment decision was made. Something was produced that was not needed. According to Milton Friedman, low interest rates (through money printing) encourage these bad investment decisions that create bubbles and because of this the best monetary policy is 3% a year money growth because money growth should be consistent with gdp growth, and 3% a year gdp growth is the healthiest rate of growth. Japan used to have 10% a year gdp growth, now they have japan's lost decade.
[QUOTE=Fenderson;37380450]because of this the best monetary policy is 3% a year money growth because money growth should be consistent with gdp growth, and 3% a year gdp growth is the healthiest rate of growth.[/QUOTE] [url]http://en.wikipedia.org/wiki/Post–World_War_II_economic_expansion[/url] Sorry but during the post war era quite a lot of countries surpassed the 3% rule and managed well from the 1940s right into the 1970s.
[QUOTE=DainBramageStudios;37380414]how do you know? all it would take is one good demagogue[/QUOTE] because the Occupy Movement (which is dedicated to complaining about income inequality) has only amounted to a bunch of unemployed people sitting around in parks. Unless some sort of revolutionary movement evolves out of Occupy, we are safe. Plus, I doubt very many people would want to spend the energy needed for a revolt, unless they are seriously suffering. [editline]23rd August 2012[/editline] [QUOTE=Fenderson;37380450]The Great Depression created monetary policy as we know it. Early on in the great depression the federal reserve contracted the money supply, denying loans to small central banks short on money. Less money is available to the public, less loans are made and bankruns ensue. This worsened the great depression. Since firms can only hire additional workers using profit, the higher taxes used to pay for the fed's funding of public works projects once the money printer started rolling supposedly strained economic growth during the great depression. Recession is supposed to be sorta a realigning of the economy. Firms step back production on negative expectations, try to stay profitable, then step up production once they are sure enough they can make profit. Somewhere along the line, a bad mass investment decision was made. Something was produced that was not needed. According to Milton Friedman, low interest rates (through money printing) encourage these bad investment decisions that create bubbles and because of this the best monetary policy is 3% a year money growth because money growth should be consistent with gdp growth, and 3% a year gdp growth is the healthiest rate of growth. Japan used to have 10% a year gdp growth, now they have japan's lost decade.[/QUOTE] what? you said inflation encourages bad spending and creates bubbles, yet at the same time inflation is a good thing? how does that make sense?
[QUOTE=Sobotnik;37381279][url]http://en.wikipedia.org/wiki/Post–World_War_II_economic_expansion[/url] Sorry but during the post war era quite a lot of countries surpassed the 3% rule and managed well from the 1940s right into the 1970s.[/QUOTE] Yeah, then the 70's recession happened, the last big recession to happen prior to 2008. The stock market crashed as a result of the 70's oil crisis and a devalued dollar due to Nixon converting to fiat currency to finance Vietnam. He overprinted the money and didn't have enough gold to back it up. Coincidentally, the world gold supply increases 3% a year. [QUOTE=The Kakistocrat;37381968]what? you said inflation encourages bad spending and creates bubbles, yet at the same time inflation is a good thing? how does that make sense?[/QUOTE] If the money supply is increased/decreased at the same rate as demand for money, the result of no inflation.
[QUOTE=Noble;37379366]That sort of operation wouldn't be able to sustain itself for very long under free market conditions. They would be fighting a constant battle against an ocean of new competition coming into the market. Price fixing and predatory pricing is completely inefficient and hurts the business doing it far more than it hurts their "target".[/QUOTE] The whole notion that an ocean of competition arising is presumptuous.
[QUOTE=Fenderson;37383357]Coincidentally, the world gold supply increases 3% a year.[/QUOTE] The gold standard is utterly useless today.
[QUOTE=Fenderson;37383357]Yeah, then the 70's recession happened, the last big recession to happen prior to 2008. The stock market crashed as a result of the 70's oil crisis and a devalued dollar due to Nixon converting to fiat currency to finance Vietnam. He overprinted the money and didn't have enough gold to back it up. Coincidentally, the world gold supply increases 3% a year. If the money supply is increased/decreased at the same rate as demand for money, the result of no inflation.[/QUOTE] but you said we should have a 3% inflation rate, not a 3% growth in the money supply. You seem to be confusing inflation with growth in money supply. EDIT: sorry, you did say growth in money supply. but how can we make our growth in money supply equal to our GDP growth? GDP growth is not constant, and it is very hard to regulate growth in money supply (we can't know when bills leaves circulation). and do you have a source on this 3% a year growth in gold supply? more importantly, how can that growth continue for much longer? we only have so much gold. [editline]24th August 2012[/editline] [QUOTE=Lonestriper;37383575]The whole notion that an ocean of competition arising is presumptuous.[/QUOTE] but it can and does happen. The Big Three used to own the auto industry, but they're inefficiency caused them to go bankrupt. RIM and Palm used to be the big names in smartphones, but now Palm is dead and RIM is dying too. Apple dominated the smartphone market for a bit, before being over thrown by Android. Even with all their stupid patent lawsuits, they are still losing market share.
[QUOTE=Lonestriper;37383575]The whole notion that an ocean of competition arising is presumptuous.[/QUOTE] If there's nothing stopping them from entering the market (like expensive regulations), and there is a potential profit to be made, then it's inevitable that new competitors will enter the market. They will try to offer better goods and services than their competition in order to make a profit, and in the process of doing so, they benefit everyone else (by providing jobs, more choice of goods/services, and lower prices for consumers). It's unsustainable for a cartel to keep its prices below market levels for very long, it will eat away at their profits and new competitors seeking to make a profit would just keep coming into the market anyway, so the cartel would have to keep lowering prices and losing profit to fight their competition. Eventually, that will come to an end. It's not an efficient way to do business and I don't see how it would be a significant issue.
[QUOTE=Noble;37387653]If there's nothing stopping them from entering the market (like expensive regulations), and there is a potential profit to be made, then it's inevitable that new competitors will enter the market. They will try to offer better goods and services than their competition in order to make a profit, and in the process of doing so, they benefit everyone else (by providing jobs, more choice of goods/services, and lower prices for consumers). It's unsustainable for a cartel to keep its prices below market levels for very long, it will eat away at their profits and new competitors seeking to make a profit would just keep coming into the market anyway, so the cartel would have to keep lowering prices and losing profit to fight their competition. Eventually, that will come to an end. It's not an efficient way to do business and I don't see how it would be a significant issue.[/QUOTE] There's other ways of attacking the competition. What is there to stop a company literally becoming so powerful from the use of underhanded tactics that it eventually grows into a government itself?
[QUOTE=The Kakistocrat;37386916]but you said we should have a 3% inflation rate, not a 3% growth in the money supply. You seem to be confusing inflation with growth in money supply. EDIT: sorry, you did say growth in money supply. but how can we make our growth in money supply equal to our GDP growth? GDP growth is not constant, and it is very hard to regulate growth in money supply (we can't know when bills leaves circulation). and do you have a source on this 3% a year growth in gold supply? more importantly, how can that growth continue for much longer? we only have so much gold.[/QUOTE] You can't make money supply growth completely consistent with GDP growth by increasing the money supply according to the data. Data lags make precision money printing difficult as gdp data is always a few months old and not always accurate in representing the state of the economy. The best way to keep the money supply consistent with economic growth is the 3% thing, because after the wins and loses of the boom/bust cycle are sorted out, that is what the GDP averages to be. The idea that the best monetary policy is one that aims to keep markets on equilibrium is a monetarist view.
[QUOTE=Sobotnik;37388261]There's other ways of attacking the competition. What is there to stop a company literally becoming so powerful from the use of underhanded tactics that it eventually grows into a government itself?[/QUOTE] How would you propose that they are going to get all the money and influence needed to do that and keep it running?
[QUOTE=Noble;37388794]How would you propose that they are going to get all the money and influence needed to do that and keep it running?[/QUOTE] Imagine a company becomes very successful, and then using their wealth and influence they use underhanded tactics to attack the competition? A lot of companies have done, still do, and will continue to do that. The British East India Company literally conquered India through such tactics.
[QUOTE=Sobotnik;37388879]Imagine a company becomes very successful, and then using their wealth and influence they use underhanded tactics to attack the competition? A lot of companies have done, still do, and will continue to do that. The British East India Company literally conquered India through such tactics.[/QUOTE] I don't know what kind of underhanded tactics a company could use, in the absence of government interference, that would allow them to gain such a level of control. Right now, companies can sink their hooks into the government (political donations) to get what they want. That's an underhanded tactic that exists today and distorts the market, but it wouldn't exist in a free market. A company simply couldn't get the influence and the resources needed to take over without the government's existence. How are they going to build up an army and establish all this control without anyone noticing what they're doing and putting a stop to it in its early stages? They're never going to establish that control unless they have a central point of influence over everyone that they can manipulate (the government).
[QUOTE=Fenderson;37388765]You can't make money supply growth completely consistent with GDP growth by increasing the money supply according to the data. Data lags make precision money printing difficult as gdp data is always a few months old and not always accurate in representing the state of the economy. The best way to keep the money supply consistent with economic growth is the 3% thing, because after the wins and loses of the boom/bust cycle are sorted out, that is what the GDP averages to be. The idea that the best monetary policy is one that aims to keep markets on equilibrium is a monetarist view.[/QUOTE] what? since when is 3% the average GDP growth? any data to back that up?
[QUOTE=The Kakistocrat;37391562]what? since when is 3% the average GDP growth? any data to back that up?[/QUOTE] Usually the GDP growth of a country is 1 to 6. If you took the all the US's GDP data from 1912 to 2012 and averaged it, you'd end up with a average annual growth of about 3%.
[QUOTE=Sobotnik;37388879]Imagine a company becomes very successful, and then using their wealth and influence they use underhanded tactics to attack the competition? A lot of companies have done, still do, and will continue to do that. The British East India Company literally conquered India through such tactics.[/QUOTE] British East India Company? you do realize that the British East India Company was given a monopoly by the government. The East India Company did not grow into a government, it was taken over by the government. In a true free market, it never would have happened. [editline]24th August 2012[/editline] [QUOTE=Fenderson;37391643]idk my economics teacher told me[/QUOTE] from the little research I just did, GDP growth (for America) is usually close to, but not equal to 3%. So your idea would simply lead to cycles of inflation and deflation.
[QUOTE=The Kakistocrat;37391650]from the little research I just did, GDP growth (for America) is usually close to, but not equal to 3%. So your idea would simply lead to cycles of inflation and deflation.[/QUOTE] Assuming we can not know what the increase or decrease in economic growth is during the printing of the money, by the time the money has any effect the data you printed it on has been way way out of date, thus suggesting that this monetary policy is any less stable than price level targeting it stupid.
[QUOTE=Noble;37389206]I don't know what kind of underhanded tactics a company could use, in the absence of government interference, that would allow them to gain such a level of control.[/QUOTE] I have explained multiple times. Private contractors, detectives, mercenaries, thieves, robbers, criminals, etc. This was the same case in Sicily after the end of the Feudal system. The government had token influence at best in the island. The island was covered with private farmers who were often harassed by criminals. They then hired private contractors to help protect their businesses, who eventually grew into criminal groups that would protect their clients in return for financial resources. These groups became the Mafia, and exerted a considerable degree of control on affairs. In an unregulated free market, organised crime would be indistinguishable from legitimate businesses. They WOULD take over, they WOULD use dirty and honest tactics to crush their rivals. A society like the one you describe would be impossible to maintain in its current form. Technological, social, political, religious and demographic change makes it impossible for a country to maintain the same system forever. [QUOTE=The Kakistocrat;37391650]British East India Company? you do realize that the British East India Company was given a monopoly by the government. The East India Company did not grow into a government, it was taken over by the government. In a true free market, it never would have happened.[/QUOTE] It was given free reign to do whatever it liked in India, whilst in competition with multiple other companies, small and large Indian states, in an environment that was very much unregulated.
the East India Company had no competitors. [QUOTE=Wikipedia]This time they succeeded, and on 31 December 1600, the Queen granted a Royal Charter to "George, Earl of Cumberland, and 215 Knights, Aldermen, and Burgesses" under the name, Governor and Company of Merchants of London trading with the East Indies.[5] For a period of fifteen years [B]the charter awarded the newly formed company a monopoly on trade[/B] with all countries east of the Cape of Good Hope and west of the Straits of Magellan.[5] Sir James Lancaster commanded the first East India Company voyage in 1601.[6][/QUOTE] [URL="http://en.wikipedia.org/wiki/East_India_Company#Founding"]http://en.wikipedia.org/wiki/East_India_Company#Founding[/URL] The government gave the East Inda Company a monopoly. That's called mercantilism, not laissez-faire capitalism. Your Sicily example also doesn't work. Organized crime violates the non-aggression principle. Finally, here is the dictionary definition of a free market: "an economic system in which prices and wages are determined by unrestricted competition between businesses, without government regulation or fear of monopolies." [URL="http://dictionary.reference.com/browse/free%20market"]http://dictionary.reference.com/browse/free%20market[/URL]
[QUOTE=The Kakistocrat;37392777]the East India Company had no competitors.[/QUOTE] Yes it did. It had the French, the Dutch, the local Indian rulers, the Portuguese, the list goes on. [QUOTE=The Kakistocrat;37392777]Your Sicily example also doesn't work. Organized crime violates the non-aggression principle.[/QUOTE] What makes you assume that in a libertarian system in which everything was run by the private sector (And the government didn't or barely existed) that there would be no aggression?
[QUOTE=Sobotnik;37393015]Yes it did. It had the French, the Dutch, the local Indian rulers, the Portuguese, the list goes on. What makes you assume that in a libertarian system in which everything was run by the private sector (And the government didn't or barely existed) that there would be no aggression?[/QUOTE] But the East India Company had no direct competitors from Britain, and as I already explained, it was the result of mercantilism/state capitalism, not laissez-faire capitalism. The East India company basically served to colonize India for Britain. The non-aggression principle is essential to libertarianism. Any system without it isn't truly libertarian. And who said there the government shouldn't exist? The police force is a public good that can only the state can provide efficiently.
[QUOTE=The Kakistocrat;37393111]But the East India Company had no direct competitors from Britain, and as I already explained, it was the result of mercantilism/state capitalism, not laissez-faire capitalism. The East India company basically served to colonize India for Britain. The non-aggression principle is essential to libertarianism. Any system without it isn't truly libertarian. And who said there the government shouldn't exist? The police force is a public good that can only the state can provide efficiently.[/QUOTE] This is however not what Noble is arguing, as Noble has stated that the private sector can do everything. The non-aggression principle would be also assuming that all humans would be perfect. (Which we aren't.)
[QUOTE=Sobotnik;37393247]This is however not what Noble is arguing, as Noble has stated that the private sector can do everything. The non-aggression principle would be also assuming that all humans would be perfect. (Which we aren't.)[/QUOTE] oops, didn't notice that he was an anarchist. And the non-aggression principle does not necessarily assume that all humans are perfect. The non-aggression principle can be enforced by law, atleast in my mind.
[QUOTE=Noble;37389206]I don't know what kind of underhanded tactics a company could use, in the absence of government interference, that would allow them to gain such a level of control. Right now, companies can sink their hooks into the government (political donations) to get what they want. That's an underhanded tactic that exists today and distorts the market, but it wouldn't exist in a free market. A company simply couldn't get the influence and the resources needed to take over without the government's existence. How are they going to build up an army and establish all this control without anyone noticing what they're doing and putting a stop to it in its early stages? They're never going to establish that control unless they have a central point of influence over everyone that they can manipulate (the government).[/QUOTE] What makes you think big capital won't just set up a new state, perhaps even with a new nation for it? Another state stopping them?
hey if the federal budget is 1/3rd of the us's gdp isnt 1/3rd of the us's economy command?
[QUOTE=Fenderson;37393630]hey if the federal budget is 1/3rd of the us's gdp isnt 1/3rd of the us's economy command?[/QUOTE] did you just realize that we are a mixed economy?
[QUOTE=The Kakistocrat;37393647]did you just realize that we are a mixed economy?[/QUOTE] yes consisting of 2/3rds free market and 1/3rd command
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