Over here on Wall Street, Capitalism calls your statement about the dollar, "Productivity." I paid my teacher 1/2 the amount in 1970 that I make today. Today he makes the same as I do. The difference is the value of the dollar and the economist told me that was good because it was "Productive." The complexity didn't go down. The time requirement didn't go down but it became half the value, for what reason? Old artists have rent control apartments, people like myself, the "Young Old" have two rooms a piano and thousands of books with no room to sleep.
I tire of the shell game. REH From: Keith Hudson [mailto:[email protected]] Sent: Friday, May 03, 2013 1:51 PM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION; Ray Harrell Subject: Re: [Futurework] Capitalism is killing our morals, our future At 06:03 03/05/2013, REH wrote: May 2, 2013 Not Enough Inflation By PAUL KRUGMAN Ever since the financial crisis struck, and the Federal Reserve began "printing money" in an attempt to contain the damage, there have been dire warnings about inflation - and not just from the Ron Paul/Glenn Beck types. Thus, in 2009, the influential conservative monetary economist Allan Meltzer warned that we would soon become "inflation nation." In 2010, the Paris-based Organization for Economic Cooperation and Development urged the Fed to raise interest rates to head off inflation risks (even though its own models showed no such risk). In 2011, Representative Paul Ryan, then the newly installed chairman of the House Budget Committee, raked Ben Bernanke, the Fed chairman, over the coals, warning of looming inflation and intoning solemnly that it was a terrible thing to "debase" the dollar. (KH) It certainly is a terrible thing to debase the dollar and history will judge Greenspan and Bernanke unkindly for having done so. Present day inflation hasn't taken the form of hyperinflation but of the fact that the dollar is now worth 1/20th of what it did in 1913, or one 1/5th of what it did in 1971 or has lost almost 1/10th during Obama's office. The present cumulative rate of inflation is 8%, not the 1%s and 2%s that are usually quoted by the government. How do they get away with it? Because they're in charge of the Consumer Price Index where they quote most of the things that most of us buy all the time, but not any of the thousands of things that most of us also buy. To be really accurate, the CPI ought to be at least 20 times larger so that it catches enough of the minor items that each of us also buy. It's interesting that Krugman doesn't explain why America doesn't have the rampant hyperinflation of the Weimar Republic in the 1920s or Zimbabwe or Hungary more recently, but of the insiduous sort that can only be accurately measured retrospectively. In this way, by avoiding the explanation, he can score cheap points against Ron Paul and Glenn Beck types (tempting targets though they may be). The reason why they are wrong is that the previous hyperinflated currencies were only minor currencies. They were only inflating in desperate attempts to increase trade with the rest of the world. However, the American dollar is in an entirely different situation because, ever since the end of World War II, it has been the world's reserve currency. Today, 80% of the world's financial transactions involve the dollar -- even trade between non-American countries. The inflating dollar becomes a bow wave that causes all other currencies to defend their countries' exports by inflating their currencies also. But by then America has gained first-mover advantage by cheapening its exports before the others have to. Quite a number of comments might be made in the est of his piece. Keith (PK) And now, sure enough, the Fed really is worried about inflation. You see, it's getting too low. Before I get to the trouble with low inflation, however, let's talk about what we should have learned so far. It's not hard to see where inflation fears were coming from. In its efforts to prop up the economy, the Fed has bought more than $2 trillion of stuff - private debts, housing agency debts, government bonds. It has paid for these purchases by crediting funds to the reserves of private banks, which isn't exactly printing money, but is close enough for government work. Here comes hyperinflation! Or, actually, not. From the beginning, it was or at least should have been obvious that the financial crisis had plunged us into a "liquidity trap," a situation in which many people figure that they might just as well sit on cash. America spent most of the 1930s in a liquidity trap; Japan has been in one since the mid-1990s. And we're in one now. Economists who had studied such traps - a group that included Ben Bernanke and, well, me - knew that some of the usual rules of economics are in abeyance as long as the trap lasts. Budget deficits, for example, don't drive up interest rates; printing money isn't inflationary; slashing government spending has really destructive effects on incomes and employment. The usual suspects dismissed all this analysis; it was "liquidity claptrap," declared Alan Reynolds of the Cato Institute. But that was four years ago, and the liquidity trappers seem to have been right, after all. And it's worth mentioning another issue on which the inflation non-worriers have been vindicated: how to measure inflation trends. The Fed relies on a measure that excludes food and energy prices, which fluctuate widely from month to month. Many commentators ridiculed this focus on "core" inflation, especially in early 2011, when rising food and energy prices briefly sent "headline" inflation above 4 percent even as the core stayed low. But, sure enough, inflation came back down. So all those inflation fears were wrong, and those who fanned those fears proved, in case you were wondering, that their economic doctrine is completely wrong - not that any of them will ever admit such a thing. And, at this point, inflation - at barely above 1 percent by the Fed's favored measure - is dangerously low. Why is low inflation a problem? One answer is that it discourages borrowing and spending and encourages sitting on cash. Since our biggest economic problem is an overall lack of demand, falling inflation makes that problem worse. Low inflation also makes it harder to pay down debt, worsening the private-sector debt troubles that are a main reason overall demand is too low. So why is inflation falling? The answer is the economy's persistent weakness, which keeps workers from bargaining for higher wages and forces many businesses to cut prices. And if you think about it for a minute, you realize that this is a vicious circle, in which a weak economy leads to too-low inflation, which perpetuates the economy's weakness. And this brings us to a broader point: the utter folly of not acting to boost the economy, now. Whenever anyone talks about the need for more stimulus, monetary and fiscal, to reduce unemployment, the response from people who imagine themselves wise is always that we should focus on the long run, not on short-run fixes. The truth, however, is that by failing to deal with our short-run mess, we're turning it into a long-run, chronic economic malaise. I wrote recently about how, by allowing long-term unemployment to persist, we're creating a permanent class of unemployed Americans. The problem of too-low inflation is very different in detail, but similar in its implications: here, too, by letting short-run economic problems fester we're setting ourselves up for a long-run, perhaps permanent, pattern of economic failure. The point is that we are failing miserably in responding to our economic challenge - and we will be paying for that failure for many years to come. -----Original Message----- From: [email protected] [ mailto:[email protected] <mailto:[email protected]> ] On Behalf Of Ray Harrell Sent: Thursday, May 02, 2013 12:15 AM To: [email protected]; 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION' Subject: Re: [Futurework] Capitalism is killing our morals, our future Well said: REH -----Original Message----- From: [email protected] [ mailto:[email protected] <mailto:[email protected]> ] On Behalf Of Mike Spencer Sent: Tuesday, April 30, 2013 11:50 PM To: [email protected] Subject: [Futurework] Re: Capitalism is killing our morals, our future REH wrote: > First we think of the mega system of the US as a home budget and now a > human body. > > I don't think I would "buy" either metaphor. It's a big blinking > system much too complicated for such comparisons even though the body > is complicated and doesn't break down well into the mechanical models > when it comes to mapping. It's hard to put find a metaphor for how a computer works that could explain it to, say, a bright, literate, educated late 17th c, gentleman. And a computer is an engineered, blueprinted artifact. The biological system -- the biosphere in all its Gaian complexity -- is sui generis. Nothing else exists that will serve as a model or metaphor to explain it. We can model little pieces -- Isle of Langerhans function or population dynamics of Sable Island horses, say. But, in general, we have to find out what's there and discover how a given "what" interacts with its surroundings, then do that a million times, building up our knowledge of Gaia. The human body, the human brain or the socio-economic system of the US (or of the Pakistan or of the world) are similarly sui generis or nearly so. And they're subsets of Gaia, of the global biology system. A unique factor of the global system of living things is that evolution, popularly described at the level of ecological niches, actually takes place at the molecular level so Gaia is integrated all the way down from populations of large organisms to the level molecules -- from giraffes and forests down to dietary trace elements in diet or systemic effect of ppm pollutants. I my view, the chief failure of economics is just about what McClosky points to: failure to look at what's actually there at all scales and try to describe it. Instead, simple models are constructed, their properties hypothesized as properties of the real world and and further models are constructed in an attempt to match the real world. It doesn't work well. The result is, as the piece from Marketwatch [1] opines, pressure to create a society that matches market concepts in place of a market economy that serves society. Good medical practitioners understand and allow for the underlying complexity of biology, for the fact that "disease models" and therapies are "best guesses" and "best practice". Pharma companies, in contrast, do not. For them, a pathological condition, a set of presenting symptoms, is a marketing opportunity. Just as we're appalled that some physicians adopt the viewpoint of the pharma companies, we should be appalled when people in government, education, justice and other social domains adopt the viewpoint of Wall Street and Madison Avenue. We should be outraged when such people manipulate those social domains into operating under the rubric of Wall Street and Madison Avenue. Hmm.., Not sure I've said anything new here. So there you go... - Mike [1] http://www.marketwatch.com/Story/story/print?guid=01AA1916-AEA6-11E2 -BA04-002128040CF6 -- Michael Spencer Nova Scotia, Canada .~. /V\ [email protected] /( )\ http://home.tallships.ca/mspencer/ <http://home.tallships.ca/mspencer/%A0%A0%A0%A0%A0%A0%A0%A0%A0%A0%A0%A0%A0%A 0%A0%A0%A0%A0%A0%A0%A0%A0%A0> ^^-^^ _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
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