Re: RE: Re: Re: RE: Greenspan's cooked book
At 03:45 PM 07/03/2002 -0700, Jim wrote: Joanna writes: You know, I'm really tired of this low inflation crap. The inflation in housing, equities (till lately), health care, and education has been HUGE. I don't know why it doesn't count. at some point, economists decided on a conventional definition of inflation as referring only to increasing prices of newly-produced goods and services. Given that convention, inflation in housing prices only counts when it affects apartment rents (or imputed rent on owner-occupied housing) and other expenses of using housing, rather than the hike in the price of housing as an asset. (The economists impute by trying to figure out how much it _would_ cost a home-owner to rent his or her home.) Equities are simply paper promises, rather than goods and services, so that equity inflation isn't counted. Health care is definitely counted, while only the part of education that isn't paid for via taxes is counted as part of the cost of living. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevinehttp://bellarmine.lmu.edu/~jdevine OK, fine. Economists have decided that most of what people spend money on: houses, education doesn't count. But the question remains: how does this affect their planning and calculation and the information that filters out to the uninitiated? My eight year old daughter had economics as a spelling word, and she asked me for a definition. So, I gave her a definition that an eight year old could understand: Economics is the art of making a budget. So, if economists are dismissing the hugest costs that people have to deal with as not part of the equation, what does this portend for their ability to make a budget, a plan, or a prediction. Oh, and it's not fair to say they're counting newly created goods in their formula. Remember, some years ago, they came up with some comparable price index vodoo, which adds up to the idea that if I can substitute hot dogs for chicken, then the fact that the price of chicken has gone up doesn't matter cause I can buy hot dogs instead...which as we all know is just like chicken. I am not asking for the party line here; I'm asking for what you think. Joanna
Re: Re: RE: Re: Re: RE: Greenspan's cooked book
joanna bujes wrote: OK, fine. Economists have decided that most of what people spend money on: houses, education doesn't count. But the question remains: how does this affect their planning and calculation and the information that filters out to the uninitiated? My eight year old daughter had economics as a spelling word, and she asked me for a definition. So, I gave her a definition that an eight year old could understand: Economics is the art of making a budget. So, if economists are dismissing the hugest costs that people have to deal with as not part of the equation, what does this portend for their ability to make a budget, a plan, or a prediction. The CPI market basket is based on the Consumer Expenditure Survey http://www.bls.gov/cex/home.htm, not what BLS economists deem it to be, and it includes education, which they weight at 2.7% of spending ftp://146.142.4.23/pub/news.release/cpi.txt. In the CES for 2000, households spent 1.5% of after-tax income on education. These numbers seem low, but that's what they say. Doug
Re: Re: RE: Re: Re: RE: Greenspan's cooked book
Joanna writes: OK, fine. Economists have decided that most of what people spend money on: houses, education doesn't count. I don't think that is the case. The CPI was originally intended to help determine whether nominal wages (what people get paid) were rising fast enough to keep up (or exceed) the increase in the prices wage workers paid for the things they bought. It was a very important tool developed for very good reasons. And, at the time the CPI was developed it was reasonable to have the CPI focus on consumption items as this was what most of the money workers spent (then) went to. Things have now changed, particularly for middle class folks, but economists and the media have continued to use the CPI in ways that might not always be appropriate. The CPI was never intended to the the ONLY measure of price increase that is important. Obviously prices for items not in the CPI basket can be very important. Unfortunately most who cite/use the CPI do not really understand what the CPI intends to measure. This is true for almost _all_ economists who use the CPI-- most are unaware of the limits of the CPI measure and, so, use it in unappropriate ways. Eric
Re: RE: Re: RE: Re: Greenspan's cooked book
Devine, James wrote: this is a common mistake, i.e., that of assigning some sort of normative meaning to value or surplus-value, when these are normative only from the perspective of commodity-producing society or capitalism (respectively). The attachment of normative meaning to surplus-value occurs when people think of productive labor (i.e., labor that produces surplus-value) as a good thing aside from being good for capitalists. You're right about how Marx used the concept, but many Marxists have taken the productive/nonproductive distinction very seriously. It completely distorted Soviet planning priorities, for example - it was much more important to produce machine tools than consumer goods (especially frivolous things like tampons). Doug
Re: Re: Re: Re: Re: Greenspan's cooked book
Hi Christian Christian: Hmm, not really. The difference is that money backed by gold is convertible on demand. Fiat money is not. Karl: Concerning money as medium of exchange Marx in Capital has the following to say (and I quote): The function of gold as coin becomes completely independent of the metallic value of that gold. Therefore things that are relatively without value, such as paper notes, can serve as coins in its place. This purely symbolic character is to a certain extent masked in metal tokens. In paper money it stands out plainly. Karl: Money by its very nature in the form of medium is does not have to be backed by gold. In the West it is not backed by gold as medium of exchange. Millions of paper dollars function as medium of exchange. They are not backed by gold. Yet they are money --money as medium of exchange. Christain: Not according to Marx. A stock share is a claim on future income, not on the firm's tangible assets. That's fictitious capital. Karl: You miss my point. My point is that Marx, in my view, may have been mistaken in his view of share capital, equities, as fictitious capital. I am not talking here of government stock.
Re: Re: Re: Re: RE: Greenspan's cooked book
- Original Message - From: Doug Henwood [EMAIL PROTECTED] What about storage costs? Insurance? Nothing's perfect. Doug == That's what folks at Zen monasteries say :-) Ian
