Cafe Hayek - Latest Comments in Today's Economy in Perspective

Re: Today's Economy in Perspective

dg lesvic — Mon, 19 Jan 2009 08:39:06 -0000

Even with all this humble pie, I haven't completely reformed. I'll probably still go on being a pain about redistribution, or "distribution," as the semantic purists would have it.

But my emphasis on it is not meant to exclude other matters, nor other approaches to this one, nor even to insist that everyone address it.

I do believe in the division of labor.

And, while I believe that redistribution is the paramount and ultimately only issue of political economy, I recognize the necessity of dealing with other matters as they arise.

And while I believe there is one best argument against redistribution, I would not exclude others.

I would simply ask that the most important issue and that the best approach to it not be excluded, and, that while not every economist must address it, at least some of them should, that that the whole thing should not be left to one little old fellow with hardly any voice in the world.

Re: Today's Economy in Perspective

dg lesvic — Mon, 19 Jan 2009 07:50:54 -0000

Lee Kelley,

It was wrong for me to have criticized you for your use of the term "inflation." For, as you said, you used it in the customary sense, and language, after all, is custom, not logic. So, while we need to keep in mind the illogicality of certain terms, we can't keep jumping on one another for their use.

The same thing about the term, "rationality." "Redistribution" is another, and, of course, "liberalism."

Martin Brock,

I agree with you, too.

Re: Today's Economy in Perspective

Martin Brock — Mon, 19 Jan 2009 03:48:45 -0000

Why not deflation of the money supply and lowering of prices?

Because consumer price "inflation" and "deflation" refer to prices in the standard definitions, not to any rise or fall in any price but to a rise or fall in prices generally. Measuring this rise or fall is relatively straightforward. On the other hand, "the money supply" is a much trickier thing to define at all, much less to measure, because money is credit, and extensions of credit occur in many different forms that aren't always so easily measured.

Re: Today's Economy in Perspective

dg lesvic — Sun, 18 Jan 2009 19:00:09 -0000

Lee Kelley,

To add a bit to what I had said about the same term for different things, to wit, inflation for both an increase in the money supply and an increase in prices.

While the two are apt to occur together, they don't necessarily do so. You could have an increase in the money supply without an increase in prices, if there was also an increase in production. So the non-inflation of prices masks the inflation of the money supply.

It is not not just the increase in prices that makes an increase in the money supply a bad thing. It is bad even without the increase in prices. For it still brings about misallocation and redistribution and a lower standard of living than would otherwise have been the case.

So, we ought to distinguish between changes in money supply and changes in price, by different terms for each, lest we allow the confusion of the two to mask what's really occuring.

By the way, are you going to follow through with our discussion below, at Rationality and Experience? You ought to, for I suspect some confusion there that could be dangerous.

Sam,

Sorry that I missed your other post. And glad to hear that you're on the right track, attacking the root of the problem as well as the branches, redistribution as well as its derivatives.

Gil,

It's always nice to hear from you.

Cheers,

I still say that the shortest distance between two points is a straight line, and that it's better to get straight to the point than beating around the bush.

Re: Today's Economy in Perspective

LowcountryJoe — Sun, 18 Jan 2009 18:43:40 -0000

If a democrat was in the White house all these 8 years the howling would be unbearable. Of course last time a democrat WAS in the White House and the economy was booming this guy was likely saying... ~ muirgeo

It has much more to do with the composition of the Congress...the more it stays out of the way, the better the economy does. It makes no difference what the Parties call themselves as long as they tend to stay out more than they care to "do something".

Re: Today's Economy in Perspective

Cheers — Sun, 18 Jan 2009 17:18:31 -0000

dg lesvic,

The path I described IS one of the ways in which people become poorer as a consequence of redistribution. I fear it will happen to the larger economy because it already has happened in several smaller areas of the economy such as healthcare.

Because there is a lack of downward pressure on certain types of medical care, the cost has increased to the point at which people who never had to worry before are starting to lose the certainty of medical care in those areas.

It is a net loss on every person in the long run that is caused by a lack of input to the market.

I make the point in this way because it's a more tangible example of net loss as a result of redistribution. It is a smaller side issue, but one that gives credence to the larger theory.

Re: Today's Economy in Perspective

Gil — Sun, 18 Jan 2009 15:55:46 -0000

Yeah dgl quit using your 'masterstroke' so much or you risk going blind!

Re: Today's Economy in Perspective

Sam Grove — Sun, 18 Jan 2009 15:25:11 -0000

It looks like you're still trying to evade the issue of redistribution.

I don't know why you would say that as I made that point recently in another blog post.

I could as well suggest that you are evading the point of my thesis.

See, you have to find out what has motivated your target's support for an expansive state.

Many fear that criminals would run amok, or invasion from the south.

Re: Today's Economy in Perspective

dg lesvic — Sun, 18 Jan 2009 14:46:55 -0000

Lee Kelley,

If there is a difference between deflation of the money supply and "deflation" of prices, why use the same term for both.

Why not deflation of the money supply and lowering of prices?

Re: Today's Economy in Perspective

dg lesvic — Sun, 18 Jan 2009 14:44:00 -0000

Mezzaninny,

You wrote:

'dg lesvic - they are not evading, they simply believe in legalized theft just because it makes them feel better. Everyone is out to get their "pound of flesh".'

You missed my point. I wasn't trying to turn Sam Grove against redistribution, for he was already against it. I was trying to convince him of the necessity of facing the issue, and, as I would like to convince you, of the conclusion that it isn't just immmoral but doesn't pay.

Re: Today's Economy in Perspective

The Dirty Mac — Sun, 18 Jan 2009 12:34:43 -0000

I agree with the first part of Muirgeo's post. The partisanship in denying the depth (an initially the existence) of the downturn seems undeniable to me. That being stated, there I have seen absolutely no indication that Muirgeo can himself recognize any fallibility on the part of the Democrats.

Also, when Clinton left office the tech bubble was bursting and if not for subsequent reckless credit expansion, the jig would have been up right there.

Re: Today's Economy in Perspective

Mezzanine — Sun, 18 Jan 2009 11:14:55 -0000

dg lesvic - they are not evading, they simply believe in legalized theft just because it makes them feel better. Everyone is out to get their "pound of flesh".

Re: Today's Economy in Perspective

Mezzanine — Sun, 18 Jan 2009 11:11:09 -0000

Notice every time we have a recession we'll have Muirgeo tell us how rotten we are to point out that this is not the worst recession ever. Because sad faces of the freshly unemployed always win elections for Democrats!

Re: Today's Economy in Perspective

Lee Kelly — Sun, 18 Jan 2009 10:30:19 -0000

It's late at night, and I haven't really gone too assiduously into what you were saying, but I think you need to keep in mind that inflation and deflation are increases or decreases in the money supply, not a rising or falling of prices; for, as I believe you noted, prices can fall even without a decrease in the money supply. - dg lesvic

I keep in mind that inflation and deflation are not changes in the money supply, but are changes in prices. Since almost everyone else uses the latter definition, it breeds miscommunication to insist upon the former. Besides, anything that can be said using one definition can be expressed using the other.

Re: Today's Economy in Perspective

dg lesvic — Sun, 18 Jan 2009 08:58:15 -0000

At the risk of duplicating a post I tried and failed to make about a half hour ago:

Sam Grove,

It looks like you're still trying to evade the issue of redistribution. The point you want to make is a good one, and should be made. But, so is the point I would make.

Why must it be just the one or the other, why not both?

Re: Today's Economy in Perspective

dg lesvic — Sun, 18 Jan 2009 08:57:33 -0000

At the risk of duplicating a post I tried and failed to make about a half hour ago:

Sam Grove,

It looks like you're still trying to evade the issue of redistribution. The point you want to make is a good one, and should be made. But, so is the point I would make.

Why must it be just the one or the other, why not both?

Re: Today's Economy in Perspective

Nick C — Sun, 18 Jan 2009 08:43:18 -0000

Don't forget about the relative wealth effect of a declining stock and housing market... people have seen a dramatic decrease in their retirement accounts and thus the real economy feels worse for them..

Re: Today's Economy in Perspective

muirgeo — Sun, 18 Jan 2009 07:18:55 -0000

We just lost 1.5 million jobs in 3 months and this guys is like.... " ehh...it ain't so bad". I'm guessing it has more to do with his conservative writings of the past and the current ownership of the presidency. If a democrat was in the White house all these 8 years the howling would be unbearable. Of course last time a democrat WAS in the White House and the economy was booming this guy was likely saying.....eh...it ain't so good".

I think he missed his true professional calling... comedian..... he's very funny to me.

Re: Today's Economy in Perspective

vidyohs — Sun, 18 Jan 2009 05:08:12 -0000

Thanks Brotio, got it.

I strongly suspect Sean just simply spent some time collecting muirduck and STrUmPiT rants and just transposed them into his robot.

LMAO!

Actually the "democraticunderground" provides all the material one needs for stupid rants should anyone want to see the birthing cesspool of muirduck and STrUmPiT.

Re: Today's Economy in Perspective

Babinich — Sun, 18 Jan 2009 01:28:03 -0000

Don Boudreaux says in his opening:

"Of course, it could become such a catastrophe if Uncle Sam continues his frenzied interventions."

The "it" being the state of the current US economy.

"catastrophe" might be the improper noun to use here.

Don, this is a question for you.

How can we measure the long term impact of government intervention this early in the game?

Re: Today's Economy in Perspective

dg lesvic — Sat, 17 Jan 2009 21:42:21 -0000

Lee Kelley,

It's late at night, and I haven't really gone too assiduously into what you were saying, but I think you need to keep in mind that inflation and deflation are increases or decreases in the money supply, not a rising or falling of prices; for, as I believe you noted, prices can fall even without a decrease in the money supply.

Cheers,

When you talk about one man paying for another man's medicine, you're talking about redistibution, taking from the rich to give to the poor. And the way to discredit it is not with what you fear but know will happen, that it will only make the poor themselves poorer.

Re: Today's Economy in Perspective

Sam Grove — Sat, 17 Jan 2009 21:30:08 -0000

dg lesvic

I offer another thesis:

The left/progressive/liberal support for the state is based on their belief that it protects us from economic power.

Muirgeo elucidates this perspective quite frequently.

They need to be convinced that the government does the opposite.

Re: Today's Economy in Perspective

TrUmPiT — Sat, 17 Jan 2009 21:07:36 -0000

Mezzanine,

I also think the rich should be waterboarded at Guantanamo to teach them some humility. I think you could benefit from the same treatment.

Re: Today's Economy in Perspective

Mezzanine — Sat, 17 Jan 2009 20:29:46 -0000

Cheers - you talk about Trumpit's tax position as though it's a valid point. He wants 100% tax rate on "the rich". The guy is a fucking psychopath.

Re: Today's Economy in Perspective

Cheers — Sat, 17 Jan 2009 20:08:55 -0000

Thanks Trumpit,

I understand where you're coming from though I don't agree with your perspective on taxation.

But setting aside my personal feelings on the morality of taxation, the issue that I have is with what happens when we don't see the cost of what we consume. That's one of the reasons why healthcare costs (and as a result, insurance costs) as well as attainability has taken such a hit. At the end of the day, when someone else is paying for your drugs, it doesn't matter how much you use. But at the same time, it also doesn't matter how much is charged or wasted, because the person who decides what to use doesn't pay for it. From purely a functional perspective, I fear that if we don't all pay for the products we use, then it's going to spiral out of control to the point that it becomes unaffordable to everyone.