Economics is not hard - Part I: Don’t let professional economists tell you otherwise

[LargoWinch]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

You've shifted the conversation from the article's focus on "The Banksters" influence in Washington to "The Rich."

As stated previously, the rich own most of the assets, and thus benefit from inflation...

Perhaps my point "c" was confusing (Banksters), but what is your counter-argument for "a" and "b"?

[MarkL]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

No. I said the rich own most of the assets, and thus benefit from inflation.
Perhaps my point "c" was confusing, but what is your counter-argument for "a" and "b"?

I agreed with point a&b!

The question I see the article and your response leading me to is, how does the power-influence game in Washington shake out in regards to monetary policy and whether the gov/fed steers us towards inflation/deflation.?

Influence #1: "The Gov" (EJ's argument). The government needs to deflate it's debt so therefore they will pull the trigger on inflation via money printing. There is no difference between the gov and the Fed in reality so the Fed will print money as governments have done numerous times to make their debt go away.

Influence #2: "The Banksters" (The Article's Argument) The Banksters have enough influence over the Pres and Congress to make them less concerned about the debt and more concerned about not deflating the Banksters debt (so the poli's will get their campaign finance). Inflation is bad for Bankers because their debt would whither in value and their influence over the Gov will win the day... no inflation.

Influence #3 "The Rich" (Largo's argument). The Rich own assets (not debt?) and so inflation benefits them. The rich have more influence over the government than the Banksters so the Rich and the Gov will pull together to pull the trigger on inflation.

The above choices simplifies reality of course. There is certainly cross-over between 2 & 3 (Rich Banksters that own both assets and debt). So to rephrase the question I stated above... if you add the Rich & the Banksters together, do they care more about inflating assets or not deflating their outstanding loans? Which do they have more of and what would the net impact of inflation be on them? Summed together which way would the rich and the Banksters end up influencing the government?

I see all your points Largo... and agree all are valid. The rich do have assets. They do benefit from gov largess, and they do own banks which do receive benefit during inflationary times. But I'm not sure to what degree these facts outweigh the fact that the Rich and the Banksters also have huge loans they've made to the world that they don't want inflated away.

I used to completely agree that EJ's gov-debt argument would unilaterally influence Washington to inflate away the debt.

I'm starting to think that both arguments have pull in Washington due to Bankster Lobbyists:
--No inflation! It will kill the economy & destroy the debt-assets of our banks pushing our banking system over the edge!!
--Inflate the Debt away! It's the only solution to the Trillion dollar deficit!!

[MarkL]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

And yet again, in my opinion you have failed to directly address the root issue (quoted below) noted at the bottom of my last post - but have rather chosen to ridicule or attempt to divert or whatever.

You of course may continue along those lines, but unless you or he brings up something substantive and factual (as well as at least taking a stab at all the open issues that I've brought up that remain unacknowledged or addressed - best I can tell), I'm done.

... and I stand by the rest of my words too.

As you failed to address mine. I've read your words over several times... I have no clue what subtlety you're referring to and still must call it as I see it... you are flaming someone who was simply stating opposing opinion in those words instead of making a cogent argument.

You make lots of good arguments on here Bart. I'm just saying the flames (as I see them) are beneath you...and this forum.

[MarkL]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

If you & he choose to believe the BS coming out of the BLS...

And please don't put words in my mouth. I didn't say I believed the BLS figures. I said they can be argued to be valid. Much like yours can argued to be valid and just like EJ can argue yours are 2%-3% too high.

To quote myself, "I don't agree with RDRees's opinion. But he's supported his arguments with strong factual backup (much of which I've written opposition to, but I still respect)..."

[LargoWinch]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

I agreed with point a&b!

The question I see the article and your response leading me to is, how does the power-influence game in Washington shake out in regards to monetary policy and whether the gov/fed steers us towards inflation/deflation.?

Influence #1: "The Gov" (EJ's argument). The government needs to deflate it's debt so therefore they will pull the trigger on inflation via money printing. There is no difference between the gov and the Fed in reality so the Fed will print money as governments have done numerous times to make their debt go away.

Influence #2: "The Banksters" (The Article's Argument) The Banksters have enough influence over the Pres and Congress to make them less concerned about the debt and more concerned about not deflating the Banksters debt (so the poli's will get their campaign finance). Inflation is bad for Bankers because their debt would whither in value and their influence over the Gov will win the day... no inflation.

Influence #3 "The Rich" (Largo's argument). The Rich own assets (not debt?) and so inflation benefits them. The rich have more influence over the government than the Banksters so the Rich and the Gov will pull together to pull the trigger on inflation.

The above choices simplifies reality of course. There is certainly cross-over between 2 & 3 (Rich Banksters that own both assets and debt). So to rephrase the question I stated above... if you add the Rich & the Banksters together, do they care more about inflating assets or not deflating their outstanding loans? Which do they have more of and what would the net impact of inflation be on them? Summed together which way would the rich and the Banksters end up influencing the government?

I see all your points Largo... and agree all are valid. The rich do have assets. They do benefit from gov largess, and they do own banks which do receive benefit during inflationary times. But I'm not sure to what degree these facts outweigh the fact that the Rich and the Banksters also have huge loans they've made to the world that they don't want inflated away.

I used to completely agree that EJ's gov-debt argument would unilaterally influence Washington to inflate away the debt.

I'm starting to think that both arguments have pull in Washington due to Bankster Lobbyists:
--No inflation! It will kill the economy & destroy the debt-assets of our banks pushing our banking system over the edge!!
--Inflate the Debt away! It's the only solution to the Trillion dollar deficit!!

Thanks MarkL , that is a great synopsis of the discussion. "Food for thoughts" as they say!

[Ben]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

Yes - and a moderate inflation is probably the easiest way to save the system, which is what the rich ultimately want

[Jay]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

I'm starting to think that both arguments have pull in Washington due to Bankster Lobbyists:
--No inflation! It will kill the economy & destroy the debt-assets of our banks pushing our banking system over the edge!!
--Inflate the Debt away! It's the only solution to the Trillion dollar deficit!!

That's why the ultimate solution for those who make money and wield power is, "do whatever you must to preserve the system!" "We make tons of money either way!"

They will start to eat themselves eventually.

[raja]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

Influence #1: "The Gov" (EJ's argument).
Influence #2: "The Banksters"
Influence #3 "The Rich" (Largo's argument).

MarkLm,

Let me suggest two other influences . . . .

Influence #4 -- The People
EJ's premise is that the government will keep the people happy by fulfilling its obligations through printing. But those obligations will be filled with inflated money, so the pensioners, people with savings, and those on the government teat will experience a severe reduction in their standard of living. It's already happening with reduced State services, retirement savings lost in the stock market, unfunded pensions. Soon, the true cause of the People's poverty will come out . . . that is, the wealth disparity in this country caused by the actions of the parasitical Financial Elite. Will The People rise up politically against the Financial Elite? If they do, and I think they will, it could very easily result in anti-inflationary policies that are inimical to the banks and the wealthy.

Influence #5 -- Our Lenders
If we inflate away the value of the dollar, will the oil-producers still sell us cheap oil? Will our trading partners still take our funny money in exchange for their labor and raw materials? If no, then world commerce -- and profits of TPTB -- will dry up.

Since inflation or deflation seems to be a choice, the question is, what do TPTB think will serve them best?

I'd really like to hear c1ue chime in on this one . . . .
And . . . it would be good to hear how EJ weighs these competing influences in his analysis. Maybe MetalMan can dig up something from the archives?

[c1ue]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

Certainly in a simplistic sense, the banksters want the debt accumulation/FIRE game to continue forever.

However, just because they are selfish and amoral, doesn't make them stupid.

As Dr. Michael Hudson noted previously and which I referenced here: http://www.itulip.com/forums/showthr...180#post119180

At some point the parasites realize the host can't support them anymore, and start devoting their efforts to reproduction and escape.

Thus this talk about banksters not wanting inflation/hyperinflation only makes sense if the banksters truly believe the existing system can continue - i.e. that their existing and ongoing debt is collectable.

I don't believe it is.

[Jay]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

I don't believe it is.

The answer will be in the TIC data.

The debt is collectible, in tiny dollar bills.

[raja]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

Certainly in a simplistic sense, the banksters want the debt accumulation/FIRE game to continue forever.

However, just because they are selfish and amoral, doesn't make them stupid.

As Dr. Michael Hudson noted previously and which I referenced here: http://www.itulip.com/forums/showthr...180#post119180

At some point the parasites realize the host can't support them anymore, and start devoting their efforts to reproduction and escape.

Thus this talk about banksters not wanting inflation/hyperinflation only makes sense if the banksters truly believe the existing system can continue - i.e. that their existing and ongoing debt is collectable.

I don't believe it is.

Thanks for your response . . . .

What about Hudson's prediction of the system continuing under Debt Servitude? Wouldn't the parasitical Financial Elite stick around for that?

Debt Servitude wouldn't work if all the debts were inflated away . . . so it seems like deflation would be most beneficial to TPTB.

Or maybe you see a different future. What would that look like?

By the way, I think the Financial Elite are too selfish to reproduce . . . if they did they'd have to share the pie.

[c1ue]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

What about Hudson's prediction of the system continuing under Debt Servitude? Wouldn't the parasitical Financial Elite stick around for that?

Debt Servitude wouldn't work if all the debts were inflated away . . . so it seems like deflation would be most beneficial to TPTB.

Or maybe you see a different future. What would that look like?

Again, it depends on your point of view. I would argue we're already in the condition of debt servitude: between the mortgage (and its Fed/bankster/No Bank Left Behind-TARP), the health care (Obamacare/No Health Insurance Company left behind), the jobs (no multinational left behind), and the foreign entanglements (No Defense Company left behind), I think that the US is already thoroughly in the debt servitude condition as a nation.

What is going on now is that the public is now discovering there is no pea under any of the walnut shells. FIRE dominance is a 'soft' one where the dominance works only if the subject doesn't know any better.

The stage we are in is one where such dominance must either transfer into a physical one or else be consumed in a populist rage.

But this transformation is a very risky one.

For every two dozen tin-pot dictators, you get a French Revolution or an outbreak of Communism.

By the way, I think the Financial Elite are too selfish to reproduce . . . if they did they'd have to share the pie.

I think if you look at the stats, the rentiers have far more children on average than the middle class.

The actual farm laborers have lots of kids, but these are already severely disadvantaged economically.

But actually I wasn't referring to physical reproduction. Sacculina don't use money, they value expansion of their genome.

Banksters reproduce by calving off chunks of rentier-dom to other nations.

[Ben]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

MarkL, like I say, I'm not sure about this. The banksters know that they depend on bailouts, stimulus and QE to not go bust.

They know some of the debt is junk, and that more of it would default in deflation and/or if the economy were allowed to weaken. They also know deflation would crush the economy.

So a moderate inflation is quite acceptable.

[MarkL]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

MarkL, like I say, I'm not sure about this. The banksters know that they depend on bailouts, stimulus and QE to not go bust.

They know some of the debt is junk, and that more of it would default in deflation and/or if the economy were allowed to weaken. They also know deflation would crush the economy.

So a moderate inflation is quite acceptable.

They didn't depend on these things prior to 3 years ago, and with the political winds blowing in the country may not be able to depend on them in the future. Even moderate inflation can cut the value of a debt in half over 10 years... quite a huge bite for the Banksters.

[rdrees]

Re: Economics is not hard - Part I: Don’t let professional economists tell you otherwise

I had moved on to the next article and hadn't seen how this had devolved. Thanks, MarkL for at least defending the concept of me being skeptical about one aspect of EJ's thesis.

If you can't take an honest, skeptical look at your beliefs you've lost the ability to be intellectual about them. They become a religion of sorts that cannot be questioned, critiqued, or even examined more than superficially.

The facts are that both PPI and CPI are lower now than they were two years ago. Dismissing the data, shooting the messenger, pretending you're misunderstood...that doesn't really get you anywhere, now does it? My only interest is in acknowledging that fact and trying to deal with it in an intellectually honest way. Does it mean we're in a deflation spiral on the order of the 1930s? I have repeatedly said that it does not, in my opinion. Does it cause me to question whether the deflationary pressures are strong enough to keep significant inflation at bay in the short to medium term? You better believe it!

c1ue, I guarantee that you can find a lower price for some things and a higher price for other things. Our economy is so damn complex that it eludes pretty much all of us. That's why I basically reject anecdotal data. You can find a higher price or a lower price or an anecdotal data point to support pretty much anything. But the aggregate numbers--PPI and CPI--say that prices are lower now than two years ago. Just like you paid less for Diet Coke this year than two years ago. I don't want to see deflation. I want to take an honest look at the numbers and that's what they say (call it disinflation, deflation, mis-inflation, or whatever you want; that's just semantics).

bart, you say you've posted a whole bunch of things that clearly show inflation. Of some things. Even in my own expenses, which I was happy to admit. But in terms of the aggregate, you've got the shadowstats, and we just have to agree to disagree on that. I use CPI and PPI, like EJ does in his posts; you use shadowstats. We're not going to change our minds on that issue so we may as well call a truce on the issue and quit the name calling.

Because I'm not here banging any deflation drum. I'll say it yet again: I don't think we'll have 1930s style deflation! I've also said repeatedly that I'm not on any mission to discredit EJ. I think he deserves a lot of credit. But we're all human beings. He made a call about the numbers that didn't quite work out. Live with it! It clearly upsets and angers you when I say we've had basically flat prices for the last several years, but I'm not pulling that out of my arse. I'm just repeating what CPI and PPI say. You can choose to disregard those numbers, but I hope you can back off from making ad hominem attacks about me being a liar or some such when that's not the case at all. You don't believe in the numbers, fine, but they do exist.