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

[FRED]

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.

We attribute our success at 12 years of forecasting to our willingness to learn from our mistakes. We welcome vigorous debate of the theories we put forward. We only ask that when a point is debated and closed that it remain closed so that we don't waste time re-hashing facts that were previously established. Back-tracking prevents forward movement.

The facts are that both PPI and CPI are lower now than they were two years ago.

This assertion is simply false, wrong, incorrect, and not true. We will post, again, a chart that prove this, again, so that we can move on.

The facts are that both PPI and CPI are higher now than they were two years ago.

A persistent unwillingness by new guests to accept easily observable facts and argue endlessly with members is called "trolling" and we do not tolerate it.

[vinoveri]

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

We attribute our success at 12 years of forecasting to our willingness to learn from our mistakes. We welcome vigorous debate of the theories we put forward. We only ask that when a point is debated and closed that it remain closed so that we don't waste time re-hashing facts that were previously established. Back-tracking prevents forward movement.

This assertion is simply false, wrong, incorrect, and not true. We will post, again, a chart that prove this, again, so that we can move on.

The facts are that both PPI and CPI are higher now than they were two years ago.

A persistent unwillingness by new guests to accept easily observable facts and argue endlessly with members is called "trolling" and we do not tolerate it.

FRED, it looks like the PPI and CPI are just a tad lower than they were 2 years ago, which was just before the financial crisis and when the bottom was falling out of the dollar and oil had hit $147/barrel, or am I misreading the graph? Perhaps a comparison to 1 year ago or 3 years ago would serve to illustrate the FACT of rising prices.

[FRED]

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

FRED, it looks like the PPI and CPI are just a tad lower than they were 2 years ago, which was just before the financial crisis and when the bottom was falling out of the dollar and oil had hit $147/barrel, or am I misreading the graph? Perhaps a comparison to 1 year ago or 3 years ago would serve to illustrate the FACT of rising prices.

We've been over this. Final word. If you start from the point of the highest surge of inflation in 30 years that peaked in June 2008, then of course inflation is lower today. But we never said inflation was going to be as high after the recession as it was at the first Peak Cheap Oil surge that ended in 2008 and helped precipitate the credit crisis. We did say that inflation would stop falling and rise even before the recession ended and that it is now higher than it was before the recession started.

Today inflation is rising steadily, and surging with respect to imports.

To deny it is to deny obvious facts. What is the motivation for denying obvious facts?

We've seen this movie over and over here. Trolls take advantage of the good nature and patience of our members who are too polite to tell them to get lost. My job is to prevent trolls from exploiting them. I'm expected to ban trolls without ceremony for this reason, and do.

[ThePythonicCow]

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

FRED, it looks like the PPI and CPI are just a tad lower than they were 2 years ago

That's my read too. But I think we're getting distracted by small stuff.

Perhaps rdrees and FRED could both agree that PPI and CPI both declined from mid 2008 to early 2009, and have since rose to about back where they were before, give or take.

If someone's thesis or antithesis depends on whether PPI or CPI is just above, or just below, where it was two years ago, that's a rather delicate thesis.

If someone's thesis is consistent with PPI or CPI going down for a little while, than resuming their climb, then I would think they are in good shape, given the evidence.

[rdrees]

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

Nevermind this post...there were a couple responses already posted, so I moved it up to that part of the discussion.

[rdrees]

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

It seems that it's all a matter of how you look at the data, and it's not as simple as a "fact." Are prices higher than the beginning of 2008? Yes. Are they lower than mid-2008? Yes. I agree 100% on that.

EJ's made a ton of great calls. But the call for significant inflation seems wrong to me based on my reading of the data, and while there are a lot of ways to read data, I don't think mine is an objectively unreasonable one. It certainly doesn't seem like a trolling sort of viewpoint to me. Some posters have jumped all over me for being a deflationista or just spouting random poop to get a reaction, but I don't think that's a fair read of my comments at all.

I have repeatedly said that I do not think we will have a large drop in prices. The evidence and my gut tells me we're starting to look a lot like Japan in the '90s--PPI and CPI going down and up but hovering on average in the 0-2% range. Maybe not a whole decade's worth of such minor ups and downs, but for a while at least. If I differ from EJ and the majority of the people on this board on that score, is that really a bannable offense? If I think EJ was right in predicting this crisis (which hardly anyone else was), but wrong in anticipating the sheer depth of it (which pretty much everyone else was, myself included), does that make me unwelcome to participate in this discussion?

My thesis or antithesis as stated above isn't based at all on whether PPI or CPI is just below where it was two years ago. But I would certainly hope that when I make a factual statement that it was below, and it in fact was below, that I am not taken to the woodshed for it.

[tastymannatees]

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

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?

Influence #6 heard this the other day - "Of course the government will do anything to avoid deflation, They can tax inflation easy but they have not figured out how to tax deflation....."

[fountainhead]

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

I really wish iTulip would start grappling with the implications of this economy rather than try to make it seem like they were 100% accuract all the time with no failings.

WHO are you rdrees? iTulip never claims they were 100% "accuract" all the time with no failings. Show us your own analysis and records instead of trolling!

[ThePythonicCow]

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

It certainly doesn't seem like a trolling sort of viewpoint to me.

I suspect that it's not the viewpoint that is "a trolling sort", rdrees. Rather I suspect that it is the posters behavior, focusing on a call that they find wrong.

If I differ from EJ and the majority of the people on this board on that score, is that really a bannable offense?

Differing is not an offense (I hope -- for I'm sure I could find some differences myself if I looked.) It's the not letting the point rest.

It's OK now and then to raise a point of disagreement. But do so a bit gently, and let it rest if apparently the point is not going to be resolved. Notice above how vinoveri handled it above. He saw a point on which he disagreed with FRED, and gently asked if the data showed something else. FRED made it quite clear that this was not a point on which he was going to come to a meeting of minds with vinoveri at the present. I'll wager a pretty penny (copper, not gold) that vinoveri will not continue to harp on this matter.

When someone else is not going to come to agreement with your position, you ultimately don't know and can't know why. Your mind (as does my mind) tells you they're wrong, you're right. But just as often the truth lies closer to the other persons position, or even some where far afield from both of you. A gentle modesty for the limits of ones own mind recommends that you retire to a position of relative silence, or at least to a position that happily allows the other person to pretty much ignore you or to write you off as eccentric.

Good natured people will often attempt to resolve matters that appear to be causing the other party distress. It's being a pain in the butt to leverage that tendency to keep bringing them back to a point on which, for whatever reason, agreement is unlikely to be reached at present.

[dummass]

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

Hey Cow, have you ever considered a career in marriage counseling?

[ThePythonicCow]

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

Hey Cow, have you ever considered a career in marriage counseling?

no -

[jk]

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

you always have the option of skipping posts that are repetitive and don't further the discussion. i started exercising this option some time before fred's reproof.

[metalman]

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

I suspect that it's not the viewpoint that is "a trolling sort", rdrees. Rather I suspect that it is the posters behavior, focusing on a call that they find wrong.

Differing is not an offense (I hope -- for I'm sure I could find some differences myself if I looked.) It's the not letting the point rest.

It's OK now and then to raise a point of disagreement. But do so a bit gently, and let it rest if apparently the point is not going to be resolved. Notice above how vinoveri handled it above. He saw a point on which he disagreed with FRED, and gently asked if the data showed something else. FRED made it quite clear that this was not a point on which he was going to come to a meeting of minds with vinoveri at the present. I'll wager a pretty penny (copper, not gold) that vinoveri will not continue to harp on this matter.

When someone else is not going to come to agreement with your position, you ultimately don't know and can't know why. Your mind (as does my mind) tells you they're wrong, you're right. But just as often the truth lies closer to the other persons position, or even some where far afield from both of you. A gentle modesty for the limits of ones own mind recommends that you retire to a position of relative silence, or at least to a position that happily allows the other person to pretty much ignore you or to write you off as eccentric.

Good natured people will often attempt to resolve matters that appear to be causing the other party distress. It's being a pain in the butt to leverage that tendency to keep bringing them back to a point on which, for whatever reason, agreement is unlikely to be reached at present.

you nailed it, cow. i've seen this here before.

say the itulip forum is a restaurant vs a forum. the forum sells forecasts that patrons consume vs plates of food. most of the food is great, but once in a while a dish kinda sucks.

if a patron pulls the manager aside & says, 'hey, the food's good here but i gotta tell ya this dish is awful' the manager will appreciate it.

if the customer announces loudly, 'hey, this dish sucks' the other patrons will look around in embarrassment & the manager will ignore him.

but if the customer stands on a chair yells...

'hey, this dish sucks!'

'doesn't this dish suck?'

'it really sucks, no?''

'don't get me wrong... the food is good here... except for this dish. it sucks'.

'don't you all agree it sucks?'

& then starts walking table to table...

'doesn't this dish suck?'

'it really sucks, no?''

'don't you all agree it sucks?'

management gets the idea that the patron either works for a competitor & is trying to disrupt the joint or doesn't know how to behave... offers a refund & shows him the door.

my sense of our man or woman is a lawyer... the point of lawyering isn't to get to a conclusion but to create doubt. create doubt & you win. so if you want him to give up just tell him he's introduced enough doubt to make his/her case plausibl that ej was wrong about inflation. there's no inflation. purchasing power is higher now than before the recession. hey, if you want to believe that... why not?

[MarkL]

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

Well, Fred, no offense, but your shaded areas go back to 2.75 years ago. RDRees is accurate if you stick to "2 years."

Broaden the question to the 1.5 or 2.75 years and you're absolutely correct. A minor period of deflation, as compared to 2 years ago and the peak has occurred. RDRees is right on that fact.

Has deflation in general occurred and was EJ wrong? No.. but you don't pick ONLY 2 years to make that determination.

[rdrees]

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

Alright, point taken. I had thought this forum was more like a traditional Roman forum where people wanted and encouraged discussion to test, refine, and challenge their views. But if this forum is more akin to a restaurant where people just want to enjoy a good meal in polite company, I can respect that. Here I thought I was being thought provoking, and it sounds like I was just coming off as the annoying kid who won't shut up.

On the subject of doubt, my personal opinion is that doubt and conclusions are not mutually exclusive. I try to cast doubt on my assumptions to test them so that I can come to a robust conclusion, and even then try to question (doubt) those conclusions every now and again so they don't get stale. I posted recently that I just read "The Black Swan" by Nicholas Nasim Taleb. He has a similar viewpoint and I agreed with his message, but he sure comes across as an arrogant SOB. Maybe skepticism is a socially awkward state of mind.

Anyway, on to shutting up.