Statistics and the Economy

Technocrat

Statistics and the Economy

zogger

Tue May 13 19:00:54 -0700 2008

Jobs.

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The government issues many reports and indices pertaining to the economy like the Consumer Price Index and Unemployment figures and the rates of inflation..but how exactly do they arrive at these figures and are they a true representation of what people are experiencing? Critics on the street at the checkout counter and economic analysts are starting to cry foul over these numbers, saying they are designed and tweaked to reflect what they would like, rather than what "is", so that governmental programs that depend on those numbers can save money.

.."n addition, food and energy prices are eliminated from the so-called core CPI, which many economists tend to focus more closely on because they claim food and gas prices are volatile."

ed.z.: The expression is "Bingo!" or "Nailed it!" the only thing I have seen or bought cheaper in the last few years is electronic gadgets, everything else, food, fuel, clothing, other sorts of hardware like tools, you name it, is all going up and apparently much faster than the official numbers claim. It is *not* some absurd low single digits thing.

Statistics and the Economy

Thomas Lord

Tue May 13 19:36:10 -0700 2008
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Let's see, what did I buy today....

Tomatoes: almost 100% up, year over year.

Chicken: I think about 25% up, year over year, unless you get seriously butchered (which is higher, sometimes closer to 100%).

Lettuce: maybe a small % up, year over year, but in CA, this time of year especially, always quite inexpensive.

A little bit of prepared potato salad: no idea; it's always a luxury to buy prepared so I only get small quantities and don't pay a lot of attention.

Couple of days ago:

Baguette (locally made): about 30%, I think.

Pasta: 25-30%, I think.

Fuel: my car got totaled a few months back and no means to replace it so I don't feel it directly but lowest octane is just shy of $4/gal. here which (I don't recall exactly) is prbly about 25% up, year over year.

Pints: maybe a tiny increase, I forget, but basically steady. Ingredients / fanciness: well, that's how they keep the price steady. The brewers keep quality up very nicely but the mix of varieties offered is getting a bit more .. hmm .. humble, and some favorite brews have (not obviously terribly) changed character a bit.

It goes on like that. But, there's two sides to this story.

All of that is stuff I experience as inflation. Simultaneously, deflation is a big story too.

The eviction notice we're expecting any day now (not for anything we did but because of the removal of the property from the rental market) is a direct consequence of massive deflation in real estate.

The skilled and unskilled job markets I look in show labor value deflation.

So, I can believe (actually, I do believe) that the macro stats can point to a minor contraction, modest overall deflation, etc. -- even while hoi poloi (like me) is already in deep s- from inflation, falling wages, etc.

The simple thing for Technocrats is to realize that none of the stats are very meaningful on their own. You've got to look at the built environment and it's real productive capacity. If, region by region, you can make or grow a bit over subsistence, then the capitalists can play poker among themselves all day and it hardly matters (in a free society). If every region is dependent on imports, and has little productive capacity natively outside of a niche or two, then we're all f-'ed. Which is where we are.

-t

FWIW

asdfg

Wed May 14 06:14:56 -0700 2008
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officially for the previous 12 months ending in March:

- gas prices are up 25%

- food prices are up 4.5%

That's tough when paycheck COLAs are about 3%. I saw an article that non-durable goods (gas+food+misc) only comprises 12% of the CPI. I would be suprised if middle to lower class families only spend up to 12% of their income on non-durables.

Well what the heck...

zogger

Wed May 14 07:12:48 -0700 2008
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...are you going to do soon? Made contingency plans, have a friend or relative to stay at, got a storage unit lined up or what? I think, just as a rough rule of thumb, you have to look at local cost of living versus employment potential. Some areas may have a great local average payscale, but with corresponding much higher local living costs. There's tradeoffs. That was one of my prime criteria in relocating out of Atlanta, wanted to be where cost of living was cheaper, and rural and on-site living/working is about as cheap as it gets. Can't beat the commute either. And just as an overall observation, people who have the ability to fully telecommute got it good! You can go someplace where it is really nice along with being cheap as long as you can manage a decent internet connection.

Well what the heck...

gstovall

Wed May 14 08:59:02 -0700 2008
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I moved from Dallas, TX to a full-time telecommute job in rural boonies Arkansas. Nice quality of life, peaceful existence. However, costs are NOT cheaper here than in Dallas. Food is more expensive because it has to be trucked further. There's a 7% state income tax here that I didn't face in Texas. Homebuilding materials are no less expensive here than anyplace else. A decent DSL connection costs $80/month. My water bill, for 5000 gallons/month, is $70.

The only thing I see that is less expensive is the cost of labor. When I moved here 5.5 years ago, the local convenience store chain advertised cashier jobs at $8/hr. That is STILL the price they are advertising. The average annual pay runs around $17K here, and that does NOT go very far at all.

Well what the heck...

Thomas Lord

Wed May 14 09:04:11 -0700 2008
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Heh. $8/hr is currently the low-end of similar unskilled labor jobs here in in the high-cost-of-living Bay Area.

-t

Well what the heck...

gstovall

Wed May 14 09:07:59 -0700 2008
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If that kind of lifestyle is appealing, then it is quite possible to buy a piece of land here for a few thousand dollars, buy an old $5000 mobile home, put in a $3000 septic system, collect rain water for water supply, and you're good to go. I see LOTS of families around here doing just that.

housing

zogger

Fri May 16 15:09:43 -0700 2008
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Most folks biggest expense is housing, it has to be a lot cheaper there, also meaning joe poor guy can afford some land so he can have a big garden and raise some beefs and chickens to help with the food bill. Anyway, congrats on getting a nice telecommute job. I came pretty close to wanting to move to around the hot springs area before I liked it so much. Went there to go get some quartz and just found it lovely.

housing

gstovall

Fri May 16 16:14:43 -0700 2008
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Yep, housing and food are way way up there. With the recent food increases, food has actually passed our house payment of $915/month.

Yes, lots of my friends have a cow butchered every year so they have beef. We've considered it, but coming up with the $1300 all at once is turning out to be more difficult than it used to be.

Housing here is cheaper than California, but it's not cheaper than Dallas. What I find here is that most people just live in really poor housing. The soil, while fertile, is extremely rocky (50% rock by volume), so soil prep is tough.

But it is lovely.

sure, i'll sketch the picture

Thomas Lord

Wed May 14 09:02:23 -0700 2008
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Sure, I'll sketch the picture. The view from one angle, anyway.

I'm limited in what I say about current relocation needs because there are some ongoing negotiations (which I shouldn't comment on). What plans we decide upon depends in part on the outcome of those negotiations.

Speaking generally:

No, there isn't really any available "friends and family" escape pod. We're not alone in this big ol' world but, really, one of our hopes is to get back sufficiently on our feet to be in a position to help some of them who could use the help.

Distant relocation is something we've done in the past and would consider. The catch is that my wife has an excellent, career-track job at the University. It's not enough for a single-income family. For example, we would qualify for Section 8 housing assistance (if the waiting list for such weren't full-up and closed). Still, she's been slowly and steadily climbing the ladder, is stand-out excellent at what she does, and it's a supportive environment with lots of other great people. As a career path, in her profession, she's in a sweet spot and future years look to include many further opportunities for advancement / growth. That being our main revenue asset (and her (and my) main source of normality / sanity / something else to think about besides our woes), it will really take an exceptional situation to justify fleeing the Bay Area at this time.

It's rather ironic.

Round about 2000, we were in half decent shape. A financial planner would have told us to keep doing what we were doing: saving at a very high rate and growth-investing a little aggressively because we were still a little precarious. But, 1997-2000 or so we had made a huge turnaround and great progress on those fronts. Then my bread and butter client, a major ISP, went bust -- big time. (Indeed, during the criminal investigations of the executives of the firm, and the bankruptcy proceedings, I was called upon to help the auditors by providing them some of my records.)

So, there was a choice at that time. One was to go all-in on a little land and a run-down house in Pennsylvania. This was sorely tempting but the catch was that the local economy made the prospects of scrounging up enough revenue to keep and work on such a place very sketchy, at best.

Fishing around, a Bay Area start-up in rapid-ramp-up mode bit, offered relocation, offered acceptable options, interesting systems coding work that also required a lot of socially responsible engineering. They were (and are) on track for either a nice IPO or nice acquisition and I'd be getting in just after first-round financing. So the plan was to live in a s_-box apartment nearby; my wife could look for (and found) work in the area; limit our discretionary spending; keep pumping up savings; and pop out the other end with a lot of economic liberty in just a few years (by now -- really by a couple of years ago). Heck, maybe go back and find a nice situation in Pennsylvania. Or New England somewhere. Or....

Day 0 of that job was "Here is our first HR manual, we just finished writing it. Here's your insurance and tax forms. Here's your desk. Oh, by the way, we changed our mind and eliminated your position but maybe we can think of something else for you to do. Also, we've rejected X% of your relocation expenses so you'll have to pay those yourself." In the weeks that followed, options-hungry twerps decided that harassment was more fun. Flattening my car tires, and much worse. The day I was cornered out of sight and physically threatened by the guy that seemed to be having an affair with the HR director I pretty much had to quit. Whereupon they started slinging legal papers at us demanding full repayment of relocation expenses, thus forcing early and untimely liquidation of some of our investments. The first Internet bust was ramping up and we wound up basically burning savings and investments during futile job searches. Partly to keep sane and partly with the thought of increasing job prospects (heh!) I started the GNU Arch project. Our s_-box apartment was expensive but almost impossible to do better than, rent-wise. My wife managed to land her entry position at the university. We migrated to Berkeley partly because it saved on commute, partly because it's an adopted second home-city for us. Struggle, struggle, scrape, scrape, find apparent toe-holds, one step up, toe-hold fails, fall two steps down, lather rinse, repeat: and here we are. Oh, we both wound up going through uncontested, self-represented Chapter 7 bankruptcy along that path, just to get even this far -- a nice little further obstacle to relocating now.

So, yeah, we could (and might even really like) to have a situation where we can "go someplace where it is really nice along with being cheap as long as you can manage a decent internet connection," but only if that internet connection is reliably (at least for the next few years) spitting out revenue in addition to IP packets. There's a lot fewer of such situations than you might think and it certainly doesn't help when you've got proactively interfering enemies in high places in the open source industrial complex.

-t

Gas Bill

Charles E Hill

Wed May 14 07:15:04 -0700 2008
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I just paid my (natural) gas bill and one thing jumped out at me. The cost per therm has jumped from $0.68-$0.72 in August-December of last year to $0.98 in April. I was wondering why my bill wasn't going down but my usage was. That is damn near a 50% increase in 3 months.

Statistics and the Economy

Uncle Entity

Tue May 13 20:00:58 -0700 2008
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Can't miss out on the government bashing...

Here's an article (warning:mises.org) that explains why having aggregates like the CPI are so important for the State apparatus. These numbers are an important factor in the planning of the economy but also are an indication of the effectiveness of the unelected bureaucrats that control our fates. So it only makes sense that they will have a rosy (seasonally adjusted) outlook on the current economic condition and they when they are all but forgotten they get readjusted to reflect reality.

It is well known that they do very poorly during changing periods like when the economy goes from a growth period to a (seasonally adjusted) very low growth period like today and the same at the other extreme.

Smoke and Mirrors...

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Bhima

Wed May 14 00:57:00 -0700 2008
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I am always bemused when people link to the Ludwig von Misses site to support their anarcho-libertarian ideology or criticisms of today’s governments from that perspective. This is rather like citing an X-Files episode to support a claim of the government covering up their possession of UFOs and UFO technology. I also get a little irritated because many people take the name to mean that here in Austria we are actually subscribing to this economic ideology and successfully running a country using it. We are not… and as far as is known it is not possible to do so.

The so called Austrian School of economics can best be described as an heresy, one which flared up more than a hundred years ago, never really got off the ground, and today is not in main stream economic schooling…. To my knowledge it is not taught in any university economics programs, even as an oddity. As I understand this is because the proponents of the Austrian School reject the scientific method and instead rely on a unique set of mental gymnastics to support a preconceived ideology. An ideology which is stridently against centralization, so you can see why it’s so popular with today’s anarcho-libertarians. Also supporters of the main stream economic schools can point to scores of factual historical events which support their economic theories and prove their economic models. These events, by definition, also invalidate the Austrian School’s claims (if only they would accept the scientific method). The corollary to all of this is that all these people posting links to monographs on Austrian School theories, are drawn to them because they support their ideologies and not because they have been shown to be successful predictors of economic reality or as useful tools in informing public policy. This strikes me as rather unhelpful and eerily reminiscent of Soviet thinking… which didn’t turn out to be so successful. So, I have to wonder if the right direction for societies is the direction which sees the majority to liberty & prosperity or the one which conforms to a particular preconceived ideology.

I apologize in advance if there are bizarre grammatical errors in my post. I am jet lagged, hung over, inconvenienced, and bored… oh and the weather sucks.

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Uncle Entity

Wed May 14 01:25:50 -0700 2008
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Then don't click on the link...who exactly do you think the warning was for?

Unless you want to argue economic theory instead of just making grand generalizing statements that have no basis in fact or apparent knowledge of the subject.

Funny how the Keynesian model completely broke down during this current 'credit crunch' while the Austrian School's theories are as strong as ever. But I assume you already know this...

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Bhima

Wed May 14 05:24:21 -0700 2008
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I’m not sure why you would specifically warn me not click on a link to a crank economist’s site. Hiding behind a warning of doing something foolish isn’t much defense against having the foolishness pointed out. It practically requires me to point this foolishness out! I never claimed to a professional economist or to be completely knowledgeable about economics. I could be wrong but then again it doesn’t really take an expert to read a few books, listen to a few lectures on tape and recognize that this school of economic theory has been largely rejected by nearly the whole of the economist profession. It's not like I am trying to run a countries economy I am simply pointing out that you can’t really link to misses.org and claim to be anything but a crank... or perhaps a radical… certainly it’s not anything you can hold up as incontrovertible evidence that the CPI is wrong or useless or what ever.

I actually did read the whole story you linked because for one I’m stuck in a hotel and besides I’ve been reading a bit about US economic history. I’m very interested in this backlash / narcissistic libertarianism that Ron Paul got going and I’m really interested to see how Bob Barr fairs in his efforts. I must confess I can’t look at him with a straight face after seeing him in Borat but he was pretty OK when I was in Georgia and he was doing his, somewhat cranky, paleo-conservative thing. Maybe he can get Sacha Cohen to campaign for him and it will be a landslide. I have more confidence in him than in John McBush but maybe that’s simply because I am not aware of Bob Barr’s sell outs.

I am not aware of any economists supporting the Austrian school who can unequivocally demonstrate the success of their theories. This is not stuff I made up, it’s part of the historical record. I’m just repeating what I have read of American history. Is there a book you can point to which catalogs the successes & failures of the Austrian School, one which isn’t predicated on anarcho-libertarian ideologies? Otherwise this is all “This is my strongly held belief, therefore it is correct”… which isn’t at all useful… even as a criticism of the Bush Administration’s economic policy. I think there is much to criticize the Bush Administration over but I think we should be accurate with our assertions. I also think a more skillful market regulation would have significantly ameliorated the current market difficulties and that the decision not to do so was a decision based mostly on political ideology and not economics… which is what a lot of folks in the business are saying.

I suppose you could say the Austrian School’s theories are as strong as they ever have been, but the assertion is a nonsensical one… they have never successfully described economic realities and they are not in common use. I don’t really feel the suspicion that all this time all those economists have been dreadfully wrong and it’s this school based on anarcho-libertarian ideologies that offers a set of theories which describe economics correctly. I am also not sure why you make the claim the Keynesian model completely broke down during this latest crisis when economists who self identify as subscribing to the Keynesian school have be warning of the unsustainably of Bush’s economic policies for years. I recall several articles in the New York Times on the subject of easy credit, the lack of skillful regulation in the credit markets, and the real estate ‘bubble’ all being a threat to the warm fuzzy feeling we were all enjoying. My broker realigned my portfolio last summer in anticipation of what is going on now.

More to the point I think there is a lot that could be said about the inaccuracies of the various indices that make up the CPI as well as the danger of making significant decisions using the CPI as the only input. However nothing at all contained at misses.org is going to provide a more reliable set of indicators. And hopefully no one is running around making decisions simply on the CPI.

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Uncle Entity

Wed May 14 06:58:42 -0700 2008
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I’m not sure why you would specifically warn me not click on a link to a crank economist’s site. Hiding behind a warning of doing something foolish isn’t much defense against having the foolishness pointed out. It practically requires me to point this foolishness out!

Well, probably so you wouldn't trot out the strawmen arguments again...

I’m very interested in this backlash / narcissistic libertarianism that Ron Paul got going and I’m really interested to see how Bob Barr fairs in his efforts. I must confess I can’t look at him with a straight face after seeing him in Borat but he was pretty OK when I was in Georgia and he was doing his, somewhat cranky, paleo-conservative thing. Maybe he can get Sacha Cohen to campaign for him and it will be a landslide. I have more confidence in him than in John McBush but maybe that’s simply because I am not aware of Bob Barr’s sell outs.

A couple points here. The Libertarian Party, libertarians, Austrian economists and whoever else you managed to mix up into this paragraph are all different things. You can't generalize from one to the other because they all have different goals and theories — fallacy of construction I believe that's called.

I am not aware of any economists supporting the Austrian school who can unequivocally demonstrate the success of their theories. This is not stuff I made up, it’s part of the historical record. I’m just repeating what I have read of American history. Is there a book you can point to which catalogs the successes & failures of the Austrian School, one which isn’t predicated on anarcho-libertarian ideologies?

Would the Nobel Committee (or whatever their official name is) be sufficiently non-anarchistic?

I also think a more skillful market regulation would have significantly ameliorated the current market difficulties and that the decision not to do so was a decision based mostly on political ideology and not economics… which is what a lot of folks in the business are saying.

is that your 'strongly held belief, therefore it is correct' or are you going off what the business leaders are saying?

But according to the ABCT the current market difficulties couldn't be saved by the skillful central planners because they are the ones who caused the difficulties in the first place. Their policies are the direct cause.

Banking regulations had the effect of moving capital out of the regulated banks into the unregulated investment banking sector where they could leverage their investments something like 20:1 on loans given to people with absolutely no due diligence done by anyone. This is what would be called the unseen effects of the current batch of regulations, people actively went out of their way to go into sectors of the banking system where they could potentially make bigger profits than the legislated risk free boring banks. They bet and lost and now are seeking bailouts from the government in exchange for regulations on the investment banks because apparently the Fed is fully willing to step in and stop very bad things from happening.

You also have to question the source of all this money that found its way into mortgage industry that caused the boom-bust cycle in the first place. Or the dot com boom-bust, saving and loan crisis, etc... and the biggest one of all, the Great Depression.

A hundred years of progressively 'more skillful market regulation' have yet to stop the business cycles, a hundred years of a more and more managed economy and Bear Stearns' lack of capital almost crashed the entire worldwide banking system. Financial Armageddon. So instead of saying the system may be a little flawed you think it's just a matter of more regulation?

I suppose you could say the Austrian School’s theories are as strong as they ever have been, but the assertion is a nonsensical one… they have never successfully described economic realities and they are not in common use.

I'll give you that they aren't in common use by the governments of the world. It would go against their interests to follow a theory that says they are the problem when they have a whole body of work that relies on complex math that the common person couldn't possibly hope to understand to justify their interventionist policies. It is in their favor to have an ignorant population and control what is taught in the public schools and universities. If you want a job as a professional economists you had better know the economics of statism because that's what we have, a statist society.

Yeah, just dismiss me as a crank because I don't subscribe to the common collectivist viewpoint...

I don’t really feel the suspicion that all this time all those economists have been dreadfully wrong and it’s this school based on anarcho-libertarian ideologies that offers a set of theories which describe economics correctly.

OK, the schools not actually based on 'anarcho-libertarian ideologies' but on the fact that humans act through purposeful means to achieve ends.

I would suggest you read some of the works by Mises instead of just basing your opinions on second hand reports. Can't imagine they are flying off the shelves in the People's Republic of Europe so you could probably pick up a copy of Human Action in your native language for virtually free... Well, if any copies survived the bonfires that is.

However nothing at all contained at misses.org is going to provide a more reliable set of indicators.

Yep, you will find very little on mises.org that can be used to support the current mixed market economic system except for pure economic theory to the contrary. No fancy math formulas that tell you how if you increase deficit spending by X amount you will get Y amount of increased consumer spending or if you restrict imports from China the wages for factory workers in Allentown, Pa will increase by Z%.

That's not what they do.

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President4242

Wed May 14 09:37:12 -0700 2008
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A hundred years of progressively 'more skillful market regulation' have yet to stop the business cycles, a hundred years of a more and more managed economy and Bear Stearns' lack of capital almost crashed the entire worldwide banking system. Financial Armageddon. So instead of saying the system may be a little flawed you think it's just a matter of more regulation?

There is another option. Self-contained regions that only trade in *surplus* items. It's not centralization. It's not a worldwide banking system. And it's not the silly worship of Ludwig von Mises and David Ricardo's anti-community attitude. It's localization, based on community, economics based on trading with the guy you meet in church every Sunday. It's the prevention of fraud through familiarization and friendship, rather than the prevention of fraud through force.

And the way to do it is to have every city able to print their own money, and make money exchanges utterly illegal.

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disco

Wed May 14 11:39:14 -0700 2008
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> There is another option. Self-contained regions that only trade in *surplus* items. It's not centralization.

Yes it is. It's just that the center has moved to the regulatory body of the community, and it is a much high regulation than what you have now. Few entrepeneurs will want to work there since they have a smaller market to work with, and aren't allowed to move their goods outside the community where the demand, and hence price, might be significantly higher. You are going to have put up high tariffs to block competition from outside so that the local businesses can survive. The cost of everything will go through the roof. The choice for consumers will be extremely limited. Everybody will drive 20 miles to buy from the rest of the world where they'll have larger choices at much lower prices. What are you going to do? Wall off the community and have a customs port for everyone driving through? Who is going to want to live there? How is that Oregon Project of yours coming along?

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President4242

Wed May 14 16:30:28 -0700 2008
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Yes it is. It's just that the center has moved to the regulatory body of the community

And thus, different communities will have different regulations that will make sense for them. Let the Entrapreneurs all get together and con each other out of money- leave the rest of us out of it.

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T Fluckiger

Wed May 14 13:04:16 -0700 2008
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Much of this has already been tried in western europe. It was called the dark ages. And economically it sucked big time.

I don't see how this could work at all. Perhaps I have misunderstood you...

T

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President4242

Wed May 14 16:32:30 -0700 2008
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Much of this has already been tried in western europe. It was called the dark ages. And economically it sucked big time.

And for those who weren't contaminated by the sin of avarice, parts of it were extremely happy places. A very Eastern Zen way of being happy.

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Uncle Entity

Wed May 14 14:44:22 -0700 2008
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How would you restrict trade and money changing without using force?

And yet again you mischaracterize the theories. Is that because you don't know what they are or is it intentionally propping up scarecrows to argue against? Just curious...

By 'make money exchanges utterly illegal' you mean a pure barter system, right? Between city-states I would imagine but you do realize that if each city had its own currency you wouldn't need this because the only place the currency would be good is within the city. Well, with a worthless fiat currency at least.

But of course you know that your Highness, doubting your word is like doubting the word of the Almighty himself. I shall seek penance in too many pints of beer, your Excellence.

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President4242

Wed May 14 16:29:05 -0700 2008
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How would you restrict trade and money changing without using force?

The same way I'm currently dealing it in my own life- by only dealing with people I KNOW. By buying from local companies.

By 'make money exchanges utterly illegal' you mean a pure barter system, right? Between city-states I would imagine but you do realize that if each city had its own currency you wouldn't need this because the only place the currency would be good is within the city. Well, with a worthless fiat currency at least.

Funny- it didn't happen that way in 1840s-1890s America when each local bank could print it's own money.

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Uncle Entity

Wed May 14 17:08:15 -0700 2008
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The same way I'm currently dealing it in my own life- by only dealing with people I KNOW.Â By buying from local companies.

So what's the problem? Oh, you want to force your ideas on everyone else. If everybody shared your views you wouldn't need trade restrictions and monetary restrictions but unfortunately your peers worship at the church of Ricardo, walmart.

So now you need to introduce force to 'convince' people that your ideas are the Truth. How very Christian of you.

Funny- it didn't happen that way in 1840s-1890s America when each local bank could print it's own money.

Uh huh...Nothing to do with the international gold standard.

Apples and oranges.

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President4242

Thu May 15 07:26:01 -0700 2008
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So what's the problem? Oh, you want to force your ideas on everyone else. If everybody shared your views you wouldn't need trade restrictions and monetary restrictions but unfortunately your peers worship at the church of Ricardo, walmart

Thereby interfering with my life as they put local producers out of business. Just try to get a capacitor or a magnet made in the United States these days.

So now you need to introduce force to 'convince' people that your ideas are the Truth. How very Christian of you.

Yes, in keeping with Acts 4:23-5:20. Of course it's really surprising how few Christians read the Bible.

Uh huh...Nothing to do with the international gold standard.

And just how was this international gold standard administrated?

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Uncle Entity

Thu May 15 11:31:29 -0700 2008
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Acts 4:32; All the believers were one in heart and mind. No one claimed that any of his possessions was his own, but they shared everything they had.

You might note that it's the believers who engage in this activity. Didn't find anywhere where non-believers were struck down by the Holy Ghost because they didn't participate fully in Peter's little experiment. Seemed to be fully voluntary, no commandment or anything.

More of a justification for monks to take a vow of poverty than any claim that God commanded us to live in a church headed socialist paradise.

Funny how people take one small segment of the Bible to backup whatever hairbrained scheme they come up with and ignore the overall message which was one of Liberty.

I can play that game too, Matthew 20:15 Is it not lawful for me to do what I will with mine own? Is thine eye evil, because I am good?

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President4242

Thu May 15 11:45:43 -0700 2008
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You might note that it's the believers who engage in this activity. Didn't find anywhere where non-believers were struck down by the Holy Ghost because they didn't participate fully in Peter's little experiment. Seemed to be fully voluntary, no commandment or anything.

Yes, exactly right. As long as the regions are protected- then why mess with those who don't want to be there? Let them leave. Let them find a community that fits THEIR desires.

More of a justification for monks to take a vow of poverty than any claim that God commanded us to live in a church headed socialist paradise.

Well, I don't see it limited to just monks- but yes. We need to recognize that the cost of wealth is poverty.

Funny how people take one small segment of the Bible to backup whatever hairbrained scheme they come up with and ignore the overall message which was one of Liberty.

Ah, but you see I'm not ignoring it- from your quote:

I can play that game too, Matthew 20:15 Is it not lawful for me to do what I will with mine own? Is thine eye evil, because I am good?

it is lawfull for you to do what you will with YOUR own- as long as it doesn't injure what I own.

In fact, that's the basic concept of liberty that capitalists often forget. They think they can excuse any bad behavior with "It's just business" or "There's a business reason for that". They let their liberty trample other people's liberty- let their focus on the material world make it impossible for others to focus on the spiritual. And that, in short, is just as much a use of force as guns and bombs- and equally as destructive to family and community.

On the Österreichische Schule

Charles E Hill

Wed May 14 15:26:06 -0700 2008
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The self-contained region would have to be self-supporting, if I read this rightly. That is going to be mighty tough in some areas. It also imposes an artificial cap on population. Are you going to regulate immigration? What about birth rates? Think of the problems Israel is having with controlling growth of Jewish settlements in the Occupied Territories. "No growth" there means no immigration. They still allow construction for "natural growth", that is kids being born. That is a major bone of contention.

If cities print their own money, as a convenient medium of exchange, yet it isn't convertable, you are guaranteeing you'd need a self-sufficient city because you have no way other than direct barter to acquire needed goods.

This was tried in several Communist countries -- non-convertable currencies. It is still the norm in Cuba, N. Korea and a few others. You can change Dollars or Euros in, but can't convert local currency to anything else -- and can't take any with you when you leave the country. I can't name one time in history this has ever worked out for very long.

On the Österreichische Schule

President4242

Wed May 14 16:40:54 -0700 2008
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The self-contained region would have to be self-supporting, if I read this rightly. That is going to be mighty tough in some areas.

Agreed. It takes acutally adjusting the lifestyle to match the environment- letting the culture EVOLVE instead of imposing it.

It also imposes an artificial cap on population.

Not neccessarily- far more likely it would impose a NATURAL cap on population- high efficiency, industrialized areas would see lowering birth rates from polution, low efficiecncy areas would see more famine thus also limiting population.

Are you going to regulate immigration?

Each region would have the right to decide that for themselves. A highly industrialized region such as the United States actually REQUIRES 500,000 new immigrants EVERY YEAR just to keep the work force steady.

What about birth rates?

As culture evolves, the birth rates WILL evolve as well- into different forms you and I wouldn't recognize.

Think of the problems Israel is having with controlling growth of Jewish settlements in the Occupied Territories.

Israel's problem is that it was artificially imposed without any thought as to what to do with the already existing population.

If cities print their own money, as a convenient medium of exchange, yet it isn't convertable, you are guaranteeing you'd need a self-sufficient city because you have no way other than direct barter to acquire needed goods.

Thus eliminating the main problem with fiat money systems: trade imbalances.

This was tried in several Communist countries -- non-convertable currencies. It is still the norm in Cuba, N. Korea and a few others. You can change Dollars or Euros in, but can't convert local currency to anything else -- and can't take any with you when you leave the country. I can't name one time in history this has ever worked out for very long.

I can, but it's not in history. By the very definition, it's pre-history; and it worked for several million years.

On the Österreichische Schule

Charles E Hill

Wed May 14 18:25:40 -0700 2008
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I can, but it's not in history. By the very definition, it's pre-history; and it worked for several million years.

Well, that brings up other problems. Most pre-historic cultures were hunter-gatherers and didn't build cities. Hunter-gatherer cultures require larger amounts of open land and impose a natural limit on birthrates. You don't have kids you can't carry when it comes time to move.

Cities evolved once agriculture evolved where people didn't have to depend on the whims of nature for survival. Once cities evolved, trade and convertable currency (gold & silver) followed immediately afterward. I think those are inextricably linked -- cities, trade and money. Direct barter doesn't scale very well.

Communism goes against human nature. It only works if there is plenty to be had by all. You'd have to be an absolute dictator to get people to not strive to acquire more, even if it is just a better standard of living. And by better standard of living, I mean more luxury and less labor.

I also fail to see how your plan would maintain the industrial infrastructure needed to support advanced medicine. You need factories and such for drugs, equipment, transport helicopters, medical schools, etc. Where does that all fit in?

On the Österreichische Schule

President4242

Thu May 15 07:48:26 -0700 2008
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Well, that brings up other problems. Most pre-historic cultures were hunter-gatherers and didn't build cities. Hunter-gatherer cultures require larger amounts of open land and impose a natural limit on birthrates. You don't have kids you can't carry when it comes time to move.

Yes! Exactly right. Cities to me are a BIG part of the problem, not the solution.

Cities evolved once agriculture evolved where people didn't have to depend on the whims of nature for survival. Once cities evolved, trade and convertable currency (gold & silver) followed immediately afterward. I think those are inextricably linked -- cities, trade and money. Direct barter doesn't scale very well.

Actually, neither does trade and money. *Before* trade and money and cities, all men were equal. If there was a bad famine, the chief starved right along with his people. *After* trade and money and cities, power became more and more anonymous. You could no longer hit the person in the nose who treated you badly.

Communism goes against human nature. It only works if there is plenty to be had by all. You'd have to be an absolute dictator to get people to not strive to acquire more, even if it is just a better standard of living. And by better standard of living, I mean more luxury and less labor.

As long as the better standard of living is spread equally, what's the problem with a better standard of living? No, where communism fell down is that it went against the money myth. The idea that some peole are better than others. And because of THAT, a few dictators decided that it would be a great con to nationalize it.

I also fail to see how your plan would maintain the industrial infrastructure needed to support advanced medicine. You need factories and such for drugs, equipment, transport helicopters, medical schools, etc. Where does that all fit in?

I'm pro evolution. That means I'm somewhat *against* advanced medicine. Advanced medicine is just a way to keep people alive who would be better off dead.

In addition- factories and such are just ONE method of achieving that end. The laws of physics don't change because you build a factory.

On the Österreichische Schule

Uncle Entity

Fri May 16 00:33:25 -0700 2008
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Oh my, you're one of those Anarcho-primitivists...

There's one in every crowd.

On the Österreichische Schule

President4242

Fri May 16 07:48:13 -0700 2008
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Yes and no. I'm more of a distributionist- the idea of family, faith and culture being the core of power, rather than materialism and money. Think of distributionists as Anarcho-primitivists who actually had functional families to model their lives on.

On the Österreichische Schule

President4242

Wed May 14 09:27:32 -0700 2008
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Please explain how the Austrian School's theories deal with 4 DECADES of continual trade imbalances destroying the United States economy.

That's where the Austrian school falls down for me. Their abject worship of David Ricardo's flawed comparative advantage theory despite proof to the contrary invalidates ALL of the rest of their work.

On the ?sterreichische Schule

Uncle Entity

Wed May 14 14:18:26 -0700 2008
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Trade imbalance?

Wouldn't that imply that somewhere along the line that we are getting something for nothing? Or do you consider foreign investment to not be 'foreign trade'?

Yeah, if you have some grand scheme to set up your own little fiefdom I could see how a little thing like comparative advantage could pose a problem since you would require all production for the local economy to be produced locally no matter what the consequences. They tried this all before, it's called merchantilism. Didn't work out so good...

I would be interested in seeing this evidence that invalidated ALL of the Austrian School's work, perhaps a link or something?

On the ?sterreichische Schule

President4242

Wed May 14 16:50:31 -0700 2008
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Wouldn't that imply that somewhere along the line that we are getting something for nothing?

Yes.

Or do you consider foreign investment to not be 'foreign trade'?

I consider it to be a hostile invasion, no different than an army marching across your border to turn all of your people into slaves.

Yeah, if you have some grand scheme to set up your own little fiefdom I could see how a little thing like comparative advantage could pose a problem since you would require all production for the local economy to be produced locally no matter what the consequences. They tried this all before, it's called merchantilism. Didn't work out so good...

And instead, you would make such little fiefdoms impossible and call it "freedom" when it is really slavery.

Oh yeah, and Brunei, Lichtenstien, Palau, and Macau all seem to be doing all right. They might not have GROWING economies, but they have a comfortable lifestyle for their spot in the environment.

I would be interested in seeing this evidence that invalidated ALL of the Austrian School's work, perhaps a link or something?

Here's the ultimate link that to me says there's something desparately wrong with both the Austrian and Kenseyan schools of thought when it comes to so-called "freedom" of business: List of countries by external debt.

Not a single country YOU would think of as "free" owns it's own soul- is debt free. They ALL owe their existance to others and are not self supporting.

On the ?sterreichische Schule

Uncle Entity

Wed May 14 17:31:53 -0700 2008
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Who said such fiefdoms would be illegal?

If it were a collective based on free association then why would anyone have a problem with it, especially those who advocate free association? What, you think the anarchist armies are going to march in and tell your flock how to live their life?

But that's not what you're saying. You wish to force everyone else into this system through the power of an 'enlightened dictator' which is the opposite of free association.

Not a single country YOU would think of as "free" owns it's own soul- is debt free.? They ALL owe their existence to others and are not self supporting.

Yeah, you got me. You have a rational (yet incorrect) argument. The only solution is to throw up protectionist barriers to solve this 'slavery' problem. Merchantilism for the win...

On the ?sterreichische Schule

President4242

Thu May 15 07:40:10 -0700 2008
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Who said such fiefdoms would be illegal?

By allowing foreign investment, they're de facto illegal.

If it were a collective based on free association then why would anyone have a problem with it, especially those who advocate free association?

Because it prevents the ability of the strong to dominate the weak- the ability of the rich to put the poor into debt.

What, you think the anarchist armies are going to march in and tell your flock how to live their life?

Why not? They already have. The fact that the secret that debt is slavery is almost unknown, and that very few Christians in the United States have ever read Acts Chapters 4 & 5, is proof of it.

But that's not what you're saying. You wish to force everyone else into this system through the power of an 'enlightened dictator' which is the opposite of free association.

Uh, no. I just want to release the secret that DEBT IS EVIL- and also turn the law on it's head, making LOCAL ORDINANCE the highest law of the land and the CONSTITUTION the lowest. The rest sorts itself out- because cities that go into debt will end up being controlled by those who don't.

Yeah, you got me. You have a rational (yet incorrect) argument. The only solution is to throw up protectionist barriers to solve this 'slavery' problem. Merchantilism for the win...

Thus freeing the population from the true use of force- USURY.

unintended consequences

zogger

Wed May 14 07:20:50 -0700 2008
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Having the fatcats engineer boom and bust cycles for skimming/ unearned wealth transference is obvious, but another thing that happens is local tax districts tend to overvalue during the boom cycles, raise rates to property and business owners, then when it goes down they are so used to spending x, they couldn't get by on y, making the problem worse. Grandiose projects started that can't be funded adequately, more government workers hired that have to be paid, long range pension planning for same, etc.. I've found the only economic self defense short of becoming a fatcat is to try and drop the needs for their sort of cash for day to day living. Any time you can reduce dependence on their phony money schemes the better, just eliminate that whole middleman scenario as much as possible. Very hard to do it totally, but not that hard to eliminate huge chunks of it. It helps to even out *their* cycles.

Don't worry about CPI & UE - Libor is broken

tqft

Tue May 13 20:17:05 -0700 2008
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Don't worry about CPI & Unemployment to some extent they are self correcting - and if you believe everything the government tells you - maybe you have it coming. To some extent economic analysis done by government & business is a self-fulfilling prophecy.

Be more concerned:www.bloomberg.com/apps/news

If you don't think Libor is important, please post yoru query and I will try and explain.

"

May 13 (Bloomberg) -- The benchmark interest rate for at least $347 trillion of derivatives and 6 million U.S. mortgages is set for its biggest shakeup in a decade on concern that banks misquoted their true borrowing costs.

``We have not run away or hidden from the need for reform or the need for review'' of ``serious issues'' in the U.K. financial-services industry, British Bankers' Association Chief Executive Officer Angela Knight said at a hearing of a parliamentary committee in London today. The BBA is set to announce the results of its most far-reaching review of the way it sets the London interbank offered rate in a decade on May 30.

...

``The Libor numbers that banks reported to the BBA were a lie,'' said Tim Bond, head of global asset allocation at Barclays Capital in London. ``They had been all along. The BBA has been trying to investigate them and that's why banks have started to report the right numbers.''

...

While the association set the one-month dollar Libor rate at 2.72 percent on April 7, the Federal Reserve said banks paid 2.82 percent for secured loans later that day. Secured loans typically yield less than unsecured debt.

...

"

a) Notice the $t in the first paragraph

b) Making every bank on the panel trade at the set rate quoted to another random bank on the panel might help the process.

Don't worry about CPI & UE - Libor is broken

Uncle Entity

Tue May 13 23:54:27 -0700 2008
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I like this quote:

The BBA has been trying to investigate them and that's why banks have started to report the right numbers.

I remember there was a fuss a month or so ago where there was serious speculation that banks were underreporting the numbers so as to not make themselves look like they were in trouble and paying higher rates than their peers.

Higher rates == higher risk == lower stock price.

After some talk of a formal investigation the rates jumped up overnight and million upon million of people woke up and found they had higher interest payments since the majority of ARMs and other variable rate loans are tied to this index.

b) Making every bank on the panel trade at the set rate quoted to another random bank on the panel might help the process.

That's not what it's all about. IIRC they throw out the highest and lowest few (3?) and average what's left to come up with the number. The banks are free to loan each other money at whatever rate they agree upon.

This is only so there is a standard index that variable rate loans can base their markup off of, like libor + 3%.

People actually benefited from a broken libor, now that it's accurate it works out to a higher mortgage payment for a lot of folks.

Don't worry about CPI & UE - Libor is broken

tqft

Wed May 14 02:00:38 -0700 2008
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"b) Making every bank on the panel trade at the set rate quoted to another random bank on the panel might help the process.

That's not what it's all about. IIRC they throw out the highest and lowest few (3?) and average what's left to come up with the number. The banks are free to loan each other money at whatever rate they agree upon."

The banks being free not to loan - ie no obligation to actually cough up cash - at the rate they quote. Some $ discipline may help the process is my suggestion. If they will not loan at the set rate - then why is it being set? If they won't lend to a bank on the panel at that rate - why is that bank on the panel? It was simply an idea of mine for the banks to put some skin in the game.

Don't worry about CPI & UE - Libor is broken

Uncle Entity

Wed May 14 02:35:29 -0700 2008
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I looked up libor on the wikipedia and it turns out I was wrong, I thought that it was the rate that banks were borrowing instead of the rate they were offering. In light of this and the fact they were understating the number (and not actually doing any interbank loaning because of the subprime risks) it would seem this matter needs further investigation to see what their motives were aside from the claim that it made them look weak to other banks who could potentially loan them the money they needed to cover their reserve requirements.

Statistics and the Economy

James Raider

Wed May 14 15:36:48 -0700 2008
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The U.S. economy is being stressed and inflation is back. The challenge for the Next President is to make the economy the foremost priority. Doing that will require real and accurate numbers.

http://pacificgatepost.blogspot.com/2008/05/44th-president-your-first-challenge.html

It is being all but ignored by the current administration and Congress.