[Winder]

You have the right to feel that way, but maybe you could actually put it in your own words for a change.

Sowell is one of the most educated economist in the country and currently working at the top think tank in the country. B.A. at Harvard, M.A. at Columbia (under Professor Arthur Burns), and PhD under Friedman at the Chicago School of Economics. He has taught at UCLA, Cornell, & Stanford. He has written some of the best selling books on economics.

There are a lot of people who will come up with reasons to not like what Sowell has to say, but I don't see many people actually putting for evidence that he is wrong, and there is a very important difference.

Maybe you can explain (without copying and pasting someone else idea) how Sowell is factually wrong.

[jeffkrol]

You have the right to feel that way, but maybe you could actually put it in your own words for a change.

Sowell is one of the most educated economist in the country and currently working at the top think tank in the country. B.A. at Harvard, M.A. at Columbia (under Professor Arthur Burns), and PhD under Friedman at the Chicago School of Economics. He has taught at UCLA, Cornell, & Stanford. He has written some of the best selling books on economics.

There are a lot of people who will come up with reasons to not like what Sowell has to say, but I don't see many people actually putting for evidence that he is wrong, and there is a very important difference.

Maybe you can explain (without copying and pasting someone else idea) how Sowell is factually wrong.

some of the "best minds" worked for the spanish inquisition.. doesn't make them instantly correct..

as to proving Sowell wrong is it you just don't believe "other people"???
you know recent studies show we make a decision and THEN find facts to back them.. arse backward if you ask me.......

I already told you he is full of it and awful full of himself.. The rest I posted was just 3rd party verification.. I can't be "reinventing the wheel" for every discussion..
IF they say what I also believe.. why not c/p.. sure beats just "making up stuff" like some other people (see Colbert Report.... )

For fun.........sort of.......

Youtu.be

Youtu.be

Pick one.........

The Nobel Prize winning economist Amartya Sen reached conclusions inconsistent with Sowell's research of price gouging.

http://en.wikipedia.org/wiki/Thomas_Sowell
http://en.wikipedia.org/wiki/Amartya_Sen

[Winder]

some of the "best minds" worked for the spanish inquisition.. doesn't make them instantly correct..

as to proving Sowell wrong is it you just don't believe "other people"???
you know recent studies show we make a decision and THEN find facts to back them.. arse backward if you ask me.......

I already told you he is full of it and awful full of himself.. The rest I posted was just 3rd party verification.. I can't be "reinventing the wheel" for every discussion..
IF they say what I also believe.. why not c/p.. sure beats just "making up stuff" like some other people (see Colbert Report.... )

For fun.........sort of.......

302 Found


Pick one.........
Thomas Sowell - Wikipedia, the free encyclopedia
Amartya Sen - Wikipedia, the free encyclopedia

Believing other people is not the question. It is the numbers that I am interested in.

I posted the link to Sowell for the point that household income is a crap statistic for gauging income growth. If you want to write an article about income then use INDIVIDUAL income. It would seem to be common sense. The definition of INDIVIDUAL income has not changed over time. It is always ONE person. Household composition changes over time. What part of this are you arguing with.

Do you not believe household composition has changed significantly over the last 80 years?
Do you think that a different definition of individual has been used over time?
What specifically did professor Sowell say about household income that you have a problem with?

[Nesster]

On the household vs individual thing:

Conservatives commonly focused on the flaws of household income as a measure for standard of living in order to refute claims that income inequality is growing, becoming excessive or posing a problem for society.[110] According to sociologist Dennis Gilbert, growing inequality can be explained in part by growing participation of women in the workforce. High earning households are more likely to be dual earner households,[9] Thus gross annual household income does not always accurately reflect standard of living as it does not consider household size. [111]

Inequality can also be explained by failure to adjust for size of household. A 2004 analysis of income quintile data by the Heritage Foundation stated that the aggregate share of income held by the upper quintile (the top earning 20 percent) decreases by 20.3% when figures are adjusted to reflect household size.[112]

However, the 2011 CBO study "Trends in the Distribution of Household Income" mentioned in this article adjusts for household size so that its quintiles contain an equal number of people, not an equal number of households.

Personal income represents the earnings of individuals and, therefore, directly reflects occupational status, achievement and educational attainment. Trends in personal income are more indicative of the job market and the economy than household income. . While many income earners, though not the majority, reside in households with more than one income earner

Income inequality in the United States - Wikipedia, the free encyclopedia

Obviously, personal income also carries some problems: it does not account for how many dependents the single income supports.

----


But, maybe we've had enough of this detour into what 'is' is?

Back to the idea that a little inflation is a good thing.

A lot of inflation is a bad thing. Dishonest measures of inflation are a bad thing. We know the politicians of both parties have monkeyed with the CPI.

But a little inflation is a good thing: it helps break a chicken-egg log jam with demand and supply, because the spender feels he'll have more (not less, as is the case today) money in the future. The maker feels that he will have pricing flexibility in the future - and as these things are financed, he'll pay today's borrowing in tomorrow's dollars.

Ultimately, the dream is that we keep on 'growing' ourselves out of any current budget mess.

[Winder]

On the household vs individual thing:

Income inequality in the United States - Wikipedia, the free encyclopedia

Obviously, personal income also carries some problems: it does not account for how many dependents the single income supports.

----


But, maybe we've had enough of this detour into what 'is' is?

Back to the idea that a little inflation is a good thing.

A lot of inflation is a bad thing. Dishonest measures of inflation are a bad thing. We know the politicians of both parties have monkeyed with the CPI.

But a little inflation is a good thing: it helps break a chicken-egg log jam with demand and supply, because the spender feels he'll have more (not less, as is the case today) money in the future. The maker feels that he will have pricing flexibility in the future - and as these things are financed, he'll pay today's borrowing in tomorrow's dollars.

Ultimately, the dream is that we keep on 'growing' ourselves out of any current budget mess.

it is true that individual income does not take into account the number of dependents, but the number of dependents has nothing to do with whether or not wages are rising or falling. If you want to track the growth of income then individual income is the most accurate. A person who decided to have 10 children is creating his own financial burden and that would not be a measure of prosperity for the rest of us.

As I have said in a previous post. Inflation in itself is not a good or bad thing. Real inflation (inflation of the monetary base) is simple one economic measure.

Governments who plan to generate or have A LOT of debt want more inflation than normal. Just as inflation destroys wealth (if inflation exceed interest on your investments then you lose money), inflation erodes the actual cost of debt.

One area where Krugman differs from Keynes is that Krugman says that debt is not important. He really does believe you can spend your way to prosperity. Keynes based his model around the economic conditions that existed at the time of the Great Depression. The country had no debt and the tight monetary policy is why the Depression started in the first place (even Friedman would agree with Keynes on this point, but Von Mises, Hayak, & Rorthbard would not). Keynes has been twisted considerably since his death, and even during his lifetime his ideas were being misapplied. He attempted to correct this in the last paper he wrote before his death. Everyone should read main work "The General Theory of Employment, Interest, and Money" by Keynes. Even though I don't agree with some of his outcomes, the economic models and tools that he introduced to the pseudo-science of economics are very important. Von Mises's "The Theory of Money and Credit" should also be on the reading list. Two very different views by two very intelligent men.

Inflation needs to stay ahead of the population growth and not exceed the wage growth or interest rates. If interest rates rise and inflation falls, then Krugman's plan is economic disaster.

[jeffkrol]

One area where Krugman differs from Keynes is that Krugman says that debt is not important. He really does believe you can spend your way to prosperity. Von Mises's "The Theory of Money and Credit" should also be on the reading list. Two very different views by two very intelligent men.

Inflation needs to stay ahead of the population growth and not exceed the wage growth or interest rates. If interest rates rise and inflation falls, then Krugman's plan is economic disaster.

No Von Mises is a "religion" w/ no basis in reality (or at least a healthy one)
your statement on Keynes and Krugman is wrong and/or deceptive..

NOBODY believes debt is not important, and quite the contray.. Gov must run "debt' to get money into a stagnant or dropping economy.. Spend int othe economy to make it work so to speak..
It would take way too much typing to explain to you, and frankly you are already closed to the idea of how our economy really works (you are a flat earther in my mind) but for the sake of amusement start reading here:
http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

intro:

So what are the deadly (yet perhaps innocent) frauds? First,
government finance is supposed to be similar to household finance:
government needs to tax and borrow first before it can spend.
Second, today’s deficits burden our grandchildren with government
debt. Third, worse, deficits absorb today’s saving. Fourth, Social
Security has promised pensions and healthcare that it will never
be able to afford. Fifth, the U.S. trade deficit reduces domestic
employment and dangerously indebts Americans to the whims of
foreigners - who might decide to cut off the supply of loans that we
need. Sixth, and related to fraud number three, we need savings to
finance investment (so government budgets lead to less investment).
And, finally, higher budget deficits imply taxes will have to be higher
in the future - adding to the burden on future taxpayers.
Mosler shows that whether or not these beliefs are innocent,
they are most certainly wrong. Again, there might be some sort of
economy in which they could be more-or-less correct. For example,
in a nonmonetary economy, a farmer needs to save seed corn to
‘invest’ it in next year’s rop. On a gold standard, a government
really does need to tax and borrow to ensure it can maintain a fixed
exchange rate. And so on. But in the case of nonconvertible currency
(in the sense that government does not promise to convert at a fixed
exchange rate to precious metal or foreign currency), none of these
myths holds. Each is a fraud.
The best reason to read this book is to ensure that you can
recognize a fraud when you hear one. And in his clear and precise
style. Mosler will introduce you to the correct paradign to develop
an understanding of the world in which we actually live.”
L. RANDALL WRAY, PROFESSOR OF ECONOMICS, UNIVERSITY OF
MISSOURI - KANSAS CITY, RESEARCH DIRECTOR, CENTER FOR
FULL EMPLOYMENT & PRICE STABILITY, SENIOR SCHOLAR, LEVY
ECONOMICS INSTITUTE

And I hate Mises to pieces........

[Winder]

I really don't care if you hate him on not. His work laid the ground work for Hayak's Nobel prize, and his work influences many great economists. Maybe you can point me to some of the books you have written on the subject.

Gov must run "debt' to get money into a stagnant or dropping economy

Really? You do realize that the country did NOT run on debt for most of its existence.

It would take way too much typing to explain to you

You have not typed 100 word this entire thread. All you do is copy and paste. I don't think you have an original idea. If you do you obviously don't know how to express it.

Krugman does not consider debt to very important as long as interest rates are low and inflation is high. He has said as much.

Exactly what part of my statement on Keynes and Krugman do you find in error? Take you time and find a good article to copy and paste in. I would have for you to have to embarrass yourself by writing your own thoughts.

[jeffkrol]

I really don't care if you hate him on not. His work laid the ground work for Hayak's Nobel prize, and his work influences many great economists. Maybe you can point me to some of the books you have written on the subject.

And Obama won the Nobel Peace Prize.. what is your point?? you seem to have a hero worship fetish.....

Really? You do realize that the country did NOT run on debt for most of its existence.

Actually that is not true but when the US was on the "gold standard it had to "back" it's money..
US was in debt to France for the Revolution..ect..
for fun (you do know fun don't you??:
The Nation's Credit

"Though much an enemy to the system of borrowing, yet I feel strongly the necessity of preserving the power to borrow. Without this, we might be overwhelmed by another nation, merely by the force of its credit." --Thomas Jefferson to the Commissioners of the Treasury, 1788. ME 6:423

Am I free to refute you w/ a chart????? Or do I need to use my time machine and gather all the primary sources and then write a thesis to make you happy??



Exactly what debt are you referring to??

On Jan. 8, 1835, all the big political names in Washington gathered to celebrate what President Andrew Jackson had just accomplished. A senator rose to make the big announcement: "Gentlemen ... the national debt ... is PAID."

That was the one time in U.S. history when the country was debt free. It lasted exactly one year.

http://www.npr.org/blogs/money/2011/04/15/135423586/when-the-u-s-paid-off-th...-it-didnt-last

You have not typed 100 word this entire thread. All you do is copy and paste. I don't think you have an original idea. If you do you obviously don't know how to express it.

Does one always have to reinvent the wheel.. I post what fits my understanding. I post words that are said better and faster than I can.. Sue me.

Krugman does not consider debt to very important as long as interest rates are low and inflation is high. He has said as much.

One area where Krugman differs from Keynes is that Krugman says that debt is not important.
Two totally different statements........do you see that??

Exactly what part of my statement on Keynes and Krugman do you find in error? Take you time and find a good article to copy and paste in. I would have for you to have to embarrass yourself by writing your own thoughts.

Keynes set a good foundation. More recent "experts" have polished it......
The economy is unarguably complex but when you don't understand what you can and can't do w/ it (because of old, or faulty, or just biased) any research based on these premises fails.. "garbage in.. garbage out"

MY key to this is when all the "gurus go "this or that should happen" then when it doesn't they need to twist something around or claim it as an exception to the rule just tells me they really don't know the rules..MY thought...............

Sorry I'm so hard on your demigods but that is just the way I see and understand it.........Feel free to ignore my posts.....

[jeffkrol]

join the school winder and be correct...........
MMT, THE EURO & THE GREATEST PREDICTION OF THE LAST 20 YEARS? | PRAGMATIC CAPITALISM

In the last few years, the Euro crisis has proven a remarkably complex and persistent event. And no school of thought so succinctly predicted the precise cause and effect, as the MMT school did. These predictions were not vague or general in any manner. In reading the research from MMTers at the time of the Euro’s inception, their predictions are almost eerily prescient. They broke down an entire monetary system and described exactly why its construction would lead to financial crisis if the union did not evolve.

In 1992 Wynne Godley described the inherent flaw in the Euro:

“If a government does not have its own central bank on which it can draw cheques freely, its expenditures can be financed only by borrowing in the open market in competition with businesses, and this may prove excessively expensive or even impossible, particularly under conditions of extreme emergency….The danger then, is that the budgetary restraint to which governments are individually committed will impart a disinflationary bias that locks Europe as a whole into a depression it is powerless to lift.”

Some economists say MMT focuses too much on reality by focusing on the actual operational aspects of the banking system and the monetary system. But as we have seen time and time again, having a poor understanding of the monetary system is not only detrimental to your portfolio, but detrimental to the millions of citizens who are now being subjected to the ignorance of the economists who influence these monetary constructs.

MMT focuses too much on reality........... food for thought.. who would want to focus on reality when social engineering is much more fun..

As to the Brits..
funny historical statement......

Cameron’s doing the right thing. Taking a little pain now so that they can heal and grow out of it sooner rather than later. It’s not easy, but it’s the right thing to do. What’s staggering, is that we in the US are going in the other direction. England has tried and now discarded due to failure many things we are trying to implement. What kind of fools are running the show here? (that was rhetorical for those wondering)
08/10/2010 at 1:58 PM

“THE WORST BIT IS YET TO COME” | PRAGMATIC CAPITALISM

GB WELCOME to your self imposed "double dip"...........

Bwahahahahahaha..... opps sorry idiocracy is really not a laughing matter.. Of course they could always fix it by going to war somewhere.....

EDIT: added for fun: YES I agree and don't want to type it all...................
Conclusion

Just like the latest ECB monetary aggregates are showing what the real situation is like in the Eurozone, the Bank of England’s data is painting a very grim picture of life in Britain as the draconian fiscal austerity drives that economy into the ground.
The data also provides a continued rejection of mainstream macroeconomic theory, which is an interesting aspect in its own right. Over the last several years, the major predictions that one would derive from mainstream macroeconomic theory have been discredited by the actual data. The state of orthodox monetary theory is in ruins and students would be well advised not to take courses in “Monetary Economics” or “Macroeconomic Economics”.

http://bilbo.economicoutlook.net/blog/?p=18007

you like data and numbers Bill Mitchell has plenty.. formulas too!!!

[Winder]

http://faculty.chicagobooth.edu/john.cochrane/research/papers/Cochrane_Infla...al_Affairs.pdf

http://faculty.chicagobooth.edu/john.cochrane/research/papers/understanding_policy_EER.pdf

[Winder]

David K. Levine: An Open Letter to Paul Krugman
http://faculty.chicagobooth.edu/john.cochrane/research/papers/krugman_response.htm

[jeffkrol]

http://faculty.chicagobooth.edu/john.cochrane/research/papers/Cochrane_Infla...al_Affairs.pdf

Garbage.. Zimbabwe has absolutely nothing to do w/ the US.. Also ignores Arab oil crisis and it's effect on inflation (external uncontrollable by any gov. means short of war)
ANY paper that relates Zimbabwe and/ or Weimer republic is not worth my time........why not throw Greece (also pointless) in there.....

http://faculty.chicagobooth.edu/john.cochrane/research/papers/understanding_policy_EER.pdf

more garbage.. hell will freeze over before those counties can pay their debt off.....they just don't want to admit it......

A‘‘shock absorber’’which functions like government equity would allow variation in the present value of
surpluses without default.Far greater reliance on long-run debt is a good first step.If surplus shocks could express themselves
in long-term interest rate variation rather than roll-over difficulties and immediate pressure on aggregate demand,there
would at least be more time to address underlying problems.Similarly,the first step for the Euro ought to be to demand far
greater long-term financing from countries expecting a bailout.

[jeffkrol]

David K. Levine: An Open Letter to Paul Krugman

Krugman is only ever half right. I consider him irrelevant.

http://faculty.chicagobooth.edu/john.cochrane/research/papers/krugman_response.htm

Again.. who cares about Krugman.. When he is right he is right.. when he iis wrong he just forgot why he was right.....
Krugman is no MMT guru.........

Read about the fallacy of composition............
New Page 1

The question is whether the US government can run deficits forever. The answer is emphatically “yes”, and that it had better do so. If you look back to 1776, the federal budget has run a continuous deficit except for 7 short periods. The first 6 of those were followed by depressions—the last time was in 1929 which was followed by the Great Depression. The one exception was the Clinton budget surplus, which was followed (so far) only by a recession.

Why is that? By identity, budget surpluses suck income and wealth out of the private sector. This causes private spending to fall, leading to downsizing and unemployment. The only way around that is to run a trade or current account surplus.

The problem is that it is hard to see how the US can do that—in fact, our current account deficit is now rising toward 7% of GDP. All things equal, that means our budget deficit has to be even larger to allow our private sector to save. Given our current account balance, the budget deficit would have to reach 9% of GDP to allow our private sector to have a surplus of 2% of GDP.

I don’t want to give the impression that government deficits are always good, or that the bigger the deficit, the better. The point I am making is that we have to recognize the macro relations among the sectors.

If we say that a government deficit is burdening our future children with debt, we are ignoring the fact that this is offset by their saving and accumulation of financial wealth in the form of government debt. It is hard to see why households would be better off if they did not have that wealth.

If we say that the government can run budget surpluses for 15 years, what we are ignoring is that this means the private sector will have to run deficits for 15 years—going into debt that totals trillions of dollars in order to allow the government to retire its debt. Again it is hard to see why households would be better off if they owed more debt, just so that the government would owe them less.

There are other differences between the federal government and an individual household. The government is the issuer of our currency, while households are users of the currency. That makes a big difference, and one explored in many other CFEPS publications. However, the purpose of this particular note is to explain why we cannot aggregate up from the individual household situation to the economy as a whole. The US government’s situation is not in any way similar to that of a household because its deficit spending is exactly offset by private sector surpluses; its debt creates equivalent net financial wealth for the private sector.

You can talk micro all you want but you are clueless on the macro level. even though it is generally quite straight forward....

The sectoral balances can be broken down according to GDP:

GDP = C + I + G + (X – M)

C = consumption

I = investment

G = government spending

X = exports

M = imports

Or stated differently;

GDP = C + S + T

C = consumption

S = saving

T = taxes

From there we can conclude:

C + S + T = GDP = C+ I + G + (X – M)

If rearranged we can see that these sectors must net to zero:

(I – S) + (G – T) + (X – M) = 0

(I – S) = private sector balance

(G – T) = public sector balance

(X – M) = foreign sector balance

Feel free to c/p your points out of those rags... I really don't have time to read all of it..........Let's just call it Economic "cliff notes"......

[Winder]

Krugman is only ever half right. I consider him irrelevant.


Again.. who cares about Krugman.. When he is right he is right.. when he iis wrong he just forgot why he was right.....
Krugman is no MMT guru.........

I don't care what you consider "irrelevant". I posted it in regard to the original post.

[jeffkrol]

I don't care what you consider "irrelevant". I posted it in regard to the original post.

your kind of cranky....


Let me be blunt.. Do YOU accept this identity????

(I – S) + (G – T) + (X – M) = 0


C = consumption
I = investment
G = government spending
X = exports
M = imports
Or stated differently;
GDP = C + S + T
C = consumption
S = saving
T = taxes

and in your own words what does it mean to you and how would you use it to fix the economy????