For the inflation "hawks" out there

[Goo For You]

The debate on monetary policy isn't really about free-market "hawks" against Keynesian/statist "doves"; it's a rules versus discretion debate between free-market (Friedman/Buchanan) "monetary constitutionalists" and people from both sides of the political spectrum who think they know better than the markets:


http://marketmonetarist.com/2013/01/...-constitution/

[MatthewT]

I dunno; they crashed the interest rate to zero and print a trillion dollars a year, and it doesn't look like it's working.

what now?

[Goo For You]

Remember the graph I showed you last time?

It could be a lot worse, you know.

In other words, under worse (deflatory) policy, the line could be pointing downward......

[MatthewT]

so, GDP doubled in 15 years; that's what, under 5%. we're growing at, what, less than 2% now.

i think you're going to see that line flatten out before 2015

[Goo For You]

so, GDP doubled in 15 years; that's what, under 5%. we're growing at, what, less than 2% now.

You looked at a graph showing the economy growing at close to 5% per year after the crisis, and concluded that the economy is growing at less than 2%......

i think you're going to see that line flatten out before 2015

Pretty insightful.....

[Skyway]

According to this CNBC article the US economy shrank by .1% in the 4th quarter 2012 and growth for the year was 2.2%. That's better than the 1.8% growth of 2011 but a far cry from 5%.

http://www.cnbc.com/id/100419252

[MatthewT]

yeah, it also worries me that so much of our GDP is basically ad revenues; what's Facebook worth?

[Goo For You]

According to this CNBC article the US economy shrank by .1% in the 4th quarter 2012 and growth for the year was 2.2%. That's better than the 1.8% growth of 2011 but a far cry from 5%.

http://www.cnbc.com/id/100419252

These reports are a bit misleading in the way they talk about GDP. What they're talking about is "real" GDP, a measure that leaves out the effects of inflation (averaging 2% after 2008) -- as if inflation were either irrelevant or counterproductive. (It's neither; when there's a serious fear of deflation, a small amount of inflation is a VERY good thing.)

When talking about the efficacy of fiscal and monetary policy, the relevant measure is nominal GDP. Economists and the Fed want little over 5% nominal growth for the catch-up period, and then 5% for the rest of eternity. These goals are very close to being met, thanks to QE3. (Hence the graph.)

PS. No one's hoping to see sustained "real" growth rates of 5% anymore...

[Goo For You]

yeah, it also worries me that so much of our GDP is basically ad revenues; what's Facebook worth?

An amazing amount of people get a large amount of pleasure from using Facebook. What does it matter whether they get their revenue from ads or from user fees?

[Bosch76]

yeah, it also worries me that so much of our GDP is basically ad revenues; what's Facebook worth?

Have you ever wondered why the mainstream media does not do stories on why unlimited political ad spending is bad?

[booybob]

Have you ever wondered why the mainstream media does not do stories on why unlimited political ad spending is bad?

They do but they only focus on the unlimited spending from Republican Super Pacs and Republican leaning causes while forgetting to mention the unions and the ads being run by democrat leaning groups.

[MatthewT]

simple. guy starts an airline. dozens, if not hundreds, of companies spring up to supply him with everything he can afford to buy to run his airline; all kinds of businesses, from food service, to scrap metal, to machine shops, etc., etc., etc. thousands, tens of thousands of people are gainfully and productively employed.

what does facebook spawn? where's the synergy? where's the growth? is it worth $40 a share? $16? $1? what's the net present value of an unstable flow of ad dollars?

just sayin'

[Goo For You]

tens of thousands of people are gainfully and productively employed.

what does facebook spawn? where's the synergy? where's the growth?

Come on, now. The service sector wasn't invented yesterday.

1) There are thousands of companies running around the Facebook ecosystem (Google Zynga for starters).

2) Some people are obsessed with gadgets, some people are obsessed with services. What's so special about a shining box of metal? (If you say planes I say healthcare, so let's compare someone's obsession with shining new barbecue grills, hi-tech microwaves and robot dogs with another guy's obsession with Twitter and FarmVille)

3) Manufacturing in developed countries is so automatized that you can't really pull the jobs card anymore.....

what's the net present value of an unstable flow of ad dollars?

just sayin'

At minimum, roughly the same as it were if it came from user fees; but more likely, a helluva lot more. The people who run these companies tend to think this stuff through...

[MatthewT]

yeah, the service economy is more fragile than the manufacturing economy.

that's my point in a nutshell

[MatthewT]

facebook has user fees?

[Goo For You]

yeah, the service economy is more fragile than the manufacturing economy.

that's my point in a nutshell

Care to explain why you think so?

Assembly line jobs were easily replaced by automation.

How do you automate programming and babysitting?

facebook has user fees?

That point just flew straight over your head, didn't it?

Or is it my English (it's my second language, sorry)?

[BeetTheBoxer]

more change we can believe in

[BeetTheBoxer]

demoRat party strikes again. pathetic

[MatthewT]

Care to explain why you think so?

Assembly line jobs were easily replaced by automation.

How do you automate programming and babysitting?




That point just flew straight over your head, didn't it?

Or is it my English (it's my second language, sorry)?

uh, automation does not cost jobs; it increases production. that's like, been kind of settled already. obama even took some shit for asserting your point, and being rebuffed.

but yeah, a country that can make its own needs for survival, and can arm itself, and fight, is more stable than a country that needs other countries to make things for it, sell it arms, and fight for it.

it's kind of basic survival; you're still on the "everything is getting better and better and better" bandwagon

[Goo For You]

uh, automation does not cost jobs; it increases production. that's like, been kind of settled already. obama even took some shit for asserting your point, and being rebuffed.

You're cutting corners. The actual mechanics of "creative destruction" go like this:

The destructive part of automation is that 100 assembly line workers are replaced by 10 specialized engineers. In other words, 100 relatively unskilled people are out of work, and 10 relatively skilled people command ever bigger salaries. The creative part is that the latter folks use their increased wealth to buy more goods and services, creating jobs for the displaced workers in the service sector -- but not so much (if at all) in manufacturing, because of automation!

So the logical conclusion is that manufacturing is more fragile than services in this regard...

Wanna try again?

but yeah, a country that can make its own needs for survival, and can arm itself, and fight, is more stable than a country that needs other countries to make things for it, sell it arms, and fight for it.

Here you're basically asserting that Adam Smith was wrong.

Wanna back the claim up with something?

it's kind of basic survival; you're still on the "everything is getting better and better and better" bandwagon

Change the channel, dude. Alex Jones is not good for you.