4
0

Noam Chomsky (2014) "How to Ruin an Economy; Some Simple


 invite response                
2014 Feb 20, 2:41am   43,185 views  271 comments

by ChapulinColorado   ➕follow (0)   💰tip   ignore  

http://www.youtube.com/embed/6mhj-j0z-fk

Chomsky argued that certain factors, among them cutting federal funding for research and development and the growing gap between the richest 1 percent and everybody else, have led to the country's current economic climate.

« First        Comments 251 - 271 of 271        Search these comments

251   control point   2014 Mar 7, 8:12am  

Depends on the speculation. Real estate, stock market, commodity speculation. Yes.

Bitcoins? I don't know, probably not in some cases.

252   spydah_hh   2014 Mar 7, 9:00am  

control point says

We choose to increase money supply in lock step with economic growth to avoid deflation and hoarding of money.

So you agree that the money supply is used in the economy but don't agree that it accounts for wealth disparity? So if the money enters the economy then how is it entered and where does it go?

253   spydah_hh   2014 Mar 7, 9:40am  

control point says

supply and money velocity would have perfect negative correlation, by definition. If money supply were held constant - GDP and money velocity would have perfect positive correlation.

control point says

It isn't hard for me to understand, I am the one who pointed out to you on another thread that it is a DERIVED STATISTIC. This happened about a month ago. Do you want me to dig it up?

I agree with Indigenous. Velocity isn't tied to the money supply. Velocity is simply a demand for money or in our case dollars. If people hold onto to their dollars then the demand for dollars goes up and velocity goes down if people got rid of their dollars rather than hold onto them, then the demand for dollars goes down and velocity goes up. The money supply doesn't have an effect on velocity.

http://richardmaybury.com/velocity.html

254   control point   2014 Mar 7, 9:58am  

spydah_hh says

So you agree that the money supply is used in the economy

Yes, obviously money supply is the medium of exchange in the economy.

spydah_hh says

So if the money enters the economy then how is it entered and where does it go?

Do you really want to know? You were asked this question earlier and couldn't answer it yourself, so now I guess it is on me. I'll tell you what, I will show you and I won't even make you promise to give up your cult beforehand. But this is the last time - the next lesson is not free - from now on, if you want me to explain something to you, you are going to have to promise to change your mind once you are shown the truth.

Anyway, look here: Red is money supply, blue is treasuries + MBS held by the federal reserve.

http://research.stlouisfed.org/fred2/graph/?g=sQo

So Since 2008, the new money has purchased:

1. Mortgage Backed Securities
2. Deficit spending by purchasing treasuries.

"Where does it go?"

Well 1. Goes to Home Purchases. Who gets the money? Well, first, the people who buy the houses. Then the people who build or sell the houses. After that, it goes to whatever the builder or former homeowner uses it for. Where does the interest go? Well, it goes to the Treasury as all Federal Reserve Income does.

2. Goes to the government, which spends it plus your tax dollars. Who gets that money? Well, the government pays a federal workforce, has military bases all over the world, makes medicare payments to doctors and hospitals, pays social security to retirees, sends aid overseas, sends money to the States for education and infrastructure, pays interest on its debt (some of which goes back to itself at the FED, which returns it to the treasury, btw), etc. A full breakdown on government expenditures can be found here:

http://www.usgovernmentspending.com/federal_budget_detail_fy13bs12014n_00#usgs302

Now, does some of this go to wealthy folks? Yes - defense contractors, large infrastructure builders, Hospitals, etc...

That happens not because of the new money - but because of the free market - they offer the means of production (service) the government needs. I guess we could have the government own all of the means of production, but that would be communism, wouldn't it?

255   spydah_hh   2014 Mar 7, 11:05am  

control point says

That happens not because of the new money - but because of the free market - they offer the means of production (service) the government needs.

Lol. I stopped right there (but read most of what you said which is true). That isn't an act of the free market that's socialism with the government redistributing debt, I am not even calling it wealth since it's money created from thin air with a IOU tag. But worst a cause of inflation. None of this creates wealth in our economy you can't have an economy based on wealth if your means to fund it is through debt. Eventually the dollar will collapse because of this BS.

But you're right I know that's how most of the programs are finance but quite a bit of the money also go to the banks.

256   spydah_hh   2014 Mar 7, 11:38am  

Also government jobs don't create wealth.

Most Gov jobs are the equivalent of digging up a ditch just to refill them up again, which doesn't create wealth.

And please don't pull the Paul Krugmen BS and say.. Well those workers are getting paid by the government and their wages stimulate the economy which creates wealth. No. Doesn't work that way. Spending does not create wealth.

257   Bellingham Bill   2014 Mar 7, 1:44pm  

But this is why savings is import if the economy doesn't spend all it's money but instead saves some of it

There really is no such thing as savings. If every worker downed tools, the modern world would end forthwith, even for the Austrians with their safes stocked with PM.

You can't eat platinum. Well, you can, but it's not going to satiate hunger.

Money, savings, "capital", etc. are abstractions, the designators of how we split wealth production and ownership of durable goods.

The production comes first not the want.

Between the production and the consumption comes the capitalist owner, who reaps where he does not sow.

http://research.stlouisfed.org/fred2/series/GINIALLRH

http://research.stlouisfed.org/fred2/graph/?g=sQC

"Ownership Society" all right. Workers got sold out a long time ago.

http://research.stlouisfed.org/fred2/series/NETEXP

The world stopped being capital-constrained some time ago. Sometime in the 1950s or 60s, maybe 80s.

If we all got on the same page to triple the standard of living of everyone below median -- declare WW3 on poverty -- we could have everyone living today have a first-class, millionaire-quality lifestyle.

Problem is it is true that if we all have 6 kids, and they have 6 kids, we'd run out of wealth surplus no doubt. Maybe 7+ billion is already too many people.

258   spydah_hh   2014 Mar 7, 1:47pm  

Bellingham Bill says

There really is no such thing as savings. If every worker downed tools, the modern world would end forthwith, even with the Austrians with the safes stocked with PM.

What? Sometimes I don't know why I even bother.

259   Bellingham Bill   2014 Mar 7, 1:51pm  

spydah_hh says

What? Sometimes I don't know why I even bother.

this is because your head is full of bullshit and you cannot think any more.

Workers create the wealth we consume every day. The dollars we have in the bank and the pieces of paper that we have title to stuff are evidence of past saving, but in the end they are only claim checks on wealth and not wealth itself.

The casino was rigged a long time ago, and most people -- people who have actually created the wealth of the modern world, did not receive title to their work, but, rather, the wealth production was taken by the capitalist owners.

http://research.stlouisfed.org/fred2/series/GINIALLRH

260   Bellingham Bill   2014 Mar 7, 1:57pm  

spydah_hh says

Wealth is created by productivity by bettering people's lives.

Wealth is simply the state of being well, of having no unmet needs and wants.

Wealth is also the goods that provide the services of satisfying these needs and wants. Wealth is the roof over our heads that keeps the cold, rain, and bugs out, and the food we eat in the morning, noon, and evening.

Capital wealth is a form of wealth that assists in the creation of end goods. Capital wealth is also the human ability to create wealth; it is the ability to program a computer, play a piano, toss a rubber ball through a metal hoop from some distance, and diagnose a disease, etc.

Since we live in a money-based economy, capital is also now the money that purchases goods and services that wealth-creators -- laborers -- require to perform their work.

But this latter form of capital is the construct that is not stricly needed now that we no longer live in the 19th or 20th centuries.

http://en.wikipedia.org/wiki/Modern_Monetary_Theory

This is arguable of course, Austrians will fight to their end to say this won't work, since this argument destroys the Austrian desire to monopolize this latter form of capital, or at least argue in defense of the established capital monopolists.

262   spydah_hh   2014 Mar 7, 11:45pm  

bgamall4 says

So Keynes, which could work in a regulated system, can't work where the bankers can bid up futures contracts, hoard commodities, etc.

This is all done by the Keynesian theory of central government taking control of the economy. All that money ends up into the bankers vaults.

263   control point   2014 Mar 8, 2:03am  

spydah_hh says

Show me an monopolists financed by private funding and enterprise that harmed consumers and workers? Please don't say standard oil or even DeBeers.

Other than these aforementioned 2, how about the NFL & MLB?

How about YKK group?

Maybe you want an oligopoly? OPEC. The DRAM price fixing scandal of the early 2000s. ADM in the 90s with Lysine. LCD price fixing case going on right now against AU, LG, Toshiba, Hitachi, Sharp, Samsung/

264   spydah_hh   2014 Mar 8, 2:20am  

control point says

how about the NFL & MLB

NFL is a non-for profit organization. But either way what about them? What prevents other companies from making their own league? If I am not mistaken there's a minor league baseball too.

control point says

Other than these aforementioned 2

Contrary to popular belief standard oil actually better and raised the standard of living in the U.S. The avg person was able to light up their homes thanks to standard oil. In fact before the government broke up standard oil, its market share was in decline especially against Russian oil companies.

But that's expected in a free market, monopolies don't last long as long as there are no barriers of entry (regulations) imposed by the government and as long as the government isn't sponsoring the monopoly.

265   spydah_hh   2014 Mar 8, 2:26am  

bgamall4 says

On the contrary, it worked in the 1930's. Without regulation the banks became too big to fail.

What worked in the 1930s? Keynesian economics? No it didn't it was the premise of why the great depression lasted so long. Government intervening in the markets. In fact Hoover in his 3 years of office did just as much deficit spending as Roosevelt in his first 3 years of office and made the depression much worst.

What's funny is people in the great depression experience high food prices but prices on everything else dropped and only reason why food prices were high was because Roosevelt kept them artificially high by destroying food with the Agriculture Adjustment Act, not to mention he eventually placed wages and price controls. All that plus other government policies (including raising the tariffs) is why the great depression lasted so long.

http://en.wikipedia.org/wiki/Agricultural_Adjustment_Act
http://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act#Economic_effects

266   control point   2014 Mar 8, 4:02am  

spydah_hh says

What prevents other companies from making their own league? If I am not mistaken there's a minor league baseball too.

Monopoly pricing, i.e. the barrier to entry.

267   spydah_hh   2014 Mar 8, 4:14am  

control point says

spydah_hh says

What prevents other companies from making their own league? If I am not mistaken there's a minor league baseball too.

Monopoly pricing, i.e. the barrier to entry.

No it's not. Companies can still beat monopoly pricing if they manage to increase their productivity. The problem is companies can't get their foot in the door because of regulatory barriers to entry that are imposed by the government(s).

Once again, just to repeat. Even John D. Rockefeller's 90% market share was collapsing after 1900s because competitors were finding ways to increase their productivity faster than he was. John D. managed to obtain the 90% market share because he found ways to increase his productivity better than his competitors in the late 1800s.

268   control point   2014 Mar 9, 1:21am  

What you are talking about is overcoming the economy of scale. You believe the only barriers to entry are regulatory. This is 100% untrue and I gave you multiple examples of free-market monopoly (oligopoly) pricing. Simply put, a supplier (or suppliers) can produce at a level where MC>MR, and their market share is so large they can still overcome the fixed production costs, whereas their competitors do not have a large enough foothold to do so.

Everything you think about Standard Oil is made up bullshit that is all over the place at mises.org. The truth couldn't be farther from what you believe.

269   spydah_hh   2014 Mar 9, 5:39am  

control point says

whereas their competitors do not have a large enough foothold to do so.

You don't need to be large to compete with big business you just need to be more efficient.

control point says

Everything you think about Standard Oil is made up bullshit that is all over the place at mises.org. The truth couldn't be farther from what you believe.

Let me shed some light.

The Sherman Antitrust Act prohibits the restraint of trade. Defenders of Standard Oil insist that the company did not restrain trade; they were simply superior competitors. The federal courts ruled otherwise.
Some economic historians have observed that Standard Oil was in the process of losing its monopoly at the time of its breakup in 1911. Although Standard had 90 percent of American refining capacity in 1880, by 1911 that had shrunk to between 60 and 65 percent, due to the expansion in capacity by competitors.[43] Numerous regional competitors (such as Pure Oil in the East, Texaco and Gulf Oil in the Gulf Coast, Cities Service and Sun in the Midcontinent, Union in California, and Shell overseas) had organized themselves into competitive vertically integrated oil companies, the industry structure pioneered years earlier by Standard itself.

Go brush up on your history because clearly you don't know damn thing about it.

http://en.wikipedia.org/wiki/Standard_Oil#Legacy_and_criticism_of_breakup

270   control point   2014 Mar 9, 9:37am  

spydah_hh says

o brush up on your history because clearly you don't know damn thing about it.

http://en.wikipedia.org/wiki/Standard_Oil#Legacy_and_criticism_of_breakup

Chief, there isn't one single thing that you or wikipedia can teach me about Standard Oil that I haven't already known and debated on patrick.net multiple times.

271   ChapulinColorado   2014 Apr 12, 1:53am  

let's try to stay civil.

« First        Comments 251 - 271 of 271        Search these comments

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   random   suggestions