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You've shown nothing. You've given no explanation (that is backed by any evidence) for how inflation causes wealth disparity and the "reasons you have shown" were refuted by the 4 articles that Marcus posted earlier. Did you forget about those?
He actually posted 3 links 2 were to the same article. Which was short and all conjecture, I followed the link to a 47 page mind numbing article that I don't have the time nor the inclination to read it.
The NPR article is long with no statistics.
This, from this, http://townhall.com/columnists/thomassowell/2013/03/06/economic-mobility-n1525556/page/full
But the very opposite conclusion arises in studies that follow actual flesh-and-blood individuals over time, most of whom move up across the various income brackets with the passing years. Most working Americans who were initially in the bottom 20 percent of income-earners, rise out of that bottom 20 percent. More of them end up in the top 20 percent than remain in the bottom 20 percent.
This, from this, http://en.wikipedia.org/wiki/Socio-economic_mobility_in_the_United_States:
An absolute majority of the people who were in the bottom 20 percent [of income] in 1975 have also been in the top 20 percent at some time since then. Most Americans don't stay put in any income bracket. At different times, they are both "rich" and "poor" -- as these terms are recklessly thrown around in the media. [...] There are of course some people who remain permanently in the bottom 20 percent. But such people constitute less than one percent of the American population, according to data published by the Federal Reserve Bank of Dallas in its 1995 annual report. Perhaps the intelligentsia and the politicians have been too busy waxing indignant to be bothered by anything so mundane as facts.[26]
This video directly refutes the notion that you only do better if you have rich parents
http://www.youtube.com/embed/UbueX92CKPk
They both cannot be right?
But they do not talk about how inflation helps the cronies as it does. Marcus' articles do not refute anything to do with inflation. Or for that matter social mobility.
Clearly you did not read the Marcus articles
Of course not. I would never have said otherwise. But the chart does prove that Fed actions taken in 2008 cannot explain wealth disparity that started in 1980.
If you'll remember, what started this debate was other posters telling me that increasing wealth disparity was/is caused by the Federal Reserve.
I asked if anyone could explain how the Fed caused the 30 year trend in increasing disparity. The ONLY answer I have gotten is the very recent Fed action to buy MBS.
Would you care to explain the 30 years?
Are you really this stupid or are you a troll?
I see it, but it is a useless analogy because it doesn't apply. If you care to properly characterize my statements, then we can talk.
Now you're just lying. If the analogy weren't apt, you would be able to explain WHY it's not apt. All you can muster is to stammer, "it doesn't apply". I don't know which is worse, you making an illogical argument, or you doggedly insisting that it's valid when it clearly is not.
You've shown nothing. You've given no explanation (that is backed by any evidence) for how inflation causes wealth disparity and the "reasons you have shown" were refuted by the 4 articles that Marcus posted earlier. Did you forget about those?
Where is you?
http://www.youtube.com/embed/Hk_-XWpUFmU&feature=player_embedded
You've given no explanation (that is backed by any evidence) for how inflation causes wealth disparity
http://research.stlouisfed.org/fred2/graph/?g=kfn
is the main dynamic of that, since everyone's budget is dominated by housing costs, but LL's cost of ownership do not rise with inflation at all.
The more inflation, the more the LLs get something (from wage-earners) for nothing.
This actually works more with wage inflation. Price inflation in the 1970s actually put a damper on rent inflation to some extent.
Now you're just lying. If the analogy weren't apt, you would be able to explain WHY it's not apt. All you can muster is to stammer, "it doesn't apply". I don't know which is worse, you making an illogical argument, or you doggedly insisting that it's valid when it clearly is not.
Uh, I did explain it. I do not, nor have I ever, insisted that there only be one explanation. Why do you continue to portray otherwise??
Are you that slow that you can't understand the discussion at hand?
BB at least offers a reasonable explanation for inflation driven wealth disparity, but it is not related to the Federal Reserve necessarily.
Are you really this stupid or are you a troll?
Talk about stammering... Have you given up then?
Tatupu has demonstrated that he is not capable of following a simple train of thought, or understanding simple logic. I call 'em like I see 'em.
lol--it's not hard to follow your train of thought. It's simple and incorrect. You keep callin' 'em, though.
But they do not talk about how inflation helps the cronies as it does. Marcus' articles do not refute anything to do with inflation. Or for that matter social mobility.
I stand corrected--his articles are more on mobility not on disparity.
You are ignoring the information about the tax law changes. Also the household income slight of hand that Elizabeth Warren hangs her hat on. Also the fact that government transfers do not show up in the stats this misreports the poor's income by 30%.
No the change in disparity is bullshit.
OK--just so we're clear---it's not the Federal Reserve, the gold standard, or inflation that has caused the increase in wealth disparity. Now you're saying the wealth disparity index is a lie? And it really hasn't changed over the last 30 years?
That's your new theory?
You are ignoring the information about the tax law changes. Also the household income slight of hand that Elizabeth Warren hangs her hat on. Also the fact that government transfers do not show up in the stats this misreports the poor's income by 30%.
No the change in disparity is bullshit.
OK--just so we're clear---it's not the Federal Reserve, the gold standard, or inflation that has caused the increase in wealth disparity. Now you're saying the wealth disparity index is a lie? And it really hasn't changed over the last 30 years?
That's your new theory?
Point 1
In recent times inflation creates disparity by the anointed ones getting free or cheap money ahead of the ensuing inflation.
Point 2
I have stated before that it is due to the "rich" filing their taxes as an S corp or an LLC instead of a C corp as the marginal tax rate on an individual went from 50% to 28% in 1988. There were also tax changes in other years that contributed to this.
Additionally Elizabeth Warren (the part Cherokee lady) chatters endlessly about household income dropping steadily over the past 30yr. Problem is that the divorce rate has gone up during that time causing household income to be cut in half with every divorce.
Additionally the income of the poor is under reported because government transfers are not counted in the income of the poor. Also many of the middle class benefits are not counted as income.
I would also add that the main reason for the growing income disparity is the unpredictability of the government the current and last POTUS are wild cards which changes the odds, which hugely discourages investment.
I would also add that the cost of wasting resources on companies that should go away cannot be over stated as those resources would otherwise be used to create start ups who are literally the seed corn of the future. But the economically illiterate POTUS is eating the seed corn.
Now you're just lying. If the analogy weren't apt, you would be able to explain WHY it's not apt. All you can muster is to stammer, "it doesn't apply". I don't know which is worse, you making an illogical argument, or you doggedly insisting that it's valid when it clearly is not.
Uh, I did explain it. I do not, nor have I ever, insisted that there only be one explanation. Why do you continue to portray otherwise??
Uh, no. Just spitting out "that doesn't apply" is not an explanation. My analogy is perfect. If one claims no murders take place with guns, and then ones "proof" is that there were murders before guns were invented, then ones proof is not valid. Likewise, if you claim the Fed isn't a cause of wealth disparity, and your "proof" is a chart that supposedly shows wealth disparity before there was Fed intervention, then your proof is not valid. Explain why that is not a valid analogy. Go ahead, explain it. Don't just call me names; explain it. You know you can't.
Are you that slow that you can't understand the discussion at hand?
Don't just call me names; explain it.
Talk about stammering... Have you given up then?
I've given up on you providing an explanation as to how my analogy isn't spot on. Go ahead and surprise me though.
lol--it's not hard to follow your train of thought. It's simple and incorrect. You keep callin' 'em, though.
WHY is it incorrect? You don't have an answer, do you?
The main thing that drives wealth disparity is income differential between households. For instance if one household makes $200K and the other makes $50K, the household making $200K will increase wealth disparity gap vs $50K household at ever increasing rate just like galaxies in universe that become further apart with every passing second. Whether the $200K household is getting taxed at 39% vs 35% or whatever is not going to drastically alter this development, thus the main driver of disparity is income differential not taxes. Related issues to this is the gap between so called knowledge workers and manual laborers, outsourcing, offshoring and destruction of unions for manual workers which results in household income differential. About federal reserve - when economy crashed in 2008, the net worth gap closed at the time between the upper 10% and the rest since the upper 10% tend to have the money in equities at a very disproportionate level vs bottom 90%. Quantivative easiing allowed the stock market to recover by making alternative investment and holding money in cash non competative. But we must acknowledge the postitives in that quantitative easing drove down mortagage rates which rescued the middle class since most of their net worth is in their homes and of course their 401Ks benefited as well. However, this medicine again increased the wealth disparity for the top 10% vs 90% since they have the most money in stocks and stock value recovered.
Uh, no. Just spitting out "that doesn't apply" is not an explanation. My analogy is perfect. If one claims no murders take place with guns, and then ones "proof" is that there were murders before guns were invented, then ones proof is not valid. Likewise, if you claim the Fed isn't a cause of wealth disparity, and your "proof" is a chart that supposedly shows wealth disparity before there was Fed intervention, then your proof is not valid. Explain why that is not a valid analogy. Go ahead, explain it. Don't just call me names; explain it. You know you can't.
I've explained it several times. If you refuse to understand, that's your problem.
Again--my claim isn't the the Fed can't cause wealth disparity. My claim is that it the recent action of the Fed buying MBS cannot be the explanation for 30 years of increasing wealth disparity.
Read it again--slowly--do you understand now?
That's why I asked again--how is the Fed the cause of increasing wealth disparity over 30 years? Is there another cause that you guys have yet to define?
Don't just call me names; explain it.
Done 4 times.
I've given up on you providing an explanation as to how my analogy isn't spot on. Go ahead and surprise me though.
Done 4 times.
WHY is it incorrect? You don't have an answer, do you?
Answered 4 times.
That's why I asked again--how is the Fed the cause of increasing wealth disparity over 30 years? Is there another cause that you guys have yet to define?
Which I have answered at least 4 times:
Point 2
I have stated before that it is due to the "rich" filing their taxes as an S corp or an LLC instead of a C corp as the marginal tax rate on an individual went from 50% to 28% in 1988. There were also tax changes in other years that contributed to this.
Additionally Elizabeth Warren (the part Cherokee lady) chatters endlessly about household income dropping steadily over the past 30yr. Problem is that the divorce rate has gone up during that time causing household income to be cut in half with every divorce.
Additionally the income of the poor is under reported because government transfers are not counted in the income of the poor. Also many of the middle class benefits are not counted as income.
I would also add that the main reason for the growing income disparity is the unpredictability of the government the current and last POTUS are wild cards which changes the odds, which hugely discourages investment.
I would also add that the cost of wasting resources on companies that should go away cannot be over stated as those resources would otherwise be used to create start ups who are literally the seed corn of the future. But the economically illiterate POTUS is eating the seed corn.
My claim is that it the recent action of the Fed buying MBS cannot be the explanation for 30 years of increasing wealth disparity.
I never said it was. That's what we call a strawman argument. And you didn't say that at first. You gradually morphed your argument into that.
Read it again--slowly--do you understand now?
I understood it the first time I read it. It also happens to be the first time you worded your argument that way. But that's always been your M.O. - you try to rewrite history and change your argument after the fact.
Here is the FIRST argument you made:
indigenous says
The money is printed out of thin air, it is then used to purchase bad mortgages through Freddy and Fanny, at the then value of the RE, from the banksIf that's the case, why did the trend towards increasing income disparity clearly begin around 1980 with Reagan's election? The Federal Reserve wasn't buying bad mortgages back then. It wasn't bailing out banks back then.
No matter how "slowly" I read that, it's not the same argument you are making now. You kept obnoxiously asking Indigenous to explain how the first receivers get their money, and he was kind enough to answer you. With the question you asked there, the implied argument is that wealth disparity cannot have a different cause now than it did in 1980. Again, logic - something you miserably fail at.
That's why I asked again--how is the Fed the cause of increasing wealth disparity over 30 years?
I never said it was.
Don't just call me names; explain it.
Done 4 times.
Nope. Not done. And STILL not done.
I've given up on you providing an explanation as to how my analogy isn't spot on. Go ahead and surprise me though.
Done 4 times.
Bullshit.
WHY is it incorrect? You don't have an answer, do you?
Answered 4 times.
Nope. Not answered ANY times.
Liar.
MY view isn't even so much about how beneficial it is or not. It's the system we have, and it's integral to the global system and where our world economy and financial system is in it's evolution.
How come?
Indigenous,
FED's effect on the economy? Let's see:
1. WWI the year after FED founding;
2. Great Depression after the FED stimulated bubble of the 20's;
3. Stagflation of the 70's
4. serial bubble economy in the past decade and half.
(continued)
Here:
http://patrick.net/?p=1226340&c=975742#comment-975742
And here is where tatupu tries to refute it, but fails in logic:
http://patrick.net/?p=1226340&c=975842#comment-975842
So please read ALL those posts, which you obviously haven't done, and then get back to me.
FED stimulated bubble of the 20's
[citation needed]
serial bubble economy in the past decade and half
this one's ALMOST a fair cop.
The Fed failed to police the mortgage industry 2000-2006, but that was a failure of inaction of the Greenspan Fed, not action.
And the common thread of the 1920s and the previous bubble decade is that's it's very dangerous to put small-government conservatives in charge of the system.
Both instances they really allowed everything to get way out of control.
This is the way they roll. Laissez faire right into BubbleTown, leaving liberals and progressives to clean up their messes.
The pattern extends to the late 1800s trust and serial bubble blowups, too.
This Fed-on-the-brain stuff is one of the more sillier aspects of rightwing thought.
Nope, it's exactly what I said it is. You changed your argument. I quoted
exactly what you wrote earlier. The proof is there.
Exactly--you quoted it alright. Only it refutes you entirely. I didn't change anything. What you quoted is exactly what I've said all along.
That's a different argument. Again, I quoted your exact original argument, and
that is not what you said before.
Again--you quoted me but nothing you quoted disagrees with anything I've said all along. I've been 100% consistent.
This is not a court. Your attempt to change your argument after the fact
failed, so now you're trying to rely on little word games to pretend you never
"technically" said what was obviously your position?
My obvious position is that I don't think the Federal Reserve is the cause of the increasing wealth disparity since 1980. I've been patiently asking the other posters who claim that the Fed is THE cause to please provide evidence or at the very least a possible mechanism for how the Fed policy increases wealth disparity. I'm sorry you can't follow such simple logic and have gone to such great lengths to try to score a meaningless technical point. You've failed.
There is a subtle difference between denying that that the Fed causes wealth
disparity, and citing a period when it increased with little fed intervention as
data that supports that idea; versus actually proving a lack of cause and
effect.
I agree 100%. Please don't allow Homeboy to mislead you.
My point is, for about the 12th time now, that the following is not a valid
proof:
"Wealth disparity began increasing in the 1980s, when there was no Fed
intervention. Therefore, the Fed cannot affect wealth disparity."
That was tatupu's argument, and it isn't a valid argument
And for the 12th time, that is NOT my argument.
If that was my argument, it should be very easy for you to quote a post in which I said that. The fact that you cannot should make it pretty obvious that you are purposely twisting my words and trolling.
There is a subtle difference between denying that that the Fed causes wealth disparity, and citing a period when it increased with little fed intervention as data that supports that idea; versus actually proving a lack of cause and effect.
This is just gibberish.
Is not being able to prove that the fed does not cause increasing wealth disparity the foundation of your argument that it does ?
Why are you trying to turn this around? Tatupu cited that chart as proof that the Fed doesn't cause wealth disparity. I simply stated that he is wrong. The tortured reasoning you pro-Fed guys are employing is astounding.
If that was my argument, it should be very easy for you to quote a post in which I said that. The fact that you cannot should make it pretty obvious that you are purposely twisting my words and trolling.
I quoted SEVEN posts of yours. You can keep playing the "I didn't say that" word-twisting game, but the proof is up there. Calling me a troll doesn't make your case. Sorry.
Tatupu cited that chart as proof that the Fed doesn't cause wealth disparity. I
simply stated that he is wrong. The tortured reasoning you pro-Fed guys are
employing is astounding.
I did not. I cited charts to show that wealth disparity has been increasing since 1980 so the recent Fed actions cannot explain the 30 year trend.
How printing trillion dollars and giving them to select big entities is not aiding wealth disparity should be beyond anybody.
The tortured reasoning you pro-Fed guys are employing is astounding.
I guess this is tortured reasoning.
Is not being able to prove that the fed does not cause increasing wealth disparity the foundation of your argument that it does ?
I though it was just a question, that I would really like to know the answer to.
Maybe you don't even think the fed adversely impacts wealth disparity, and you're just the logic police looking for nits to pick.
I quoted SEVEN posts of yours. You can keep playing the "I didn't say that"
word-twisting game, but the proof is up there. Calling me a troll doesn't make
your case. Sorry.
Yes, you did. But none of them are relevant. None of them say what you purport them to say.
I agree--calling you a troll doesn't make my case. It serves more to describe your personality.
I am currently working on MBS, short for 'mell-backed-securities', a new vehicle that will soon flood the market to aid the economy. Please buy some!
Tatupu - time to just admit that your argument didn't hold water. You are flailing so much trying to both distance yourself from your argument AND claim it was valid, it's really laughable.
I agree--calling you a troll doesn't make my case. It serves more to describe your personality.
Ooh, you sure got me. I'm crying now.
Just admit your argument didn't hold water.
I am currently working on MBS, short for 'mell-backed-securities', a new vehicle that will soon flood the market to aid the economy. Please buy some!
If you don't buy them, really bad things will happen. Human sacrifice, dogs and cats living together, mass hysteria!
How printing trillion dollars and giving them to select big entities is not aiding wealth disparity should be beyond anybody.
In real life, are you by any chance Marcia Stigum ?
First of all, I'm not sure that tatupu's data is even correct. Here's another chart that seems to show a relatively flat period, and even a reversal, thoughout the second half of the 1980s.
OK--lets take a look at the 7 posts that supposedly show that I am trying to prove that the Fed can't cause wealth disparity.
Everyone blames the Federal Reserve, but nobody can really pinpoint how exactly
the Fed is causing all these bad things to happen.
This one looks to me like a simple question. Asking others to show supporting evidence as to why they think the Fed causes increasing wealth disparity. No assertions.
That's a nice narrative except that it is complete BS. Please detail how the
first receivers get their money. Show me the "simple math" as you call it.
Again--looks like I'm asking for more supporting evidence here. No assertions here.
I understand that is what you and others claim is happening. My question is how?
Please explain how the money is created and given to the "cronies"
Hmm.. I seeing a pattern. Again, a question looking for some supporting evidence. No assertions.
The Federal Reserve wasn't buying bad mortgages back then. It wasn't bailing
out banks back then.
Hey--an assertion! But I don't think this is controversial. Just reminding the other poster the timeline.
So, again, I ask. How does the Federal Reserve cause increasing income/wealth
disparity?
And, guess what. Another question. No assertion.
OK--I think you're confused. Your (and others) thesis is that the Federal
Reserve gives an advantage to the "cronies". And that causes income/wealth
disparity because they are the first receivers and get the money while the
general public doesn't. Did I summarize that correctly?
Me trying to summarize the argument to keep it on track. Indigenous has a habit of going off on tangents so you have keep him focused. No assertions.
I won't say what talking to you is like. Since you've failed miserably at the
whole CEOs create jobs, let's get back to the original question which neither
you nor Turtle, nor homeboy, nor gsr seem to be able to answer.
Not sure why you posted this one. Another question-no assertions.
How does the Federal Reserve contribute to inequality?
Another question. No assertions.
Yes, but I've shown that those explanations don't hold water. I was hoping you
could do better. Othwerise, I'll assume that the Federal Reserve has no impact
on income inequality and that the whole crony/first receiver stuff is nonsense.
This is the best post you've got. I was hoping to get some better answers from the other posters and I thought the last line would get them to try harder.
Hopefully, you see your mistake now. Please read more carefully in the future and don't twist my words.
How printing trillion dollars and giving them to select big entities is not aiding wealth disparity should be beyond anybody.
In real life, are you by any chance Marcia Stigum ?
I don't know who that is, I'd have to read up on it - I see there are some google hits to get started :)
Tatupu - time to just admit that your argument didn't hold water. You are
flailing so much trying to both distance yourself from your argument AND claim
it was valid, it's really laughable.
If I had made an argument, you might have a point.. I posted the chart to REFUTE another posters point--not to support any point of mine.
There is a difference there which you seem incapable of grasping.
How printing trillion dollars and giving them to select big entities is not aiding wealth disparity should be beyond anybody.
In real life, are you by any chance Marcia Stigum ?
I don't know who that is, I'd have to read up on it - I see there are some google hits to get started :)
I see she is deceased. Oops.
She's an expert (or was) on money markets, with a classic and widely read text on the subject. I was thinking your summary of what the fed does sounded like you might be her.
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The US Federal Reserve has jumped the gun. It has mishandled its exit strategy from quantitative easing, triggering a global bond rout that it did not anticipate, and is struggling to control.
It has set off an emerging market shock and risks "blowback" from a fresh spasm of the eurozone debt crisis, and it is letting all this happen at the same time, before the US economy is safely out of the woods.
It has violated its own counter-deflation strategy, tightening monetary policy even though core PCE inflation has fallen to the lowest levels in living memory and below levels deemed dangerous enough in the past to warrant a blast of emergency stimulus. It is doing so even though the revival of bank lending has faded
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10144451/Risk-of-1937-relapse-as-Fed-gives-up-fight-against-deflation.html