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Excellent points. Most people confuse macroeconomics with microeconomics. You cannot apply the principles of personal finance to a national economy.

logfromblammo 11y ago
Macroeconomics is (in my opinion) the science of applying statistical analysis to microeconomics in such a way that it retroactively justifies whatever it is the power-elites are already doing. As such, there is a lot of hand-waving, misdirection, and misuse of language in it. Whenever someone says "deflation," I must immediately ask "of what?" Production costs? Retail prices? Wages? Quantity of circulating currency? Most of the time, an unqualified "deflation" means "a trend of declining retail prices, as measured by non-adjusted currency." And I know why economists in the employ of monetary authorities hate it. It means that there was a missed opportunity for that authority to steal more from the economy by inflating the money supply at a faster rate. Ordinary price deflation is beneficial [for the working class]. It allows you to buy more stuff with less of your own labor. You can buy a computer today that is vastly more capable than one from 1995, at maybe 20% the cost, as measured by your own labor. You might have spent two weeks of gross wages back then. Now, you might spend 2 days of your work. Working people usually spend at least 2000 hours of their own labor per year, for a span of about 50 years. They have to budget that 100000 hours out for everything they will ever want or need. They can't get more stuff for free just by printing off a few more bills or raising taxes. So everybody loves it when they can all get more stuff with the same amount of work, and everybody hates it when they have to work twice as hard to only get the same amount of stuff their parents had. The economy hasn't just been in the toilet since the 80s. Real wages for working class families have been in decline since 1970. And the cause (in my opinion) was economists who pretended that macroeconomics was something other than a simple summation of many thousands of individual microeconomic models. They pretended that "government" was some magical economic actor that could defy the laws of microeconomics, by gradually moving numbers from the "truth" column of the ledger into "lies", from "lies" to "damned lies", and finally putting them into "statistics", where they could safely be explained away, hidden in margins for error, or redefined into nothing. This is what monetary authorities and their pet macroeconomists have given us since 1970. The ordinary march of human progress--which has steadily given us an approximate annualized return of 1.5% per year, failing only temporarily due to wars, plagues, or other catastrophes--now goes directly into an annual inflation of the money supply of at least 1.5%. This has transformed global commerce from an ever-rising tide that floats all boats, into one where only the yachts float higher as the canoes, coracles, skiffs, and dinghies get swamped. You can and should apply the principles of personal finance to national economies. You may learn something about macroeconomics that you didn't suspect before.
- fweespeech 11y ago
  > Most of the time, an unqualified "deflation" means "a trend of declining retail prices, as measured by non-adjusted currency." And I know why economists in the employ of monetary authorities hate it. It means that there was a missed opportunity for that authority to steal more from the economy by inflating the money supply at a faster rate. > This is what monetary authorities and their pet macroeconomists have given us since 1970. The ordinary march of human progress--which has steadily given us an approximate annualized return of 1.5% per year, failing only temporarily due to wars, plagues, or other catastrophes--now goes directly into an annual inflation of the money supply of at least 1.5%. Someone hasn't heard of the various inflation-caused panics of the 1800s or deflationary economic problems pre-1900. applauds Read some history books. Please, just stop. You have no clue what you are talking about.
  - logfromblammo 11y ago
    That's explicitly ad hominem. If you have something meaningful to add, do so. Otherwise, don't dismiss everything I said by claiming I am ignorant of some facts that you somehow failed to provide. I am claiming that the problems caused by central banking are worse than the those supposedly solved by central banking. Some people that are far more knowledgeable about economics than I have claimed that the greatest single cause of the Great Depression was the monetary policy of the Federal Reserve. The first panic of the 19th century was created or worsened by the Second Bank of the United States, a Hamiltonian central bank. I loathe that guy. They should have run him out of Philadelphia in a wheelbarrow in 1783. If ever there was a man who loved money more than freedom, it was him. Unfortunately, there are plenty of others like him, and someone would have tried multiple times to institute a central bank in the U.S. After all, we got saddled with the Fed long after he was dead. The second panic was caused mostly by massive fraud by a single financial company, but also the fear of legal slavery in the western territories. The third was a combination of a bubble in railroads and the government ending the bimetallic standard, due to the 16:1 fix getting very unbalanced by silver mining. And oh, look, another "too big to fail" bank overinvested in the railroads bubble and failed. Again, it was Hamilton that fixed the silver:gold ratio at 15:1 in the first place instead of letting the market work. That jerk. The fourth? Oh, shit. Another railroads bubble, and more bank failures from overinvestment in it. And more stupid government intervention in the silver market. Did I miss any? Investment bubbles and the silver standard, all the way. Do I need to include the greenback crisis during the Civil War, where Lincoln paid for the Union war effort with inflationary fiat paper that went all the way up to one gold dollar costing 2.5 greenback dollars just a few scant years after the first print run? And are you referring to the deflationary period from 1870 to 1890, which correlates with one of the strongest periods of sustained growth, industrialization, and prosperity in the history of the U.S.? That deflation in consumer prices of about 2% per year? The only economic problem there was that businesses had a harder time achieving economic profits--that is, a greater return than other possible investments--because more things were becoming commoditized. If you wanted to make real money, you had to innovate and invest in useful capital. ~Sounds like a real problem to me.~ Do you dispute that central banks pursue an explicit economic policy of routine monetary inflation to offset price deflation? Do you dispute that this practice transfers wealth away from the producers of value in the economy to the printers of money, and those who get to spend that new paper first? Do you dispute that any institution that is too big to fail is also too dangerous to continue to exist? I have several clues about what I am talking about, and I haven't needed to impugn your knowledge of this subject to do it. Please do me the courtesy of arguing with facts, rather than dismissing my claims with the rhetoric of ad hominems and appeals to authority.

logfromblammo 11y ago

Macroeconomics is (in my opinion) the science of applying statistical analysis to microeconomics in such a way that it retroactively justifies whatever it is the power-elites are already doing. As such, there is a lot of hand-waving, misdirection, and misuse of language in it. Whenever someone says "deflation," I must immediately ask "of what?" Production costs? Retail prices? Wages? Quantity of circulating currency? Most of the time, an unqualified "deflation" means "a trend of declining retail prices, as measured by non-adjusted currency." And I know why economists in the employ of monetary authorities hate it. It means that there was a missed opportunity for that authority to steal more from the economy by inflating the money supply at a faster rate. Ordinary price deflation is beneficial [for the working class]. It allows you to buy more stuff with less of your own labor. You can buy a computer today that is vastly more capable than one from 1995, at maybe 20% the cost, as measured by your own labor. You might have spent two weeks of gross wages back then. Now, you might spend 2 days of your work. Working people usually spend at least 2000 hours of their own labor per year, for a span of about 50 years. They have to budget that 100000 hours out for everything they will ever want or need. They can't get more stuff for free just by printing off a few more bills or raising taxes. So everybody loves it when they can all get more stuff with the same amount of work, and everybody hates it when they have to work twice as hard to only get the same amount of stuff their parents had. The economy hasn't just been in the toilet since the 80s. Real wages for working class families have been in decline since 1970. And the cause (in my opinion) was economists who pretended that macroeconomics was something other than a simple summation of many thousands of individual microeconomic models. They pretended that "government" was some magical economic actor that could defy the laws of microeconomics, by gradually moving numbers from the "truth" column of the ledger into "lies", from "lies" to "damned lies", and finally putting them into "statistics", where they could safely be explained away, hidden in margins for error, or redefined into nothing. This is what monetary authorities and their pet macroeconomists have given us since 1970. The ordinary march of human progress--which has steadily given us an approximate annualized return of 1.5% per year, failing only temporarily due to wars, plagues, or other catastrophes--now goes directly into an annual inflation of the money supply of at least 1.5%. This has transformed global commerce from an ever-rising tide that floats all boats, into one where only the yachts float higher as the canoes, coracles, skiffs, and dinghies get swamped. You can and should apply the principles of personal finance to national economies. You may learn something about macroeconomics that you didn't suspect before.

fweespeech 11y ago
> Most of the time, an unqualified "deflation" means "a trend of declining retail prices, as measured by non-adjusted currency." And I know why economists in the employ of monetary authorities hate it. It means that there was a missed opportunity for that authority to steal more from the economy by inflating the money supply at a faster rate. > This is what monetary authorities and their pet macroeconomists have given us since 1970. The ordinary march of human progress--which has steadily given us an approximate annualized return of 1.5% per year, failing only temporarily due to wars, plagues, or other catastrophes--now goes directly into an annual inflation of the money supply of at least 1.5%. Someone hasn't heard of the various inflation-caused panics of the 1800s or deflationary economic problems pre-1900. applauds Read some history books. Please, just stop. You have no clue what you are talking about.
- logfromblammo 11y ago
  That's explicitly ad hominem. If you have something meaningful to add, do so. Otherwise, don't dismiss everything I said by claiming I am ignorant of some facts that you somehow failed to provide. I am claiming that the problems caused by central banking are worse than the those supposedly solved by central banking. Some people that are far more knowledgeable about economics than I have claimed that the greatest single cause of the Great Depression was the monetary policy of the Federal Reserve. The first panic of the 19th century was created or worsened by the Second Bank of the United States, a Hamiltonian central bank. I loathe that guy. They should have run him out of Philadelphia in a wheelbarrow in 1783. If ever there was a man who loved money more than freedom, it was him. Unfortunately, there are plenty of others like him, and someone would have tried multiple times to institute a central bank in the U.S. After all, we got saddled with the Fed long after he was dead. The second panic was caused mostly by massive fraud by a single financial company, but also the fear of legal slavery in the western territories. The third was a combination of a bubble in railroads and the government ending the bimetallic standard, due to the 16:1 fix getting very unbalanced by silver mining. And oh, look, another "too big to fail" bank overinvested in the railroads bubble and failed. Again, it was Hamilton that fixed the silver:gold ratio at 15:1 in the first place instead of letting the market work. That jerk. The fourth? Oh, shit. Another railroads bubble, and more bank failures from overinvestment in it. And more stupid government intervention in the silver market. Did I miss any? Investment bubbles and the silver standard, all the way. Do I need to include the greenback crisis during the Civil War, where Lincoln paid for the Union war effort with inflationary fiat paper that went all the way up to one gold dollar costing 2.5 greenback dollars just a few scant years after the first print run? And are you referring to the deflationary period from 1870 to 1890, which correlates with one of the strongest periods of sustained growth, industrialization, and prosperity in the history of the U.S.? That deflation in consumer prices of about 2% per year? The only economic problem there was that businesses had a harder time achieving economic profits--that is, a greater return than other possible investments--because more things were becoming commoditized. If you wanted to make real money, you had to innovate and invest in useful capital. ~Sounds like a real problem to me.~ Do you dispute that central banks pursue an explicit economic policy of routine monetary inflation to offset price deflation? Do you dispute that this practice transfers wealth away from the producers of value in the economy to the printers of money, and those who get to spend that new paper first? Do you dispute that any institution that is too big to fail is also too dangerous to continue to exist? I have several clues about what I am talking about, and I haven't needed to impugn your knowledge of this subject to do it. Please do me the courtesy of arguing with facts, rather than dismissing my claims with the rhetoric of ad hominems and appeals to authority.