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Stupid political crap your friends post on facebook. - Page 135

post #2011 of 5454
Quote:
Originally Posted by NameBack View Post


Inflation is completely irrelevant because wages rise with prices, and as long as there's real GDP growth (which is going to be more likely if we're in a stimulative, loose monetary environment), then my labor can buy more stuff.

I wish my employer matched inflation.
post #2012 of 5454
Quote:
Originally Posted by Jr Mouse View Post

No one posted this to FB, but this is the closest we have to a thread for random political crap. FARK discovered that Bob Dole and Jack Kemp’s 1996 presidential election campaign website is still active.

If you have a website lasting longer than four election cycles, call your doctor.
post #2013 of 5454
Quote:
Originally Posted by El Argentino View Post

I wish my employer matched inflation.

Me too. I also wished when I was saving for something like a house or car or something, my savings wouldn't lose value... oh wait, who am I kidding, everything is bought on credit now. Saving money, how novel.
post #2014 of 5454
Quote:
Originally Posted by NameBack View Post

Why should money keep its value?

Because it's a representation of labor, and labor's value should not be diminished over the passage of time, nor should savings be discouraged. The value of labor is something an alleged liberal should hold as a central tenet of their being. The problem with modern liberalism is that there's nobody within the movement smart enough to point out their member's mistakes!
Quote:
Here's the thing; I don't care what my dollars can buy. I care what my labor can buy.

See above. In a stable-currency environment labor maintains its purchasing power. And remember that the "raise" you receive for next year is merely meant to help you try to catch up to last year's inflation.
Quote:
When one hour of my labor can buy more stuff than the year before,

For the 99% it cannot. Again, see above. The hour you worked last year and banked has been lost to inflation, and this year's wages are stagnant or decreasing, or are indexed to a dishonest measurement of CPI that puts 25% of its weighting into the wild-ass guess of "Owners Equivalent Rent".


Quote:
Inflation is completely irrelevant because wages rise with prices

And I continue to outflank you from your left by bringing up the growth in income disparity.

http://online.wsj.com/article/SB10001424052702304458604577490842584787190.html

AFL-CIO analysis of CEO pay across a broad sample of S&P 500 firms showed the average CEO earned 380 times more than the typical U.S. worker. In 1980, that multiple was 42... Wide gaps in pay can affect employee morale, productivity and turnover, several studies have found... "High disparity devalues the work of rank-and-file employees," says Brandon Rees, deputy director of the AFL-CIO's office of investment.


Mr. Rees's comments may have been more rhetorical in nature, but those comments are equally applicable to purchasing power.

Quote:
and as long as there's real GDP growth (which is going to be more likely if we're in a stimulative, loose monetary environment), then my labor can buy more stuff.

There has been no real GDP growth since at least 2000. Nominal (i.e. "official") GDP growth has been equaled or exceeded by the federal deficit since 2000. So all that "growth" has been borrowed, as in "placed on the liabilities side of the ledger". This even allows for the counting of the explosion in FedGov spending as "GDP growth", which I would rather not do since blowing stuff up in Iraqistan and paying the salaries of Thousands Standing Around at airports hardly constitutes "product".

post #2015 of 5454
Quote:
Originally Posted by NameBack View Post

I watched the first half of that interview, and I don't know what alternate reality you were watching but Mike completely demolished Karl.
Karl was talking entirely out of his ass with complete disregard for any empirical reality. He talks about nominal GDP increases but ignores real GDP increases and starts talking about indexing inflation exclusively to corn and gas -- which is pretty much the sign of a lunatic.
Also, his write up is basically correct, but at the same time completely wrong. Yes, MV=PQ, but he's wrong in not realizing that Q can in fact rise when you increase M. Why? Because there's a whole lot of goddamn idling capacity in the economy right now. If Q was at full capacity and could not possibly rise any more, then yes an increase in M will result in an exact rated increase in P, but that's not the case in an economy with 8% headline unemployment.

According to MMT 8% headline (U3) unemployment should be impossible after a decade of FedGov spending sprees and ZIRP. FRNs = MMT soma.
post #2016 of 5454
Quote:
Originally Posted by musicmax View Post

Because it's a representation of labor, and labor's value should not be diminished over the passage of time, nor should savings be discouraged. The value of labor is something an alleged liberal should hold as a central tenet of their being. The problem with modern liberalism is that there's nobody within the movement smart enough to point out their member's mistakes!

See above. In a stable-currency environment labor maintains its purchasing power. And remember that the "raise" you receive for next year is merely meant to help you try to catch up to last year's inflation.

By this logic, real wages would necessarily decline during any period of inflation. And yet...

fredgraph.png?&id=COMPRNFB,CPILFESL&scale=Left,Left&range=Max,Max&cosd=1947-01-01,1957-01-01&coed=2012-07-01,2012-09-01&line_color=%230000ff,%23ff0000&link_values=false,false&line_style=Solid,Solid&mark_type=NONE,NONE&mw=4,4&lw=1,1&ost=-99999,-99999&oet=99999,99999&mma=0,0&fml=a,a&fq=Quarterly,Monthly&fam=avg,avg&fgst=lin,lin&transformation=lin,lin&vintage_date=2012-11-14,2012-11-14&revision_date=2012-11-14,2012-11-14

Now, note something important here -- I'm using real compensation, not just wages, since for the last 30-40 years healthcare has made up an increasingly large percentage of how workers are compensated. I think that's troubling and needs to change, but if we're trying to answer the question of how much stuff can an hour of labor purchase, we have to take into account non-wage compensation.

So at the end of the day, your silly logic that wage hikes are always playing catch-up to inflation is flatly wrong. Wage hikes also anticipate future inflation, because realistically wages are not being determined at a constantly fluctuating market price. Wage re-calibration happens at longer intervals. The one possible bone to pick is that if inflation is so substantial between those intervals that it hugely erodes compensation -- but as long as we're talking about sub-10% inflation, that's really not an issue.
Quote:
For the 99% it cannot. Again, see above. The hour you worked last year and banked has been lost to inflation, and this year's wages are stagnant or decreasing, or are indexed to a dishonest measurement of CPI that puts 25% of its weighting into the wild-ass guess of "Owners Equivalent Rent".

I've already gone over OER with you and how it's actually overestimating inflation right now, not underestimating it.

Quote:

What does this graph have to do with inflation? Real wages have declined recently -- how exactly would that be tied to our extremely low rate of inflation? It doesn't. It has to do with a soft labor market and a downward pressure on demand for labor.
Quote:
And I continue to outflank you from your left by bringing up the growth in income disparity.
http://online.wsj.com/article/SB10001424052702304458604577490842584787190.html
AFL-CIO analysis of CEO pay across a broad sample of S&P 500 firms showed the average CEO earned 380 times more than the typical U.S. worker. In 1980, that multiple was 42... Wide gaps in pay can affect employee morale, productivity and turnover, several studies have found... "High disparity devalues the work of rank-and-file employees," says Brandon Rees, deputy director of the AFL-CIO's office of investment.
Mr. Rees's comments may have been more rhetorical in nature, but those comments are equally applicable to purchasing power.

Equally applicable? How so? How would inflation -- a market-wide phenomenon -- somehow target lower-wage workers but not higher-wage workers? Why would it create escalating disparity? The much more straightforward explanation is that a higher stable rate of unemployment since the '80s has been responsible for weaker compensation growth.
Quote:
There has been no real GDP growth since at least 2000. Nominal (i.e. "official") GDP growth has been equaled or exceeded by the federal deficit since 2000. So all that "growth" has been borrowed, as in "placed on the liabilities side of the ledger". This even allows for the counting of the explosion in FedGov spending as "GDP growth", which I would rather not do since blowing stuff up in Iraqistan and paying the salaries of Thousands Standing Around at airports hardly constitutes "product".

This is just lunacy. You can't make your argument with the numbers the normal world uses, so you make up your own. You're off the deep end.
post #2017 of 5454
Quote:
Originally Posted by musicmax View Post

According to MMT 8% headline (U3) unemployment should be impossible after a decade of FedGov spending sprees and ZIRP. FRNs = MMT soma.

Hardly. Your understanding of MMT is shallow at best.
post #2018 of 5454
Quote:
Originally Posted by brokencycle View Post

Me too. I also wished when I was saving for something like a house or car or something, my savings wouldn't lose value... oh wait, who am I kidding, everything is bought on credit now. Saving money, how novel.

Well there's your mistake. You shouldn't be saving money, you should be investing it. Duh.
post #2019 of 5454
Thanks for ruining this thread, guys. Seriously, we all really appreciate it.
post #2020 of 5454
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post #2021 of 5454
Quote:
Originally Posted by NameBack View Post

Why should money keep its value?
Here's the thing; I don't care what my dollars can buy. I care what my labor can buy. When one hour of my labor can buy more stuff than the year before, then I don't give a shit how many dollars that labor is denominated in, because it doesn't fucking matter.
Inflation is completely irrelevant because wages rise with prices, and as long as there's real GDP growth (which is going to be more likely if we're in a stimulative, loose monetary environment), then my labor can buy more stuff.

This is utter crap - unless you wish to work until the day you die and spend every penny you make the day you earn it. The WHOLE point of money is to be able to invest your labor in the OPPORTUNITY to buy someone else's labor (or resources) at a later date. It vastly improved the barter system by allowing people to produce up to their full potential.
post #2022 of 5454
Quote:
Originally Posted by ChicagoRon View Post

This is utter crap - unless you wish to work until the day you die and spend every penny you make the day you earn it. The WHOLE point of money is to be able to invest your labor in the OPPORTUNITY to buy someone else's labor (or resources) at a later date. It vastly improved the barter system by allowing people to produce up to their full potential.

Realistically though there are tons of place to put your money that are (explicitly or implicitly) indexed to inflation. Inflation has not robbed anyone of their life savings in this country. We are not Brazil in the '80s. Certainly we can't get much lower inflation than we have currently, at least not without harming the economy--or do you think we should raise interest rates and taxes right now? Does that seem like a good idea to you?

I care what labor can buy -- including non-wage long-term compensation like pensions, and including assets that typically keep pace with inflation, like stocks.
post #2023 of 5454
Quote:
Originally Posted by NameBack View Post

Realistically though there are tons of place to put your money that are (explicitly or implicitly) indexed to inflation. Inflation has not robbed anyone of their life savings in this country. We are not Brazil in the '80s. Certainly we can't get much lower inflation than we have currently, at least not without harming the economy--or do you think we should raise interest rates and taxes right now? Does that seem like a good idea to you?
I care what labor can buy -- including non-wage long-term compensation like pensions, and including assets that typically keep pace with inflation, like stocks.

In a perfect world, stocks appreciate rather than keeping pace with inflation - and they are a risky asset class for most investors (index funds are less risky, I know).

The only reason we have low inflation right now is that we are replacing money supply that was deflated out of the economy by loan write-offs. I'm not sure how much more of that we really need tho.
post #2024 of 5454
Quote:
Originally Posted by ChicagoRon View Post

In a perfect world, stocks appreciate rather than keeping pace with inflation - and they are a risky asset class for most investors (index funds are less risky, I know).
The only reason we have low inflation right now is that we are replacing money supply that was deflated out of the economy by loan write-offs. I'm not sure how much more of that we really need tho.

At some point, inflation will be seen as a hostile act by our creditors, as well. WE can't just devalue all the money we borrowed from China and Japan.
post #2025 of 5454
Quote:
Originally Posted by ChicagoRon View Post

At some point, inflation will be seen as a hostile act by our creditors, as well. WE can't just devalue all the money we borrowed from China and Japan.

Sure we can. What the fuck are they gonna do about it? Not buy our debt? Fat chance. They're already buying our debt at negative real rates of appreciation, so why would they stop doing that? Their existing debt stock would decline in value, but realistically where in the world are they going to turn for an asset as secure as US debt going forward? Nominal rates would go up, real rates would stay low or negative, and business would continue as usual. Better still would be if we're talking about substituting the revolving-door debt charade with its functional equivalent of simply creating assets, then we wouldn't care if anyone ever buys our debt again, because we wouldn't be issuing it.
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