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At 11/16/09 01:22 PM, Proteas wrote:

At 11/16/09 08:55 AM, Der-Lowe wrote: BTW this is me

And this is my Dual Swords // Will Power Brute, whom recently hit lvl 50 in the game.

I SEE NO TOP HAT >=(

At 11/15/09 10:06 PM, SmilezRoyale wrote:

At 11/14/09 05:28 PM, Der-Lowe wrote:

Actually, you had declines in almost everything, nominally and really.

Just a reiteration of the fact that the economy needs to contract. in the same respect that being "achy" and warm headed when you have a fever isn't the sickness, it's the correction. I'm not saying that the human body is proof that free markets work though.

But you see that there is no reason for wasting 10% of the labor force. If, as it seems to be your argument, there is excess consumption, then, if markets clear, there is no reason for the mechanism not show this new necessary trend to re channel resources into whatever it needs to be produced, be it capital, butter or cannons. A necessary corollary of the assertion of clearance of markets is Say's law, if markets work then they should be able to fix themselves without decreased output, because resources are there to be employed.

And that's the problem, there is no real argument here to defend the functioning of the market during the great depression (not to say that it was government spending who pulled the country out of it). If markets worked, there would have been no unemployment, bad investments should have ceased and employment re channeled into lucrative investments, without jumping to 25% unemployment rates.

As a libertarian i do feel somewhat obligated to study the depression more than I already have, it's a political topic that I'm weak on. I do know, however, that what made the 29 depression different from the one roughly ten years earlier is that the Great depression involved wage and price controls that made the functions of lower prices and lower wages impossible, even during the hoover administration. If wages cannot fall, businesses have no choice to fire workers.

Price controls were imposed in 1933, as part as the new deal. From 1929 to 1933 a deflationary spiral took place. After the New Deal was imposed, the economy started to recover, until it fell into a recession again in 1937 when FDR tried to balance the budget.
After that came WW2, as government spending soared, the crisis was left behind.

I'm highly skeptical of the notion that someone somewhere has the actual wealth that is backing all of the debt that Americans and their government have accumulated. I mean... Asside from all of the foreigners.

The debt is backed by future tax revenues, which I believe are in the 2 trillion dollars per year.

No individual would have the audacity to say that the 5,000 dollars a month they spend per month is covered by the 3000 dollars per month of future income, but i don't want to insult your intelligence by implying you don't already know that.

I'm saying that the US government can collect enough taxes to pay its debt.

I'm talking about cases where the money is borrowed or printed by the government. The Tin Pot Dictator in this case would channel the money from foreign aid into military expenditures, or building a golf court for himself.

The government just takes what's willingly supplied and finds no demand, it has nothing to do with re-channeling something that was supposed to be employed for a good cause into a bad investment. It's about finding a use for money that nobody wants to use, because of a giant market failure in the money markets.

Consumer confidence theory... Businesses and individuals don't want to perpetually living 'bare bones necessity' That they underutilized capital temporarily and use what resources they have more efficiently, restructure work to fix the mistakes occurred in the boom is not something to complain about. Americans are learning from their mistakes, both consumers and investors. And now the government and the economic parrots are complaining that people aren't returning to their old reckless behaviors, which is why we need the government to encourage people to return to those bad habits, because the government never learns.

A Kitchen Analogy

If people burn themselves on a stove they'll be disinclined to touch stoves again for awhile, and instead rely on the micro wave, but eventually they're deprivation of well made soups and other stove oriented foodstuffs leads them back to cooking with the stove, but this time more carefully.

Keynes sociology class theory is cute but it's unrealistic and completely elitist, and to be expected from someone with a background like Keynes.

Consumers: are great because their consumption is important, but consumers themselves are dumb, passive, determined robots.

Investors:Dynamic but irrational and crazy, creatures of mood and optimists and pessimists. If they wake up in a good mood one morning they'll invest and if they have a cold the next day they'll sell. So you can't rely on them.

Deus Ex Machina: (government) Supremely rational, especially when guided by top economists like Keynesians, and they can step in and correct the mood swings of the investors. Government expenditures is a form of honorary investment.

That's quite an imperfect view of the General Theory.
Firstly, Keynes does not use such characterization of economic agents. He does say that some are good, bad, nor believes the superiority of one agent over another.
As any scientist, he studies a phenomenon and tries to explain it. It had been long ago observed (by Marx) that capitalist economies face regular downturns. Neoclassical theory believed this to be effects of friction, situations that arose in between equilibriums. The corollary was that no intervention should be used, the best thing the government could do was to keep its budget balanced, and wait until the private sector fixed itself.
However, these crisis were getting stronger and stronger (also, noted by the first time by Marx), and some did not fix themselves shortly. Before the Great Depression, Britain had experienced a long period of high unemployment, which gave Keynes the upper-hand in the discussion of the Great Depression. And that's basically the core of Keynesian theory: recessions can be managed, through monetary, trade, and fiscal policy.
The State acknowledged the existence of these tools, and has been using them for the last 70 years, with varying degrees of success.

I'm not calling you a Keynesian, but your general dislike of investors

¿?
I never said I disliked investors.

and bias towards government seems to stem from his interpretation of the three classes.

As for utility, that was my point, but it's almost certain that if Government is spending the money, it's probably not maximizing society's utility.

As long as utility is positive, it's better than zero.

Let the prices of all of the misused capital fall and eventually some entrepreneur, and it won't be stuck in the hands of some political interest group or building bridges to nowhere, building more statues in the capital building, or for paying artists to make eulogies to Obama.

The thing is prices never fall enough, and even if they do, the deflation destroys the financial system. As in 1929.

At 11/15/09 01:16 AM, Al6200 wrote:

At 11/8/09 02:40 AM, Der-Lowe wrote:

Yeah, because the secret to development is underfunded educational and health systems.
Look how well Ghana is doing!

I agree with your overall message, however I do not agree with this particular statement. The value of spending money on education is vastly overrated

Elaborate. I find this statement quite weak, since if you see at any process of economic development, education has played a major role, if not the most important one.

BTW this is me

At 11/16/09 12:09 AM, SevenSeize wrote: Hey Der-Lowe, are you aggravated that on this Tropico you can't kill the tourists?

I never use tourism unless I'm obliged to.
I am teh industrialist ^_^

I am. My soldiers should be able to get anyone I sick them on.

My mother was horrified to hear of an american game where you became the president of a hispanic little island, and where I was considering to either assassinate, imprison, or "make an accident" with the members of the opposition.

Also, the AI fails. If I have condominiums set up with 0 for rent, why the hell are they still building shacks??????

Must've to do with distance to work. I build lots of garages. It's also good for unemployment. In a map, I had 45% unemployment because I accepted taking refugees.
DAMN IMMIGRANTS LIVING OFF TAXPAYER'S MONEY.

No tropico politics in the lounge!

At 11/14/09 10:10 AM, RydiaLockheart wrote:

At 11/13/09 07:38 PM, Der-Lowe wrote: Hey, how did the presentation of teh über corrupt country go?

No kidding. XD Only problem was I went over time, because I was trying to fit in stuff that just happened 24 hours prior, like the blackout and the deployment of the Army to the San Pedro Department.

I liked it when the congress of paraguay provided a tax cut on 4x4 imports. That was teh lulz considering they stole all the money that had to be used to relocate half of Encarnación for Yaciretá. Not surprisingly, half of the city flooded.
And then they go call Brazilians exploiters for paying little for the electricity they use from Itaipú. HELLO THEY BUILT IT, you only get electricity because half of the river is Paraguayan. Same with Bolivians and Petrobras. My uncle, who lives in the border with Paraguay, started watching Paraguayan media and comes with this exploitation tales. Annoying.

At 11/9/09 04:08 PM, SmilezRoyale wrote: That is to be expected. If prior to a recession / depression you have artificially low interest rates one would expect over investment, or loans being made on the assumption that loans are cheaper then they actually are relative to the REAL amount of deferred consumption. I'm not saying that overinvestment is good either. And it makes sense that after the depression of 1929 and the depression of 1920 that you had declines in both consumption and investment.

Actually, you had declines in almost everything, nominally and really.
And that's the problem, there is no real argument here to defend the functioning of the market during the great depression (not to say that it was government spending who pulled the country out of it). If markets worked, there would have been no unemployment, bad investments should have ceased and employment re channeled into lucrative investments, without jumping to 25% unemployment rates.

The other kind of growth involves spending, you spend money you don't have, and say that the economy has improved because people are spending more, this is like going on a junk food binge and measuring your weight and saying 'my economy has grown' or injecting yourself with steroids and telling everyone how your physique has improved.

The thing is that the money being spent exists, in the way of not realized investment. The private sector has a huge amount of funds that is currently not using (that's why NOMINAL interest rates went negative on the T-bills a year ago) , so the government uses the opportunity, and spends them. Since we're in a liquidity trap, there is no crowding-out effect: the government does not displace investment, because the deficit does not raise interest rates (which are zero).

I'm highly skeptical of the notion that someone somewhere has the actual wealth that is backing all of the debt that Americans and their government have accumulated. I mean... Asside from all of the foreigners.

The debt is backed by future tax revenues, which I believe are in the 2 trillion dollars per year.

The pitfalls of GDP are more related to its accurate measuring of the level income, (or "utility"), rather than its evolution.
And even if you eliminate government expenditures, the economy still grew. We call that the multiplier effect, and it's greater than 1.
Hooray! suck that friedman.

I'm talking about cases where the money is borrowed or printed by the government. The Tin Pot Dictator in this case would channel the money from foreign aid into military expenditures, or building a golf court for himself.

The government just takes what's willingly supplied and finds no demand, it has nothing to do with re-channeling something that was supposed to be employed for a good cause into a bad investment. It's about finding a use for money that nobody wants to use, because of a giant market failure in the money markets.

As for utility, that was my point, but it's almost certain that if Government is spending the money, it's probably not maximizing society's utility.

As long as utility is positive, it's better than zero.

At 11/8/09 05:06 PM, SmilezRoyale wrote:

At 11/8/09 02:40 AM, Der-Lowe wrote:

Although i'm not particularly sure why China consuming it's own products would help the global economy,

Because the products they consume themselves are to be replaced by foreign production. A more expensive yuan will also increase imports, increasing Chinese demand of foreign goods.

i think China would be stupid to continue it's current relationship with the united states. It seems to me that the only goods that the united states produces any more are Health, Education, and Government. Health and education are expenses, not things you want to have to be so large and it should be startling to anyone at the fact that these sectors have grown whilst the manufacturing sectors have continually been shrinking. As for the government sector i don't think i have to say much about it.

Yeah, because the secret to development is underfunded educational and health systems.
Look how well Ghana is doing

The increased personal investment in health and education are not solely demand derived, the cost of healthcare and education have gone up, which is why people are spending more of their income on these things.

This is basically explained by saying that those goods are luxury goods, and that their supply curve has a positive slope.

Having young americans go deeper and deeper in to debt to pay for education which is all too often over-rated does not sound like a healthy trend.

And on the same token neither is

For example, cosmetic and lasik surgery's have been getting increasingly advanced, and on the same token they have been getting increasingly cheaper. in developed countries Vane people can alter their faces with less of their income in relative terms even when the technology of those surgery's has improved.

I don't think so, prices here are merely cheaper because surgeon's salaries are lower, and still very expensive in local salaries.

point is, China having all of these US dollars is worthless for them, since i cannot conceive of what they could possibly buy from us with those dollars.

Soy, every agricultural product known to man, basically any technological good known to man. Cars, basically any type of machinery, etc.

But America's Manufacturing base is declining.

http://4.bp.blogspot.com/_GMkD4mFrFxw/Sn 92P-qjBDI/AAAAAAAAB7w/tHxChL2SZEM/s1600-
h/Annual+employment+growth+in+US.gif

That link does not back up your statement.

Yeah, well, it would actually be the other way round. A higher yuan would shift demand outwards (which is why they would save the world), since foreign goods become cheaper. They'd export less, and import more, possibly moderating their growth rates. Their fiscal stimulus might compensate for the loss.

I don't see the difference between what you said and what i said.

you say it would lead to "euphoria", whereas the effect of a revaluation would be to cool the economy.

At 11/8/09 10:12 AM, morefngdbs wrote:

Those figures are negligible compared to the effect on their balance of payments a revaluation would cause.

And a "tanking" of the purchasing power of the dollar would be beneficial for the US, as noted above.

I HAVE A NEW PC (it's been 4 years)
CORE 2 DUO 3 GHZ 45NM
most importantly...

I CAN PLAY TROPICO NOWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWW

*HAPPY DANCE*

I know where andorra is, but I can't distinguish the flags of Ecuador, Colombia and Venezuela. I can distinguish venezuela's football team shirt, since it's red wine. Yum.

About knowing the US, I studied the 50 states and its capitals at english school. It was fun. And we had this little book about New York. Then, since the Argentinian constitution is basically Ctrl+c Ctrl+v from the American one, I've come to know more about the US constitution than many here.
Oh, I also studied the Civil war in highschool, but I don't remember much, though. But well.
Malvinas argentinas or sth.

At 11/12/09 11:18 AM, RydiaLockheart wrote: Presentation on Paraguay this afternoon. I'm nervous as hell.

...it also doesn't help there were a ton of new developments overnight either...

Hey, how did the presentation of teh über corrupt country go?

At 11/12/09 09:19 AM, morefngdbs wrote: Its a sunny day out today .
5 degrees & I'm going into town to get my studded tires installed.

& I'm still in shorts ;)

fuck you winter, by this afternoon I'll be all set !

Heh. It's 26ºC here and I'm wearing jeans.
No shorts in the School of Economics >=( This ain't no humanities yo.

Economic lolcats.

Alternative caption: Can I haz recoveries?

At 11/8/09 08:10 PM, SmilezRoyale wrote:

At 11/1/09 08:29 PM, X-Gary-Gigax-X wrote: How the heck did that happen? We still remain on the brink of 10% unemployment.

Actually our real unemployment is somewhere around seventeen percent.

Using another U-N ?

The reason that people are running around saying that the economy is growing, is because they are measuring likely measuring it by. The government injected a huge amounts of stimulus money into the economy to stimulate demand. Not even the heaviest critics of the stimulus (I.E. peter schiff) can deny that pumping money into an economy is going to stimulate demand.

There are two kinds of economic growth, one kind of economic growth involves savings. Capital is accumulated which then goes to build up the factories and firms and infrastructure that is essential to maximizing our world of scarcity. Deferred consumption today leads to greater overall opportunities for consumption tomorrow.

A recession does not necessarily balance itself with a boom afterwards, and vice versa.
The only way in which a drop in consumption now can mean higher consumption tomorrow is if that savings are being channeled into investment. This is not the case in recessions, since businessmen get pessimistic. For example, Net investment went negative during the great depression, despite the increased investment by the decrease in consumption.

The other kind of growth involves spending, you spend money you don't have, and say that the economy has improved because people are spending more, this is like going on a junk food binge and measuring your weight and saying 'my economy has grown' or injecting yourself with steroids and telling everyone how your physique has improved.

The thing is that the money being spent exists, in the way of not realized investment. The private sector has a huge amount of funds that is currently not using (that's why NOMINAL interest rates went negative on the T-bills a year ago) , so the government uses the opportunity, and spends them. Since we're in a liquidity trap, there is no crowding-out effect: the government does not displace investment, because the deficit does not raise interest rates (which are zero).

on another note, GDP numbers are terrible barometers of economic growth. It's entirely too easy for some tin pot dictator to spend millions on weapons and materials for the army to oppress the masses, and then report those millions in it's GDP and call it growth. Likewise if politicians hand out hundreds of billions of printing press money to politically connected allies, it doesn't mean that society as a whole is any better off.

The pitfalls of GDP are more related to its accurate measuring of the level income, (or "utility"), rather than its evolution.
And even if you eliminate government expenditures, the economy still grew. We call that the multiplier effect, and it's greater than 1.
Hooray! suck that friedman.

At 11/8/09 05:57 PM, SmilezRoyale wrote:

At 11/8/09 02:14 PM, Der-Lowe wrote:

At 11/8/09 10:32 AM, morefngdbs wrote:

Economically, it's government owned, since government gets all the interest that the Fed earns by buying US T-bills.

I think you've hit something here. It's basically worth saying that any sort of unique, exclusive, and symbiotic nature between a private company and government would suggest that the government effectively owns and governs that private institution.

This line of logic would suggest that the government has far more that it 'owns' than one would initially expect.

Yeah, Friedman in Price Theory says that the US govt effectively owns 40% of every business, since that is (was) the corporate income tax.

At 11/8/09 10:32 AM, morefngdbs wrote:

Economically, it's government owned, since government gets all the interest that the Fed earns by buying US T-bills.

I want a big dog now =(
I had a rottweiler but my dad gave it away.

And a new PC. I have three. They all stopped working in the same week. Hard Disk drive and videocard in one, motherboard in another, and power supply (apparently) in the other.
But hey, I'm getting two new pcs ^_^ A Core 2 Duo 2.93 Ghz and another Core 2 duo, 2.5. I'll have the pleasure of assembling one of them (the fastest one :D)
Oh, I got my driver's licence. I parallel park LIKE GOD.

At 11/2/09 12:32 PM, Elfer wrote: The correct way to fix the economy would be to attempt to consume according to production. When you consume beyond production, you're just creating an inflationary gap that will eventually slam you back into a recession.

Good that none of that has happened in the developed world since WW2

Of course, the REAL way to fix the economy is to stop ignoring factors like the environment and stop trying to drive the economy through consumption in general.

I do not see how the financial crisis is related to environmental problems.
Unless there was a whole Greenpeace conspiracy I am not aware of.

At 11/7/09 10:39 PM, SmilezRoyale wrote:

At 10/19/09 05:38 PM, Der-Lowe wrote: and save themselves.

Although i'm not particularly sure why China consuming it's own products would help the global economy,

Because the products they consume themselves are to be replaced by foreign production. A more expensive yuan will also increase imports, increasing Chinese demand of foreign goods.

i think China would be stupid to continue it's current relationship with the united states. It seems to me that the only goods that the united states produces any more are Health, Education, and Government. Health and education are expenses, not things you want to have to be so large and it should be startling to anyone at the fact that these sectors have grown whilst the manufacturing sectors have continually been shrinking. As for the government sector i don't think i have to say much about it.

Yeah, because the secret to development is underfunded educational and health systems.
Look how well Ghana is doing!

point is, China having all of these US dollars is worthless for them, since i cannot conceive of what they could possibly buy from us with those dollars.

Soy, every agricultural product known to man, basically any technological good known to man. Cars, basically any type of machinery, etc.

In my opinion the dollar right now should be next to worthless, and the Yuan should be much higher in value.

Well, that's precisely what I say. We agree :D

I can conceive that if China restructured it's economy to allow for more domestic consumption of it's products, it would probably experience the same kind of euphoria that America experienced in the 50's. All of the factories that were originally configured for war production turned to producing goods for domestic use.

Yeah, well, it would actually be the other way round. A higher yuan would shift demand outwards (which is why they would save the world), since foreign goods become cheaper. They'd export less, and import more, possibly moderating their growth rates. Their fiscal stimulus might compensate for the loss.

At 10/23/09 07:28 PM, Deathbybible wrote: Call me an idiot... but isnt the economy doomed to fail as it is?

If all money comes from banks (the only people who can legally print money....)

The Federal Reserve, actually. Which is a bank, but government owned.

and they only give money through loans

This is not true, the fed can buy stocks, other monies, gold, etc.

that charge interest.. isnt there always more debt than money in existance??

Actually, money is a right. When you have US currency, the Fed owes you. So you're exchanging debt for debt

like say a bank printed the first 20 dollars, and loaned it to someone with a 25% interest.

He now owes 25 dollars, but only 20 dollars even exist. What is he to do? Nothing butwork off his debt.

Oh, and the Fed generally puts money in the system through the US government, it buys us debt with money. But then all the profits earned by the Fed go back to the Treasury, so no harm done.

Paraguay?

THREAD STARTING FRENZYYYYYY

and save themselves.
In an era of global recession like the one we're in, the most important global players need to use their power and pull the world out through an increase in aggregate demand. This used to be easy when the biggest players where the same as the biggest creditor nations (ie, everybody owed them). They could simply "cash in" their loans, increasing demand, and problem solved.
As you all know, the world's most economically important nation, the US, is in not a comfortable position to do this. Whereas not as large as it used to be (7% of its GDP!) the balance of payment of the US is still shaky (3% deficit). Moreover, it hasn't had a fiscal surplus in a decade, which created a considerable yet not lethal amount of public debt. That means that the US government is not in a good position to reset the world's economy.

China, however, has been amassing T-bills for quite a while now. Its consumption/gdp ratio is abnormally low (35% while the US' is 70%, and the normal value is 60%).Fiscally speaking, its debt is among the lowest in the world (15% vs the US' 60%) and their budget is balanced.

Even if China didn't want to start spending all their money, there is not need for them to do so. A mere revaluation of their currency would have major economic impacts for the rest of the world.
The Chinese may ask: while helping others is nice, what's in it for us? Well, increasing consumption would mean increasing the living standards of hundreds of millions of Chinese. It means cheaper imports, and China is a major food importer. Far-sighted Chinese may argue: we're not going to fall into the trap the US already fell on: ignore the long run to enjoy the short run. Well, it's not ignoring the long run: China has already 2 trillion dollars worth of US securities. It will be the major loser in a possible US currency/debt crisis, a crisis that is much more likely to happen if China does not start reverting its trade situation with the US now and lifting the global economy off the ground.

Having read just a little Marx really makes me want to hurt myself whenever I read a communism topic here.
I mean, seriously, how can you ever criticize or praise something you have not read?
-----------
Anyway. I ate empanadas. Meat and then delicias, (cheese, tomato, eggs and basil). And ice-cream for dessert! ^_^

At 10/17/09 03:29 AM, SadisticMonkey wrote: Communism represents a controlled soceity. Capitalistic democracies represent free society.

I like to see that you have really profound mental processes.

At 10/17/09 06:43 PM, Tankdown wrote: Marx thought that humans had a natural working spirit and it wouldn't matter if you gave them all they needed

... Source?

At 10/17/09 08:22 PM, Hellz-Yeah wrote: The idea behind anarchy is that there is no governement, everybody works and reaps their payment, and there's no racism or crimes.
First of all, unless you're a farmer or something along those lines, you can't really make any sort of profit if there's no government to make money to give to the citizen.

Monetary systems were not created by the government, rather by private individuals. If there were no government, people would simply start trading with gold or some good of the sort, establishing as a currency.
Profit, although measured in monetary terms, is not monetary in nature, it's the excess wealth you have compared to a previous moment in time; it can perfectly happen without a currency.

I have not heard claims on whether anarchy would eliminate racism.

At 10/17/09 04:32 PM, zendahl wrote: If you can't find a job it's because you are lazy or un willing to take a certain type of job.

So unemployment is just laziness? The business cycle is just an invention created by lazy people?

WOW, that's an ausom webpage. I believe there was something of the sort here as well. But mainly because the media didn't pay attention to the public works of the government.

At 10/16/09 11:58 PM, Proteas wrote:

At 10/16/09 09:15 PM, Der-Lowe wrote: I don't know what quesadilla is. Must be a burrito/taco thing.
However, I did laugh at the pic.

A quesadilla is kind of like a fried taco made with a flour torilla and lots of cheese. I like some diced onions, green pepper, and chicken on mine. Although there was this time where I made one just using pepperoni and american cheese, then baked it.

Sounds yummy. It's funny how we use tortilla to name something completely different, namely, a mix of eggs and potatoes fried. My grandmother makes them spanish, ie, with sausage. hmmm

At 10/17/09 05:12 AM, fli wrote: Things wouldn't feel so terrible if I could find a job.
I mean, I got a few jobs... but I'm talking the boring 8 to 5.

Without school, what else am I going to do with my time?
Twitter thumbs?

I got an English degree, but so does everyone else in California.
I thinking of applying for a Masters if I can't get the second BA.

At least it will keep me moving.

Oh wells...
Things were worse in the Depression.

Well, in germany, Nazism arise. Unless you're a conservative nutjob, then the situation in the US is much better. Here, dollars started to come in again, the Central Bank already had to intervene to keep the peso from appreciating ^_^
yay recoveries!

At 10/17/09 11:25 AM, SkunkyFluffy wrote: My dad is getting back to his ex-girlfriend, who did not so much dump him as simply stop responding to any attempt at contact. He drove two hours from Richmond to see her.

I love him, but I think he's an idiot. This is the second time they've broken up.

I tried to convince him to just take a detour on his way up there, stop at our house, and not keep going. I don't think it worked.

(

aw, well, maybe in order to learn he has to make the mistake on his own. Twice.