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At 10/12/10 10:16 AM, zephiran wrote: CONGRATULATIONS ON BECOMING A FINLANDWSWEDE!

FUCK THIS IS AWESOME!

red and yellow

-_-
SHUSH NON SCANDINAVIAN YOU

At 10/12/10 08:59 AM, Korriken wrote:

At 10/12/10 07:18 AM, Der-Lowe wrote: Hello!
I've come to be congratulated on my day.
GO

*puts on red and yellow ribbon*

)

clue us in. what day would this be?

http://en.wikipedia.org/wiki/Fiesta_Naci onal_de_Espa%C3%B1a
tada!

At 10/12/10 04:32 PM, SolInvictus wrote: all malware and no play make Sol a dull boy.

My MSN likes crashing all the time :(

Hello!
I've come to be congratulated on my day.
GO

*puts on red and yellow ribbon*

:)

At 10/9/10 01:35 PM, SmilezRoyale wrote: In times past when the US Dollar was treated as "Gold" in a metaphorical sense, when foreign investors were either uncertain about foreign currencies or foreign economies, or even the American Stock market, they would put their money in the dollar, in effect 'hold on to' or 'hoard' dollars

You forgot to say "this continues to happen nowadays". Don't you remember the negative yields on T-bills during the crisis?

Also, I'd hardly call a 2% inflation target "run away inflation" capable of destroying our economy. As I said though, I doubt inflation would be as good for us as the people advocating its use thing it would be.

Government Statisticians tend to under-report inflation. Again I'll point you to Schiff who can explain it as well or better than I can. a TLDR version of it is this.... Inflation statistics (1) Take energy and food out of the equation (2) are often times 'cost of living' based. This is problematic if rising prices causes people to switch to less expensive substitutes.

Oh, he is so, ugh, wrong. He's just another conspiracy theorist.
on (1)
Economists are interested in core inflation because it allows us to see how inertial inflation is doing. By taking goods that are determined in competitive markets, we're left with those that are determined oligopolistically and under fixed contracts. These are determined on inflation expectations, and that's why we need core inflation. You might think that is merely an excuse to replace the old CPI for one that sheds a favorable light on the Fed. But the "old" CPI continues to be calculated, and is used to index, for example, Social Security
and (2) is also blatantly wrong. the type of index used to calculate CPIs all around the world, that is Laspayres, OVERestimates inflation, not underestimates it. Apparently, the bls has dealt with this by correcting the index for it to account to substitution effects.
More info here

At 10/7/10 07:39 PM, Memorize wrote:

At 10/7/10 02:49 PM, Der-Lowe wrote:

Why, that's a clearly unbiased source, which we should use to base our discussion upon.

</sarcasm>

So he shouldn't source institutions that have always been right?

*laughs*
No institution is always right, not even the most um, uncompromising Austrian will claim that he/she is always right, mainly because it would make him/her look bad, and because that posture is at odds with his/her own theory.

At 10/7/10 07:50 AM, SadisticMonkey wrote:

At 10/7/10 07:42 AM, Der-Lowe wrote: source?

its based on article I read on mises.org

LET THE AUSTRIANISM FLOW THROUGH YOUUU

Why, that's a clearly unbiased source, which we should use to base our discussion upon.

</sarcasm>

source?

I expected a negative correlation between govt expenditures as well, and I got it, but with a small R^2 again, this time 0.4335, a bit better than that of your claim, but still leaves the door open for other causes.

I forgot to say, most of the Data comes from the OECD, and it was patched through the CIA factbook (Gini and Govt expenditures as % of GDP)

http://stats.oecd.org/Index.aspx
https://www.cia.gov/library/publications /the-world-factbook/

At 9/30/10 05:23 AM, SadisticMonkey wrote: basically the reason there is so much wealth inequality is because the rich use the state to help them unfairly increase and protect their wealth, both by socialising their losses and by helping prevent the lower level of "rich" individuals from breaking into their level of wealth. This is dealt with in a book titled "The conservative nanny state: how the wealthy use the government to stay rich and get richer". I don't like the title, because it suggests that voting democrats will fix everything, and it has a general anti-free market position which is just retarded, but still, its good for understanding the state's role in wealth inequality.

I've done the empirical research, and the linear regression agrees with your statement (more regulation => more inequality), however, its explicative strength is minimal, shown by the small R^2 (R² = 0,2252, it should be 0.7 at least).
Most notably, the US and China show similar Income Distributions, with the US being the most unregulated country in the sample, and China the most regulated one.

Fable 6:it the expansion was a classic Keynesian economic recovery driven by the stimulative effects of high deficits
Since nominal GDP didn't grow rapidly in the 80s, and deficits failed to create growth in the 90s, deficits weren't the main source of growth in the 80s.
Basically, Keynesian demand pulls act by increasing money aggregates, which create both growth and inflation. Both of these are expressed in nominal GDP. However, the disinflation policy brought inflation down, and that is the main point, a Keynesian policy would inevitably have lead to higher inflation, not lower. I agree that it wasn't an expenditure driven; it was "natural" growth. I would say that the growing of the economy did not respond to classic Keynesian Economics, ie the one used to describe the Great Depression, but to NeoKeynesian, the Neoclassical Synthesis, or Mainstream Economics.
The second point is rather beyond the fable, deficits do create short-run growth. There was no growth in the 90s because the slow growth created the deficit.

Fable 7: the robust Reagan economic expansion was only a result of the steep economic decline in the 1980s
Since growth was more robust both before and after Reagan's years, and since it lasted for a very long time, we cannot argue that the economy just bounced back.
That the growth levels before were lower than during the Reagan years is explained by the adverse exogenous shocks known as the oil shocks. True, monetary and fiscal policy weren't the best, but in the end, they can only affect short run growth, and the long run depends on the expansion of aggregate supply. Even so, the growth rate difference is minimal (2,8 against 3,2); there was no miracle.
Anyway, the author is right about this one.

Distributional effects.

Fable 9: Workers had to work harder for smaller paychecks
While it is true that wages+compensations should be analyzed, I find it odd that the author does not compare the performance of this measure against other periods. Since I do not have interwebs at my current location, I cannot perform this study.

Fable 10: the rich got richer, and the poor got poorer
It is said that people from all income levels saw their income rise. However, the author confesses that the rich did get richer more quickly than the poor.
The phrase "the rich got richer and the poor got poorer" is plain wrong. Almost in every capitalist nation, the rich do get richer, but some of the growth inevitably is enjoyed by the poorer classes. Real wages have been growing at a 2% yearly rate since the Industrial Revolution.
For a completely subjective point of view, let me say that equality is a desirable goal by economic policy, as important as mere growth. Here Reagan's administration failed miserably. Inequality did rise, and not even a libertarian author can deny it. Poor people's income did grow despite Reaganomics, and not because of it. 6% growth in 8 years is laughable. The equality-efficiency trade-off was simply not there. Disinflation and stability had nothing to do with the tax cuts, GDP growth was similar to what it has been historically been in developed nations.
The correct expression to use would be...

Fable 11: the poor and minorities lost ground under Reagan's Economic policies.
It is shown how real income grew 6% in the Reagan Years, whereas had negative growth both before and after.
The analysis is misleading. The years before Reagan where those of high inflation and slow growth, that significantly harms the income of the poorest individuals. Clearly, low inflation is pro-poor. The years after are those of recession, when all incomes tend to fall.
The key lies in the phrasing, in order to prove the fable wrong, what should have been proved was that income of the lower quintiles grew as fast or faster than in the higher quintiles. The author cannot do that mainly because he has just proved the exact opposite in his previous fable. Therefore, Fable 11 is no Fable.

Fable 12: The rich got their tax bills go down in the 1980s while everyone else paid more
False, clearly, for the reform while decreasing tax rates also eliminated the posibility of tax elusion; in the end "the rich" did pay more taxes.

--------------------
TLDR version:
*Growth was not exceptional, the comparison the author made ignores the effects of the 90s recession and oil shocks.
*Inflation was brought down with monetary policy, Reagan had nothing to do with it.
* Fiscal policy was irresponsible, and the tax cuts were responsible for the deficit to grow. However, disinflation was also responsible, and lower defense spending would have helped. This imbalance had to be corrected by future administrations.
* Income distribution was severely worsed and has not recovered till today. However, Reagan is not entirely responsible for it, since similar phenomena happened in other countries.

Wai halo thar. After being nagged by and having given unsatisfactory explanations to Brian, I have decided to download the pdf, read it, and criticize it.
Let me start by saying that I dislike the method the author uses; comparing performances period to period is rather simplistic. Moreover, the author has incomplete data, for he takes 1989-1995 as "Bush-Clinton" years, whereas his actual period of analysis should have been until 1999. This is not malintentioned analysis; the article is just old, since it was written in 1996.
I believe that the most direct way of dealing with the article is by discussing what its idea of truth and "fable" is. Therefore, I will proceed to give my opinion on the different fables it has commented.
Let's start.

The Budget.
Fable 1 : The Reagan administration relied on "Pie in the sky" Predictions that tax rate cuts would pay for themselves
This applies more to pro-Reagan people and supply-siders in general. Not much to comment, I agree that tax cuts do not pay for themselves.

Fable 2: The Reagan tax cuts caused the deficit to explode in 1990
The author compares the increase in defense spending with the increase of the deficit in the same period. The figures differ by little, indicating that it was defense spending that caused the deficit.
The data adds up in the sum of all years, but not in the trend. You'll see that the author has not graphed the difference, mainly because it directly contradicts his conclusion. There is high defense spending in years with small deficits, and little defense spending in years with large deficits.
Graphing the relation in a scatter graph, if the author were right in his assertions, we would most likely expect a correlation of 1 (when defense spending increases in one dollar, the deficit increases in one dollar) with a high R^2 (indicating that the correlation is strong). However the correlation is very weak, with an R^2 of 0,006, which may be enough for some people (;)) but clearly marks no correlation for the rest of us statistician mortals.
In light of these findings, we need to ask ourselves the following questions: Why did the deficit grow during 1987-9 despite the reduction in defense spending? Why does it keep growing when defense spending keeps about the same in the first years?
Clearly, if the deficits persist to grow, there is a structural disequilibrium in the public finances. One whose absolute gap increases with time, yet in increases in lower amounts each year.
Firstly, we need to explain the initial disequilibrium, and why it persisted. This was caused not by a surge in defense spending, since the surge in deficit was prior to the surge in defense spending, as the first graph shows. The explanation lies, I believe, in the tax cuts, which, not having been repealed, persisted during the whole period of analysis.
But we also need to explain why it kept growing, and why at decreasing amounts. Here is where the report partially is correct: disinflation.
How does this work? Well, the key is that expenses lag to inflation, whereas tax receipts do not. When planning next year's budget, past inflation is taken into account. However, if we are in a process of disinflation, past inflation is higher than the actual inflation, therefore the tax receipts we will receive will be lower than expected, and the expenditure excessive. This means the deficit will grow.
But why should it grow at a decreasing rate? Simply because so does inflation; generally, inflation falls sharply initially, let's say 5 percentage points from 15 to 10% annually, but in the next year only to 7,5%, then 6, and so on until it reaches the monetary authority's goal (generally, 2%).
Concluding this point, the deficit, and doubling of debt WAS caused by the lowering of taxes, which was combined by wrong estimations of inflation. Lower defense expenditures could have certainly made the deficit worse, yet they do not explain its evolution through time.
At the end of the fable, the author asks himself (and implicitly answers it): whether it was correct to have financed the increase in defense spending through debt and not taxes. Putting the structural problem we described aside, I believe that the surge in spending SHOULD have been financed through increased taxes, mainly because I believe in maintaining a balance in the budget except for depression situations (like now :D). However, I admit that it my stance on this subject is open to discussion
Having explained the evolution of the American budget during the period, we can address the eighth fable:

Fable 8: Bush and Clinton inherited a future of high and rising deficits from Reagan
Here the author conveniently changes the way of looking at things. As we have said, the deficit was indeed increasing, but at lower rates every year. Therefore, Bush, and Clinton did inherit deficits. Were they growing? Yes. Where they high? 2,6% of GDP is moderately high indeed.
Then how can the author say this is a fable? Well, the thing is that the economy was growing. What the creditor really cares for is the ability to pay of the nation. This is measured with the Deficit/GDP ratio. As anyone with basic arithmetic knowledge knows, as long as GDP grows faster than the Deficit, then that ratio will get smaller. Since we saw that the deficit was growing slower and slower, while the economy enjoyed moderate growth, the deficit to GDP ratio decreased through time.
Counting on continued growth was that the CBO projected that the deficit would continue to decrease through the Bush and Clinton years. But what happened? A recession happened. And not a Fed-induced one, easy to revert, it was a serious, difficult-to-manage recession that inevitably led to lower revenues. It wasn't that Bush and Clinton were careless.
Moreover, low deficits (which were only going to be achieved after 5 more years) aren't enough to lower the debt. You need to run surpluses to balance out the excess expenditure. This is a rather painful process; not only because of the vested interests that inevitably are affected, but also to the adverse effect they have on the economy. Were the reduction in expenditures and the tax hike unnecessary, then the politicians could have avoided the process and see higher popularity.
In conclusion, the deficits were high, and something had to be done about them (and luckily, something WAS done about them).

Monetary Policy
Fable 3: The Federal Reserve, not Reagan, deserves credit for ending the 1970s era of high inflation
The author claims that, while the monetary policy was key, Reagan supported it; therefore he should get part of the credit for it.
I don't really know what to say about it; endorsing a policy is not the same as carrying it out. Yeah, his administration was right about the evolution of inflation, but he didn't actually do anything about it. It WAS Vockler the responsible for fighting inflation.

Economic Growth
Fable 4: Reagan had little to do with ending the energy crisis; he was a fortunate beneficiary of the demise of the OPEC
I can't say much of this, given that I do not know about the oil shocks at first hand, except for what I have read in wikipedia. However, Carter put an end to the regulationalist policies, and the lost of power of the OPEC seems to have been caused not only by increased production in the US but also in other non OPEC countries.

Fable 5: Clinton's economic record has outperformed Reagan's

This is kind of irrelevant, and the article lacks the data for the last Clinton years.

Erh, don't understand what you guys are talking about. Except for Proteas, and yeah, that was kind of mean. But well, buy her a balloon or sth to make it up for he. Although she might think you're into her, so just pray for her.

ANYWAY
as Seven said, WE ARE THE CALIFORNIA OF SOUTH AMERICA! :D

At 7/3/10 04:37 PM, SkunkyFluffy wrote: Meat just came out!

yay
Meat always cheers me up, thnx

At 7/3/10 01:04 PM, Malachy wrote:

At 7/3/10 01:01 PM, Der-Lowe wrote: ='(

oh well

spoil sport. All I wanted was to harass you at your national team's embarrassing defeat. I didn't even have a chance to tell you that even Brazil got a goal in during their loss...

Not funny. At all.

Anyway GO SPAIIIIIINNNNNNNN
IN THE SEMIS FOR THE FIRST TIME IN HISTORY

='(

oh well

At 7/2/10 08:24 PM, Lunaful wrote:

At 7/2/10 08:18 PM, Scarab wrote:

At 7/2/10 07:35 PM, HeavyTank wrote: Yeah, so then they can find the excuse that "they got beaten by the team that won that world cup".

I like Germany because I like Germany.

I like Germany because of this young man; Mesut Özil, this guy can play so wicked football.

What about Messi, then? >=(
-----------
I support Suarez and I believe he is ausom; I bet he'll get a distinction in Uruguay of some sort.

ANYWAY TOMORROW MATCH D:
I'll go to the café early, have a late breakfast, watch it, DIE OF NERVOUSNESS and hopefully come back home singing. Then have a late lunch.

VAMOS ARGENTINA!

At 7/2/10 07:38 PM, Memorize wrote:

At 7/2/10 12:00 AM, Warforger wrote:

...........Thats not what he was saying, he was saying its something that should gradually be fixed, hopefully at a faster rate then the amount of debt we stack on daily.

You would be putting a lot of faith in politicians.

That cynical attitude will lead you nowhere. Sweden had faced a similar situation in the early 90s, with their deficit growing up to 15% of their GDP (that's 50% larger than the US now, which combines the biggest crisis since 1929 and the biggest govt spending program since WW2), and a few years later, they had turned that into a surplus. How?
Read it from the direct source
Mainly, make a long term plan, stick to it. Oh, and print a lot of money to compensate for the fiscal cut.

Uruguay vs Ghana was
UNBELIEVABLE

GO URUGUAY!!!!!

Abreu, spectacular.

URUGUAY, ONTO THE SEMI FINALS!

Go Uruguay! :D

At 7/2/10 01:29 PM, RydiaLockheart wrote: So apparently I'm not the only one laughing.

you and 40 million Argentinians . The radio commentator said "What's wrong Brazil? Brazil's lost focus, Brazil is in trouble, Brazil is LOOOOOOOOOOSING" and recently "So, uh any unexpected results? Oh, um, yeah BRAZIL LOST"

I thought scoring goals for the other team was something peewee players did?

hm?

At 7/2/10 01:32 PM, RydiaLockheart wrote: Apparently since the Brazilian sports page servers are crashing the Brazilians are flooding other countries' sites. Paraguay's Ultima Hora is full of them.

HAHAHAHAHA
Also, you know more about Paraguay than I do. And I'm 2km away from them every summer :\

At 7/2/10 02:14 PM, Idiot-Finder wrote: What are the odds that Argentina will win their next match by handballing?

Maradona made it cool.

Yeah, and he also did cocaine. And is kinds phat.
But let's judge him by that, and ignore that he scored the best goal in the history of humanity, and that he overcame all his personal difficulties, and media opposition, to bring a demotivated argentinian team back into the World Cup.
You are the worst kind a person there is, the kind that goes around judging others by the worst thing they have made in their lives. I wonder how you'll be judged.

TRISTEEEEEEEEEEZA NAO TEM FIM
FELIIIIIIICIDADEEEEEE SIIMMMMMMMMMMMMM
HAHAHAHAHAHA

*fist in air*
hahaha, was going to post a pic of the brazilian players, but the server of the sports newspaper collapsedhahahaha
HAHAHAHAHA

ORANJEEEEEEEEEEEEE
ORANJEEEEEEEEEEEE
BRASILEROOO BRASILEROOOO
QUE AMARGADO SE TE VEEEE
MARADONA ES MAS GRANDE
ES MAS GRANDE QUE PELÉ

LA TENÉS ADENTRO BRASIL!
LA TENÉS
AAAAAAAAAAAAADENTRRROOOOOOOOO

At 7/2/10 10:00 AM, Ejit wrote: go nethedrlndz

lol
that was really poor defending.
Also, what's with Robben ALWAYS going left even when his marker is TO HIS LEFT AND THERE'S NONE IN FRONT OF HIM.
He needs a plan B, jeez.

At 7/2/10 09:04 AM, Will wrote: I won £310 on the Brazil 3-0 win ;).

Spain to win 3-0 tomorrow.

yay

Argentina to win today.

yay

Brazil to win the world cup.

NAY >=(

I want to win the final against Brazil.
That'd made me oooooooh so happy
^_____________________________________^

Really worried about Verón not playing. Dunno what diego's thinking, but well.
WE'LL SEE D:

for now....
GO ORANJE! :D

Football, not Hand Egg

I'm guessing SOME of you actually like the sport (some British here as well) so I'm asking you what your favorite formation is. The question came to me given the debate here (Argentina) whether we should play 4-3-3 or 4-4-2 in the next World Cup against Germany. Is Tevez really worth the loss of control in midfield? =o

Anyway, discuss.

Economic policy has been focused on reducing the fiscal deficits of the developed countries, as a way to get us out of the crisis, or now that the worst part of the crisis has passed. Although no economist would argue that persistent deficits are harmless, I believe that the risks of it are greatly overrated, and the focus on the aspect to balance (that is, spending) is incorrect.
In order to simplify, I will base my analysis on the fiscal situation of the US, which is half of the developed world anyway.

What really triggered me to make this post was this graph,that shows how much taxes have fallen all across the board since 2001. What followed was to calculate the fiscal impact of the cuts, simply by multiplying the difference of actual rates with the rates that would have existed without the cuts by the pretax income of the US.
source, used data up to 2007 because it was the latest available.

(1) (2) (4) (5) (6) (7)
84.000 108,3 $ 9.096.276,00 23,0
79.300 109,4 $ 8.674.468,40 21,4 -1,6 $ -138.791,49
75.900 111,4 $ 8.453.817,90 20,7 -2,3 $ -194.437,81
77.000 112,1 $ 8.633.009,00 19,8 -3,2 $ -276.256,29
81.300 113,3 $ 9.209.501,40 20,1 -2,9 $ -267.075,54
84.800 114,5 $ 9.710.448,00 20,6 -2,4 $ -233.050,75
87.303 116,1 $ 10.135.833,10 20,7 -2,3 $ -233.124,16
89.829 116,9 $ 10.501.016,27 20,4 -2,6 $ -273.026,42
Total $ -1.615.762.470.988,10
In 2007 dollars $ -1.726.759.800.042,51

(1) Year
(2) Household Pre-tax Income (in 2006 dollars)
(3) Households (in millions)
(4) US Pre-tax Income (in millions)
(5) Average federal tax rate
(6) Difference with year 2000
(7) Lost Tax receipts (in millions)

And now, if we analyze how much the debt increased in that period...
source

Year Debt held by the public
2001 $ 3.339.310.176.094,74
2007 $ 5.136.302.727.072,67
Increase $ 1.796.992.550.977,93

So yeah, the figures are astonishingly similar (I myself was shocked). The calculation is a bit misleading, because I admit that the fall in tax receipts would have taken place even without the tax cuts because of the lower economic activity. But still, doesn't that put into perspective (not to say make ridicule) the argument to cut spending?

For my argument that the debt burden problem is overrated, I take this graph from wikipedia, which shows the evolution of US debt. The US has nowadays 60% Debt/GDP ratio. Even being pessimistic, say it'll grow to 100%, that's not much by historical standards, the US has overcome such situations in the past. Moreover, many developed nations face similar realities, like Japan and Italy.

In conclusion, yes the debt is an issue, but it is a long term issue, therefore it should be treated as such. There is no need to be fiscally aggressive right now, and emphasis should be made in recovering the ability of the US government to collect taxes.

How to cut the deficit:

At 7/1/10 01:22 PM, NHT123 wrote: I would tell those people at the federal reserve that they are not getting all the interest they seek for loaning us money.

That we should cut spending and raise interest rates now because the markets might want that in the future, although there's no sign that they will. Oh, and that doing it will have no effect in economic growth. (page 85/222)

At 6/15/10 12:18 AM, SmilezRoyale wrote: If a company, particularly in a new industry, is extremely innovative; always staying ahead of it's competitors. It is liable to get a large majority of the market share, it will probably earn massive profits while simultaneously providing consumers with something new and unique. At this point it would be idiotic for people to go on a trust busting crusade and attempting to fix said companies market share at a given point, that company is more likely to act like a 'monopoly' as it is commonly understood; few innovations, under production, and high prices, because the company knows that it is legally prohibited from 'competing' beyond a certain point. This is why a company can have a 90% market share and still be fiercely competitive; it's not that their high market share means they aren't competing, it's that their competition explains their market share.

Distress against the monopoly will arise if the consumers perceive that the prices are being lifted artificially. This is specially the case of legislation involving oligopolies, they are enabled to exist only if they avoid price fixing.
At this point, it is irrelevant whether they achieved their advantage though bullying smaller firms, or achieved consumer sympathy through aiding the poor or putting an end to the israel-palestine conflict, for that is a sunk cost (or benefit).

And what vanilla says is true in that a market share is never a permanent phenomenon, just because a company has an 85% market share today does not guarantee the same or larger market share tomorrow, and history has shown this.

This is basically because

in the long runnnnn,
we're all dead (UUUUUUUUUHHHHHH).

The same could be said about dictatorships, but that doesn't mean that nothing should be done to fight them.

If the company ever decides to cut production, halt innovation, and raise prices, the assets of the businesses they drove out of business will be bought up and new companies will be created, or new firms will be built up, depending on the profit margins.

If a company is earning massive profits while not innovating and cutting back on production then you either have to figure out if the industry if the industry is a natural monopoly (And please make the case for it) or if some artificial barrier to entry is causing a monopoly-monopoly situation to arise.

Current legislation takes this into account, proof should be made that the monopoly in existence has anti-competitive practices (eg: the ability of lowering prices to make eventual competitors go bankrupt). If there is not, I agree, a monopoly has to behave as a competitive firm, or close to it.