"Increasing Gummint Revenue Starves the Beast"

[Bret Cahill]

> > Laffer said tax cuts result in an increase in revenue.

> > Norquist says that tax cuts starve the beast.

> > Which one is it?

> Unsurprisingly - both!

"Increasing revenue starves the beast . . . ."

[Bret Cahill]

[Bret Cahill]

Tire biters are as bat crap insane as a 3 piece suit Republican paid
shill.


Bret Cahill

[Neolibertarian]

In article
<5ce07846-a157-46a9...@h13g2000yqe.googlegroups.com>,

The thing is, if you increase taxes, you get increased revenues to the
Treasury. If you lower taxes, you get increased revenues to the Treasury.

There's lots of caveats to both, of course. And we're not just referring
to federal income taxes. But you get the idear: you get increased
revenue either way--as long as production continues to increase.

The problem today is: there is no actual economic growth. For some
reason, they figure in government spending into GDP totals. So these
days, the GDP continues to grow, but only because of the fantastic
amount of government spending.

Aye, and that's the rub. There's no way to "starve the beast" because
the beast is eating itself.

--
Neolibertarian

"Global Warming: It ain't the heat, it's the stupidity."

[Les Cargill]

Neolibertarian wrote:
> In article
> <5ce07846-a157-46a9...@h13g2000yqe.googlegroups.com>,
> Bret Cahill <BretC...@peoplepc.com> wrote:
>
>>>> Laffer said tax cuts result in an increase in revenue.
>>
>>>> Norquist says that tax cuts starve the beast.
>>
>>>> Which one is it?
>>
>>> Unsurprisingly - both!
>>
>> "Increasing revenue starves the beast . . . ."
>>
>> Tire biters are as bat crap insane as a 3 piece suit Republican paid
>> shill.
>>
>
> The thing is, if you increase taxes, you get increased revenues to the
> Treasury. If you lower taxes, you get increased revenues to the Treasury.
>

NO, no you won't. Not over all equilibria of the economy. Never mind
whether "starve the beast" is prima facie nonsense ( and it is ); the
point of smaller government is not the operating cost of government
but rather the cost of its *effects*.

You did have increased revenue he Kennedy tax cuts; the Bush tax cuts
pretty much failed to increase revenue. We now have "Conservatives"
who rend their garments about the deficit but won't touch those tax
cuts.

the tax cuts mainly benefit wonks in S-coprs, while real jobs
are disappearing. Corporations are spending more and more
on decision support IT and this simply amplifies the effects
of bad measurement even more. So they double down, and....

The Laffer curve works, but not for all cases. That would be
contradictory; it would imply than negative taxation should produce more
revenue.

If you want smaller government, you must make coherent, solid arguments
for it - not appeal to bumper stickers and bad fallacies. I'm biased
towards a Hayek sort of argument myself ( read Bryan Caplan's "Why I
Am Not an austrian Economist" ). Even Hayek has flaws; Bryan
himself says "wages should fall", which is incredibly wrong.

For whatever reason, this is not being done. Nobody seems capable
of expressing this in terms of facts. They rely on a narrative-level
folklore that falls apart quickly. It turns into "anarchists" who
have toll tags...

When you write for the National Review, it's simply easier
to write pieces that are about the politics of identity
than about the facts. "Reason" is some better, but has
fewer subscribers.

We want it fixed, but not after you tell us what it takes to fix it.

> There's lots of caveats to both, of course. And we're not just referring
> to federal income taxes. But you get the idear: you get increased
> revenue either way--as long as production continues to increase.
>

But production has increased while revenue* has declined. We have supply
almost completely regulated by demand, and demand is almost completely
regulated by cash flow of consumers.

*all revenue, not just government

This is now expressed in declining increases in GDP, both nominal
and real.

And this:
<http://eduardo.intermeta.com.br/posts/2013/5/10/hand-to-mouth-living-from-a>

> The problem today is: there is no actual economic growth. For some
> reason, they figure in government spending into GDP totals.

That's not a bad thing, really... might be nice to have it broken
out, bur actual public goods are still production.

> So these
> days, the GDP continues to grow, but only because of the fantastic
> amount of government spending.
>

So what's wrong with the non-government part then? There's been four
kinds of "growth" since say, 1980 ( or 1973):

- Cost reduction in production, which can only be seen in GDP increases
when it frees up capital or labor to increase other production.

- The PC revolution. That put actual computer improvements
in the sphere of being measurable. Prior to that, nobody could
argue against Drucker's "computers are zero sum."

- the dotcom thing. Some of it was real; a lot of it just
isn't. The belief that web-based anything is somehow better
is unjustifiable, based on a a distortion of the fact that
networked machines *are* quantitatively better. It is just
that the networking of machines that is better, is not about
anything like the Web.

- The housing bubble.

Why can't the private sector maintain a consumer sector
that can afford everything, even though costs are radically
reduced?

Maybe it's this:

<http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/11/why-arent-americans-moving-anymore-heres-a-new-theory/>

> Aye, and that's the rub. There's no way to "starve the beast" because
> the beast is eating itself.
>

It's an incoherent fantasy that Milton Friedman should have known better
than to say.

--
Les Cargill

[Neolibertarian]

In article <kmm0us$8nm$1...@dont-email.me>,

Les Cargill <lcarg...@comcast.com> wrote:

> Neolibertarian wrote:
> > In article
> > <5ce07846-a157-46a9...@h13g2000yqe.googlegroups.com>,
> > Bret Cahill <BretC...@peoplepc.com> wrote:
> >
> >>>> Laffer said tax cuts result in an increase in revenue.
> >>
> >>>> Norquist says that tax cuts starve the beast.
> >>
> >>>> Which one is it?
> >>
> >>> Unsurprisingly - both!
> >>
> >> "Increasing revenue starves the beast . . . ."
> >>
> >> Tire biters are as bat crap insane as a 3 piece suit Republican paid
> >> shill.
> >>
> >
> > The thing is, if you increase taxes, you get increased revenues to the
> > Treasury. If you lower taxes, you get increased revenues to the Treasury.
> >
>
> NO, no you won't.

Upon what are you basing such a claim? The data very much corroborates
my statement.

> Not over all equilibria of the economy. Never mind
> whether "starve the beast" is prima facie nonsense ( and it is ); the
> point of smaller government is not the operating cost of government
> but rather the cost of its *effects*.
>
> You did have increased revenue he Kennedy tax cuts; the Bush tax cuts
> pretty much failed to increase revenue.

Revenues to the US Treasury by year in nominal dollars:

1962���$105 billion
1963���$114 billion
1964���$114 billion

(Congress enacts Kennedy's proposed income tax cuts posthumously)

1965���$123 billion
1966���$141 billion
1967���$150 billion
1968���$174 billion

Revenues increased over 60% since 1962

_________________________________________


1981���$626 billion

(Reagan income tax cuts enacted)

1982���$624 billion

(FICA taxes increased)

1983���$649 billion
1984���$716 billion
1985���$780 billion
1986���$823 billion

(Reagan 2nd income tax cuts enacted: there are now only two income tax
rates: 17% and 28%)

1987���$903 billion
1988���$966 billion
1989���$1.0 trillion
1990���$1.1 trillion

Revenues nearly doubled since 1981

_________________________________________

2001���$2.0 trillion
2002���$1.8 trillion
2003���$1.9 trillion

(George W. Bush income tax cuts enacted)

2004���$2.0 trillion
2005���$2.3 trillion
2006���$2.5 trillion
2007���$2.6 trillion
2008���$2.5 trillion

(Recession begins, revenues have increased by about 25% since 2001)

2009���$2.2 trillion
2010���$2.4 trillion
2011���$2.5 trillion
2012���$2.6 trillion

All data from Bureau of Economic Analysis Tables

http://www.bea.gov/

Please explain your statement "the Bush tax cuts pretty much failed to
increase revenue."

It's pretty obvious that Bush tax cuts succeeded in increasing revenue;
or, more properly, that revenues increased during the period of the Bush
tax cuts.

> We now have "Conservatives"
> who rend their garments about the deficit but won't touch those tax
> cuts.

You have /Republicans/ who do so. Not conservatives.

Since the 1980s, conservatives have been increasingly committed to
Hayek, Friedman and economic libertarianism.

Most Republicans then and now are committed to economic /corporatism/.

>
> the tax cuts mainly benefit wonks in S-coprs, while real jobs
> are disappearing. Corporations are spending more and more
> on decision support IT and this simply amplifies the effects
> of bad measurement even more. So they double down, and...

This appears to be a series of uneducated guesses. Please provide your
data or point to your sources.

>
> The Laffer curve works, but not for all cases. That would be
> contradictory; it would imply than negative taxation should produce more
> revenue.

If you understand what the Laffer curve describes, this qualification is
utterly unnecessary.

>
> If you want smaller government, you must make coherent, solid arguments
> for it

The arguments have long been established to the point they're
incontrovertible.

Only 12 years ago, the US had a $5 trillion debt with a $13 trillion
economy. Today we have a $17 trillion debt with an economy of only $16
trillion. This means you must make coherent, solid arguments /for
sustaining or growing/ a larger government, not the other way around.

We're all happy to have as much government as we're willing to pay for.

The problem, of course, is for many, many years we've had a much larger
government than ANYONE ANYWHERE is willing to pay for.

We the People are obviously being governed beyond We the People's
consent.

> not appeal to bumper stickers and bad fallacies. I'm biased
> towards a Hayek sort of argument myself ( read Bryan Caplan's "Why I
> Am Not an austrian Economist" ). Even Hayek has flaws; Bryan
> himself says "wages should fall", which is incredibly wrong.

Whatever flaws are found in Hayek, these cannot begin to compare to the
monumentally deadly flaws, both economic based and morality based, in
systems which require bureaucratic institutions to implement.

You see, it doesn't matter if a fascistic system can be more successful
economically in the short term (which it definitely can). It doesn't
matter if you can use a benign tyranny to smooth out market corrections
(which we do so more and more frequently).

>
> For whatever reason, this is not being done. Nobody seems capable
> of expressing this in terms of facts. They rely on a narrative-level
> folklore that falls apart quickly. It turns into "anarchists" who
> have toll tags...

Libertarianism is not anarchism; but then, I'm not a libertarian, so I'm
hardly here for the purpose of defending libertarians.

Suffice it to say: my libertarian cousins have been proved correct time
and time again concerning the spontaneous order which can and does arise
in the free market.

From my observations, the true anarchists reside almost wholly on the
left.

>
> When you write for the National Review, it's simply easier
> to write pieces that are about the politics of identity
> than about the facts. "Reason" is some better, but has
> fewer subscribers.

You've never read a single issue of the National Review, obviously. It's
not quite what it was when helmed by Buckley, of course, but the
articles there are hardly about identity politics in the sense you're
implying.

>
> We want it fixed, but not after you tell us what it takes to fix it.

The conservatives who write for the National Review, et al, have many
large pieces of the correct answers, along with a clear understanding of
the obstacles standing in their way.

>
> > There's lots of caveats to both, of course. And we're not just referring
> > to federal income taxes. But you get the idear: you get increased
> > revenue either way--as long as production continues to increase.

> But production has increased while revenue* has declined. We have supply
> almost completely regulated by demand, and demand is almost completely
> regulated by cash flow of consumers.

Consumption only accounts for about 60% of the United States economy.
The US, in fact, has the best mixed economy on earth, and has had since
1913.

You must be reading the wrong economists.

Don't feel bad, many politicians and elected officials must be reading
at the same poisoned watering holes. But then, it's to their advantage
to believe "supply is [or should be or can be] completely regulated by
demand, and demand is almost completely regulated by cash flow."

>
> *all revenue, not just government
>
> This is now expressed in declining increases in GDP, both nominal
> and real.
>
> And this:
> <http://eduardo.intermeta.com.br/posts/2013/5/10/hand-to-mouth-living-from-a>

If Eduardo wants to know if "people are living hand to mouth" he could
easily look up household indebtedness.

Debt is almost as great a destroyer of wealth as divorce.

>
> > The problem today is: there is no actual economic growth. For some
> > reason, they figure in government spending into GDP totals.

> That's not a bad thing, really... might be nice to have it broken
> out, bur actual public goods are still production.

"Public goods?"

Friend, you're referring to the populist bureaucracy. Only a tiny
fraction of the laws passed in the United States are passed in the halls
of Congress. Many 10s of thousands of pages of regulations are being
written every year (which carry the full weight of law) by unelected
bureaucrats you couldn't even identify.

Over 90,000 pages of regulations have been written just in connection
with the Affordable Care Act, and it hasn't even been implemented fully
yet.

These regulations have all sorts of deleterious and far-reaching effects
on your economy.

You're also servicing an ever growing dependency class with all sorts of
entitlements possessing ludicrous, unsustainable funding mechanisms.

>
> > So these
> > days, the GDP continues to grow, but only because of the fantastic
> > amount of government spending.
> >
>
> So what's wrong with the non-government part then? There's been four
> kinds of "growth" since say, 1980 ( or 1973):
>
> - Cost reduction in production, which can only be seen in GDP increases
> when it frees up capital or labor to increase other production.

What's wrong is that there's less and less room to grow. The money
supply is being used in ever increasing measure to sustain government
consumption.

Government doesn't produce anything.

>
> - The PC revolution. That put actual computer improvements
> in the sphere of being measurable. Prior to that, nobody could
> argue against Drucker's "computers are zero sum."
>
> - the dotcom thing. Some of it was real; a lot of it just
> isn't. The belief that web-based anything is somehow better
> is unjustifiable, based on a a distortion of the fact that
> networked machines *are* quantitatively better. It is just
> that the networking of machines that is better, is not about
> anything like the Web.

If the above is your understanding of the last thirty years of US
economic history...well that goes pretty far in explaining your
erroneous view on everything else.

>
> - The housing bubble.
>
> Why can't the private sector maintain a consumer sector
> that can afford everything, even though costs are radically
> reduced?
>
> Maybe it's this:
>
> <http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/11/why-arent-american
> s-moving-anymore-heres-a-new-theory/>

I only follow a hyperlink to one recommended blog per post. Sorry.
You'll have to wait until the next post to point me to a blog (instead
of relevant data sources).

>
>
> > Aye, and that's the rub. There's no way to "starve the beast" because
> > the beast is eating itself.
> >
>
> It's an incoherent fantasy that Milton Friedman should have known better
> than to say.

When Friedman was still alive, it was still possible to starve the
beast, of course.

We don't deserve representatives with that much courage, obviously.

[Les Cargill]

Neolibertarian wrote:
> In article <kmm0us$8nm$1...@dont-email.me>,
> Les Cargill <lcarg...@comcast.com> wrote:
>
>> Neolibertarian wrote:
>>> In article
>>> <5ce07846-a157-46a9...@h13g2000yqe.googlegroups.com>,
>>> Bret Cahill <BretC...@peoplepc.com> wrote:
>>>
>>>>>> Laffer said tax cuts result in an increase in revenue.
>>>>
>>>>>> Norquist says that tax cuts starve the beast.
>>>>
>>>>>> Which one is it?
>>>>
>>>>> Unsurprisingly - both!
>>>>
>>>> "Increasing revenue starves the beast . . . ."
>>>>
>>>> Tire biters are as bat crap insane as a 3 piece suit Republican paid
>>>> shill.
>>>>
>>>
>>> The thing is, if you increase taxes, you get increased revenues to the
>>> Treasury. If you lower taxes, you get increased revenues to the Treasury.
>>>
>>
>> NO, no you won't.
>
> Upon what are you basing such a claim? The data very much corroborates
> my statement.
>

BTW, thanks for your thoughts; here are mine.


Something like this analysis:

<http://www.econdataus.com/taxcuts.html>

<snip>

> All data from Bureau of Economic Analysis Tables
>
> http://www.bea.gov/
>
> Please explain your statement "the Bush tax cuts pretty much failed to
> increase revenue."
>

<http://www.econdataus.com/taxcuts.html>

> It's pretty obvious that Bush tax cuts succeeded in increasing revenue;
> or, more properly, that revenues increased during the period of the Bush
> tax cuts.
>
>> We now have "Conservatives"
>> who rend their garments about the deficit but won't touch those tax
>> cuts.
>
> You have /Republicans/ who do so. Not conservatives.
>

Excellent point! Please note the scare quotes.

> Since the 1980s, conservatives have been increasingly committed to
> Hayek, Friedman and economic libertarianism.
>
> Most Republicans then and now are committed to economic /corporatism/.

I would not disagree at all - indeed, it's a great distinction.

>>
>> the tax cuts mainly benefit wonks in S-coprs, while real jobs
>> are disappearing. Corporations are spending more and more
>> on decision support IT and this simply amplifies the effects
>> of bad measurement even more. So they double down, and...
>
> This appears to be a series of uneducated guesses. Please provide your
> data or point to your sources.

Oh, certainly.
<http://voices.washingtonpost.com/ezra-klein/2010/07/research_desk_how_much_do_the.html>

What I've seen is more than just that; that happens
to be a pretty reasonable summary.

>>
>> The Laffer curve works, but not for all cases. That would be
>> contradictory; it would imply than negative taxation should produce more
>> revenue.
>
> If you understand what the Laffer curve describes, this qualification is
> utterly unnecessary.

Sadly, I have run into people for whom the qualification
is necessary.

>>
>> If you want smaller government, you must make coherent, solid arguments
>> for it
>
> The arguments have long been established to the point they're
> incontrovertible.
>

That is not all that clear.

> Only 12 years ago, the US had a $5 trillion debt with a $13 trillion
> economy. Today we have a $17 trillion debt with an economy of only $16
> trillion. This means you must make coherent, solid arguments /for
> sustaining or growing/ a larger government, not the other way around.
>

My meaning is that default state of political opinion in the US
is that we have a growing government. That is what was the standard
before Reagan.

Yo are aware that there was a world before Reagan, right:)? Some
people are not... yes, I am that old...

Maybe it's just me, but I see Libertarianism as a
way to implement improvements against that baseline.

> We're all happy to have as much government as we're willing to pay for.
>

Exactly.

> The problem, of course, is for many, many years we've had a much larger
> government than ANYONE ANYWHERE is willing to pay for.
>
> We the People are obviously being governed beyond We the People's
> consent.
>
>> not appeal to bumper stickers and bad fallacies. I'm biased
>> towards a Hayek sort of argument myself ( read Bryan Caplan's "Why I
>> Am Not an austrian Economist" ). Even Hayek has flaws; Bryan
>> himself says "wages should fall", which is incredibly wrong.
>
> Whatever flaws are found in Hayek, these cannot begin to compare to the
> monumentally deadly flaws, both economic based and morality based, in
> systems which require bureaucratic institutions to implement.
>

But we have bureaucracies that work. They just take a human
lifetime to get calibrated. Department of Agriculture is one.

Best I can tell, wages should not be falling. Something's wrong.

Here's the tradeoff - if libertarianism means wages
are falling/stagnant, then it will never work as politics. I
think we do not have a clear picture of why wages are
falling, and I do not think that libertarian policies
require falling wages in the aggregate.

Perhaps I am just wrong, or perhaps "aggregates" can't
be trusted. Perhaps our efforts to support wages through
the political process have backfired.

> You see, it doesn't matter if a fascistic system can be more successful
> economically in the short term (which it definitely can). It doesn't
> matter if you can use a benign tyranny to smooth out market corrections
> (which we do so more and more frequently).

We actually can correct some market fluctuations. The
agricultural commodities markets work.

That all sounds easier than it is:) Since at least
the Scots Free Banks in the 18th century, we've had single
central banks ( the Bank of England ) as the model.

We have no historical data on a free banking system
and it would be an impossible thing to sell. The deign
goal for the Fed was to basically replace JP Morgan in any
subsequent Panic of 1907.

>>
>> For whatever reason, this is not being done. Nobody seems capable
>> of expressing this in terms of facts. They rely on a narrative-level
>> folklore that falls apart quickly. It turns into "anarchists" who
>> have toll tags...
>
> Libertarianism is not anarchism; but then, I'm not a libertarian, so I'm
> hardly here for the purpose of defending libertarians.
>

Understood; my "anarchist" is the image of some guy listening
to talk radio in a Lexus while on a toll road. All those things
end up using public ( nonrival and nonexcludable ) goods.

> Suffice it to say: my libertarian cousins have been proved correct time
> and time again concerning the spontaneous order which can and does arise
> in the free market.
>

And that is true. It's just not all there is.

> From my observations, the true anarchists reside almost wholly on the
> left.

They haven't in a long time, but we digress.

>>
>> When you write for the National Review, it's simply easier
>> to write pieces that are about the politics of identity
>> than about the facts. "Reason" is some better, but has
>> fewer subscribers.
>
> You've never read a single issue of the National Review, obviously.

More than one, I fear.

> It's
> not quite what it was when helmed by Buckley, of course, but the
> articles there are hardly about identity politics in the sense you're
> implying.

Check again. It's become the official paper of record for
the Grover Norquist "right".

I am referring exactly to its loss of "fire" and intellect
since the passing of Buckley.

After what happened to David Frum, I no longer trust TNR.

>>
>> We want it fixed, but not after you tell us what it takes to fix it.
>
> The conservatives who write for the National Review, et al, have many
> large pieces of the correct answers, along with a clear understanding of
> the obstacles standing in their way.

I don't see much on there but appeals to Republican
just-so stories. There are exceptions.

>>
>>> There's lots of caveats to both, of course. And we're not just referring
>>> to federal income taxes. But you get the idear: you get increased
>>> revenue either way--as long as production continues to increase.
>
>> But production has increased while revenue* has declined. We have supply
>> almost completely regulated by demand, and demand is almost completely
>> regulated by cash flow of consumers.
>
> Consumption only accounts for about 60% of the United States economy.

Didn't that used to be 70%, though?

> The US, in fact, has the best mixed economy on earth, and has had since
> 1913.
>

Now? For people who prefer statism, no. They'd probably
prefer a Sweden or Finland. Perhaps Canada; I know a few
expats there.

> You must be reading the wrong economists.
>

Aren't they all wrong? :) My faves are Scott Sumner, Russ Roberts,
the EconLog guys, Tyler Cowan and Arnold Kling.


That's just present day. Hayek, of course.... both
Friedmans, a few others.

> Don't feel bad, many politicians and elected officials must be reading
> at the same poisoned watering holes. But then, it's to their advantage
> to believe "supply is [or should be or can be] completely regulated by
> demand, and demand is almost completely regulated by cash flow."
>>
>> *all revenue, not just government
>>
>> This is now expressed in declining increases in GDP, both nominal
>> and real.
>>
>> And this:
>> <http://eduardo.intermeta.com.br/posts/2013/5/10/hand-to-mouth-living-from-a>
>
> If Eduardo wants to know if "people are living hand to mouth" he could
> easily look up household indebtedness.
>

He's familiar with it; but I think it's an effect, not
a cause.

> Debt is almost as great a destroyer of wealth as divorce.

Debt is good evidence that wages aren't strong enough.

>>
>>> The problem today is: there is no actual economic growth. For some
>>> reason, they figure in government spending into GDP totals.
>
>> That's not a bad thing, really... might be nice to have it broken
>> out, bur actual public goods are still production.
>
> "Public goods?"
>

Things that are both nonrival and nonexcludable.

> Friend, you're referring to the populist bureaucracy. Only a tiny
> fraction of the laws passed in the United States are passed in the halls
> of Congress. Many 10s of thousands of pages of regulations are being
> written every year (which carry the full weight of law) by unelected
> bureaucrats you couldn't even identify.
>

Of course.

> Over 90,000 pages of regulations have been written just in connection
> with the Affordable Care Act, and it hasn't even been implemented fully
> yet.
>

Yep.

> These regulations have all sorts of deleterious and far-reaching effects
> on your economy.
>

Hard to say, really. We seem to manage. And there's never been a good
accounting of the cost. Handwaving.

Going back, the default for Americans is to *prefer* regulation. That's
probably an artifact of the continued emphasis on Hearst paper
nonsense, but still...

> You're also servicing an ever growing dependency class with all sorts of
> entitlements possessing ludicrous, unsustainable funding mechanisms.
>

You would not have a dependency class if labor demand were strong.

>>
>>> So these
>>> days, the GDP continues to grow, but only because of the fantastic
>>> amount of government spending.
>>>
>>
>> So what's wrong with the non-government part then? There's been four
>> kinds of "growth" since say, 1980 ( or 1973):
>>
>> - Cost reduction in production, which can only be seen in GDP increases
>> when it frees up capital or labor to increase other production.
>
> What's wrong is that there's less and less room to grow. The money
> supply is being used in ever increasing measure to sustain government
> consumption.
>

Sorry; I must disagree. There's been shown time and time again to be no
"crowding out."

<http://www.mcclatchydc.com/2013/03/20/186450/is-government-spending-crowding.html#.UY-73VN0iCo>

Thumbnail is - interest rates are still low. Of course this is by fiat,
but there can be interest rate structures that are above and beyond
the F3ederal rates.

Interest rates at payday loan places are high, because there is risk,
because... wages are low.

The real economy views government as an outage and routes
around it....

> Government doesn't produce anything.

False. For one measly example, the Berlin Wall falling....

>>
>> - The PC revolution. That put actual computer improvements
>> in the sphere of being measurable. Prior to that, nobody could
>> argue against Drucker's "computers are zero sum."
>>
>> - the dotcom thing. Some of it was real; a lot of it just
>> isn't. The belief that web-based anything is somehow better
>> is unjustifiable, based on a a distortion of the fact that
>> networked machines *are* quantitatively better. It is just
>> that the networking of machines that is better, is not about
>> anything like the Web.
>
> If the above is your understanding of the last thirty years of US
> economic history...well that goes pretty far in explaining your
> erroneous view on everything else.

Sorry; this view *corrects* erroneous beliefs. Otherwise, explain
Pets.com ....

Google and Facebook generate no economic activity at all*. The
use people's contributed writing as grist for the mill. See
Peter Drucker's books for details on why "computers are zero sum."

*beyond advertising.

Objects that are networked like factory machines or pipeline
SCADA *do* real work. Online kaffe klatches do not.

>>
>> - The housing bubble.
>>
>> Why can't the private sector maintain a consumer sector
>> that can afford everything, even though costs are radically
>> reduced?
>>
>> Maybe it's this:
>>
>> <http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/11/why-arent-american
>> s-moving-anymore-heres-a-new-theory/>
>
> I only follow a hyperlink to one recommended blog per post. Sorry.
> You'll have to wait until the next post to point me to a blog (instead
> of relevant data sources).

The blog posts are summaries of data. I am time constrained here; I
don't have time to replicate what's already in the blog post.

If you don't like Ezra, I can't help you. Sources are
thin on the ground.

>>
>>
>>> Aye, and that's the rub. There's no way to "starve the beast" because
>>> the beast is eating itself.
>>>
>>
>> It's an incoherent fantasy that Milton Friedman should have known better
>> than to say.
>
> When Friedman was still alive, it was still possible to starve the
> beast, of course.
>

No, it wasn't.

> We don't deserve representatives with that much courage, obviously.
>

Familiar with the anthropic principle? So we had the "Contract With
America" crew in the '90s; they hit self-imposed term limits and aren't
there any more. If you can use physics, you don't need "courage".

--
Les Cargill

[Neolibertarian]

In article <kmoeuu$hej$1...@dont-email.me>,
Les Cargill <lcarg...@comcast.com> wrote:

Let's tighten this up.

In nominal dollars, revenues increased during all modern tax cuts, not
just Kennedy's, Reagan's and Bush's, but this was also the case for the
Mellon tax cuts (1920s) as well.

Adjusting for inflation is all well and good, but must always be
approached with caution--methodology can be critical, especially since
the CPI became highly misleading (especially so since the mid 1970s).
Chained dollars can lead to useful information, but not over a long
period of time (where the inherent errors are multiplied). Adjustments
are no panacea for arriving at real measure. Also, for instance, few
economists ever adjust for the deflation of the first two years of
Reagan's administrations.

Nominal dollars are an accurate measure for the space of one or two
presidential terms. Period. There are obvious problems with your
source's methodology and conclusions.

Not that any of this is important when considering the heart of the
discussion. And the heart of the discussion is this:

Arguments about how many businesses or individuals are affected by
income tax reductions or income tax increases are moot. Completely moot.

The fact of the matter is, the income tax was resurrected in 1913: In
all the 100 years since, the rates have continually been adjusted, and
readjusted, and re-readjusted. The rates have never remained static in
all that time. Top statutory rates have fluctuated between 12% and 91%.
Lowest statutory rates have fluctuated between 2% and 40%, and, since
the Dubya's administration, lowest rates have actually become NEGATIVE
rates (where the tax filer actually receives more money through the EIC
than he paid into the IRS).

These rates have always been a lie. A purposeful, willful lie that
countless demagogues, statists and populist-bureaucrats have used
against the American people to bamboozle them for whatever political
gain could be had at the time.

Effective rates have never matched statutory rates. During the
Eisenhower administration, when the top rates were an outlandish 91%, no
one but "overnight" rich--like movie stars and popular musicians--ever
paid them; and by the next April 15, they had hired a good tax lawyer so
they'd never have to pay those ridiculous rates again. In 1935, when
Roosevelt raised the top rates to 79%, these only applied to only a
single individual in the country, John Rockefeller. A bill of attainder
if there ever was one.

Since the 1920's, the Treasury department has only ever taken in about
18% of GDP in revenues from income tax, no matter what percentage the
rates happened to be.

Today the effective rate of income tax, when averaging in all income
groups together, is 11.1%.

That's very low, but not the lowest it's ever been. When populist
bureaucrats like Obama and the Congressional leadership look at that
effective rate, they believe it should be much, much higher. When they
discuss raising rates, people react to the statutory rates which will
push 40%. When populist bureaucrats speak of "eliminating deductions"
they're hoping to extract more than 18% of GDP from the economy.

They're all correct, and they're all out of their minds because no one
can actually put their finger on ACTUAL rates and ACTUAL revenues. This
perpetual lie and deception has made rational discussions about income
taxes quite impossible.

There's never been a time when income tax rates made sense. They've
never been fair. Never been efficient. Never been honest and above
board. Never been just.

It's quite impossible to make them so. A century long experiment has
proved this beyond the shadow of doubt.

Taxing income is an inherently bad idea that can never, ever, ever be
made into a good idea.

Let's stop the lies, fraud and lunacy. What do you say? The only ones
who stand to lose by ridding ourselves of the deception are the populist
bureaucrats.

18% of GDP is a marginally reasonable place to begin. If you MUST tax
income, then tax it at 18% for everyone who has an income, and never
adjust it again unless temporarily in wartime. If the federal debt were
zero, as it SHOULD be in peacetime, you'd most likely not need to raise
taxes even in wartime.

As for your concern for falling wages in real dollars, you need look no
farther than the federal debt. Did you know that the CPI in 1913 was
very nearly identical to what it had been in 1789?

Why has it never been the same since?

[Les Cargill]

Neolibertarian wrote:
> In article <kmoeuu$hej$1...@dont-email.me>,
> Les Cargill <lcarg...@comcast.com> wrote:
>
> Let's tighten this up.
>
> In nominal dollars, revenues increased during all modern tax cuts, not
> just Kennedy's, Reagan's and Bush's, but this was also the case for the
> Mellon tax cuts (1920s) as well.
>

Right.

> Adjusting for inflation is all well and good, but must always be
> approached with caution--methodology can be critical, especially since
> the CPI became highly misleading (especially so since the mid 1970s).

Agreed, although it's fairly important to do this.

I prefer the estimates of GDP percent to even
the link I provided. Even that's problematic.

> Chained dollars can lead to useful information, but not over a long
> period of time (where the inherent errors are multiplied). Adjustments
> are no panacea for arriving at real measure. Also, for instance, few
> economists ever adjust for the deflation of the first two years of
> Reagan's administrations.
>

Interesting - not something I'd noticed.

> Nominal dollars are an accurate measure for the space of one or two
> presidential terms. Period. There are obvious problems with your
> source's methodology and conclusions.
>
> Not that any of this is important when considering the heart of the
> discussion. And the heart of the discussion is this:
>
> Arguments about how many businesses or individuals are affected by
> income tax reductions or income tax increases are moot. Completely moot.
>

I'll disagree for reasons of political economy, and especially
when deficits are rising.

> The fact of the matter is, the income tax was resurrected in 1913: In
> all the 100 years since, the rates have continually been adjusted, and
> readjusted, and re-readjusted. The rates have never remained static in
> all that time. Top statutory rates have fluctuated between 12% and 91%.
> Lowest statutory rates have fluctuated between 2% and 40%, and, since
> the Dubya's administration, lowest rates have actually become NEGATIVE
> rates (where the tax filer actually receives more money through the EIC
> than he paid into the IRS).
>

Yep.

> These rates have always been a lie. A purposeful, willful lie that
> countless demagogues, statists and populist-bureaucrats have used
> against the American people to bamboozle them for whatever political
> gain could be had at the time.
>

I'm not as convinced of that as you are. It can be utter garbage
stats without being willfully so.

I do applaud the scorn you heap on it, though.

> Effective rates have never matched statutory rates. During the
> Eisenhower administration, when the top rates were an outlandish 91%, no
> one but "overnight" rich--like movie stars and popular musicians--ever
> paid them; and by the next April 15, they had hired a good tax lawyer so
> they'd never have to pay those ridiculous rates again.

Or in the case of Reagan, took longer vacations.

> In 1935, when
> Roosevelt raised the top rates to 79%, these only applied to only a
> single individual in the country, John Rockefeller. A bill of attainder
> if there ever was one.
>

Heh. I'd have to disagree with the diagnosis, although I get
your meaning.

> Since the 1920's, the Treasury department has only ever taken in about
> 18% of GDP in revenues from income tax, no matter what percentage the
> rates happened to be.
>

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205

> Today the effective rate of income tax, when averaging in all income
> groups together, is 11.1%.
>

I knew we had low aggregate taxes, but geez. Also, the link I put up
says 16.7 for 2013 (projected) or 15.8 for 2012.

> That's very low, but not the lowest it's ever been. When populist
> bureaucrats like Obama and the Congressional leadership look at that
> effective rate, they believe it should be much, much higher. When they
> discuss raising rates, people react to the statutory rates which will
> push 40%. When populist bureaucrats speak of "eliminating deductions"
> they're hoping to extract more than 18% of GDP from the economy.
>

Yep.

> They're all correct, and they're all out of their minds because no one
> can actually put their finger on ACTUAL rates and ACTUAL revenues. This
> perpetual lie and deception has made rational discussions about income
> taxes quite impossible.
>

I wouldn't disagree. It's quite the Kabuki theater.

> There's never been a time when income tax rates made sense. They've
> never been fair. Never been efficient. Never been honest and above
> board. Never been just.
>
> It's quite impossible to make them so. A century long experiment has
> proved this beyond the shadow of doubt.
>
> Taxing income is an inherently bad idea that can never, ever, ever be
> made into a good idea.
>

I won't disagree.

> Let's stop the lies, fraud and lunacy. What do you say? The only ones
> who stand to lose by ridding ourselves of the deception are the populist
> bureaucrats.
>
> 18% of GDP is a marginally reasonable place to begin.

20% gets bandied about. I believe Henry George used that as the
estimate of both the cost of government and the sum value of land
rents.

> If you MUST tax
> income, then tax it at 18% for everyone who has an income, and never
> adjust it again unless temporarily in wartime. If the federal debt were
> zero, as it SHOULD be in peacetime, you'd most likely not need to raise
> taxes even in wartime.
>

If we can account for a cultural preference for progressive
taxation, I'd agree again. Some have proposed a variation
on EITC to provide all safety net income ( Charles Murray for
one).

> As for your concern for falling wages in real dollars, you need look no
> farther than the federal debt.

I rather seriously doubt that, unless you somehow mean that interest
rates have somehow caused deflation or near-deflation.

Remember, I don't buy "crowding out".

> Did you know that the CPI in 1913 was
> very nearly identical to what it had been in 1789?
>

no, I hadn't looked much. Actual CPI was not kept prior
to 1913; sfaik, all such stats are estimates.

> Why has it never been the same since?
>

I would say because of the Wars, then abuses of the gold standard during
the interwar period, then Basel I and Basel II. Postwar, there was
stability from 1945 to 1973 of a sort.

If this is true, remember that the dominant variation in price
from 1789 to about 1913 was deflation and panic.

--
Les Cargill

[Neolibertarian]

In article <kmrq95$91j$1...@dont-email.me>,

Les Cargill <lcarg...@comcast.com> wrote:

> > Since the 1920's, the Treasury department has only ever taken in about
> > 18% of GDP in revenues from income tax, no matter what percentage the
> > rates happened to be.
> >
>
> http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205

Since the Big One, then.

> > Today the effective rate of income tax, when averaging in all income
> > groups together, is 11.1%.
> >
>
> I knew we had low aggregate taxes, but geez. Also, the link I put up
> says 16.7 for 2013 (projected) or 15.8 for 2012.

That's percentage of GDP.

11.1% is the percentage of income paid (effective tax rate).

>
> > Did you know that the CPI in 1913 was
> > very nearly identical to what it had been in 1789?
> >
>
> no, I hadn't looked much. Actual CPI was not kept prior
> to 1913; sfaik, all such stats are estimates.

CPI is estimated for the 19th Century, yes.

> > Why has it never been the same since?
> >
>
> I would say because of the Wars, then abuses of the gold standard during
> the interwar period, then Basel I and Basel II. Postwar, there was
> stability from 1945 to 1973 of a sort.
>
> If this is true, remember that the dominant variation in price
> from 1789 to about 1913 was deflation and panic.

And that's the key. Fearing market corrections and deflation.

You can look at the Gilded Age (1870-1913) as a whirlwind time of
recessions, panics and deflation. But you can also look at the Gilded
Age as a period when the US economy multiplied itself 5 fold. Between
1870 and 1878 alone, it DOUBLED.

During this period, the US economy surpassed even the great colonial
empires of Europe. It remained the largest economy on earth even through
the Great Depression.

What's to fear when the market corrects? Markets have to find their
bottom, or they can't recover.

What's to fear in periodic deflation? Low prices? Heh.

When real wages rose during the Gilded Age, they ACTUALLY rose. Really.
CPI stable increases.

Now they rise, and rise, and rise, but they're actually falling.

What's wrong with this picture?

The lies, demagoguery and the cowardice, of course. That's what's wrong.

[Les Cargill]

Neolibertarian wrote:
> In article <kmrq95$91j$1...@dont-email.me>,
> Les Cargill <lcarg...@comcast.com> wrote:
>
>>> Since the 1920's, the Treasury department has only ever taken in about
>>> 18% of GDP in revenues from income tax, no matter what percentage the
>>> rates happened to be.
>>>
>>
>> http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205
>
> Since the Big One, then.
>

Right. Thanks, President Wilson!

>>> Today the effective rate of income tax, when averaging in all income
>>> groups together, is 11.1%.
>>>
>>
>> I knew we had low aggregate taxes, but geez. Also, the link I put up
>> says 16.7 for 2013 (projected) or 15.8 for 2012.
>
> That's percentage of GDP.
>
> 11.1% is the percentage of income paid (effective tax rate).

Ah; right. I'd managed to miss that detail.

>>
>>> Did you know that the CPI in 1913 was
>>> very nearly identical to what it had been in 1789?
>>>
>>
>> no, I hadn't looked much. Actual CPI was not kept prior
>> to 1913; sfaik, all such stats are estimates.
>
> CPI is estimated for the 19th Century, yes.
>

And at least in the US*, of you were wiped out Back East, you could
move West ad start over. By the Great Depression, that stopped being an
option.


*really also true in Yurp as well...

>>> Why has it never been the same since?
>>>
>>
>> I would say because of the Wars, then abuses of the gold standard during
>> the interwar period, then Basel I and Basel II. Postwar, there was
>> stability from 1945 to 1973 of a sort.
>>
>> If this is true, remember that the dominant variation in price
>> from 1789 to about 1913 was deflation and panic.
>
> And that's the key. Fearing market corrections and deflation.
>

I am a bit biased there - it may not be an econ book per se
( there's not a differential equation any where in it ) but
the provocatively titled "A Nation of Deadbeats" does a
reasonable job enumerating the guesses we have for most
of those Panics.

You get the feeling that they're mostly hubris. But that's
the design goal of the book...

> You can look at the Gilded Age (1870-1913) as a whirlwind time of
> recessions, panics and deflation. But you can also look at the Gilded
> Age as a period when the US economy multiplied itself 5 fold. Between
> 1870 and 1878 alone, it DOUBLED.
>

Ayup! For some reason, such explosions are highly unstable.
"Deadbeats" says that such panics are not simple market corrections;
they are usually caused by... Official action. "Official"
meaning government or defacto government actors ( such as the Fed
or Bank of England or others such).

> During this period, the US economy surpassed even the great colonial
> empires of Europe. It remained the largest economy on earth even through
> the Great Depression.
>

And it only became less than the largest because of growth on other
shores - mainly because people started doing what we had
done.

> What's to fear when the market corrects? Markets have to find their
> bottom, or they can't recover.
>

The fear is that there's a human cost when you have wrenching
dislocations. The fear is that you'll have lower growth if
everybody is self-insuring against each other.

> What's to fear in periodic deflation? Low prices? Heh.
>

No; what's to fear is people hedging against goods with cash. If
the economy were to actually give people time to adjust, it would
be less troublesome.

It's pretty well understood that deflation isn't
desirable, especially when the principal means of
creation of money is debt and deflation punishes debtors.

My grandparents* adjusted to deflation, and it made them work
a lot harder at being frugal than perhaps they should have been.

*born about the turn of the 20th century, give or take.

> When real wages rose during the Gilded Age, they ACTUALLY rose. Really.
> CPI stable increases.
>

And when they crashed.... we had bomb throwin' anarchists in the
streets.

One prominent economic historian thought the Chinese Inner Circle
was going to have hm expound on some technical topic when he
was invited to speak to them; they wanted to know how Britain had
managed to not have a revolution in the 1870s....

> Now they rise, and rise, and rise, but they're actually falling.
>
> What's wrong with this picture?
>
> The lies, demagoguery and the cowardice, of course. That's what's wrong.
>

This isn't significantly different from any other example
of the Narrative Fallacy. Perhaps it hurts more.

And there are *multiple* demagogueries to go 'round...


--
Les Cargill

[Neolibertarian]

In article <kmtbn2$9kc$1...@dont-email.me>,

Les Cargill <lcarg...@comcast.com> wrote:

> Neolibertarian wrote:
> > In article <kmrq95$91j$1...@dont-email.me>,
> > Les Cargill <lcarg...@comcast.com> wrote:
> >
> >>> Since the 1920's, the Treasury department has only ever taken in about
> >>> 18% of GDP in revenues from income tax, no matter what percentage the
> >>> rates happened to be.
> >>>
> >>
> >> http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205
> >
> > Since the Big One, then.
> >
>
> Right. Thanks, President Wilson!

That was the Great One. The Big One came under Roosevelt's evil cousin.

>
> >>> Today the effective rate of income tax, when averaging in all income
> >>> groups together, is 11.1%.
> >>>
> >>
> >> I knew we had low aggregate taxes, but geez. Also, the link I put up
> >> says 16.7 for 2013 (projected) or 15.8 for 2012.
> >
> > That's percentage of GDP.
> >
> > 11.1% is the percentage of income paid (effective tax rate).
>
> Ah; right. I'd managed to miss that detail.

So you see the dilemma:

Income taxes are very low today.

While there are many millionaires and billionaires making $250,000/y or
more paying up to 39%, on the other hand, when you average out all
incomes, the effective overall income tax rate is 11.1%.

You earlier mentioned the public's appetite for progressive income
taxes. Not denying that appetite is there, but I think you'll find the
public also is increasingly aware that the tax code is broken, probably
beyond repair. It's certainly recently become aware that the IRS is a
broken bureaucracy.

The public can either be educated, or it can't.

When they call for progressive taxes on the rich, they need to
understand no matter how poor they might be, they're calling for raising
taxes on THEMSELVES.

As Roosevelt's evil cousin once said about taxes:

"Taxes are paid in the sweat of every man who labors because they are a
burden on production and are paid through production. If those taxes are
excessive, they are reflected in idle factories, in tax-sold farms, and
in hordes of hungry people, tramping the streets and seeking jobs in
vain. Our workers may never see a tax bill, but they pay. They pay in
deductions of wages, in increased cost of what they buy, or--as now--in
broad unemployment throughout the land. There is not an unemployed man,
there is not a struggling farmer, whose interest in this subject is not
direct and vital."
---Franklin Roosevelt (1932)

Yes, early in that first campaign, Roosevelt was claiming that Hoover
was a big government tax and spender.

Which Hoover was, obviously. We just sometimes forget that because of
what came after him.

> >>> Did you know that the CPI in 1913 was
> >>> very nearly identical to what it had been in 1789?
> >>>
> >>
> >> no, I hadn't looked much. Actual CPI was not kept prior
> >> to 1913; sfaik, all such stats are estimates.
> >
> > CPI is estimated for the 19th Century, yes.
> >
>
> And at least in the US*, of you were wiped out Back East, you could
> move West ad start over. By the Great Depression, that stopped being an
> option.

That's never, ever stopped being an option in America.

>
> *really also true in Yurp as well...

That was never, ever an option in Yurp.

America was the option for Yurp, of course, if that's what you mean.

America was available to them until 1965.

>
> >>> Why has it never been the same since?
> >>>
> >>
> >> I would say because of the Wars, then abuses of the gold standard during
> >> the interwar period, then Basel I and Basel II. Postwar, there was
> >> stability from 1945 to 1973 of a sort.
> >>
> >> If this is true, remember that the dominant variation in price
> >> from 1789 to about 1913 was deflation and panic.
> >
> > And that's the key. Fearing market corrections and deflation.
> >
>
> I am a bit biased there - it may not be an econ book per se
> ( there's not a differential equation any where in it ) but
> the provocatively titled "A Nation of Deadbeats" does a
> reasonable job enumerating the guesses we have for most
> of those Panics.

You think Nelson has a particular insight? He begins with the erroneous
notion that panics and recessions are bad, painful affairs.

Like starting with the notion that push-ups are bad, painful affairs.

OF COURSE they are. But that's never, ever, ever been to point to
push-ups, and it's not the point to recessions.

>
> You get the feeling that they're mostly hubris. But that's
> the design goal of the book...

Hubris is part of man's makeup. If you want this freedom thingy to work
at all (which more and more of us seem to be giving up on), you first
must accept that man is what he is.

Hubris is no stumbling block at all. Nor is laziness.

We are, after all, Homo Supinus.

>
> > You can look at the Gilded Age (1870-1913) as a whirlwind time of
> > recessions, panics and deflation. But you can also look at the Gilded
> > Age as a period when the US economy multiplied itself 5 fold. Between
> > 1870 and 1878 alone, it DOUBLED.
> >
>
> Ayup! For some reason, such explosions are highly unstable.

Not when viewed in decadal increments. There was only one direction...up.

> "Deadbeats" says that such panics are not simple market corrections;
> they are usually caused by... Official action. "Official"
> meaning government or defacto government actors ( such as the Fed
> or Bank of England or others such).

Always, always, and always the government is there with its fingerprints
all over a recession. Every time.

They started to figure out if they got busy trying to fix it, masser
wouldn't bring out his bull whip on them when he finally figured out who
to blame.

Hence the birth of the Populist-Bureaucracy, and the beginning of
America's quest to beat the free market.

>
> > During this period, the US economy surpassed even the great colonial
> > empires of Europe. It remained the largest economy on earth even through
> > the Great Depression.
> >
>
> And it only became less than the largest because of growth on other
> shores - mainly because people started doing what we had
> done.

Since the end of WWI, America has never stopped being the largest
economy on earth. It's not even under threat of losing its throne today.

We hear noises about China, of course. But they aren't "set to overtake"
anything. Their economy is less than 1/2 of the US's, they have over 1.3
billion people which makes their per capita about $7,000. It's over
$47,000 per capita in the US.

In order to pretend their economy is still growing, the Chinese
Communist Party leaders are behaving like paranoid lunatics. For
instance, they're building at least 10 ghost cities a year, each with
the capacity of housing over 1 million ghosts each:

http://tinyurl.com/c286pse

That's the economy that "will overtake the US in ten years..."

Heh.

>
> > What's to fear when the market corrects? Markets have to find their
> > bottom, or they can't recover.
> >
>
> The fear is that there's a human cost when you have wrenching
> dislocations. The fear is that you'll have lower growth if
> everybody is self-insuring against each other.

But there is no cure for this "ailment."

I take that back: the cure might save some people some inconvenience for
a generation or two--the only price is endless wars and a leviathan
administrative state which will threaten to stifle the last embers of
your animal spirit.

And a two class corporatist society.

>
> > What's to fear in periodic deflation? Low prices? Heh.
> >
>
> No; what's to fear is people hedging against goods with cash. If
> the economy were to actually give people time to adjust, it would
> be less troublesome.

The economy, like man, is what it is.

You only get into real trouble when you seek to change its nature.

>
> It's pretty well understood that deflation isn't
> desirable, especially when the principal means of
> creation of money is debt and deflation punishes debtors.

The great mystery of the Great Depression was its persistence. Always
before, and always afterward (until 2008) a recession might be painful,
but was always comparatively short-lived. Two or three years usually
before both recovery and a return to pace.

People got wiped out sometimes. Ouch. But at least a cup of coffee still
cost what it had 120 years ago. The bottom was firm, and stable. That
way you could find your feet.

Life isn't for wussies.

>
> My grandparents* adjusted to deflation, and it made them work
> a lot harder at being frugal than perhaps they should have been.

How can you work harder at being frugal than necessary?

>
> *born about the turn of the 20th century, give or take.

My fraternal granddad was born in 1860. He was a dirty old man and a
cradle robber. My dad was born in 1923. Fraternal granddad committed
suicide when he was wiped out in the Great Depression. My maternal great
granddad committed suicide a couple of years later for the some of the
same reasons.

Grandma talked about feeding a family of seven a single turnip for
dinner.

Bad as it was, there was no reason for those conditions to persist for
over a decade. In 1939, recovery had arrived, but unemployment was still
over 16%, back when most households only had one breadwinner. The
economy would stay off pre-1929 pace until after the war.

Rough way to go.

>
> > When real wages rose during the Gilded Age, they ACTUALLY rose. Really.
> > CPI stable increases.
> >
>
> And when they crashed.... we had bomb throwin' anarchists in the
> streets.

They came from Yurp. Or they read the yurp peein's Marx and Engels who
delighted in teaching the kiddies how to steal a free lunch.

Got so bad they had to jail Eugene Debs. But by then they weren't
protecting freedom, they were protecting Economic Corporatism.

>
> One prominent economic historian thought the Chinese Inner Circle
> was going to have hm expound on some technical topic when he
> was invited to speak to them; they wanted to know how Britain had
> managed to not have a revolution in the 1870s..

Queen Victoria would not allow it, obviously.

>
> > Now they rise, and rise, and rise, but they're actually falling.
> >
> > What's wrong with this picture?
> >
> > The lies, demagoguery and the cowardice, of course. That's what's wrong.
> >
>
> This isn't significantly different from any other example
> of the Narrative Fallacy. Perhaps it hurts more.

Don't get all post modern on me. You see, for a minute there, I forgot
this was still Usenet.

>
> And there are *multiple* demagogueries to go 'round...

Why else did you think the 2nd Amendment is so damned important?

[Les Cargill]

Neolibertarian wrote:
> In article <kmtbn2$9kc$1...@dont-email.me>,
> Les Cargill <lcarg...@comcast.com> wrote:
>
>> Neolibertarian wrote:
>>> In article <kmrq95$91j$1...@dont-email.me>,
>>> Les Cargill <lcarg...@comcast.com> wrote:
>>>
>>>>> Since the 1920's, the Treasury department has only ever taken in about
>>>>> 18% of GDP in revenues from income tax, no matter what percentage the
>>>>> rates happened to be.
>>>>>
>>>>
>>>> http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205
>>>
>>> Since the Big One, then.
>>>
>>
>> Right. Thanks, President Wilson!
>
> That was the Great One. The Big One came under Roosevelt's evil cousin.

First one, then the other. Pershing predicted WII 20-25 years
after 1918.

That's 1938-1943....

>>
>>>>> Today the effective rate of income tax, when averaging in all income
>>>>> groups together, is 11.1%.
>>>>>
>>>>
>>>> I knew we had low aggregate taxes, but geez. Also, the link I put up
>>>> says 16.7 for 2013 (projected) or 15.8 for 2012.
>>>
>>> That's percentage of GDP.
>>>
>>> 11.1% is the percentage of income paid (effective tax rate).
>>
>> Ah; right. I'd managed to miss that detail.
>
> So you see the dilemma:
>
> Income taxes are very low today.
>

Yep.

> While there are many millionaires and billionaires making $250,000/y or
> more paying up to 39%, on the other hand, when you average out all
> incomes, the effective overall income tax rate is 11.1%.
>
> You earlier mentioned the public's appetite for progressive income
> taxes. Not denying that appetite is there, but I think you'll find the
> public also is increasingly aware that the tax code is broken, probably
> beyond repair. It's certainly recently become aware that the IRS is a
> broken bureaucracy.
>

That's because the tax code is (ab)used as a social shaping device. Why
else the mortgage deduction?

> The public can either be educated, or it can't.
>

I'll go with "won't".

> When they call for progressive taxes on the rich, they need to
> understand no matter how poor they might be, they're calling for raising
> taxes on THEMSELVES.
>
> As Roosevelt's evil cousin once said about taxes:
>
> "Taxes are paid in the sweat of every man who labors because they are a
> burden on production and are paid through production. If those taxes are
> excessive, they are reflected in idle factories, in tax-sold farms, and
> in hordes of hungry people, tramping the streets and seeking jobs in
> vain. Our workers may never see a tax bill, but they pay. They pay in
> deductions of wages, in increased cost of what they buy, or--as now--in
> broad unemployment throughout the land. There is not an unemployed man,
> there is not a struggling farmer, whose interest in this subject is not
> direct and vital."
> ---Franklin Roosevelt (1932)
>
> Yes, early in that first campaign, Roosevelt was claiming that Hoover
> was a big government tax and spender.
>

Absolutely.

> Which Hoover was, obviously. We just sometimes forget that because of
> what came after him.
>

Hoover's an interesting guy. He's roughly the last rational
Progressive.

>>>>> Did you know that the CPI in 1913 was
>>>>> very nearly identical to what it had been in 1789?
>>>>>
>>>>
>>>> no, I hadn't looked much. Actual CPI was not kept prior
>>>> to 1913; sfaik, all such stats are estimates.
>>>
>>> CPI is estimated for the 19th Century, yes.
>>>
>>
>> And at least in the US*, of you were wiped out Back East, you could
>> move West ad start over. By the Great Depression, that stopped being an
>> option.
>
> That's never, ever stopped being an option in America.

The various Homestead Laws are gone... point taken, though. There's
very cheap land if it's not free.

>>
>> *really also true in Yurp as well...
>
> That was never, ever an option in Yurp.
>
> America was the option for Yurp, of course, if that's what you mean.
>
> America was available to them until 1965.

That's true also. Ingress had slowed a great deal, though.

>>
>>>>> Why has it never been the same since?
>>>>>
>>>>
>>>> I would say because of the Wars, then abuses of the gold standard during
>>>> the interwar period, then Basel I and Basel II. Postwar, there was
>>>> stability from 1945 to 1973 of a sort.
>>>>
>>>> If this is true, remember that the dominant variation in price
>>>> from 1789 to about 1913 was deflation and panic.
>>>
>>> And that's the key. Fearing market corrections and deflation.
>>>
>>
>> I am a bit biased there - it may not be an econ book per se
>> ( there's not a differential equation any where in it ) but
>> the provocatively titled "A Nation of Deadbeats" does a
>> reasonable job enumerating the guesses we have for most
>> of those Panics.
>
> You think Nelson has a particular insight? He begins with the erroneous
> notion that panics and recessions are bad, painful affairs.
>

I think it's a nice book because it lines all of them up
for you. Yes, panics are painful, bad things.

> Like starting with the notion that push-ups are bad, painful affairs.
>

This is a principle I live by :)

> OF COURSE they are. But that's never, ever, ever been to point to
> push-ups, and it's not the point to recessions.

His insight is that most of them were engineered by some darned thing
or another. I think of it as a different slant
on the usual Hayek story.

>>
>> You get the feeling that they're mostly hubris. But that's
>> the design goal of the book...
>
> Hubris is part of man's makeup.

Indeed!

> If you want this freedom thingy to work
> at all (which more and more of us seem to be giving up on), you first
> must accept that man is what he is.
>

Yep! Although most people aren't all that interested, really.

> Hubris is no stumbling block at all. Nor is laziness.
>
> We are, after all, Homo Supinus.

:) Consider that stolen!

>>
>>> You can look at the Gilded Age (1870-1913) as a whirlwind time of
>>> recessions, panics and deflation. But you can also look at the Gilded
>>> Age as a period when the US economy multiplied itself 5 fold. Between
>>> 1870 and 1878 alone, it DOUBLED.
>>>
>>
>> Ayup! For some reason, such explosions are highly unstable.
>
> Not when viewed in decadal increments. There was only one direction...up.
>
>> "Deadbeats" says that such panics are not simple market corrections;
>> they are usually caused by... Official action. "Official"
>> meaning government or defacto government actors ( such as the Fed
>> or Bank of England or others such).
>
> Always, always, and always the government is there with its fingerprints
> all over a recession. Every time.
>

Absolutely. Although I beleive there's a case where the Bank of England
caused
a British-empire wide panic all by itself.

> They started to figure out if they got busy trying to fix it, masser
> wouldn't bring out his bull whip on them when he finally figured out who
> to blame.
>

I don't think they know how. there's a *MASSIVE* public choice
problem - they have absolutely no incentive to know that.

> Hence the birth of the Populist-Bureaucracy, and the beginning of
> America's quest to beat the free market.

It's even better than the real thing!

>>
>>> During this period, the US economy surpassed even the great colonial
>>> empires of Europe. It remained the largest economy on earth even through
>>> the Great Depression.
>>>
>>
>> And it only became less than the largest because of growth on other
>> shores - mainly because people started doing what we had
>> done.
>
> Since the end of WWI, America has never stopped being the largest
> economy on earth. It's not even under threat of losing its throne today.
>

Not really. I worded that sentence badly.

> We hear noises about China, of course. But they aren't "set to overtake"
> anything. Their economy is less than 1/2 of the US's, they have over 1.3
> billion people which makes their per capita about $7,000. It's over
> $47,000 per capita in the US.
>

Yep.

> In order to pretend their economy is still growing, the Chinese
> Communist Party leaders are behaving like paranoid lunatics. For
> instance, they're building at least 10 ghost cities a year, each with
> the capacity of housing over 1 million ghosts each:
>
> http://tinyurl.com/c286pse
>

It boggles the mind. A Potemkin metropolis.

> That's the economy that "will overtake the US in ten years..."
>
> Heh.

And so what if it does? Good. But yes - China is one rigged
game after another.

>>
>>> What's to fear when the market corrects? Markets have to find their
>>> bottom, or they can't recover.
>>>
>>
>> The fear is that there's a human cost when you have wrenching
>> dislocations. The fear is that you'll have lower growth if
>> everybody is self-insuring against each other.
>
> But there is no cure for this "ailment."
>

I am not sure, being an optimist and willfully dumb about
some things. I thought... twenty years ago that "the problem
is that monetary velocity damps down too quickly. What if
they steered the system by simply measuring M3, then directly
sending cash - $100 bills, for the marginal folks who still use
them and are the great unknown - somehow into circulation."

And as it turns out, Scott Sumner thinks the same
thing. Is it true? I don't know.

The people who hoard $100 bills live hand to mouth
or are at risk of prison, and it won't "debase the currency". I
am not even convinced it show up as inflation...

> I take that back: the cure might save some people some inconvenience for
> a generation or two--the only price is endless wars and a leviathan
> administrative state which will threaten to stifle the last embers of
> your animal spirit.
>

Oooh, somebody's read Bismarck! Way cool.

> And a two class corporatist society.

Yeah, well...

>>
>>> What's to fear in periodic deflation? Low prices? Heh.
>>>
>>
>> No; what's to fear is people hedging against goods with cash. If
>> the economy were to actually give people time to adjust, it would
>> be less troublesome.
>
> The economy, like man, is what it is.
>

True thing, dewd!

> You only get into real trouble when you seek to change its nature.

Indeed. And if our masters would be our servants, we'd all be better off.

>>
>> It's pretty well understood that deflation isn't
>> desirable, especially when the principal means of
>> creation of money is debt and deflation punishes debtors.
>
> The great mystery of the Great Depression was its persistence. Always
> before, and always afterward (until 2008) a recession might be painful,
> but was always comparatively short-lived. Two or three years usually
> before both recovery and a return to pace.
>

Have you seen Irwin's paper?

http://www.nber.org/papers/w16350
http://www.voxeu.org/article/did-france-cause-great-depression

Thin about all the Wiemar era hyperinflation. Now people
central banks with people who'd been through those...

> People got wiped out sometimes. Ouch. But at least a cup of coffee still
> cost what it had 120 years ago. The bottom was firm, and stable. That
> way you could find your feet.
>
> Life isn't for wussies.

Newp!

>>
>> My grandparents* adjusted to deflation, and it made them work
>> a lot harder at being frugal than perhaps they should have been.
>
> How can you work harder at being frugal than necessary?
>>
>> *born about the turn of the 20th century, give or take.
>
> My fraternal granddad was born in 1860. He was a dirty old man and a
> cradle robber. My dad was born in 1923. Fraternal granddad committed
> suicide when he was wiped out in the Great Depression.

Wow.

> My maternal great
> granddad committed suicide a couple of years later for the some of the
> same reasons.
>

Geez.

> Grandma talked about feeding a family of seven a single turnip for
> dinner.
>

Mine did, too. We'd complain about corned beef and cabbage. Little
did I know...

> Bad as it was, there was no reason for those conditions to persist for
> over a decade. In 1939, recovery had arrived, but unemployment was still
> over 16%, back when most households only had one breadwinner. The
> economy would stay off pre-1929 pace until after the war.
>
> Rough way to go.

Yep. And I think it's because of deflation, and I know people who *say*
they know how to fix that. Being the sort of feeble mind I am, I
think they may be right.

Part of it was that Teddy's Evil Cousin was playing defense over
all that alphpabet soup by then.

But then Europe Godwined the whole thing...

>>
>>> When real wages rose during the Gilded Age, they ACTUALLY rose. Really.
>>> CPI stable increases.
>>>
>>
>> And when they crashed.... we had bomb throwin' anarchists in the
>> streets.
>
> They came from Yurp. Or they read the yurp peein's Marx and Engels who
> delighted in teaching the kiddies how to steal a free lunch.
>

Absolutely. Anarchists, when they got serious, invented Communism - no
point in making mass murder a craft good when you can put it on an
industrial scale, complete with rhetoric that the most diseased
syphillitic couldn't rant...

> Got so bad they had to jail Eugene Debs. But by then they weren't
> protecting freedom, they were protecting Economic Corporatism.

This is true also - although I have to wonder what else there really
is. We keep organizing into that mode and reject all attempts
to get out of it. Yes, I think there's a significant bottom-up
preference for corporatism.

if a small cabal did this to us, I think we're pretty much
stuck with it. They're simply better at this than we are.

>>
>> One prominent economic historian thought the Chinese Inner Circle
>> was going to have hm expound on some technical topic when he
>> was invited to speak to them; they wanted to know how Britain had
>> managed to not have a revolution in the 1870s..
>
> Queen Victoria would not allow it, obviously.

I forgot about that. <Tugs forelock>

>>
>>> Now they rise, and rise, and rise, but they're actually falling.
>>>
>>> What's wrong with this picture?
>>>
>>> The lies, demagoguery and the cowardice, of course. That's what's wrong.
>>>
>>
>> This isn't significantly different from any other example
>> of the Narrative Fallacy. Perhaps it hurts more.
>
> Don't get all post modern on me. You see, for a minute there, I forgot
> this was still Usenet.

it's not post modern - it's a Real Thing. Nassaim Taleb is it's prophet
these days.
http://wiki.lesswrong.com/wiki/Narrative_fallacy

>>
>> And there are *multiple* demagogueries to go 'round...
>
> Why else did you think the 2nd Amendment is so damned important?
>

Most people can't shoot well enough for a gun to do 'em any good...
there's a couple of Larry McMurty novels where he stresses the
utter incompetence of nearly everybody with a firearm - Ned and
Zeke is one...

--
Les Cargill

[emoneyjoe]

On Wed, 15 May 2013 18:41:19 -0500, Les Cargill <lcarg...@comcast.com>
wrote:

[snip 400+ lines]

>it's not post modern - it's a Real Thing. Nassaim Taleb is it's prophet
>these days.
>http://wiki.lesswrong.com/wiki/Narrative_fallacy
>
>>>
>>> And there are *multiple* demagogueries to go 'round...
>>
>> Why else did you think the 2nd Amendment is so damned important?
>>
>
>Most people can't shoot well enough for a gun to do 'em any good...
>there's a couple of Larry McMurty novels where he stresses the
>utter incompetence of nearly everybody with a firearm - Ned and
>Zeke is one...

Famous last words. :-)

Is it an increase in government revenue that
caused;

"New figures from the Congressional Budget Office show this year’s
deficit on track to total $642 billion, down from a forecast of $850
billion three months ago."

http://www.csmonitor.com/USA/DC-Decoder/2013/0515/Federal-deficit-falling-fast-Is-that-a-good-thing-or-a-bad-thing


The deficit is falling, the debt is ballooning;

http://www.usdebtclock.org/

17 Trillion, right around the corner, with
only 113 million taxpayers and 23.5 million
government employees.

[Neolibertarian]

In article <kn15s9$492$1...@dont-email.me>,

Les Cargill <lcarg...@comcast.com> wrote:

> Neolibertarian wrote:
> > In article <kmtbn2$9kc$1...@dont-email.me>,
> > Les Cargill <lcarg...@comcast.com> wrote:
> >
> >> Neolibertarian wrote:
> >>> In article <kmrq95$91j$1...@dont-email.me>,
> >>> Les Cargill <lcarg...@comcast.com> wrote:
> >>>
> >>>>> Since the 1920's, the Treasury department has only ever taken in about
> >>>>> 18% of GDP in revenues from income tax, no matter what percentage the
> >>>>> rates happened to be.
> >>>>>
> >>>>
> >>>> http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205
> >>>
> >>> Since the Big One, then.
> >>>
> >>
> >> Right. Thanks, President Wilson!
> >
> > That was the Great One. The Big One came under Roosevelt's evil cousin.
>
> First one, then the other. Pershing predicted WII 20-25 years
> after 1918.
>
> That's 1938-1943...

Harding and Coolidge knew it too. That's why they almost single-handedly
kept Germany fed during the lean Versailles Years. Then came Hoover with
a banking crisis 7 months into his presidency.

Hoover was no George Bailey, and he couldn't save Germany from Mr.
Potter.

Luckily only 80 million people would be killed. We'll never be that
dumb-luck fortunate again.

> >>
> >>>>> Today the effective rate of income tax, when averaging in all income
> >>>>> groups together, is 11.1%.
> >>>>>
> >>>>
> >>>> I knew we had low aggregate taxes, but geez. Also, the link I put up
> >>>> says 16.7 for 2013 (projected) or 15.8 for 2012.
> >>>
> >>> That's percentage of GDP.
> >>>
> >>> 11.1% is the percentage of income paid (effective tax rate).
> >>
> >> Ah; right. I'd managed to miss that detail.
> >
> > So you see the dilemma:
> >
> > Income taxes are very low today.
> >
>
> Yep.
>
> > While there are many millionaires and billionaires making $250,000/y or
> > more paying up to 39%, on the other hand, when you average out all
> > incomes, the effective overall income tax rate is 11.1%.
> >
> > You earlier mentioned the public's appetite for progressive income
> > taxes. Not denying that appetite is there, but I think you'll find the
> > public also is increasingly aware that the tax code is broken, probably
> > beyond repair. It's certainly recently become aware that the IRS is a
> > broken bureaucracy.
> >
>
> That's because the tax code is (ab)used as a social shaping device. Why
> else the mortgage deduction?

Marriage. Mortgages. Mayhem. Who needs a bunch of bureaucrats shaping
society?

>
> > The public can either be educated, or it can't.
> >
>
> I'll go with "won't".

Eh. They're busy, not obstinate.

>
> > When they call for progressive taxes on the rich, they need to
> > understand no matter how poor they might be, they're calling for raising
> > taxes on THEMSELVES.
> >
> > As Roosevelt's evil cousin once said about taxes:
> >
> > "Taxes are paid in the sweat of every man who labors because they are a
> > burden on production and are paid through production. If those taxes are
> > excessive, they are reflected in idle factories, in tax-sold farms, and
> > in hordes of hungry people, tramping the streets and seeking jobs in
> > vain. Our workers may never see a tax bill, but they pay. They pay in
> > deductions of wages, in increased cost of what they buy, or--as now--in
> > broad unemployment throughout the land. There is not an unemployed man,
> > there is not a struggling farmer, whose interest in this subject is not
> > direct and vital."
> > ---Franklin Roosevelt (1932)
> >
> > Yes, early in that first campaign, Roosevelt was claiming that Hoover
> > was a big government tax and spender.
>
> Absolutely.
>
> > Which Hoover was, obviously. We just sometimes forget that because of
> > what came after him.
> >
>
> Hoover's an interesting guy. He's roughly the last rational
> Progressive.

He was the consummate technocrat. It's how he got the job in the first
place.

>
> >>>>> Did you know that the CPI in 1913 was
> >>>>> very nearly identical to what it had been in 1789?
> >>>>>
> >>>>
> >>>> no, I hadn't looked much. Actual CPI was not kept prior
> >>>> to 1913; sfaik, all such stats are estimates.
> >>>
> >>> CPI is estimated for the 19th Century, yes.
> >>>
> >>
> >> And at least in the US*, of you were wiped out Back East, you could
> >> move West ad start over. By the Great Depression, that stopped being an
> >> option.
> >
> > That's never, ever stopped being an option in America.
>
> The various Homestead Laws are gone... point taken, though. There's
> very cheap land if it's not free.

Land stopped being important a long, long time ago. Where you live is
one of the least important things about you.

If there's something that needs updating in the Constitution, it's
representation by fictional land boundaries.

> >> *really also true in Yurp as well...
> >
> > That was never, ever an option in Yurp.
> >
> > America was the option for Yurp, of course, if that's what you mean.
> >
> > America was available to them until 1965.
>
> That's true also. Ingress had slowed a great deal, though.

Yes...well, except for the British Invasion.

> >>>>> Why has it never been the same since?
> >>>>>
> >>>>
> >>>> I would say because of the Wars, then abuses of the gold standard during
> >>>> the interwar period, then Basel I and Basel II. Postwar, there was
> >>>> stability from 1945 to 1973 of a sort.
> >>>>
> >>>> If this is true, remember that the dominant variation in price
> >>>> from 1789 to about 1913 was deflation and panic.
> >>>
> >>> And that's the key. Fearing market corrections and deflation.
> >>>
> >>
> >> I am a bit biased there - it may not be an econ book per se
> >> ( there's not a differential equation any where in it ) but
> >> the provocatively titled "A Nation of Deadbeats" does a
> >> reasonable job enumerating the guesses we have for most
> >> of those Panics.
> >
> > You think Nelson has a particular insight? He begins with the erroneous
> > notion that panics and recessions are bad, painful affairs.
> >
>
> I think it's a nice book because it lines all of them up
> for you. Yes, panics are painful, bad things.
>
>
> > Like starting with the notion that push-ups are bad, painful affairs.
> >
>
> This is a principle I live by :)
>
> > OF COURSE they are. But that's never, ever, ever been to point to
> > push-ups, and it's not the point to recessions.
>
>
> His insight is that most of them were engineered by some darned thing
> or another. I think of it as a different slant
> on the usual Hayek story.

I think that Von Mises the point.

>
> >>
> >> You get the feeling that they're mostly hubris. But that's
> >> the design goal of the book...
> >
> > Hubris is part of man's makeup.
>
> Indeed!

Of course you obtuse little peon! I wouldn't have written it if it
weren't true!

Heh. :-)

>
> > If you want this freedom thingy to work
> > at all (which more and more of us seem to be giving up on), you first
> > must accept that man is what he is.
> >
>
> Yep! Although most people aren't all that interested, really.
>

They're just busy.

>
> > Hubris is no stumbling block at all. Nor is laziness.
> >
> > We are, after all, Homo Supinus.
>
> :) Consider that stolen!
>

Heh.

> >>
> >>> You can look at the Gilded Age (1870-1913) as a whirlwind time of
> >>> recessions, panics and deflation. But you can also look at the Gilded
> >>> Age as a period when the US economy multiplied itself 5 fold. Between
> >>> 1870 and 1878 alone, it DOUBLED.
> >>>
> >>
> >> Ayup! For some reason, such explosions are highly unstable.
> >
> > Not when viewed in decadal increments. There was only one direction...up.
> >
> >> "Deadbeats" says that such panics are not simple market corrections;
> >> they are usually caused by... Official action. "Official"
> >> meaning government or defacto government actors ( such as the Fed
> >> or Bank of England or others such).

Oh, it's both. We can trace government policies, initiatives and
institutions which brought about the great panic of 2008. Funny thing
is, the "experts" see exactly what I see, but they conclude that can't
be it--Freddy and Fannie only account for about 3 trillion of the bad
debts and toxic instruments. The entire problem was on the order of
about 60 trillion worldwide.

How it works is this: the bureaucracy coaxes you to the edge of the
cliff, and then flings sacks of dollar bills over the edge. Uncle Sam
doesn't even need to kick you in the pants. You jump/fall of your own
volition.

The reason he can do that to you and get away with this is because Uncle
Sam has the only real monopoly there is or ever will be. You /have/ to
pay attention to him.

> >
> > Always, always, and always the government is there with its fingerprints
> > all over a recession. Every time.
> >
>
> Absolutely. Although I beleive there's a case where the Bank of England
> caused
> a British-empire wide panic all by itself.

The thing is, we don't need the help of Sam. We're quite capable of
falling over the cliff without his help.

>
> > They started to figure out if they got busy trying to fix it, masser
> > wouldn't bring out his bull whip on them when he finally figured out who
> > to blame.
> >
>
> I don't think they know how. there's a *MASSIVE* public choice
> problem - they have absolutely no incentive to know that.

We the People used to know how.

>
> > Hence the birth of the Populist-Bureaucracy, and the beginning of
> > America's quest to beat the free market.
>
> It's even better than the real thing!
>
> >>
> >>> During this period, the US economy surpassed even the great colonial
> >>> empires of Europe. It remained the largest economy on earth even through
> >>> the Great Depression.
> >>>
> >>
> >> And it only became less than the largest because of growth on other
> >> shores - mainly because people started doing what we had
> >> done.
> >
> > Since the end of WWI, America has never stopped being the largest
> > economy on earth. It's not even under threat of losing its throne today.
> >
>
> Not really. I worded that sentence badly.
>
>
> > We hear noises about China, of course. But they aren't "set to overtake"
> > anything. Their economy is less than 1/2 of the US's, they have over 1.3
> > billion people which makes their per capita about $7,000. It's over
> > $47,000 per capita in the US.
> >
>
> Yep.
>
> > In order to pretend their economy is still growing, the Chinese
> > Communist Party leaders are behaving like paranoid lunatics. For
> > instance, they're building at least 10 ghost cities a year, each with
> > the capacity of housing over 1 million ghosts each:
> >
> > http://tinyurl.com/c286pse
> >
>
> It boggles the mind. A Potemkin metropolis.

But it keeps the GDP figures moving upward. It keeps leading indicators
like raw material orders looking up.

The Tiananmen Square you saw on tv with the kid standing in front of the
T-80s was only a small part of what happened. It went on all over the
country like that and worse. It took the fully mobilized People's Army
many months to quell the insurrection. More than 100,000 were put in
jail. Untold numbers of others killed and liquidated.

The Politburo knew from that time onward, the only way to keep the
circus tent up was to have a perpetually expanding economy. If they
economy fails to produce, just once...that's the end of the CPC.

>
> > That's the economy that "will overtake the US in ten years..."
> >
> > Heh.
>
>
> And so what if it does? Good.

We'd all benefit.

> But yes - China is one rigged
> game after another.
>
> >>
> >>> What's to fear when the market corrects? Markets have to find their
> >>> bottom, or they can't recover.
> >>>
> >>
> >> The fear is that there's a human cost when you have wrenching
> >> dislocations. The fear is that you'll have lower growth if
> >> everybody is self-insuring against each other.
> >
> > But there is no cure for this "ailment."
> >
>
> I am not sure, being an optimist and willfully dumb about
> some things. I thought... twenty years ago that "the problem
> is that monetary velocity damps down too quickly. What if
> they steered the system by simply measuring M3, then directly
> sending cash - $100 bills, for the marginal folks who still use
> them and are the great unknown - somehow into circulation."
>
> And as it turns out, Scott Sumner thinks the same
> thing. Is it true? I don't know.

You're observing it right now.

To me it looks like solving your circulation problems with an aneurysm.

>
> The people who hoard $100 bills live hand to mouth
> or are at risk of prison, and it won't "debase the currency". I
> am not even convinced it show up as inflation...

You're saying Iran is doing us a favor by floating all those super 100s?

By George you just might be right!

> > I take that back: the cure might save some people some inconvenience for
> > a generation or two--the only price is endless wars and a leviathan
> > administrative state which will threaten to stifle the last embers of
> > your animal spirit.
> >
>
> Oooh, somebody's read Bismarck! Way cool.

And lived it, as well!

>
> > And a two class corporatist society.
>
> Yeah, well...
>
> >>
> >>> What's to fear in periodic deflation? Low prices? Heh.
> >>>
> >>
> >> No; what's to fear is people hedging against goods with cash. If
> >> the economy were to actually give people time to adjust, it would
> >> be less troublesome.
> >
> > The economy, like man, is what it is.
> >
>
>
> True thing, dewd!
>
> > You only get into real trouble when you seek to change its nature.
>
> Indeed. And if our masters would be our servants, we'd all be better off.

"Laissez-nous faire, Louis!"

> >>
> >> It's pretty well understood that deflation isn't
> >> desirable, especially when the principal means of
> >> creation of money is debt and deflation punishes debtors.
> >
> > The great mystery of the Great Depression was its persistence. Always
> > before, and always afterward (until 2008) a recession might be painful,
> > but was always comparatively short-lived. Two or three years usually
> > before both recovery and a return to pace.
> >
>
> Have you seen Irwin's paper?
>
> http://www.nber.org/papers/w16350
> http://www.voxeu.org/article/did-france-cause-great-depression

Gold hoarding causes recessions. Push-ups cause your arms and chest to
hurt.

You're better off in each case, so why the sniveling?

>
> Thin about all the Wiemar era hyperinflation. Now people
> central banks with people who'd been through those...

There won't be any of that today.

No gold standard, no pegs, everyone is doing it in tandem with
you--hence no inflation. Not even on the global markets.

No, you don't get a warning anymore. You see, you welded the breaker in
the open position.

No more stumbling down into the basement stairs in the dark for you.
You're smarter than that.

>
> > People got wiped out sometimes. Ouch. But at least a cup of coffee still
> > cost what it had 120 years ago. The bottom was firm, and stable. That
> > way you could find your feet.
> >
> > Life isn't for wussies.
>
> Newp!
>
> >>
> >> My grandparents* adjusted to deflation, and it made them work
> >> a lot harder at being frugal than perhaps they should have been.
> >
> > How can you work harder at being frugal than necessary?
> >>
> >> *born about the turn of the 20th century, give or take.
> >
> > My fraternal granddad was born in 1860. He was a dirty old man and a
> > cradle robber. My dad was born in 1923. Fraternal granddad committed
> > suicide when he was wiped out in the Great Depression.
>
> Wow.
>
> > My maternal great
> > granddad committed suicide a couple of years later for the some of the
> > same reasons.
>
> Geez.

That's just the highlight reel.

>
> > Grandma talked about feeding a family of seven a single turnip for
> > dinner.
> >
>
> Mine did, too. We'd complain about corned beef and cabbage. Little
> did I know...
>
> > Bad as it was, there was no reason for those conditions to persist for
> > over a decade. In 1939, recovery had arrived, but unemployment was still
> > over 16%, back when most households only had one breadwinner. The
> > economy would stay off pre-1929 pace until after the war.
> >
> > Rough way to go.
>
> Yep. And I think it's because of deflation, and I know people who *say*
> they know how to fix that. Being the sort of feeble mind I am, I
> think they may be right.

Deflation is the thing that makes full recovery possible...and REAL.

If you think the circus tent will collapse if you didn't hold it up
constantly, you're no better than the Chinese.

>
> Part of it was that Teddy's Evil Cousin was playing defense over
> all that alphpabet soup by then.
>
> But then Europe Godwined the whole thing...
>

Hence fascism became everyone's darling and the star of the hour. It's
not capitalism, and it's not communism. It's the best of both with none
of the ills.

> >>> When real wages rose during the Gilded Age, they ACTUALLY rose. Really.
> >>> CPI stable increases.
> >>>
> >>
> >> And when they crashed.... we had bomb throwin' anarchists in the
> >> streets.
> >
> > They came from Yurp. Or they read the yurp peein's Marx and Engels who
> > delighted in teaching the kiddies how to steal a free lunch.
> >
>
> Absolutely. Anarchists, when they got serious, invented Communism - no
> point in making mass murder a craft good when you can put it on an
> industrial scale, complete with rhetoric that the most diseased
> syphillitic couldn't rant...
>
> > Got so bad they had to jail Eugene Debs. But by then they weren't
> > protecting freedom, they were protecting Economic Corporatism.
>
> This is true also - although I have to wonder what else there really
> is. We keep organizing into that mode and reject all attempts
> to get out of it. Yes, I think there's a significant bottom-up
> preference for corporatism.
>
> if a small cabal did this to us, I think we're pretty much
> stuck with it. They're simply better at this than we are.

Fascism is still as wildly popular as it always was. Everything about it
is an easy sell, as long as you don't call it fascism.

>
> >>
> >> One prominent economic historian thought the Chinese Inner Circle
> >> was going to have hm expound on some technical topic when he
> >> was invited to speak to them; they wanted to know how Britain had
> >> managed to not have a revolution in the 1870s..
> >
> > Queen Victoria would not allow it, obviously.
>
> I forgot about that. <Tugs forelock>
>
> >>
> >>> Now they rise, and rise, and rise, but they're actually falling.
> >>>
> >>> What's wrong with this picture?
> >>>
> >>> The lies, demagoguery and the cowardice, of course. That's what's wrong.
> >>>
> >>
> >> This isn't significantly different from any other example
> >> of the Narrative Fallacy. Perhaps it hurts more.
> >
> > Don't get all post modern on me. You see, for a minute there, I forgot
> > this was still Usenet.
>
> it's not post modern - it's a Real Thing. Nassaim Taleb is it's prophet
> these days.
> http://wiki.lesswrong.com/wiki/Narrative_fallacy

Obama recently spoke something about "not allowing these misconceptions
to harden."

Once they harden, many people aren't capable of perceiving them as
misconceptions.

It reminded me that all the great psychologists don't work in hospitals
and clinics anymore. They all went into the field of marketing
psychology. They never publish, and you can only figure out what they're
discovering by observing it at the fringes.

Look, no one's map of the universe is perfect. If your map is missing
roads and out of proportion, you'll get lost. Otherwise, you'll muddle
through some how.

Now I'm the optimist all of a sudden. Lincoln's postulate still stands.

>
> >>
> >> And there are *multiple* demagogueries to go 'round...
> >
> > Why else did you think the 2nd Amendment is so damned important?
> >
>
> Most people can't shoot well enough for a gun to do 'em any good...
> there's a couple of Larry McMurty novels where he stresses the
> utter incompetence of nearly everybody with a firearm - Ned and
> Zeke is one...

The Newtown Shooter fired 154 rounds at unarmed GRADE SCHOOLERS, all at
close range for crying out loud, and only killed 26.

Virginia Tech shooter fired 174 rounds and only killed 33 (including
himself) and only injured 17.

Obviously they'd learned to shoot by playing video games.

[Les Cargill]

Neolibertarian wrote:
> In article <kn15s9$492$1...@dont-email.me>,
> Les Cargill <lcarg...@comcast.com> wrote:
>
>> Neolibertarian wrote:
>>> In article <kmtbn2$9kc$1...@dont-email.me>,
>>> Les Cargill <lcarg...@comcast.com> wrote:
>>>
>>>> Neolibertarian wrote:
>>>>> In article <kmrq95$91j$1...@dont-email.me>,
>>>>> Les Cargill <lcarg...@comcast.com> wrote:
>>>>>
>>>>>>> Since the 1920's, the Treasury department has only ever taken in about
>>>>>>> 18% of GDP in revenues from income tax, no matter what percentage the
>>>>>>> rates happened to be.
>>>>>>>
>>>>>>
>>>>>> http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205
>>>>>
>>>>> Since the Big One, then.
>>>>>
>>>>
>>>> Right. Thanks, President Wilson!
>>>
>>> That was the Great One. The Big One came under Roosevelt's evil cousin.
>>
>> First one, then the other. Pershing predicted WII 20-25 years
>> after 1918.
>>
>> That's 1938-1943...
>
> Harding and Coolidge knew it too. That's why they almost single-handedly
> kept Germany fed during the lean Versailles Years. Then came Hoover with
> a banking crisis 7 months into his presidency.
>

Shhhh! You'll make Prescott Bush look like a good guy.

IN a fit of levelheadedness, the Senate did not ratify Versailles.

> Hoover was no George Bailey, and he couldn't save Germany from Mr.
> Potter.
>

That's a strange way to spell "Bismarck".

> Luckily only 80 million people would be killed. We'll never be that
> dumb-luck fortunate again.

Every highs school student should have to spend two weeks in *some*
class learning details about the Battle of Stalingrad.


<snip>

>> That's because the tax code is (ab)used as a social shaping device. Why
>> else the mortgage deduction?
>
> Marriage. Mortgages. Mayhem. Who needs a bunch of bureaucrats shaping
> society?

We do, apparently. We're apparently narcissists.

>>
>>> The public can either be educated, or it can't.
>>>
>>
>> I'll go with "won't".
>
> Eh. They're busy, not obstinate.

Exactly. But have you actually watched "American Idol?" It's The Roman
Games with lyrics instead of swords... I don't even think Gene Simmons
could take it... ( he was on one of those shows, anyway ).

<snip>

>>
>> Hoover's an interesting guy. He's roughly the last rational
>> Progressive.
>
> He was the consummate technocrat. It's how he got the job in the first
> place.

Well, the Greenville Flood was a big deal. That's another detail they
don't teach in school much.


<snip>

>>> That's never, ever stopped being an option in America.
>>
>> The various Homestead Laws are gone... point taken, though. There's
>> very cheap land if it's not free.
>
> Land stopped being important a long, long time ago. Where you live is
> one of the least important things about you.
>
> If there's something that needs updating in the Constitution, it's
> representation by fictional land boundaries.
>

Interesting idea. I think it pretty much *enshrined* that,
with the innovation of the loss of Divine Right kings.

>>>> *really also true in Yurp as well...
>>>
>>> That was never, ever an option in Yurp.
>>>
>>> America was the option for Yurp, of course, if that's what you mean.
>>>
>>> America was available to them until 1965.
>>
>> That's true also. Ingress had slowed a great deal, though.
>
> Yes...well, except for the British Invasion.
>

Which, unbeknownst to most people, was actually quite resented.
A 1940 model American was just as likely to grumble about it
as embrace it.
<snip>

>>
>> His insight is that most of them were engineered by some darned thing
>> or another. I think of it as a different slant
>> on the usual Hayek story.
>
> I think that Von Mises the point.

Von Mises sounds better than he is.

>>
>>>>
>>>> You get the feeling that they're mostly hubris. But that's
>>>> the design goal of the book...
>>>
>>> Hubris is part of man's makeup.
>>
>> Indeed!
>
> Of course you obtuse little peon! I wouldn't have written it if it
> weren't true!
>
> Heh. :-)

"Little peon"? Why you.... I'm not so little any more. :)

>>
>>> If you want this freedom thingy to work
>>> at all (which more and more of us seem to be giving up on), you first
>>> must accept that man is what he is.
>>>
>>
>> Yep! Although most people aren't all that interested, really.
>>
> They're just busy.

Busy being busy. Feh. *Thinking* makes a lot of that go away if
you're careful.

<snip>

>>>> "Deadbeats" says that such panics are not simple market corrections;
>>>> they are usually caused by... Official action. "Official"
>>>> meaning government or defacto government actors ( such as the Fed
>>>> or Bank of England or others such).
>
> Oh, it's both. We can trace government policies, initiatives and
> institutions which brought about the great panic of 2008.

I really like what Sachs is saying now - we've known for a long
time that employment will suffer in our system, and we do incredibly
dumb things to "counterbalance" this.

I don't have an answer for it.

> Funny thing
> is, the "experts" see exactly what I see, but they conclude that can't
> be it--Freddy and Fannie only account for about 3 trillion of the bad
> debts and toxic instruments. The entire problem was on the order of
> about 60 trillion worldwide.
>

Yep. But arnold kling has (IMO) the best theory for the connection
there.

> How it works is this: the bureaucracy coaxes you to the edge of the
> cliff, and then flings sacks of dollar bills over the edge. Uncle Sam
> doesn't even need to kick you in the pants. You jump/fall of your own
> volition.
>

You don't even need *that*. and make that "Sachs" of money...

> The reason he can do that to you and get away with this is because Uncle
> Sam has the only real monopoly there is or ever will be. You /have/ to
> pay attention to him.

But it's a benign dictatorship, or as close as
we can get. It's just really low bandwidth.

You cannot make the case for pure-private banking and money. The
tide of history is against it. Because the Bank of England.

It may be that that won't work, either. We just don't know. The design
of the Fed was to replace JP Morgan in the Panic of 1907. That's not a
bad goal.

>>>
>>> Always, always, and always the government is there with its fingerprints
>>> all over a recession. Every time.
>>>
>>
>> Absolutely. Although I beleive there's a case where the Bank of England
>> caused
>> a British-empire wide panic all by itself.
>
> The thing is, we don't need the help of Sam. We're quite capable of
> falling over the cliff without his help.

Not if we do it right. When it comes down to it, it was the Shorts
that won in 2008 and did what they always do. All the government
stuff is just so much Kabuki theater - outside of whatever effect
it actually has on deficits/debt.

>>
>>> They started to figure out if they got busy trying to fix it, masser
>>> wouldn't bring out his bull whip on them when he finally figured out who
>>> to blame.
>>>
>>
>> I don't think they know how. there's a *MASSIVE* public choice
>> problem - they have absolutely no incentive to know that.
>
> We the People used to know how.

I think we never did; it's just that the useful fiction of 40
acres and a mule farther West was the safety valve.

<snip>

>>
>> It boggles the mind. A Potemkin metropolis.
>
> But it keeps the GDP figures moving upward. It keeps leading indicators
> like raw material orders looking up.
>

I'd say "kept" now. That's rolling off...

> The Tiananmen Square you saw on tv with the kid standing in front of the
> T-80s was only a small part of what happened. It went on all over the
> country like that and worse.

Absolutely.

> It took the fully mobilized People's Army
> many months to quell the insurrection. More than 100,000 were put in
> jail. Untold numbers of others killed and liquidated.
>
> The Politburo knew from that time onward, the only way to keep the
> circus tent up was to have a perpetually expanding economy. If they
> economy fails to produce, just once...that's the end of the CPC.

Ayup. Ride that tiger!

>>
>>> That's the economy that "will overtake the US in ten years..."
>>>
>>> Heh.
>>
>>
>> And so what if it does? Good.
>
> We'd all benefit.
>

Absolutely.

<snip>

>>
>> And as it turns out, Scott Sumner thinks the same
>> thing. Is it true? I don't know.
>
> You're observing it right now.
>

I am not so sure.

> To me it looks like solving your circulation problems with an aneurysm.

Understood. It however has none of the effects predicted by the
detractors of Market Monetarism.

I think the value of a dollar, like the mass of an electron, is just not
interesting. What is interesting is The Flow.

Since most of us remember the 1970s Stagflation, we have an acquired
allergy to any inflation.

>>
>> The people who hoard $100 bills live hand to mouth
>> or are at risk of prison, and it won't "debase the currency". I
>> am not even convinced it show up as inflation...
>
> You're saying Iran is doing us a favor by floating all those super 100s?
>
> By George you just might be right!
>

I think it is, but it's all very new. No, what I mean is that we
somehow get $100 bills into the hands of people who live on
the edge of the economy.

You know - the people who don't "deserve" it. And not with fanfare;
with deadly secrecy.

I think if they pumped money into the scratchoff lottery
ticket business - *secretly* - we'd probably stop having
so much angst.

>>> I take that back: the cure might save some people some inconvenience for
>>> a generation or two--the only price is endless wars and a leviathan
>>> administrative state which will threaten to stifle the last embers of
>>> your animal spirit.
>>>
>>
>> Oooh, somebody's read Bismarck! Way cool.
>
> And lived it, as well!

Haven't we all?

<snip>

>>
>> Indeed. And if our masters would be our servants, we'd all be better off.
>
> "Laissez-nous faire, Louis!"
>

So far as that goes... We can't handle the truth.

>>>>
>>>> It's pretty well understood that deflation isn't
>>>> desirable, especially when the principal means of
>>>> creation of money is debt and deflation punishes debtors.
>>>
>>> The great mystery of the Great Depression was its persistence. Always
>>> before, and always afterward (until 2008) a recession might be painful,
>>> but was always comparatively short-lived. Two or three years usually
>>> before both recovery and a return to pace.
>>>
>>
>> Have you seen Irwin's paper?
>>
>> http://www.nber.org/papers/w16350
>> http://www.voxeu.org/article/did-france-cause-great-depression
>
> Gold hoarding causes recessions. Push-ups cause your arms and chest to
> hurt.
>
> You're better off in each case, so why the sniveling?

Ooh, that's a sharp comment. I don't think you're better off; at
least not if you want the gold standard to work. Irwin, IMO,
puts it as a Prisoner's Dilemma and that makes
gold a quaint anachronism.

>>
>> Thin about all the Wiemar era hyperinflation. Now people
>> central banks with people who'd been through those...
>
> There won't be any of that today.
>
> No gold standard, no pegs, everyone is doing it in tandem with
> you--hence no inflation. Not even on the global markets.
>

Right. I agree.

> No, you don't get a warning anymore. You see, you welded the breaker in
> the open position.
>
> No more stumbling down into the basement stairs in the dark for you.
> You're smarter than that.

Asserted sans evidence, I fear. I really do think we could get out
of our own way. We're *this* close.

And if we're not smart enough, then more fool us.

<snip>

>>> My maternal great
>>> granddad committed suicide a couple of years later for the some of the
>>> same reasons.
>>
>> Geez.
>
> That's just the highlight reel.

People seem to lack this memory...

<snip>

>> Yep. And I think it's because of deflation, and I know people who *say*
>> they know how to fix that. Being the sort of feeble mind I am, I
>> think they may be right.
>
> Deflation is the thing that makes full recovery possible...and REAL.
>

That sounds like you're saying "only suffering confers value",
which I at best resent, and even more doubt.

> If you think the circus tent will collapse if you didn't hold it up
> constantly, you're no better than the Chinese.

What we really *want* is Friedman's computer that runs monetary
policy like an automatic controller. We sort of have that; the only
problem is the target variable.

The Sumnerians say that *in*flation ( above some sort of deadband
creep ) is part of the same poor regulation mechanism.

I can literally name analogous mechanisms from control theory.

>>
>> Part of it was that Teddy's Evil Cousin was playing defense over
>> all that alphpabet soup by then.
>>
>> But then Europe Godwined the whole thing...
>>
> Hence fascism became everyone's darling and the star of the hour. It's
> not capitalism, and it's not communism. It's the best of both with none
> of the ills.
>
>

And in the ultimate historical irony, it was Claude Shannon in the US
but even more Kurt Godel who developed the theoretical
underpinnings of what Fascism can never defeat - information.

Godel was in Germany at the time...

<snip>

>>
>> if a small cabal did this to us, I think we're pretty much
>> stuck with it. They're simply better at this than we are.
>
> Fascism is still as wildly popular as it always was. Everything about it
> is an easy sell, as long as you don't call it fascism.

But our Fascism works! Parts of it actually do, you know...

<snip>

>>> Don't get all post modern on me. You see, for a minute there, I forgot
>>> this was still Usenet.
>>
>> it's not post modern - it's a Real Thing. Nassaim Taleb is it's prophet
>> these days.
>> http://wiki.lesswrong.com/wiki/Narrative_fallacy
>
> Obama recently spoke something about "not allowing these misconceptions
> to harden."
>
> Once they harden, many people aren't capable of perceiving them as
> misconceptions.
>
> It reminded me that all the great psychologists don't work in hospitals
> and clinics anymore. They all went into the field of marketing
> psychology. They never publish, and you can only figure out what they're
> discovering by observing it at the fringes.
>
> Look, no one's map of the universe is perfect. If your map is missing
> roads and out of proportion, you'll get lost. Otherwise, you'll muddle
> through some how.
>

Indeed, but at least Taleb's work points at the hubris. And the
Narrative Fallacy is at the heart of it.

> Now I'm the optimist all of a sudden. Lincoln's postulate still stands.

Always.

>>
>>>>
>>>> And there are *multiple* demagogueries to go 'round...
>>>
>>> Why else did you think the 2nd Amendment is so damned important?
>>>
>>
>> Most people can't shoot well enough for a gun to do 'em any good...
>> there's a couple of Larry McMurty novels where he stresses the
>> utter incompetence of nearly everybody with a firearm - Ned and
>> Zeke is one...
>
> The Newtown Shooter fired 154 rounds at unarmed GRADE SCHOOLERS, all at
> close range for crying out loud, and only killed 26.
>

Yep.

> Virginia Tech shooter fired 174 rounds and only killed 33 (including
> himself) and only injured 17.
>
> Obviously they'd learned to shoot by playing video games.
>

Probably. Thank $DEITY.

--
Les Cargill

[Neolibertarian]

In article <kn59lr$bgf$1...@dont-email.me>,

Les Cargill <lcarg...@comcast.com> wrote:

>
> > If you think the circus tent will collapse if you didn't hold it up
> > constantly, you're no better than the Chinese.
>
> What we really *want* is Friedman's computer that runs monetary
> policy like an automatic controller. We sort of have that; the only
> problem is the target variable.

Friedman's Fed-Computer is prolly the answer.

We don't sort of have that today, evidently because of Humphrey-Hawkins
(1978).

Certainly, every time Bernanke discusses his QE Infinity up on the Hill,
he pegs it to employment...which is pretty much mandated by
Humphrey-Hawkins (Maybe not so much Scott Sumner).

Unemployment goes down, he tells us, and he'll consider cutting back or
ending it.

Greenspan, when he aggressively lowered rates in 2002, cited employment,
as well.

You gotta repeal Humphrey-Hawkins before you do anything else.

And even before that, you have to spank the boys and girls up on Capitol
Hill and take away all their toys. They have to grow up before Mommy and
Daddy let them sit at the adult table again.

I don't advocate for the Gold Standard: Gold is just a commodity, and
needs to be manipulated in order to serve as a standard.

I'm not Andy Jackson: I'm not opposed to a Central Ragg-Tagg bank. As
you stated earlier, a central bank is what everyone wants, and you'll
never convince anyone of anything else.

Reminds me of the jews as they occupied the Promised Land. As soon as
they'd set up shop, they started looking around for a king. They wanted
a king. They demanded a king.

YHWH told them: "You don't need a king. You have My Torah, and you have
the judges I've appointed among you."

"We still need a king!" they replied.

"But a king will set aside a portion of your land for himself; he'll
take one in ten of your flock to keep for his own. He'll take your
daughters into his palace to be his cooks and milkmaids; he'll take a
tenth of your profit at market. When he wars, he'll even take your sons."

"We still need a king, Adonai. How will the other nations respect us if
we have no king? We need a king to protect us, and to lead us into war
with our enemies."

So YHWH gave them a king.

We have a central bank, and we will have a central bank no matter what.
I get it.

A Moneiac 9000?

Quantify the entire economy is real-time. If little Suzie breaks her
piggy bank to buy the new Malibu Barbie she saw at Toys R Us yesterday,
that gets factored in immediately. ATT is going to lay off 17,000
employees next week, you already know to the dime what the final impact
will be. Nowadays, you'd have to factor in a new widget being developed
in Indonesia, as well. Globalization is with us, just like the Central
Bank.

Weimar Inflation was partly willful, of course. But the worst effects
manifested because they were operating in the dark. In their ignorance,
they couldn't control the bus as it careened down the hill.

Same for the deflation of part of the Depression. Friedman tells us that
at no time did the fed ever have an accurate picture of money supply.

Also, there was no effective cooperation in the global markets. This
lack amplified the pain greatly.

Quantify the economy completely, in real time, and you have the
knowledge you need.

If you can do all that, then you can have a rational CPI again. A rock
solid currency. A perfect waltz partner who knows your next move before
you do.

No need for tyranny in Israel anymore.

[Les Cargill]

Neolibertarian wrote:
> In article <kn59lr$bgf$1...@dont-email.me>,
> Les Cargill <lcarg...@comcast.com> wrote:
>
>>
>>> If you think the circus tent will collapse if you didn't hold it up
>>> constantly, you're no better than the Chinese.
>>
>> What we really *want* is Friedman's computer that runs monetary
>> policy like an automatic controller. We sort of have that; the only
>> problem is the target variable.
>
> Friedman's Fed-Computer is prolly the answer.
>
> We don't sort of have that today, evidently because of Humphrey-Hawkins
> (1978).
>

Maybe. I don't think the idea would have had any penetration in 1978.

People didn't know what a computer was. They probably thought it
was like the computers on Star Trek.

I think the ideas of a Kaypro running a control algorithm
in somebody's basement that Charts the Course of Humanity is so
terrifying to most people that it can't happen. I can't quite
give it the gravitas it deserves.

I am also unsure of Friedman's use of metaphor - I think it
was a metaphor, and estimate of what we should expect as the complexity
of such a thing. But I could not explain that to my Mother, who
grew up under FDR. And especially my Father, who does not believe in
computers at all.

it's a *delightfui* metaphor, but only for people who are
sufficiently twisted as I am, predisposed to think in those terms. It's
like unto Johnny Carson's "under Funk ad Wagnall's front porch".

> Certainly, every time Bernanke discusses his QE Infinity up on the Hill,
> he pegs it to employment...which is pretty much mandated by
> Humphrey-Hawkins (Maybe not so much Scott Sumner).
>

Right. I agree completely; and discovered Humphrey-Hawkins on this
very newsgroup lo those many years ago.

I think Sumner is rather playing a completely different game than
the others. I have to question my attraction to the sheer novelty of it,
but it again fits this sort of "dream" I've had about the
economy. If all the ordinary people I'd know had more money,
however they got it, they would have probably been better off. f
they had not missed that payment because they did not have it,

we'd all be better off.

It's as much William Jennings Bryant as Sumner - that idea; the idea
that money is but an abstraction that we reify into a concrete thing
that we cannot then get around.

I can, I suppose, believe that we are capable of getting out of our own
way and getting on to the business of making ourselves happy.

> Unemployment goes down, he tells us, and he'll consider cutting back or
> ending it.
>
> Greenspan, when he aggressively lowered rates in 2002, cited employment,
> as well.
>

you'll hear this I doubt from me first - the Iraqi military Adventure
also employed large numbers of young ( and not so young ) men in
places that Kipling wrote scornfully about.

Our ole buddy Bismarck again...

> You gotta repeal Humphrey-Hawkins before you do anything else.
>

I do not know about that. Truly, I just don't.

Giving that up, at least for me, would be a major breach of faith with
my past. That's very irrational. It literally is an article of faith.

I understand the difficulties, but I still want to point to it - we
have a *law* that says the working man means something in the country.

I'd at least like to get Merle Haggard's opinion on it.

> And even before that, you have to spank the boys and girls up on Capitol
> Hill and take away all their toys. They have to grow up before Mommy and
> Daddy let them sit at the adult table again.
>

Feh.

> I don't advocate for the Gold Standard: Gold is just a commodity, and
> needs to be manipulated in order to serve as a standard.
>

Indeed. Might as well be iPods.

> I'm not Andy Jackson:

Ummm...

> I'm not opposed to a Central Ragg-Tagg bank. As
> you stated earlier, a central bank is what everyone wants, and you'll
> never convince anyone of anything else.
>

I think it's a fascinating experiment to not have one, and you
can start that day I am dead.

> Reminds me of the jews as they occupied the Promised Land. As soon as
> they'd set up shop, they started looking around for a king. They wanted
> a king. They demanded a king.
>
> YHWH told them: "You don't need a king. You have My Torah, and you have
> the judges I've appointed among you."
>
> "We still need a king!" they replied.
>
> "But a king will set aside a portion of your land for himself; he'll
> take one in ten of your flock to keep for his own. He'll take your
> daughters into his palace to be his cooks and milkmaids; he'll take a
> tenth of your profit at market. When he wars, he'll even take your sons."
>
> "We still need a king, Adonai. How will the other nations respect us if
> we have no king? We need a king to protect us, and to lead us into war
> with our enemies."
>
> So YHWH gave them a king.
>

Ab. So. Lutely. And the utter simplicity, and sheer beauty of that story
remains. All that follows, all the pain, exile and grief, is due to that
one hubris, simply told.

We see it still today.

That's it, in one of the oldest surviving written records of
our species' history.

My hat is off to you, sir, for bringing that in.

But *here's the thing*. When Judaism, and all that followed
stopped being about the temple, when $DEITY destroyed the Temple
he'd given them, it became about an idea and it became indestructible
and eternal.

As they say, "In the beginning was the Word..."

> We have a central bank, and we will have a central bank no matter what.
> I get it.
>
> A Moneiac 9000?
>

How about a Galaxy 500?
http://www.youtube.com/watch?v=Yb_juTPQJUc

Sorry. Thread needed some crazy.

> Quantify the entire economy is real-time. If little Suzie breaks her
> piggy bank to buy the new Malibu Barbie she saw at Toys R Us yesterday,
> that gets factored in immediately. ATT is going to lay off 17,000
> employees next week, you already know to the dime what the final impact
> will be. Nowadays, you'd have to factor in a new widget being developed
> in Indonesia, as well. Globalization is with us, just like the Central
> Bank.
>
> Weimar Inflation was partly willful, of course.

Partly. It was savage as well.

> But the worst effects
> manifested because they were operating in the dark. In their ignorance,
> they couldn't control the bus as it careened down the hill.
>

Right.

> Same for the deflation of part of the Depression. Friedman tells us that
> at no time did the fed ever have an accurate picture of money supply.
>

Never.

> Also, there was no effective cooperation in the global markets. This
> lack amplified the pain greatly.
>

The global markets on thin wobbly legs, simply vanished. Encouraged by
destitution in Soviet Russia, that stopped, and then it stopped.

> Quantify the economy completely, in real time, and you have the
> knowledge you need.
>

But quantify something alive completely and you probably kill it*. We
need a modest machine in the corner creaking towards our happiness.


*I know, I know...

This is hard.

> If you can do all that, then you can have a rational CPI again. A rock
> solid currency. A perfect waltz partner who knows your next move before
> you do.
>
> No need for tyranny in Israel anymore.
>

There was never any need for tyranny anywhere. We just like it. Or
something,


--
Les Cargill