tag:blogger.com,1999:blog-4900303239154048192.post3264235377007495808..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: Meltzer: Fire Keynes, Replace Him with FriedmanUnknownnoreply@blogger.comBlogger10125tag:blogger.com,1999:blog-4900303239154048192.post-1847910881221420342009-06-18T12:21:07.426-04:002009-06-18T12:21:07.426-04:00I must admit I’m loving the little catfight betwee...I must admit I’m loving the little catfight between Meltzer and Krugman. Inflation vs. deflation debate between Allan Meltzer and Paul Krugman is a rather interesting and insightful. Allan Meltzer says inflation is our greatest threat and I'm agree with him. Meltzer’s warning remains relevant.Sujan Patriciahttp://www.asiarooms.com/noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-19614887360211260932009-05-08T00:44:00.000-04:002009-05-08T00:44:00.000-04:00To SteffenH:
Opportunity isn't a cost. Once you ...To SteffenH:<br /><br />Opportunity isn't a cost. Once you fall into that pit you are doomed to tail chasing forever in the land of "only private gamblers can make a difference". People who are productive do not concern themselves with opportunities they might have had. They take the productive option that maximizes utility for them and they do it. A foregone opportunity has no cost. There is only opportunity value and no such thing as opportunity costs until you become a neoclassical liar. <A HREF="http://GreaterVoice.org/essays/LaborTheoryOfCost.php" REL="nofollow">Labor Theory of Cost</A>.<br /><br />See Also: <A HREF="http://www.youtube.com/watch?v=VVp8UGjECt4" REL="nofollow">Economics Explained</A>. Pay particular attention to the Snickers Bars.TheTruckerhttps://www.blogger.com/profile/10346127768102862741noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-80761072489489883532009-05-05T10:29:00.000-04:002009-05-05T10:29:00.000-04:00SteffenH,
It's odd you would mention Bastiat, sin...SteffenH,<br /><br />It's odd you would mention Bastiat, since you could interpret my column on Krugman a few days ago as an invocation of exactly that argument. Would you agree? In this case, however, we are not talking about broken windows but thin, unsealed, leaky windows that waste heating energy. With IRR's well into the double digits, weatherization programs are efficiency-enhancing, whether undertaken voluntarily by owners or financed out of stimulus funds. I agree, of course, that arbitrary projects whose only purpose is to spend money will not raise efficiency. In his famous quote about burying bottles of money, Keynes began by recommending productive investments instead.Peter Dormanhttps://www.blogger.com/profile/00093399591393648071noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-20641393773569034612009-05-05T09:34:00.000-04:002009-05-05T09:34:00.000-04:00Regarding to energy efficiency investment there is...Regarding to energy efficiency investment there is a difference between overcoming market failure and paying subsidies for arbitrary projects. Keep in mind that the so called "landlord-tenant"-problem often is not the cause but the effect of other government failure. Econospeakers should think of Bastiats Brooken-Window-Fallacy: Do you heard of opportunity costs?SteffenHhttps://www.blogger.com/profile/05620353978634649343noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-66898227830730113062009-05-04T21:23:00.000-04:002009-05-04T21:23:00.000-04:00Let me be more specific. As long as work-time regu...Let me be more specific. As long as work-time regulation is not a key part of the stimulus policy mix, debt-fueled economic expansion will tend to be increasingly ineffectual in achieving full employment.Sandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-90653935227716446342009-05-04T20:50:00.000-04:002009-05-04T20:50:00.000-04:00There is no reason to believe this debt is not sus...<I>There is no reason to believe this debt is not sustainable.</I> <br /><br />Presumably Peter means 'sustainable' in a narrow economic context, not a broader ecological and social justice one. I would argue that even from the narrow economic perspective that sustainability is uncertain because one is not just dealing with abstract debt to GDP ratios. There is the matter of the qualitative make-up of that GDP. <br /><br />If fiscal stimulus policies have a tendency to debase or water down the socially necessary content of GDP relative to superfluous elements, then the ratio of debt to GDP is misleading.<br /><br />So there are at least four reasons to believe debt may not be sustainable:<br /><br />climate change;<br /><br />the end of cheap energy;<br /><br />world population growth;<br /><br />unreliability of GDP as a measure of economically sustainable activity.Sandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-65549094057307759882009-05-04T17:57:00.000-04:002009-05-04T17:57:00.000-04:00I remember the Volcker era differently. There was ...I remember the Volcker era differently. There was a higher degree of unionization and many other firms followed their settlements.<br /><br />Unions trailed (slightly) behind the cost of living increases, but workers didn't lose out to much as a consequence. On the other hand retirees, those with savings set aside for retirement (this was before 401K's, so savings tended to be bonds or bank accounts) suffered. Poor people had little savings to be inflated away, but they didn't have the bargaining abilities of the better paid workers.<br /><br />So their wages lagged and their expenses went up. Indexing SS was one of the things that came out of the period.<br /><br />There is never an excuse for 15-20% inflation, it shows a poorly run government and one that allowed itself to get into a such a bad situation in the first place.<br /><br />I see that some (like George Soros) are now promoting a return to inflation, but only for a short term to eliminate the possibility of deflation. This would be followed by a rapid rise in interests to choke it off before it went too far. I think he doesn't understand political dynamics well enough. Controlled wildfires have a way of jumping over the fire breaks...Robert D Feinmanhttps://www.blogger.com/profile/11811511835460945217noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-86824140662642579112009-05-04T17:21:00.000-04:002009-05-04T17:21:00.000-04:00«Volcker may be seen as a hero by some, but I thin...«<I>Volcker may be seen as a hero by some, but I think he was a disaster for those at the bottom of the ladder.</I>»<br /><br />Inflation was pretty bad for them too, and anyhow he used the right policy -- it is not his fault that the victims of the right policy had a very bad safety net. The fault was with the political consensus that those who become are unemployed are losers and no winners wants to waste money supporting them.<br /><br />«<I>We are now engaged (and losing) two wars and also failing to pay for them. </I>»<br /><br />What, haven't they been fully paid for with tax cuts? :-)<br /><br />Or rather subsidized by selling what are in effect war bonds to China, Japan and Saudi Arabia at fantastically high prices?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-74648262612254627152009-05-04T15:05:00.000-04:002009-05-04T15:05:00.000-04:00One thing is to look at how people act, not what t...One thing is to look at how people act, not what they say. I see a trend which has extended over at least a decade away from long-term bonds (private and government) and more towards short-term alternatives.<br /><br />As a parallel there is the rise in money market funds, the ultimate in short-term investing. The Treasury gave up 30 year bonds under Bush and has only recently revived them in a small way.<br /><br />The reluctance of investors to commit for the long-term seems to me an indication that inflation fears are just below the surface, despite what business leaders say in public.<br /><br />I look at the situation under LBJ as a parallel to the current day. He fought (lost) a war and refused to raise taxes to pay for it, instead promoting "guns and butter". It was left to those who came after to deal with the inevitable inflation. Volcker may be seen as a hero by some, but I think he was a disaster for those at the bottom of the ladder.<br /><br />We are now engaged (and losing) two wars and also failing to pay for them. Why should things turn out any differently in a few years?<br /><br />The problem is that once you have punched a big hole in the bottom of the boat the need to keep bailing before you can make repairs overrides long-term fixes. Just when a new tax policy was overdue to correct for Reaganism, we get hit with a popped bubble, thus making the range of solutions even more limited.<br /><br />We are faced with the a choice of least worst options, not good ones.Robert D Feinmanhttps://www.blogger.com/profile/11811511835460945217noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-31890757398400847722009-05-04T14:30:00.000-04:002009-05-04T14:30:00.000-04:00china isn't buying our physical trash for recyclin...china isn't buying our <EM>physical</EM> trash for recycling, eitherhapanoreply@blogger.com