Essential Economics for Politicians

Bruddah IZ said:
Ah yes, the CPI basket that never contains any of the goods or services that cause financial crisis.
Click to expand...

I agree that CPI has become politicized and messed with too much. It's your solution I'm not down with...
 
Wez said:
I agree that CPI has become politicized and messed with too much. It's your solution I'm not down with...
Click to expand...
Most aren't despite what you just mentioned about the CPI. Homes are not in the CPI basket neither are stocks. I am reading the attached paper to the Atlantic article. I am not surprised that the Atlantic left out the two most important events, The creation of the Fed and the Federal income tax of 1913, when discussing the charts. The article makes key points about the gold standard restricting the printing of more money to combat inflation of prices. That is just a complete mis-understanding of the symptoms as opposed to the cause of inflation.
 
Bruddah IZ said:
Most aren't despite what you just mentioned about the CPI. Homes are not in the CPI basket neither are stocks.
Click to expand...

Homes shouldn't be in CPI, but rents probably should. Why would stocks be in CPI, that's not an item people need to buy?
 
Wez said:
Homes shouldn't be in CPI, but rents probably should. Why would stocks be in CPI, that's not an item people need to buy?
Click to expand...
Right but those are the items that they spend the most on in life and the two sectors where the Great recession and the great depression happened. Both events caused by an inflation of the money supply.
 
Bruddah IZ said:
Right but those are the items that they spend the most on in life and the two sectors where the Great recession and the great depression happened. Both events caused by an inflation of the money supply.
Click to expand...

You're confused as to what CPI is supposed to represent. It's not what people spend the most on, it's a sampling of typical goods and services. You can't put everything in there, stocks, Real Estate, etc. are more speculative investments that would make CPI a meaningless index. People with modest incomes and savings don't care what people are paying for their speculative investments, they need to know how much the stuff they do buy is changing in price.
 
Wez said:
You're confused as to what CPI is supposed to represent. It's not what people spend the most on, it's a sampling of typical goods and services. You can't put everything in there, stocks, Real Estate, etc. are more speculative investments that would make CPI a meaningless index. People with modest incomes and savings don't care what people are paying for their speculative investments, they need to know how much the stuff they do buy is changing in price.
Click to expand...
Totally agree. That is why I wouldnʻt use the CPI to argue against the gold standard. Printing more fiat money or extending more credit typically increases the cost of not just CPI items but goods and services as a whole. Not printung does the opposite obviously.
 
Please tell us more about how Libertarian policy is what we need...

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-kansas-economy-20161031-story.html

"Kansas is still bleeding, thanks to tea party economics"

"Who’s to blame for this? The state’s voters are. While they already were feeling the pain, they reelected Brownback to a second term in 2014, at which point things got worse. Why? Maybe the electorate revels in the state’s role as a “laboratory for supply side nostrums,” as economist Menzie Chinn of the University of Wisconsin called it recently. Some of those who voted for Brownback deserve what they’re getting. But they’re imposing the disaster on a lot of innocent people."
 
Wez said:
Please tell us more about how Libertarian policy is what we need...

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-kansas-economy-20161031-story.html

"Kansas is still bleeding, thanks to tea party economics"

"Who’s to blame for this? The state’s voters are. While they already were feeling the pain, they reelected Brownback to a second term in 2014, at which point things got worse. Why? Maybe the electorate revels in the state’s role as a “laboratory for supply side nostrums,” as economist Menzie Chinn of the University of Wisconsin called it recently. Some of those who voted for Brownback deserve what they’re getting. But they’re imposing the disaster on a lot of innocent people."
Click to expand...

Libertarian policy? You mean because people spend their money better then the government can?

Kansas: An Unsung Hero For Economic Growth
http://www.forbes.com/sites/rexsinq...unsung-hero-for-economic-growth/#3272806a5992
 
Bruddah IZ said:
You mean because people spend their money better then the government can?
Click to expand...

This statement in isolation, is not true. Free market solutions are usually preferable, but not always. Prisons would be a good example of where market based solutions are a very bad idea. Finding the right balance between municipal services that need to be paid for with taxes and market solutions is best, imo. What taxation level is best is up for debate and I think is not a set number, but varies incredibly based on many different factors.
 
Wez said:
This statement in isolation, is not true. Free market solutions are usually preferable, but not always. Prisons would be a good example of where market based solutions are a very bad idea. Finding the right balance between municipal services that need to be paid for with taxes and market solutions is best, imo. What taxation level is best is up for debate and I think is not a set number, but varies incredibly based on many different factors.
Click to expand...
Didn't you mean in isolation my statement is true? Our government has no problem implementing private prisons in the aggregate. That's how we got ACA. You seem to agree that one size fits all policies yield less then favorable results.
 
You must log in or register to reply here.
Back
Top