OT: Goodbye to the American Dream

[John Larkin]

On Mon, 31 Aug 2015 07:40:23 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 11:43:17 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 7:23:24 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 04:54:39 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

snip

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to come
due eventually. We spent about 5 years printing 6% of GDP in phony
prosperity, borrowed from our future. The only question is whether we'll
make monthly installments (reductions in future growth), or have the bill
come due all at once.

The bill for the 1930's non-stimulus - the Great Depression - was a 25% reduction in GDP.

The 30's were nothing but 'stimulus' starting with Hoover (playing George
W. Bush to Obama's FDR). That created the Great Depression from what should
have been a transient panic. Rent-seeking, Smoot-Hawley, and chiefly,
unstable lawless government & federal deficits, terrorizing production
and borrowing from future prosperity. Same same.

That is your "flat earth" take on the situation. Hoover's stimulus wasn't substantial enough to do anything useful.

Industrial production didn't get back to the 1929 level until 1937, then took another hit when James Arthur think-alikes prematurely cut back the stimulus, after which it fell and didn't recover until 1939.

Actually that's another myth. Stimulus, being artificial, never lit the fire
it was supposed to light.

As you keep on telling us. It's just a coincidence that Hoover presided over decline, and Roosevelt presided over recovery.

As soon as the money stops, instant withdrawal
and retraction, as you've just acknowledged. (If it had worked, it wouldn't
have needed until 1937 to ignite a self-sustaining recovery.) We just had
the same experience with Obama's wasteulous, and Japan's been mired in it
since the late 1980's.

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

You're barking mad. Businesses would be hiring in three months. By five years
they'd be in their nth wave of new hiring, with wages percolating throughout
the economy and stimulating your precious demand to whatever maximal extent it
ever would. Five years is far more than enough to ignite a fire if your
theory were correct, but, it didn't. It never happened. It doesn't work.

It creates artificial activity that stops the instant the artificial input
disappears--you just cited the proof! No lasting 'recovery' is launched.

Japan's been doing it nearly three decades and it still hasn't worked.

That's because IT DOESN'T WORK. Stealing from one's future to party in the
present is a significantly under-unity proposition. Q.E.D.

Cheers,
James Arthur

Some businesses explode/implode in a year or two, and some grow or
fade away over generations.

To grow, a business has to evolve products, grow a customer base,
develop a talented staff and management, and learn how to design,
manufacture, and sell. I'd estimate that the average business has a
stimulus-response time constant in the range of 10 to 20 years. A
small change in gain (and 35% corporate taxation is not small) can
have a huge effect on that tau.

Sloman advocates government stimulus because he doesn't have a
business and hasn't worked in decades. He's a natural socialist.

The problem with government stimulus is that the money has to come
from somewhere. Another problem is the the recipients of stimulus are
selected politically, so usually squander the resources. The "money
multiplier" of stimulus gets praised, but not many people want to talk
about the much bigger de-multiplier that pays for stimulus. The Broken
Window theory is still popular among the non-working class.



--

John Larkin Highland Technology, Inc
lunatic fringe electronics

jlarkin att highlandtechnology dott com
http://www.highlandtechnology.com

 

Life doesn't come with any guarantees. I would say there was just a blip in history where 90% of the population could have a good job, enough to buy a house, a car and raise a family on. A medium skills person these days can't get a job as a precision lathe operator or anything like that. They have to go into the service sector and flip burgers or do retail sales or whatever. That is only going to get worse with the commoditisation of industrial robotics (eg. rethink robotics) reducing the cost of industrial automation (IA). At the moment a basic IA robot is $25,000. You can expect that to decrease to say $10,000 with much greater flexibility of use over the next few years.
http://www.rethinkrobotics.com/

 

[John Larkin]

On Mon, 31 Aug 2015 09:03:01 -0500, amdx <nojunk@knology.net> wrote:

On 8/30/2015 11:51 PM, rickman wrote:
On 8/30/2015 12:52 PM, amdx wrote:
On 8/30/2015 9:37 AM, rickman wrote:
On 8/25/2015 8:57 PM, amdx wrote:

My house dropped in value by 1/2,

Is that including the absurd doubling in value (or more) in the few
years immediately before the bubble burst?


I paid $83K in 1994, during the 2006 boom, homes in my neighborhood
were going $250 to $270K. Now, If I got $140K I'd be very lucky, if, I
was selling, I'm not.
Ok, I exaggerated the 1/2, a little.

The real point to take away from this is understanding why you bought
real estate at a time when nearly every property in the country had
doubled in value in some 5 to 7 years.

The same illogical reasoning was applied by governments when their real
estate tax base dropped in value by 1/2 just after it doubled. Net
effect was nearly zero but they all screamed they had to raise taxes
because of the loss of the windfall.

Please reread what I wrote.

But reading what you wrote would waste an opportunity to be nasty.

 

[rickman]

On 8/31/2015 10:03 AM, amdx wrote:

On 8/30/2015 11:51 PM, rickman wrote:
On 8/30/2015 12:52 PM, amdx wrote:
On 8/30/2015 9:37 AM, rickman wrote:
On 8/25/2015 8:57 PM, amdx wrote:

My house dropped in value by 1/2,

Is that including the absurd doubling in value (or more) in the few
years immediately before the bubble burst?


I paid $83K in 1994, during the 2006 boom, homes in my neighborhood
were going $250 to $270K. Now, If I got $140K I'd be very lucky, if, I
was selling, I'm not.
Ok, I exaggerated the 1/2, a little.

The real point to take away from this is understanding why you bought
real estate at a time when nearly every property in the country had
doubled in value in some 5 to 7 years.

The same illogical reasoning was applied by governments when their real
estate tax base dropped in value by 1/2 just after it doubled. Net
effect was nearly zero but they all screamed they had to raise taxes
because of the loss of the windfall.

Please reread what I wrote.

Sorry, I read that as 2004. You bought at a good time when prices were
in moderate decline from a moderate bubble in the late 80's.

No, I better write it another way.
In 1994 I bought and paid $83K for my house, today is now worth close to
$140K. See the time frame there?

So why are you griping about loosing half your value? Oh, you are
looking for drama?

During the intervening years the value boomed to $250k to $270K, then
dropped with the real estate bust.

Should'a sold and rented for three or four years then rebought. So
should I.

In the years since I've had a home, garden and workshop.
I didn't buy my home as an investment, and haven't counted it as a
financial asset for years.

Then why did you start this?

That said, I'm not going to be hard on the millions that did get get
stuck upside down on there mortgages, I just don't want to pay for it.

Then don't, move to another country. Vietnam is inexpensive.

I do understand how mortgage renegotiation helped support real estate
prices. I don't know if this a was paid for by tax payers or banks or both.

What difference does it make? Either way you bear the brunt of the cost
since you aren't reaping any rewards.

--

Rick

 

[Bill Sloman]

On Monday, 31 August 2015 23:50:29 UTC+10, dca...@krl.org wrote:

On Sunday, August 30, 2015 at 11:17:46 PM UTC-4, Bill Sloman wrote:

My attention span is plenty long. But I doubt if I will ever read that
book.It sounds like a boring book about something I am not very interested in and about something that I could not change. If I had the book memorized I doubt if it would improve my life in any way. Other than being able to discuss the book with you , why do you think I should read the book?

It explains one aspect of American exceptionalism - why the US is rich, but way down on lots of public health issues. The authors nail down the point that rich is good only up to the point where everybody has more or less enough to eat, after which a reasonably egalitarian wealth distribution becomes more important.

If you understood it, you'd probably realise that the US does need to change in this respect, and you'd have some idea of how it ought to change. The authors don't say a thing about the mechanism - pointing out that Japan gets much the same advantages from a relatively egalitarian wealth distribution as does Scandinavia, while getting there by completely different mechanisms.

But my understanding would still have no effect. I am not a member of Congress.

Members of Congress are responsive to the views of their constituents. The kind of change required is going to need grass-roots support.

This is one area where grass-roots campaigningis going to be particularly important, since it's not an area where the Koch brothers (and their ilk) are likely to want a variation from the status quo.

> So would have spent time reading a book about something I am not interested in, and the result of reading it would be the same as if I had not read it.

You don't know enough about the contents of the book to be all that confident that you wouldn't find it interesting. It certainly surprised me from time to time.

As for not changing things - you may be as torpid as I am, but some people have been inspired to political activism

https://www.equalitytrust.org.uk/

It seems to be a strictly UK only web-site, but in the US "Occupy Now" and similar groups have much the same point of view.

https://en.wikipedia.org/wiki/Joseph_Stiglitz

is an economist, rather than an epidemiologist, and I got put onto to "The Spirit Level" by citing his 2012 book "The Price of Inequality" and being told that "The Spirit Level" tells the same story rather better (which is certainly true).

Stoiglitz's latest book "The Great Divide: Unequal Societies and What We Can Do About Them " may provide the sort of prescription for the US situation that you seem to want.

--
Bill Sloman, Sydney

 

On Monday, August 31, 2015 at 7:39:39 PM UTC-4, Les Cargill wrote:

John Larkin wrote:
On Mon, 31 Aug 2015 07:40:23 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 11:43:17 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 7:23:24 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 04:54:39 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

snip

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to come
due eventually. We spent about 5 years printing 6% of GDP in phony
prosperity, borrowed from our future. The only question is whether we'll
make monthly installments (reductions in future growth), or have the bill
come due all at once.

The bill for the 1930's non-stimulus - the Great Depression - was a 25% reduction in GDP.

The 30's were nothing but 'stimulus' starting with Hoover (playing George
W. Bush to Obama's FDR). That created the Great Depression from what should
have been a transient panic. Rent-seeking, Smoot-Hawley, and chiefly,
unstable lawless government & federal deficits, terrorizing production
and borrowing from future prosperity. Same same.

That is your "flat earth" take on the situation. Hoover's stimulus wasn't substantial enough to do anything useful.

Industrial production didn't get back to the 1929 level until 1937, then took another hit when James Arthur think-alikes prematurely cut back the stimulus, after which it fell and didn't recover until 1939.

Actually that's another myth. Stimulus, being artificial, never lit the fire
it was supposed to light.

As you keep on telling us. It's just a coincidence that Hoover presided over decline, and Roosevelt presided over recovery.

As soon as the money stops, instant withdrawal
and retraction, as you've just acknowledged. (If it had worked, it wouldn't
have needed until 1937 to ignite a self-sustaining recovery.) We just had
the same experience with Obama's wasteulous, and Japan's been mired in it
since the late 1980's.

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

You're barking mad. Businesses would be hiring in three months. By five years
they'd be in their nth wave of new hiring, with wages percolating throughout
the economy and stimulating your precious demand to whatever maximal extent it
ever would. Five years is far more than enough to ignite a fire if your
theory were correct, but, it didn't. It never happened. It doesn't work.

It creates artificial activity that stops the instant the artificial input
disappears--you just cited the proof! No lasting 'recovery' is launched.

Japan's been doing it nearly three decades and it still hasn't worked.

That's because IT DOESN'T WORK. Stealing from one's future to party in the
present is a significantly under-unity proposition. Q.E.D.

Cheers,
James Arthur

Some businesses explode/implode in a year or two, and some grow or
fade away over generations.

To grow, a business has to evolve products, grow a customer base,
develop a talented staff and management, and learn how to design,
manufacture, and sell. I'd estimate that the average business has a
stimulus-response time constant in the range of 10 to 20 years. A
small change in gain (and 35% corporate taxation is not small) can
have a huge effect on that tau.

Sloman advocates government stimulus because he doesn't have a
business and hasn't worked in decades. He's a natural socialist.

The problem with government stimulus is that the money has to come
from somewhere.

It has to come from some*when*. @ 2% GDP growth, a fifty-year
period erodes $100 to 37.5 cents on the dollar. At 4% growth,
it's $0.17 per dollar.

We don't run the government like a pawn shop.

This money can come from the Fed, which can make it out of thin air.

The signal you've gone too far is the spread on bond yields - which
has been effectively zero or negative for some time.

ISTM you're getting lost in the abstractions. They can't print *valuable
stuff*, so in printing more coupons for "valuable stuff," they dilute the
value of the existing coupons.

Another problem is the the recipients of stimulus are
selected politically, so usually squander the resources.

Much larger problem, although the resources are seldom squandered outright.

The "money
multiplier" of stimulus gets praised,

And it should...

but not many people want to talk
about the much bigger de-multiplier that pays for stimulus. The Broken
Window theory is still popular among the non-working class.


If you can get money in the hands of people who are pretty poor,
chances are real good it'll increase the overall movement
of money.

But that's a big "if". We suck out loud at redistribution.

No, it's still crap. Giving thirty million people a dollar each--perfectly
redistributed--doesn't build a factory. It sprouts a few more McDonald's
franchises, which dry up once the money's gone.

Cheers,
James Arthur

 

[Bill Sloman]

On Tuesday, 1 September 2015 00:40:33 UTC+10, dagmarg...@yahoo.com wrote:

On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 11:43:17 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 7:23:24 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 04:54:39 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

snip

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to
come due eventually. We spent about 5 years printing 6% of GDP in
phony prosperity, borrowed from our future. The only question is
whether we'll make monthly installments (reductions in future
growth), or have the bill come due all at once.

The bill for the 1930's non-stimulus - the Great Depression - was a 25% reduction in GDP.

The 30's were nothing but 'stimulus' starting with Hoover (playing George
W. Bush to Obama's FDR). That created the Great Depression from what
should have been a transient panic. Rent-seeking, Smoot-Hawley, and
chiefly, unstable lawless government & federal deficits, terrorizing
production and borrowing from future prosperity. Same same.

That is your "flat earth" take on the situation. Hoover's stimulus wasn't substantial enough to do anything useful.

Industrial production didn't get back to the 1929 level until 1937, then took another hit when James Arthur think-alikes prematurely cut back the stimulus, after which it fell and didn't recover until 1939.

Actually that's another myth. Stimulus, being artificial, never lit the
fire it was supposed to light.

As you keep on telling us. It's just a coincidence that Hoover presided over decline, and Roosevelt presided over recovery.

As soon as the money stops, instant withdrawal
and retraction, as you've just acknowledged. (If it had worked, it
wouldn't have needed until 1937 to ignite a self-sustaining recovery.)
We just had the same experience with Obama's wasteulous, and Japan's been
mired in it since the late 1980's.

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

It clearly wasn't long enough to persuade businesses that they were out of recession. They reacted to the cutting back of the stimulus by going into a self-protective mode, minimising investment in all but the most certainly profitable prospects.

You've spent so much time reading economics written by economists who wanted tractable economic models that you've lost sight of the fact (as they did) that the market consists of real - complicated - human beings who act in conformance with their (often irrational) expectations. Op amps can give you a consistent loop gain greater than one. People running businesses look further afield - further back in time (while op amps don't have memory) and ahead towards an ineptly predicted future.

You're barking mad. Businesses would be hiring in three months. By five years
they'd be in their nth wave of new hiring, with wages percolating throughout
the economy and stimulating your precious demand to whatever maximal extent it
ever would. Five years is far more than enough to ignite a fire if your
theory were correct, but, it didn't. It never happened. It doesn't work.

You've just laid out your theoretical expectation. It doesn't describe what happened in 1937 so your theory is busted. It didn't predict what happened then - didn't work - and has no more hope of working now.

It creates artificial activity that stops the instant the artificial input
disappears--you just cited the proof! No lasting 'recovery' is launched.

The activity created wasn't artificial, and it didn't disappear. The US GDP had got back up to roughly its 1929 level by 1937, and stopped rising when the stimulus was removed, and in fact started declining again at roughly the same rate as it had declined in 1929. You are confusing "economic activity" with "growth of economic activity". Nobody much stopped what they were doing, but everybody started making cautious choices, based on the fact that the market was no longer being encouraged to expand.

https://en.wikipedia.org/wiki/Great_Depression#/media/File:GDP_depression.svg

> Japan's been doing it nearly three decades and it still hasn't worked.

The Japanese are still unwilling to admit that real estate in Tokyo is ridiculously over-valued.

Back in 2000, when Ben Bernanke was a professor of economics at Princeton, he published a paper that made it clear that he thought that the Bank of Japan hadn't done enough (any more than Hoover had) to tackle the 1990 Japanese depression. Paul Krugman thinks that he made much the same mistake when he was controlling the Fed,basically paying too much attention to the opinions of ignorant ideologues like you.

That's because IT DOESN'T WORK. Stealing from one's future to party in the
present is a significantly under-unity proposition. Q.E.D.

God only knows what you think you have proved - that you have allowed your ingrained ideology to trump your logical faculties? Roosevelt's New Deal did work, and what he borrowed from the future got paid back with interest - that's how government bonds work.

Hoover stole from the future by allowing 25% of the US manufacturing capacity to be taken out of service and effectively destroyed. That was permanently lost, both to the present and the future. Incompetence is wasteful.

Roosevelt invested in getting it back into action. Roosevelt is revered by everybody except the far-right-minded. Hoover is execrated by all sides.

--
Bill Sloman, Sydney

 

On Monday, August 31, 2015 at 7:48:21 PM UTC-4, Les Cargill wrote:

dagmargoodboat@yahoo.com wrote:
On Monday, August 31, 2015 at 11:56:58 AM UTC-4, John Larkin wrote:
On Mon, 31 Aug 2015 07:40:23 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:

[stimulus]

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

You're barking mad. Businesses would be hiring in three months. By five years
they'd be in their nth wave of new hiring, with wages percolating throughout
the economy and stimulating your precious demand to whatever maximal extent it
ever would. Five years is far more than enough to ignite a fire if your
theory were correct, but, it didn't. It never happened. It doesn't work.

It creates artificial activity that stops the instant the artificial input
disappears--you just cited the proof! No lasting 'recovery' is launched.

Japan's been doing it nearly three decades and it still hasn't worked.

That's because IT DOESN'T WORK. Stealing from one's future to party in the
present is a significantly under-unity proposition. Q.E.D.


Some businesses explode/implode in a year or two, and some grow or
fade away over generations.

To grow, a business has to evolve products, grow a customer base,
develop a talented staff and management, and learn how to design,
manufacture, and sell. I'd estimate that the average business has a
stimulus-response time constant in the range of 10 to 20 years.

Granted. The wasteulus theory was about getting existing businesses rolling
and up to speed again though, shovel-ready etc. All the infrastructure
should already be in place, idled, ready to roll. That should respond quickly.

And of course, it didn't, because the whole notion's a fairy-tale that's utterly
ignorant of human nature--bogus social-engineering. You grow a bunch of weeds,
and they die the day you run out of water to flood them.


But in this case, they never even really acted on the "stimulus". It
literally never went to anybody outside of the odd Soylyndra or such.

Subsidies don't work for a variety of reasons, except when they do.


A small change in gain (and 35% corporate taxation is not small) can
have a huge effect on that tau.

Sloman advocates government stimulus because he doesn't have a
business and hasn't worked in decades. He's a natural socialist.

The problem with government stimulus is that the money has to come
from somewhere.

Right. They suck it out of the economy, then splash what's left after spillage
onto crops in the desert. Kudzu--hey, that's nice and green!


but they don't put the money in piles and burn it - it cycles
through the rest of the economy. It's just not nearly enough to
make a dent.

Plenty of federal spending cycled through the economy, it simply doesn't work.
Sorry, it's a bankrupt theory, a sub-zero sum technique.

Do you have any examples of deficit-funded stimulus ever actually working,
i.e., igniting a long-term, self-sustaining recovery?

They try to hide that reality by borrowing (instead of immediate taxation),

... and they should...

I don't believe a government of the People should be diligently engaged in
deceiving the People. I just have a basic philosophical problem with it.

They're also stupid and slow, so besides having no right to make such decisions,
they're in no position to either.

but fool no one. (Even Keynes said his gimmick was only good for a few months
until everyone got wise to the new flows being bogus, temporary, and debts to be
paid back later.)


But permanent programs like Food Stamps *do* work pretty well for that.
And they're cheap. But food production is pretty efficient, so a small
degree of inefficiency gets lost in the noise.

They're great for depressing wages and creating poverty traps. I'd challenge
you to think past this and ask, since we agree that food is cheap, why would
we assume able-bodied people wouldn't be able to afford it, and why would we
create a system that enforces that vision?

Another problem is the the recipients of stimulus are
selected politically, so usually squander the resources.

Right. If the stimulated thing were good it wouldn't need public dole.
It's the loser projects that need propping, and they fold when the props
fail.


The paperwork overhead doesn't help...

True. As dumb as it is, it sucks the life out of someone who's working full-
speed to get something to market.

The 'winner' outfits have to pay for it all, which, in a time of stress,
kills some of them off. Net loss.


Not ... likely. I mean a good healthy firm won't get killed
off by that sort of thing.

The people laid off in 2009 will be glad to hear that.

The "money
multiplier" of stimulus gets praised, but not many people want to talk
about the much bigger de-multiplier that pays for stimulus.

Greenspan did a study, calculated the Keynesian Multiplier of Barack's stimulus
as negative. Su-prise, su-prise, su-prise.

Might have been; nobody's really done the math. But most of the Obama
stimulus was a nonstarter - it never really happened at all.

Agreed, which is why it was a waste. They did a lot of shoveling, but they
were shoveling something other than jobs.

Cheers,
James Arthur

 

[Les Cargill]

John Larkin wrote:

On Mon, 31 Aug 2015 07:40:23 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 11:43:17 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 7:23:24 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 04:54:39 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

snip

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to come
due eventually. We spent about 5 years printing 6% of GDP in phony
prosperity, borrowed from our future. The only question is whether we'll
make monthly installments (reductions in future growth), or have the bill
come due all at once.

The bill for the 1930's non-stimulus - the Great Depression - was a 25% reduction in GDP.

The 30's were nothing but 'stimulus' starting with Hoover (playing George
W. Bush to Obama's FDR). That created the Great Depression from what should
have been a transient panic. Rent-seeking, Smoot-Hawley, and chiefly,
unstable lawless government & federal deficits, terrorizing production
and borrowing from future prosperity. Same same.

That is your "flat earth" take on the situation. Hoover's stimulus wasn't substantial enough to do anything useful.

Industrial production didn't get back to the 1929 level until 1937, then took another hit when James Arthur think-alikes prematurely cut back the stimulus, after which it fell and didn't recover until 1939.

Actually that's another myth. Stimulus, being artificial, never lit the fire
it was supposed to light.

As you keep on telling us. It's just a coincidence that Hoover presided over decline, and Roosevelt presided over recovery.

As soon as the money stops, instant withdrawal
and retraction, as you've just acknowledged. (If it had worked, it wouldn't
have needed until 1937 to ignite a self-sustaining recovery.) We just had
the same experience with Obama's wasteulous, and Japan's been mired in it
since the late 1980's.

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

You're barking mad. Businesses would be hiring in three months. By five years
they'd be in their nth wave of new hiring, with wages percolating throughout
the economy and stimulating your precious demand to whatever maximal extent it
ever would. Five years is far more than enough to ignite a fire if your
theory were correct, but, it didn't. It never happened. It doesn't work.

It creates artificial activity that stops the instant the artificial input
disappears--you just cited the proof! No lasting 'recovery' is launched.

Japan's been doing it nearly three decades and it still hasn't worked.

That's because IT DOESN'T WORK. Stealing from one's future to party in the
present is a significantly under-unity proposition. Q.E.D.

Cheers,
James Arthur

Some businesses explode/implode in a year or two, and some grow or
fade away over generations.

To grow, a business has to evolve products, grow a customer base,
develop a talented staff and management, and learn how to design,
manufacture, and sell. I'd estimate that the average business has a
stimulus-response time constant in the range of 10 to 20 years. A
small change in gain (and 35% corporate taxation is not small) can
have a huge effect on that tau.

Sloman advocates government stimulus because he doesn't have a
business and hasn't worked in decades. He's a natural socialist.

The problem with government stimulus is that the money has to come
from somewhere.

It has to come from some*when*. @ 2% GDP growth, a fifty-year
period erodes $100 to 37.5 cents on the dollar. At 4% growth,
it's $0.17 per dollar.

We don't run the government like a pawn shop.

This money can come from the Fed, which can make it out of thin air.

The signal you've gone too far is the spread on bond yields - which
has been effectively zero or negative for some time.

Another problem is the the recipients of stimulus are
selected politically, so usually squander the resources.

Much larger problem, although the resources are seldom squandered outright.

The "money
multiplier" of stimulus gets praised,

And it should...

but not many people want to talk
about the much bigger de-multiplier that pays for stimulus. The Broken
Window theory is still popular among the non-working class.

If you can get money in the hands of people who are pretty poor,
chances are real good it'll increase the overall movement
of money.

But that's a big "if". We suck out loud at redistribution.

<snip>

--
Les Cargill

 

On Monday, August 31, 2015 at 7:56:30 PM UTC-4, Les Cargill wrote:

dagmargoodboat@yahoo.com wrote:
snip

Barack Obama means 'by force.' Charity is never forced.


That's disingenuous. Pay them taxes; it's worth it.

That's incredibly arrogant, and incorrect. It's not in my interest to fund
the demise of my own country. I'm morally opposed. It's not in my interest
to pay large amounts to create poverty and permanent non-productive
rent-seekers. If Barack wants something built, let him build it, himself.

So, I'll continue holding my tax liability to nothingness, and you can pay
69 cents on the dollar to promote and encourage poverty. Deal?


Cheers,
James Arthur

 

[Les Cargill]

dagmargoodboat@yahoo.com wrote:

On Monday, August 31, 2015 at 11:56:58 AM UTC-4, John Larkin wrote:
On Mon, 31 Aug 2015 07:40:23 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:

[stimulus]

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

You're barking mad. Businesses would be hiring in three months. By five years
they'd be in their nth wave of new hiring, with wages percolating throughout
the economy and stimulating your precious demand to whatever maximal extent it
ever would. Five years is far more than enough to ignite a fire if your
theory were correct, but, it didn't. It never happened. It doesn't work.

It creates artificial activity that stops the instant the artificial input
disappears--you just cited the proof! No lasting 'recovery' is launched.

Japan's been doing it nearly three decades and it still hasn't worked.

That's because IT DOESN'T WORK. Stealing from one's future to party in the
present is a significantly under-unity proposition. Q.E.D.


Some businesses explode/implode in a year or two, and some grow or
fade away over generations.

To grow, a business has to evolve products, grow a customer base,
develop a talented staff and management, and learn how to design,
manufacture, and sell. I'd estimate that the average business has a
stimulus-response time constant in the range of 10 to 20 years.

Granted. The wasteulus theory was about getting existing businesses rolling
and up to speed again though, shovel-ready etc. All the infrastructure
should already be in place, idled, ready to roll. That should respond quickly.

And of course, it didn't, because the whole notion's a fairy-tale that's utterly
ignorant of human nature--bogus social-engineering. You grow a bunch of weeds,
and they die the day you run out of water to flood them.

But in this case, they never even really acted on the "stimulus". It
literally never went to anybody outside of the odd Soylyndra or such.

Subsidies don't work for a variety of reasons, except when they do.

A small change in gain (and 35% corporate taxation is not small) can
have a huge effect on that tau.

Sloman advocates government stimulus because he doesn't have a
business and hasn't worked in decades. He's a natural socialist.

The problem with government stimulus is that the money has to come
from somewhere.

Right. They suck it out of the economy, then splash what's left after spillage
onto crops in the desert. Kudzu--hey, that's nice and green!

but they don't put the money in piles and burn it - it cycles
through the rest of the economy. It's just not nearly enough to
make a dent.

> They try to hide that reality by borrowing (instead of immediate taxation),

.... and they should...

but fool no one. (Even Keynes said his gimmick was only good for a few months
until everyone got wise to the new flows being bogus, temporary, and debts to be
paid back later.)

But permanent programs like Food Stamps *do* work pretty well for that.
And they're cheap. But food production is pretty efficient, so a small
degree of inefficiency gets lost in the noise.

Another problem is the the recipients of stimulus are
selected politically, so usually squander the resources.

Right. If the stimulated thing were good it wouldn't need public dole.
It's the loser projects that need propping, and they fold when the props
fail.

The paperwork overhead doesn't help...

The 'winner' outfits have to pay for it all, which, in a time of stress,
kills some of them off. Net loss.

Not ... likely. I mean a good healthy firm won't get killed
off by that sort of thing.

The "money
multiplier" of stimulus gets praised, but not many people want to talk
about the much bigger de-multiplier that pays for stimulus.

Greenspan did a study, calculated the Keynesian Multiplier of Barack's stimulus
as negative. Su-prise, su-prise, su-prise.

Might have been; nobody's really done the math. But most of the Obama
stimulus was a nonstarter - it never really happened at all.

The Broken
Window theory is still popular among the non-working class.

And the fo'telligensia.

Cheers,
James Arthur

--
Les Cargill

 

[Les Cargill]

dagmargoodboat@yahoo.com wrote:

On Sunday, August 30, 2015 at 9:31:33 PM UTC-4, amdx wrote:
On 8/30/2015 6:04 PM, rickman wrote:
On 8/30/2015 4:17 PM, amdx wrote:
On 8/30/2015 1:20 PM, John Larkin wrote:

I don't think that buying established stocks, getting rich that way,
does society much good.

Unless you want to count the millions of people that have retirement
funds because they have a 401k, IRA or pension that was invested in the
stock market. I think that does society much good.

So you are a proponent of wealth redistribution?


Ya, especially if it's because millions buy a product with their money,
the company does well financially and I get money because I own a part
of that company. That's good wealth redistribution!

I think it's good for society when families can save and invest their
money to make more money, so in retirement they can support themselves.

Your comment went over my head, so please explain how you pulled wealth
redistribution from personal saving and investing.

It's actually not wealth distribution. Rick's confused wealth creation with
redistribution.

If you have a pile of axe-handles and I have a pile of axe-heads, just about
anything that acts to combine or facilitate combining those *creates* something
new, additional, and valuable--axes. Wealth.

If I paid you for some axe handles, we're both better off. Wealth has been
*created*, and the benefits of the increase split between the parties
according to their mutual agreements.

If you or I started a company dedicated to that--assembling, combining, or
producing axes--and people wanted to invest in owning part of our ventures,
we all benefit if our venture succeeds.

Wealth redistribution is when a strongman of one sort or another empties
your wallet and spreads it amongst his friends. That's zero-sum.

But it's not - *ideally*. If we could do it actually, you could
probably measure the effect and it would be positive. The
marginal value of money is very real.

But we are *terrible* at it for a long time. Programs
that do this sort of thing take decades to debug.

Less
than zero-sum, actually, as the second-order effects terrorize and
discourage wealth producers from producing.

I seem to run into a lot who get over it...

Cheers,
James

--
Les Cargill

 

[John Larkin]

On Mon, 31 Aug 2015 18:41:22 -0500, Les Cargill
<lcargill99@comcast.com> wrote:

John Larkin wrote:
On Mon, 31 Aug 2015 07:40:23 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 11:43:17 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 7:23:24 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 04:54:39 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

snip

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to come
due eventually. We spent about 5 years printing 6% of GDP in phony
prosperity, borrowed from our future. The only question is whether we'll
make monthly installments (reductions in future growth), or have the bill
come due all at once.

The bill for the 1930's non-stimulus - the Great Depression - was a 25% reduction in GDP.

The 30's were nothing but 'stimulus' starting with Hoover (playing George
W. Bush to Obama's FDR). That created the Great Depression from what should
have been a transient panic. Rent-seeking, Smoot-Hawley, and chiefly,
unstable lawless government & federal deficits, terrorizing production
and borrowing from future prosperity. Same same.

That is your "flat earth" take on the situation. Hoover's stimulus wasn't substantial enough to do anything useful.

Industrial production didn't get back to the 1929 level until 1937, then took another hit when James Arthur think-alikes prematurely cut back the stimulus, after which it fell and didn't recover until 1939.

Actually that's another myth. Stimulus, being artificial, never lit the fire
it was supposed to light.

As you keep on telling us. It's just a coincidence that Hoover presided over decline, and Roosevelt presided over recovery.

As soon as the money stops, instant withdrawal
and retraction, as you've just acknowledged. (If it had worked, it wouldn't
have needed until 1937 to ignite a self-sustaining recovery.) We just had
the same experience with Obama's wasteulous, and Japan's been mired in it
since the late 1980's.

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

You're barking mad. Businesses would be hiring in three months. By five years
they'd be in their nth wave of new hiring, with wages percolating throughout
the economy and stimulating your precious demand to whatever maximal extent it
ever would. Five years is far more than enough to ignite a fire if your
theory were correct, but, it didn't. It never happened. It doesn't work.

It creates artificial activity that stops the instant the artificial input
disappears--you just cited the proof! No lasting 'recovery' is launched.

Japan's been doing it nearly three decades and it still hasn't worked.

That's because IT DOESN'T WORK. Stealing from one's future to party in the
present is a significantly under-unity proposition. Q.E.D.

Cheers,
James Arthur

Some businesses explode/implode in a year or two, and some grow or
fade away over generations.

To grow, a business has to evolve products, grow a customer base,
develop a talented staff and management, and learn how to design,
manufacture, and sell. I'd estimate that the average business has a
stimulus-response time constant in the range of 10 to 20 years. A
small change in gain (and 35% corporate taxation is not small) can
have a huge effect on that tau.

Sloman advocates government stimulus because he doesn't have a
business and hasn't worked in decades. He's a natural socialist.

The problem with government stimulus is that the money has to come
from somewhere.

It has to come from some*when*. @ 2% GDP growth, a fifty-year
period erodes $100 to 37.5 cents on the dollar. At 4% growth,
it's $0.17 per dollar.

An ever-increasing public debt as a fraction of GDP eventually hits
the wall. Only enforced zero interest rates can delay the pain.

We don't run the government like a pawn shop.

This money can come from the Fed, which can make it out of thin air.

The signal you've gone too far is the spread on bond yields - which
has been effectively zero or negative for some time.

Another problem is the the recipients of stimulus are
selected politically, so usually squander the resources.

Much larger problem, although the resources are seldom squandered outright.

For nonstandard versions of "seldom."

If only squandering could be limited to 100% of the money spent!

The "money
multiplier" of stimulus gets praised,

And it should...

but not many people want to talk
about the much bigger de-multiplier that pays for stimulus. The Broken
Window theory is still popular among the non-working class.


If you can get money in the hands of people who are pretty poor,
chances are real good it'll increase the overall movement
of money.

Create lots of poor people first, then print some money to give them.
You'll see lots of movement.

But that's a big "if". We suck out loud at redistribution.

Job creation (REAL job creation) is the best form of redistribution,
because it creates wealth to redistribute.

 

[Les Cargill]

rickman wrote:
<snip>

What is not zero sum about the stock market?

Firms actually do grow.

The only aspect of it that
is not zero sum is that more and more money flows into it raising
prices.

No; stocks actually gain in value for real. Not all of 'em.

Likewise money can flow out crashing stock prices making the
investors slow to react into paupers.

Yep.

Didn't someone in Congress suggest that Social Security be replaced by
mandatory investments in the stock market?

It's been floated. It's a terrible idea. Price an annuity that replaces
SS and then decide.

--
Les Cargill

 

[Les Cargill]

dagmargoodboat@yahoo.com wrote:
<snip>

Barack Obama means 'by force.' Charity is never forced.

That's disingenuous. Pay them taxes; it's worth it.

<snip>

The transactions are only zero-sum if you ignore the future value, which
you just did.

Exactly.

Cheers,
James Arthur

--
Les Cargill

 

On Monday, August 31, 2015 at 10:36:50 PM UTC-4, Les Cargill wrote:

John Larkin wrote:
On Mon, 31 Aug 2015 18:41:22 -0500, Les Cargill wrote:

John Larkin wrote:

The problem with government stimulus is that the money has to come
from somewhere.

It has to come from some*when*. @ 2% GDP growth, a fifty-year
period erodes $100 to 37.5 cents on the dollar. At 4% growth,
it's $0.17 per dollar.

An ever-increasing public debt as a fraction of GDP eventually hits
the wall. Only enforced zero interest rates can delay the pain.


It depends on what you mean by "ever-increasing." And it depends
a lot.

I have little doubt but that America could right now shoulder much
more public debt if GDP growth was better.

But we seem individually quite disinterested in that.

Other than Obama, everyone's quite interested. But we're not going to have it.
Emulating European policies results in European growth rates.

Besides, haven't we all got some important new paperwork assignment from
our favorite Uncle, instead of <whatever>?

[..]

If you can get money in the hands of people who are pretty poor,
chances are real good it'll increase the overall movement
of money.

Create lots of poor people first, then print some money to give them.
You'll see lots of movement.


But you don't create poor people. They occur naturally. Poverty is the
default state of Man.

It's the default state, but only inevitable in countries whose governments
produce it. IME.

But that's a big "if". We suck out loud at redistribution.

Job creation (REAL job creation) is the best form of redistribution,

Without doubt.

because it creates wealth to redistribute.


Sometimes. But this has been extremely slow since 2008 ( and even
before ) and you can't attribute it to the guy in the oval office,
tax policy or much else, really.

You most certainly can attribute it to Obama--from coal, to Keystone, to
"you didn't build that," to the EPA, Obamacare, and on, and on, and on.

Those things matter.

As does his debt. I know you don't think so, I know you think of money as a
fiction and an abstraction with a merely theoretical and mercurial value,
but most people don't.

Cheers,
James Arthur

 

On Monday, August 31, 2015 at 11:34:09 PM UTC-4, Bill Sloman wrote:

On Tuesday, 1 September 2015 00:40:33 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 11:43:17 UTC+10, dagmarg...@yahoo.com wrote:

As soon as the money stops, instant withdrawal
and retraction, as you've just acknowledged. (If it had worked, it
wouldn't have needed until 1937 to ignite a self-sustaining recovery.)
We just had the same experience with Obama's wasteulous, and Japan's been
mired in it since the late 1980's.

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

It clearly wasn't long enough to persuade businesses that they were out of recession.

That's idiotic, and avoids the question. But since the stimulus actually
started circa 1929, I mis-phrased it: Do you really insist that EIGHT years
of stimulus isn't enough to initiate a self-sustaining recovery?


> They reacted to the cutting back of the stimulus by going into a self-protective mode, minimising investment in all but the most certainly profitable prospects.

Of course, that's what rational people do. Stimulus today = tax tomorrow,
so people stash the stimulus and brace for the taxes. The project was
doomed from the start.

Even Keynes said the stimulus has to happen before businessmen and consumers
realized the funds were borrowed, & accruing a debt they'd pay later.

Except in this day and age of the internet, those arguments were made and
understood, published, and discussed *before* the stimulus even passed, so
Keynes' two-month-ish 'fooling the public' window was reduced to nada.

All these socialist fantasies assume people are stupid and will sit
passively by while they're fleeced. They aren't and don't.

Cheers,
James Arthur

 

[Les Cargill]

John Larkin wrote:

On Mon, 31 Aug 2015 18:41:22 -0500, Les Cargill
lcargill99@comcast.com> wrote:

John Larkin wrote:
On Mon, 31 Aug 2015 07:40:23 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 11:43:17 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 7:23:24 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 04:54:39 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

snip

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to come
due eventually. We spent about 5 years printing 6% of GDP in phony
prosperity, borrowed from our future. The only question is whether we'll
make monthly installments (reductions in future growth), or have the bill
come due all at once.

The bill for the 1930's non-stimulus - the Great Depression - was a 25% reduction in GDP.

The 30's were nothing but 'stimulus' starting with Hoover (playing George
W. Bush to Obama's FDR). That created the Great Depression from what should
have been a transient panic. Rent-seeking, Smoot-Hawley, and chiefly,
unstable lawless government & federal deficits, terrorizing production
and borrowing from future prosperity. Same same.

That is your "flat earth" take on the situation. Hoover's stimulus wasn't substantial enough to do anything useful.

Industrial production didn't get back to the 1929 level until 1937, then took another hit when James Arthur think-alikes prematurely cut back the stimulus, after which it fell and didn't recover until 1939.

Actually that's another myth. Stimulus, being artificial, never lit the fire
it was supposed to light.

As you keep on telling us. It's just a coincidence that Hoover presided over decline, and Roosevelt presided over recovery.

As soon as the money stops, instant withdrawal
and retraction, as you've just acknowledged. (If it had worked, it wouldn't
have needed until 1937 to ignite a self-sustaining recovery.) We just had
the same experience with Obama's wasteulous, and Japan's been mired in it
since the late 1980's.

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

You're barking mad. Businesses would be hiring in three months. By five years
they'd be in their nth wave of new hiring, with wages percolating throughout
the economy and stimulating your precious demand to whatever maximal extent it
ever would. Five years is far more than enough to ignite a fire if your
theory were correct, but, it didn't. It never happened. It doesn't work.

It creates artificial activity that stops the instant the artificial input
disappears--you just cited the proof! No lasting 'recovery' is launched.

Japan's been doing it nearly three decades and it still hasn't worked.

That's because IT DOESN'T WORK. Stealing from one's future to party in the
present is a significantly under-unity proposition. Q.E.D.

Cheers,
James Arthur

Some businesses explode/implode in a year or two, and some grow or
fade away over generations.

To grow, a business has to evolve products, grow a customer base,
develop a talented staff and management, and learn how to design,
manufacture, and sell. I'd estimate that the average business has a
stimulus-response time constant in the range of 10 to 20 years. A
small change in gain (and 35% corporate taxation is not small) can
have a huge effect on that tau.

Sloman advocates government stimulus because he doesn't have a
business and hasn't worked in decades. He's a natural socialist.

The problem with government stimulus is that the money has to come
from somewhere.

It has to come from some*when*. @ 2% GDP growth, a fifty-year
period erodes $100 to 37.5 cents on the dollar. At 4% growth,
it's $0.17 per dollar.

An ever-increasing public debt as a fraction of GDP eventually hits
the wall. Only enforced zero interest rates can delay the pain.

It depends on what you mean by "ever-increasing." And it depends
a lot.

I have little doubt but that America could right now shoulder much
more public debt if GDP growth was better.

But we seem individually quite disinterested in that.

We don't run the government like a pawn shop.

This money can come from the Fed, which can make it out of thin air.

The signal you've gone too far is the spread on bond yields - which
has been effectively zero or negative for some time.

Another problem is the the recipients of stimulus are
selected politically, so usually squander the resources.

Much larger problem, although the resources are seldom squandered outright.

For nonstandard versions of "seldom."

Sorta. A mirror-image is something like Iridium, which has remained
valuable besides the dismal start it had.

If only squandering could be limited to 100% of the money spent!



The "money
multiplier" of stimulus gets praised,

And it should...

but not many people want to talk
about the much bigger de-multiplier that pays for stimulus. The Broken
Window theory is still popular among the non-working class.


If you can get money in the hands of people who are pretty poor,
chances are real good it'll increase the overall movement
of money.

Create lots of poor people first, then print some money to give them.
You'll see lots of movement.

But you don't create poor people. They occur naturally. Poverty is the
default state of Man.

But that's a big "if". We suck out loud at redistribution.

Job creation (REAL job creation) is the best form of redistribution,

Without doubt.

because it creates wealth to redistribute.

Sometimes. But this has been extremely slow since 2008 ( and even
before ) and you can't attribute it to the guy in the oval office,
tax policy or much else, really.

--
Les Cargill

 

[John Larkin]

On Mon, 31 Aug 2015 21:38:35 -0500, Les Cargill
<lcargill99@comcast.com> wrote:

John Larkin wrote:
On Mon, 31 Aug 2015 18:41:22 -0500, Les Cargill
lcargill99@comcast.com> wrote:

John Larkin wrote:
On Mon, 31 Aug 2015 07:40:23 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 11:43:17 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 7:23:24 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 04:54:39 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:

snip

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to come
due eventually. We spent about 5 years printing 6% of GDP in phony
prosperity, borrowed from our future. The only question is whether we'll
make monthly installments (reductions in future growth), or have the bill
come due all at once.

The bill for the 1930's non-stimulus - the Great Depression - was a 25% reduction in GDP.

The 30's were nothing but 'stimulus' starting with Hoover (playing George
W. Bush to Obama's FDR). That created the Great Depression from what should
have been a transient panic. Rent-seeking, Smoot-Hawley, and chiefly,
unstable lawless government & federal deficits, terrorizing production
and borrowing from future prosperity. Same same.

That is your "flat earth" take on the situation. Hoover's stimulus wasn't substantial enough to do anything useful.

Industrial production didn't get back to the 1929 level until 1937, then took another hit when James Arthur think-alikes prematurely cut back the stimulus, after which it fell and didn't recover until 1939.

Actually that's another myth. Stimulus, being artificial, never lit the fire
it was supposed to light.

As you keep on telling us. It's just a coincidence that Hoover presided over decline, and Roosevelt presided over recovery.

As soon as the money stops, instant withdrawal
and retraction, as you've just acknowledged. (If it had worked, it wouldn't
have needed until 1937 to ignite a self-sustaining recovery.) We just had
the same experience with Obama's wasteulous, and Japan's been mired in it
since the late 1980's.

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to 'stimulate' the
economy for five years (per your theory), you're saying that's not long enough
for desperate businesses to rehire, consumption to rise, and create a
self-sustaining recovery if, as you assume, the loop gain is >1 ?

You're barking mad. Businesses would be hiring in three months. By five years
they'd be in their nth wave of new hiring, with wages percolating throughout
the economy and stimulating your precious demand to whatever maximal extent it
ever would. Five years is far more than enough to ignite a fire if your
theory were correct, but, it didn't. It never happened. It doesn't work.

It creates artificial activity that stops the instant the artificial input
disappears--you just cited the proof! No lasting 'recovery' is launched.

Japan's been doing it nearly three decades and it still hasn't worked.

That's because IT DOESN'T WORK. Stealing from one's future to party in the
present is a significantly under-unity proposition. Q.E.D.

Cheers,
James Arthur

Some businesses explode/implode in a year or two, and some grow or
fade away over generations.

To grow, a business has to evolve products, grow a customer base,
develop a talented staff and management, and learn how to design,
manufacture, and sell. I'd estimate that the average business has a
stimulus-response time constant in the range of 10 to 20 years. A
small change in gain (and 35% corporate taxation is not small) can
have a huge effect on that tau.

Sloman advocates government stimulus because he doesn't have a
business and hasn't worked in decades. He's a natural socialist.

The problem with government stimulus is that the money has to come
from somewhere.

It has to come from some*when*. @ 2% GDP growth, a fifty-year
period erodes $100 to 37.5 cents on the dollar. At 4% growth,
it's $0.17 per dollar.

An ever-increasing public debt as a fraction of GDP eventually hits
the wall. Only enforced zero interest rates can delay the pain.


It depends on what you mean by "ever-increasing." And it depends
a lot.

I have little doubt but that America could right now shoulder much
more public debt if GDP growth was better.

But we seem individually quite disinterested in that.


We don't run the government like a pawn shop.

This money can come from the Fed, which can make it out of thin air.

The signal you've gone too far is the spread on bond yields - which
has been effectively zero or negative for some time.

Another problem is the the recipients of stimulus are
selected politically, so usually squander the resources.

Much larger problem, although the resources are seldom squandered outright.

For nonstandard versions of "seldom."


Sorta. A mirror-image is something like Iridium, which has remained
valuable besides the dismal start it had.

If only squandering could be limited to 100% of the money spent!



The "money
multiplier" of stimulus gets praised,

And it should...

but not many people want to talk
about the much bigger de-multiplier that pays for stimulus. The Broken
Window theory is still popular among the non-working class.


If you can get money in the hands of people who are pretty poor,
chances are real good it'll increase the overall movement
of money.

Create lots of poor people first, then print some money to give them.
You'll see lots of movement.


But you don't create poor people. They occur naturally. Poverty is the
default state of Man.


But that's a big "if". We suck out loud at redistribution.

Job creation (REAL job creation) is the best form of redistribution,

Without doubt.

because it creates wealth to redistribute.



Sometimes. But this has been extremely slow since 2008 ( and even
before ) and you can't attribute it to the guy in the oval office,
tax policy or much else, really.

I do attribute it to tax policy. And immigration policy.


--

John Larkin Highland Technology, Inc
lunatic fringe electronics

jlarkin att highlandtechnology dott com
http://www.highlandtechnology.com

 

[Bill Sloman]

On Tuesday, 1 September 2015 12:44:17 UTC+10, John Larkin wrote:

On Mon, 31 Aug 2015 21:38:35 -0500, Les Cargill
lcargill99@comcast.com> wrote:
John Larkin wrote:
On Mon, 31 Aug 2015 18:41:22 -0500, Les Cargill
lcargill99@comcast.com> wrote:
John Larkin wrote:
On Mon, 31 Aug 2015 07:40:23 -0700 (PDT), dagmargoodboat@yahoo.com
wrote:
On Sunday, August 30, 2015 at 11:00:23 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 11:43:17 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 7:23:24 PM UTC-4, Bill Sloman wrote:
On Monday, 31 August 2015 04:54:39 UTC+10, dagmarg...@yahoo.com wrote:
On Sunday, August 30, 2015 at 2:20:55 PM UTC-4, John Larkin wrote:
On Sun, 30 Aug 2015 10:39:24 -0700 (PDT), dagmargoodboat@yahoo..com
wrote:

snip

The bill for the pseudo-stimulus (about .3 GDP*years worth) has to
come due eventually. We spent about 5 years printing 6% of GDP in
phony prosperity, borrowed from our future. The only question is
whether we'll make monthly installments (reductions in future
growth), or have the bill come due all at once.

The bill for the 1930's non-stimulus - the Great Depression - was a 25% reduction in GDP.

The 30's were nothing but 'stimulus' starting with Hoover (playing
George W. Bush to Obama's FDR). That created the Great Depression
from what should have been a transient panic. Rent-seeking, Smoot-
Hawley, and chiefly, unstable lawless government & federal deficits,
terrorizing production and borrowing from future prosperity. Same
same.

That is your "flat earth" take on the situation. Hoover's stimulus wasn't substantial enough to do anything useful.

Industrial production didn't get back to the 1929 level until 1937, then took another hit when James Arthur think-alikes prematurely cut back the stimulus, after which it fell and didn't recover until 1939.

Actually that's another myth. Stimulus, being artificial, never lit
the fire it was supposed to light.

As you keep on telling us. It's just a coincidence that Hoover presided over decline, and Roosevelt presided over recovery.

As soon as the money stops, instant withdrawal
and retraction, as you've just acknowledged. (If it had worked, it
wouldn't have needed until 1937 to ignite a self-sustaining
recovery.) We just hadthe same experience with Obama's wasteulous,
and Japan's been mired in it since the late 1980's.

It did work, from 1933 to 1937, and it's premature retraction was what created the 1937 recession.

Let's briefly examine that. If a government showers money to
'stimulate' theeconomy for five years (per your theory), you're saying
that's not long enough for desperate businesses to rehire, consumption
to rise, and create a self-sustaining recovery if, as you assume, the
loop gain is >1 ?

You're barking mad. Businesses would be hiring in three months. By
five years they'd be in their nth wave of new hiring, with wages
percolating throughout the economy and stimulating your precious demand > >>>>> to whatever maximal extent it ever would.
Five years is far more than enough to ignite a fire if your theory were
correct, but, it didn't. It never happened. It doesn't work.

It creates artificial activity that stops the instant the artificial
input disappears--you just cited the proof! No lasting 'recovery' is
launched.

Japan's been doing it nearly three decades and it still hasn't worked.

That's because IT DOESN'T WORK. Stealing from one's future to party in
the present is a significantly under-unity proposition. Q.E.D.

James Arthur thinks he's demonstrated something there. Essentially that he is the one that's barking mad.

Some businesses explode/implode in a year or two, and some grow or
fade away over generations.

To grow, a business has to evolve products, grow a customer base,
develop a talented staff and management, and learn how to design,
manufacture, and sell. I'd estimate that the average business has a
stimulus-response time constant in the range of 10 to 20 years. A
small change in gain (and 35% corporate taxation is not small) can
have a huge effect on that tau.

Sloman advocates government stimulus because he doesn't have a
business and hasn't worked in decades. He's a natural socialist.

Why would having a business or having got one the jobs I've been applying for convert me into a right-wing idiot.

Modern socialism is highly unnatural, and it's taken a long time to get it right - Scandinavia and Germany seem to have managed it, but there are lots of ways of getting it wrong.

The problem with government stimulus is that the money has to come
from somewhere.

It has to come from some*when*. @ 2% GDP growth, a fifty-year
period erodes $100 to 37.5 cents on the dollar. At 4% growth,
it's $0.17 per dollar.

An ever-increasing public debt as a fraction of GDP eventually hits
the wall. Only enforced zero interest rates can delay the pain.

It depends on what you mean by "ever-increasing." And it depends
a lot.

I have little doubt but that America could right now shoulder much
more public debt if GDP growth was better.

But we seem individually quite disinterested in that.

We don't run the government like a pawn shop.

This money can come from the Fed, which can make it out of thin air.

The signal you've gone too far is the spread on bond yields - which
has been effectively zero or negative for some time.

Another problem is the the recipients of stimulus are
selected politically, so usually squander the resources.

Much larger problem, although the resources are seldom squandered outright.

For nonstandard versions of "seldom."

Sorta. A mirror-image is something like Iridium, which has remained
valuable besides the dismal start it had.

If only squandering could be limited to 100% of the money spent!

The "money multiplier" of stimulus gets praised,

And it should...

but not many people want to talk
about the much bigger de-multiplier that pays for stimulus. The Broken
Window theory is still popular among the non-working class.

Bastiat's Broken Window parable gets much of it's rhetorical force from the stuff that Bastiat leaves out. In this case he left it out because it hadn't been understood back then, which is unusual, since he was dishonest about a lot of things he should have known about.

Keynes dismantled the parable in the 1930's and Daniel Kahneman got a Nobel Prize for economics in 2002 for spelling out exactly why the parable is rubbish.

If you can get money in the hands of people who are pretty poor,
chances are real good it'll increase the overall movement
of money.

Create lots of poor people first, then print some money to give them.
You'll see lots of movement.

But you don't create poor people. They occur naturally. Poverty is the
default state of Man.

But that's a big "if". We suck out loud at redistribution.

Job creation (REAL job creation) is the best form of redistribution,

Without doubt.

because it creates wealth to redistribute.

Sometimes. But this has been extremely slow since 2008 ( and even
before ) and you can't attribute it to the guy in the oval office,
tax policy or much else, really.

I do attribute it to tax policy. And immigration policy.

And your opinion on this subject is worth about as much as your opinion on anthropogenic global warming, where you haven't done your homework either.

Listening to James Arthur on the subject is the very antithesis of homework, because he's got some thoroughly silly ideas, which he trots out with every sign of taking them seriously.

I think he's claimed earlier in this thread, that Roosevelt caused the Great Depression, or at least made it a lot worse. All the GDP curves drop until Roosevelt got elected, then start rising again, but James Arthur find it necessary to believe that this doesn't mean that Roosevelt did anything useful.

--
Bill Sloman, Sydney