Paul M Foster wrote:
> On Wed, Sep 08, 2004 at 09:43:09PM -0400, John Pedersen wrote:
>
>
>>Paul M Foster wrote:
>>
>>>On Tue, Sep 07, 2004 at 05:37:18PM -0400, Bryan J. Smith wrote:
>>>
>>><snip>
>>>
>>>>>Bankers and corporate elites get richer, everybody else loses.
>>>>
>>>>Agreed. The monopoly the Federal Reserve has had on the amount of cash
>>>>in this country is at the heart.
>>>
>>>
>>>I'll disagree here. The key to any economy is productivity. The Fed can
>>>act as a brake or a stimulus, but producitivity is what drives any
>>>economy. The problem in this society is that too much of the wealth
>>>vests in the hands of too few _who produce too little_.
>>
>>I sort of agree with you, but don't be too quick to dismiss the
>>effects of monetary policy set by the Fed. The Fed has lots of ways
>>of creating money, and does so in astronomical amounts. Why do you
>>think you can buy a house full of furniture with no interest and no
>>payments for a year. Keep on shopping! That's the only thing that is
>>keeping the economy going, so that "pundits" can claim the economy is
>>doing well. (Apparently the definition of "economy" == number of
>>people shopping)
>>
>
>
> I don't disagree that monetary policy can affect the economy. But it's
> productivity that's the key. And people shopping is a byproduct of a
> productive economy.
Be careful with that word productivity. If productivity means output
(measured in dollars) per manhour of labor, then consider:
a) I have a factory with 100 workers that makes widgets; they start as
castings, they machine them, they assemble, they test and they ship
them out the door, to the tune of $10,000,000 per year. (or pick your
own number)
Now we improve things:
b) Get the castings, already machined, and assembled, from China.
Very low cost. Do some testing and packaging in USA. Get rid of 90
people, because 10 people can handle it. Now 10 people ship
$10,000,000 per year.
Gee, by the definition of "output/manhour", we improved productivity
by a huge wallop. Ain't that great?!
My point of my oversimplified example is that the liars who need to
keep blowing air into the stock market furnace can and do play with
"productivity" figures and keep the bullshit flowing. Like a juggler
with ten balls in the air, if they lose control of just one, the whole
thing is likely to fall apart.
Personally, I prefer to look at PRODUCTION, in absolute numbers,
instead of productivity.
> The cornerstone of economies is the creation of
> saleable items and the exchange of those items for something else
> considered valuable (in our case, money). Buying and selling are simply
> the opposite sides of the same coin. More of both means a healthy
> economy.
Tom, Dick and Harry. Tom has a printing press and prints pictures of
presidents on green paper. He supplies them (lends them) at virtually
no interest to Dick, who buys TVs, VCRs, DVDs, etc, from China. Dick
sells these to Harry, who buys one of everything as soon as it comes
in the store! Harry has no job, by the way, because he used to work
in a factory that closed. But that's ok--he can keep buying from Dick
because he refinanced his house, and besides, Dick often has specials
where he offers no payments for one year. So Harry has a 50 inch LCD
tv, and a Mac dual G5 computer, two new cars in the garage, and pretty
much every toy and gizmo that comes onto the market.
By your definition, with all this buy and selling, the above is a
vibrant, healthy economy.
And right now, we _do_ have a healthy economy. The problem is
> that the press is absolutely insistent on running it down, so there is
> this impression that it's sickly
>
>
>>As a shorthand, we say that they are printing money like crazy, but
>>they have various mechanisms, like changing marginal rates, etc.
>>
>
>
> Yes, this is government sleight of hand. It's twiddling the money supply
> and interest rates rather than changing tax policy and other such
> actions to actually gun the economy.
>
> <snip>
>
>>Lemme give you a prediction. Some day, I would say within five years,
>>China will take over Taiwan, by force, which the US, once upon a time,
>>swore they would never let happen. The Chinese leaders will make one
>>phone call, saying that if the US interferes, they will destroy the US
>>currency, virtually overnight. And the US will stand back and let
>>Taiwan go.
>>
>
>
> You could be right. There's a movie that's frightening in a similar way,
> called "Rollover". Kris Kristofferson and Jane Fonda. Except in this
> one, the Arabs are the ones holding all the US money. Scared the crap
> out of me the first time I saw it.
>
> While I think tariffs are a bad idea, this is one of the problems I see
> with a "global" economy. The more interconnected we are with other
> nations for our goods and services, the more we are at the mercy of
> whatever policies they choose to enforce. We should drill in ANWAR,
> build a refinery a month, and make all the tree huggers live in the
> forest without electricity.
>
> Paul
>
>
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