Free Market Fundamentalist Ideology is based on a Logical Fallacy.

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I've often used this quote by her, I think it's from the same book, which seems, also, eerily relevant today:

“The ideal subject of totalitarian rule is not the convinced Nazi or the convinced Communist, but people for whom the distinction between fact and fiction and the distinction between true and false no longer exist.” —Hannah Arendt

 

Wait till you see the economic effect of Trumps and Biden’s handouts

 

I don't think the argument is to eliminate markets. It's that unfettered capitalism is flawed. It needs to be regulated, but, there is the debate, right there.

 

Can anyone here tell me why inflation is bad? It’s the worst kind of selfishness. Controlled inflation is amazing. It encourages investment and the flow of money. However the type of inflation we are going to see is beyond controlled.

 

I don’t think that’s a debate for anyone who is rational. Unregulated markets are bad but so is over regulation

 

His comment on #12 should have tipped you off to that.

 

Inflation is, essentially, taxation without representation.

Those that can hedge ( benefit ) , and those who cannot ( the poor ) pay for that benefit with the erosion of their purchasing power.

Inflation, therefore, is a transfer of wealth from the poor to the rich ( and 'rich' includes the government, the actual source of inflation ).

 

Wow, thats a grim picture. I wouldn’t summit up that easily. Inflation is often a product of the poor. Like demanding free money. So to say it like you did insinuates that the rich do it to target when that’s not the case either. Inflation is necessary in a marketplace. Why would you ever want a deflationary currency? You would never spend it.

 

No, no implication of that is being made, nor can you draw that inference. It's done via the Federal Reserve in cooperation with member banks, the 'accelerator/brake pedal' of which is the wholesale rate ( the discount rate ) the fed charges member banks. ( It is the main one, there are others)

Neither are particularly attractive in my view, though we have learned to live with 2% per year, and the rate has been closer to 3% since the fed was created, if I recall correctly.

You mean 'sum it up' ( are you using voice to text? ) .

No, there is only one possible way to create inflation.

First, we need to define it, it's the sustained rising trend line, NOT the temporal ups and downs.

To understand it, we can look at small historical gold rush towns, when there was a flood of gold in the small towns, the prices rose to levels no settled ever dreamed was possible.

It can be liked to this: You give everyone on Ebay an additional $100 and the average bids on goods will rise.

There are temporary reasons prices go up, due to labor shortage, scarcity of resources, etc, but these do not necessarily cause a sustained aggregate price rise.

To achieve a sustained aggregate price rise, there has to be a situation where too few goods are chasing too many dollars, there has to be an increasing money supply above and beyond the aggregate level of productivity.

Inflation is not necessary, it's just very difficult to prevent, so they allow it. The fed strives for 2% per year, as I understand it, but they overshoot the mark, it's more like 2.7% or something like that.

Now, the pandemic caused demand to drop, so then came the stimulus, which propped up demand, and it prevented deflation.

But that fiat currency is still still out there ( and exacerbated with Trump's tax cuts to the rich ) and when the economy is getting back on it's feet, demand is now surging ( to previous normal levels ) but since the fiat currency is still out there, that is why we are experiencing inflation now, it was due to

1. Trump's $1.9 trillion tax cut
2. Trump's $2 trillion stimulus

That created a $3.9 trillion increase in the deficit, and this was paid for by a massive influx of fiat currency into the money supply
It could have been prevented if Trump had repealed the tax cut.

Will Biden's stimulus cause inflation, well? It will, indeed, if those tax cuts ( at least the ones on the affluent side ) aren't repealed and other ways of financing the package aren't employed. Note taht the infrastructure package will be spread out over 10 years and, if we are to believe Biden, it will be paid for mostly by raising taxes on the rich ( just bring them to prior levels, that would do it).

"Poor getting free stuff", which is how you have characterized it, won't necessarily cause inflation if it is paid for by some means. Oh, and the gov borrows on top of the fiat currency, and so, that adds to the interest on the national debt, which I'm not crazy about, either.

Now, of course, the MMTers will disagree, and some of my liberal brethren will disagree, but on the cause of inflation, I'm on the side that asserts that inflation is a monetary phenomenon. My liberal brethren will accuse me of being a conservative, for holding this view. I am, just a little, at least on this point, but that is the extent of it.

 

No, I said free money. And demanding such does hold economic risks. You actually are very on par with the way I think concerning inflation. I agree with you for the most part. I believe there are way too many people who don’t understand why prices will go up. Everyone talks as if the poor are the victims in the price market but in many ways they are actually the cause. (Which I’m sure you disagree with me on that but it’s true)

Things like minimum wage increases, free money, high crime will all cause price increases along with fewer jobs. Look at the high crime areas that bloomed out of the defund the police movement. Businesses are packing up shop and moving or simply not coming back at all. None of this is a product of the rich (unless you include the people funding this madness).

 

A rising price isn't necessarily inflation. Inflation is the rising and sustained trend line.

For that to occur it requires deficit financing via fiat currency. Without it, prices go up and down due to factors such as you describe, but the trendline doesn't.

 

That's right.

If you go to apartments.com there's a studio apartment that rents for $2,290/month.

Why? Because when that studio became vacant, there were 1,000+ people demanding it and probably 200 of them were willing and able to pay $2,290/month. Another 600 people could afford $600 to $2,000/month and then 200 could only afford $600/month or less.

Increasing the federal or State minimum wage does not make that apartment "affordable" for the 200 who cannot afford it now.

And, to add insult to injury, if as Left-wingers say, that all wages rise relative to a minimum wage increase, then those 200 who can afford $2,290/month will now be able to pay $2,500/month, so the apartment is still not affordable for those who choose to be on the bottom.

In stark contrast, where I live in Cincinnati, 2-bedrooms start at $395/month and go up from there. A decent one will be $450/month and they go up based on housing market and amenities.

The federal government, specifically HUD and the EPA are largely to blame for high rents.

Urban areas are already developed and don't need additional money for development, but HUD keeps dumping money into them.

The reason people migrate from rural areas to urban areas is the lack of jobs.

There are no jobs because the government wasted money on urban areas rather than develop rural areas. You need access to interstate highways and Congress' pork barrel projects include the Exit Ramp to Nowhere and the Bridge to Nowhere.

In the modern era, you need airports. Clinton County, Ohio has a population of 42,000 and the largest "city" is Wilmington with about 12,000.

The federal and State governments ignored Wilmington, so the county and city spent their own money to expand the airport and DHL came calling creating 1,000s of jobs.

The State saw the error of their ways and chipped in some money to expand the airport further, and now Amazon and a few others have set up shop creating more jobs.

But, HUD will dump $10s of $Millions into cesspools like Detroit where most of the money goes into the pockets of corrupt city and county governments and nothing happens very slowly.

And then there's the EPA.

I have a 60-unit vacant apartment building that I cannot refurbish until I first conduct Lead and Asbestos Abatement. That ain't free. The Lead Fairy and the Asbestos Unicorn don't come down and take the Lead and Asbestos away just because I dance naked around an oak tree singing Kum-ba-ya under a full Moon.

I'm not gonna put my ass on the line and borrow $3 Million from a bank to do Lead and Asbestos Abatement, plus refurbish the units and then give them away to low-income people for nothing.

That's mostly what's wrong.

 

First no free market fundamentalist and libertarians believe there should be NO government "inference". They argue that the LEAST amount of government interference is best. And yes as has been proven over and over we all do best when we can most act in our own self interest. Government has a role in mediating conflicts that occur, as in contract law. They have a role, as stipulated in the Constitution, to maintain standards such as weights and measurements and even safety standards to an extent.

Buyers and sellers are not inanimate objects sitting there waiting for government to tell them what to do. Those millions of buying and selling decisions made on a daily bases by the people actually engaged in those buying and selling decision are FAR more able create the best market for all us rather than bureaucrats in Washington DC trying to guess at it. Who would you rather take those pile of bricks and make that house, a bunch of government bureaucrats in Washington DC or you and your local private contractor acting in each of your own self interest to build you a quality home out of them?

Actually those who invest in the longer term do better than those who play the market getting in and out trying to time it.

 

The first is NOT the market that latter ARE the market and the freer the better.

 

There is no such animal called a free market without govt. oversight..

 

Thank you for your comments.

On the issue of micro and macro-economic models, I mentioned in a recent essay economist Steven Keen regarding the problem of applying abstract attributes of micro-economics to the higher abstractions of macro-economic attributes of attributes: for example, deficits on the micro level are completely different on the national macro level where new attributes emerge. See...

Bertrand Russell's Critique of Fregean Logico-Mathematical Objects​

 

Wham! Bam! Sock! Pow! Ouch! Elon is making a Tesla Bot, after going to Mars and building a civilization, and cures cancer, and invents eternal life, and flies into a black hole, and denies climate change, and feeds the poor....ELON MUST BE WOKE JUST LIKE JESUS!

Elon Musk is selling his Tesla bots as servants, but we know that in a very short time they be our remote masters. All the bots come in one color--Alabama White, of South African White. Freedom of choice!

What Musk doesn't tell you is that if you criticize a billionaire or our fascist-mafia government, the robot will automatically Instant Message audio and video to the local police department. And if you keep it up, the Tesla bot murders you just before its batteries burst into flames. In a fascist society how good is it going to be?

Technology for better living...or else.

 

I have listened to economist Michael Hudson's lectures for over ten years, and I learn something every time.

Global Financial Empire 1 by Dr. Michael Hudson
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There aren't many economists I respect or pay attention to, but Hudson is one. Also check out Steve Keen, Mariana Mazzucato and Ha-Joon Chang.

 

Your classic Straw Man Fallacy is a gross misrepresentation of what lassie faire is.

Free Market does not mean Free-for-All Melee.

No government interference means no wage controls, no price controls, no price setting, no price ceilings, no price floors, no quotas, and nothing dictating the manner, means, or methods of production, distribution or sale.

Laws that are enacted, say criminal or civil statutes against fraud, are not "government interference."

Such laws are welcomed by Free Market Fundamentalists because they protect everyone in the Market whether you're a buyer, a seller, a producer or a consumer.

Should you have to compete against another who engaged in fraud, deception or misrepresentation? Or worse, you're forced to engage in the same frauds, deceptions or misrepresentations in order to compete.

Free Market does not mean freedom to lie, cheat, steal, or swindle or engage in any other negative behavior.

How is it you can't comprehend that the Free Market did not evolve in vacuum? Sorry, but English Common Law was already in place.

You sell 100% cranberry juice and label it as 100% cranberry juice while your competitors sell 10% cranberry juice and 40% apple juice and 50% water and call it 100% cranberry juice. That is a misrepresentation in the least on your competitor's part.

The Free Market would not tolerate that even in the absence of government.

Non-sequitur Fallacy.

Stock markets have little to do with the Free Market. Stock markets are neither necessary nor essential to any successful economy, whether the economic system is the Free Market, a Command Market, a Traditional Market or a Hybrid Market, and if State legislatures prohibited the existence of corporations -- which they could legally do -- there would be no negative consequences to your economy.

A stock market is an indicator of one, and only one, thing and that is where investors are putting their money.

It cannot possibly tell you any more than that, and it doesn't even single out individual investors.

It is not my fault that morons don't understand that the Dow Jones Industrial Average (DJIA) is 30 publicly-traded corporations.....out of approximately 780,000 publicly-traded corporations (which represents 3% of all business in the US.)

30 / 780,000 = 0.0038%

If you're gonna buy or sell stocks based on the performance of 0.0038% of all publicly-traded corporations then you deserve to lose your shirt in the stock market.

Then that is your fault for lacking the courage, intestinal fortitude and wherewithal to effect change.

Own it.

 

No, no! You got it all wrong. You should go back to the 4th century A.D. and learn politico-economics that is more insightful than your fantasy Fox News economic model.

"In order to enslave the many, the greedy began to appropriate and accumulate the necessities of life and kept them tightly shut up, so that they might keep these bounties for themselves. They did this not for humanity’s sake (which was not in them at all), but to rake up all things as products of their greed and avarice. In the name of justice they made unfair and unjust laws to sanction their thefts and avarice against the power of the multitude. In this way they availed as much by authority as by strength of arms or overt evil. (Lactantius, Divine Institutes, V,vi.)"--Christian Father Lactantius, 345 A.D., on the Rome Empire.

 

I have a BA in Economics and studied economies, including Rome's economies at different points in its history.

I haven't watched network/cable news in more than 25 years, because I don't need to.

That has nothing to do with the Free Market or Economic Systems.

That you don't even understand the difference between Property Theories and Economic Systems says it all.

 

Argumentum ad verecundiam. I would ask for my money back from the university.

You are right, Lactantius, is telling us it has nothing to do with Free Markets because there isn't any except maybe today's Somalia.

 

Again, it isn't my fault you don't understand the difference between Property Theories and Economic Systems.

There are Free Markets. You're obviously not educated enough to see them. Black Markets are Free Markets, by the way.