Just in passing on that income inequality during the 1920s mentioned early. Phil Gramm just came out with a book (don't remember the co-author at the moment) where he seemed to be surprised to find that the 'disparity' between the average (I think median, not mean) income of the top 20% was NOT 17+ times the mean of the bottom 20% because only earned income was counted as income. If you add all the govt program monies received by the bottom 20% (food and rent subsidies, Medicaid, etc) and take out taxes paid on earned income (including SS, etc) the real disparity or difference is about 4 times.
IOW, the wealthy really don't have that much more to buy with. In fact, there's a website with the "income needed to live comfortably (but check the definition) for an individualand links to same for a family, that appears to show that in any given state probably fewer than 20% for sure are able to "live comfortably." That's a real First World Problem I guess.
Deflation was so damaging during the 30s because the government tried to fight deflation with assorted price controls. The government was destroying food and limiting farm production in order to raise the price of farm goods at the same time people were going hungry. This is also the era of minimum wages and enhanced union power. Raise the price of labor when people are unemployed. Smart!
(And an overleveraged financial system didn't help either.)
There was extended price deflation during the late 1800s which corresponded to massive prosperity.
Conversely, the inflation of the 70s was exacerbated bigly by Nixon's price controls. We had the oil, but it wasn't worth pumping due to inflation coupled with price controls.
I'm a bit rusty on my Keynesian readings, but I think "government spending" in the GDP formula excludes transfer payments. Government spending in this formula is a form of consumption and capital spending. The Keynesian paradigm assumes that consumption + capital spending = production, so you can measure consumption and capital spending to get production.
The Keynesians ignore intermediate good production, which has been a rather big deal. Just look at the price of building materials...
GDP also utterly ignores home production. Take your kids out of day care and raise them yourself and GDP goes down. Ditto for cooking a tasty meal at home vs. ordering takeout. Prosperity growth in the 70s was less than advertised as feminism added to GDP while cutting back on home production. (On the other hand, we did get some serious pollution reduction during that era -- a life improvement which is also not reflected in GDP.)
Economics to me is money in money out. I don't want to make it more complicated because it hurts. Inflation can be summed up by having to go further or digging deeper for resources just to keep the wheels on the bus turning. At some point the system fails and/or is replaced by a new system. What has happened more recently since the industrial revolution is that we pile new systems on top of the old ones thereby giving the impression that some kind of progress is happening. Which it is... I guess... but there comes a point where anyone who stops to look around starts to wonder what the hell we're actually trying to achieve beyond putting food on the table and buying a bigger truck. I mean... is there a plan... other than the now blatantly obvious eugenicist technocracy that is unfolding and somewhat being rejected as people start to recognize it for what it is.
We'll get through the ups and downs of economic bumps in the road. The system will readjust and drop some ballast. I just want to know if anyone has pinned a plan to the wall that is worth a damn because for now it seems to me that it's every man for himself until further notice. I say this because every time someone comes along with a really awesome plan (seems to be Elon's turn) things never go as intended and sometimes it ends up with everyone fighting everyone else just because. It looks like that is what's on the table again either as a coverup or because there really is no other way out of the economic mess that we get ourselves into.
Just in passing on that income inequality during the 1920s mentioned early. Phil Gramm just came out with a book (don't remember the co-author at the moment) where he seemed to be surprised to find that the 'disparity' between the average (I think median, not mean) income of the top 20% was NOT 17+ times the mean of the bottom 20% because only earned income was counted as income. If you add all the govt program monies received by the bottom 20% (food and rent subsidies, Medicaid, etc) and take out taxes paid on earned income (including SS, etc) the real disparity or difference is about 4 times.
IOW, the wealthy really don't have that much more to buy with. In fact, there's a website with the "income needed to live comfortably (but check the definition) for an individualand links to same for a family, that appears to show that in any given state probably fewer than 20% for sure are able to "live comfortably." That's a real First World Problem I guess.
https://www.visualcapitalist.com/mapped-the-income-needed-to-live-comfortably-in-every-u-s-state/?utm_placement=newsletter
That looks to me like it's predicting a deflationary depression is all but guaranteed.
Deflation was so damaging during the 30s because the government tried to fight deflation with assorted price controls. The government was destroying food and limiting farm production in order to raise the price of farm goods at the same time people were going hungry. This is also the era of minimum wages and enhanced union power. Raise the price of labor when people are unemployed. Smart!
(And an overleveraged financial system didn't help either.)
There was extended price deflation during the late 1800s which corresponded to massive prosperity.
Conversely, the inflation of the 70s was exacerbated bigly by Nixon's price controls. We had the oil, but it wasn't worth pumping due to inflation coupled with price controls.
I'm a bit rusty on my Keynesian readings, but I think "government spending" in the GDP formula excludes transfer payments. Government spending in this formula is a form of consumption and capital spending. The Keynesian paradigm assumes that consumption + capital spending = production, so you can measure consumption and capital spending to get production.
The Keynesians ignore intermediate good production, which has been a rather big deal. Just look at the price of building materials...
GDP also utterly ignores home production. Take your kids out of day care and raise them yourself and GDP goes down. Ditto for cooking a tasty meal at home vs. ordering takeout. Prosperity growth in the 70s was less than advertised as feminism added to GDP while cutting back on home production. (On the other hand, we did get some serious pollution reduction during that era -- a life improvement which is also not reflected in GDP.)
Economics to me is money in money out. I don't want to make it more complicated because it hurts. Inflation can be summed up by having to go further or digging deeper for resources just to keep the wheels on the bus turning. At some point the system fails and/or is replaced by a new system. What has happened more recently since the industrial revolution is that we pile new systems on top of the old ones thereby giving the impression that some kind of progress is happening. Which it is... I guess... but there comes a point where anyone who stops to look around starts to wonder what the hell we're actually trying to achieve beyond putting food on the table and buying a bigger truck. I mean... is there a plan... other than the now blatantly obvious eugenicist technocracy that is unfolding and somewhat being rejected as people start to recognize it for what it is.
We'll get through the ups and downs of economic bumps in the road. The system will readjust and drop some ballast. I just want to know if anyone has pinned a plan to the wall that is worth a damn because for now it seems to me that it's every man for himself until further notice. I say this because every time someone comes along with a really awesome plan (seems to be Elon's turn) things never go as intended and sometimes it ends up with everyone fighting everyone else just because. It looks like that is what's on the table again either as a coverup or because there really is no other way out of the economic mess that we get ourselves into.