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On Argentina, Krugman, Mosler, and Wenzel

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February 05, 2013 – Comments (34)

Argentina just announced price controls on rising grocery prices. 

Headline: Argentina freezes prices to break inflation spiral.

Here's my favorite part:

Polls show Argentines worry most about inflation, which private economists estimate could reach 30 percent this year. The government says it's trying to hold the next union wage hikes to 20 percent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 percent.

Before we proceed further, let me remind you of this book: Forty Centuries of Wage and Price Controls.  Price controls have been around for a long time.  They don't work. They never have worked.  In 4,000 years, not a single price control has ever been more effective than allowing supply and demand to find the market clearing price.

Progressives are not interested in evidence-based theory, unfortunately, despite their arrogant claim to being scientific.  

Shortage of Brains

Price controls create shortages, and you can rest assured that those are coming in Argentina.  One intervention (creating paper money like it's going out of style) breaks something else (the pricing system), which leads to another intervention (price controls) that will break the supply system (shortages), that will lead to another intervention (state seizure of grocers and farms), and on and on we go.

This theory of interventionism is also supported by ample amounts of historical evidence.  Yet, once again, Progressives are not interested in evidence.  They are just sure it'll work this time.  The great economist Ludwig Von Mises outlined the process of intervention in his 1929 work, Critique of Interventionism.  I am certain not one  interventionist has read it.

But why didn't economists see this coming?  This inflation spiral that would need to be "checked"?

Appeal to Authority

Well, the government said the inflation was low, and as we have seen on Motley Fool many times, if an authority spits out a statistic our statist friends will continue to believe it no matter what evidence is offered otherwise. I've outlined the many problems with inflation calculations before.  To summarize, they are usually worthless.  Price inflation (or, what happens after you commit inflation - the process of debasing the currency) measures year over year price changes using objective measurements of utility to determine substitution decisions.  Utility is subjective and can never be precisely measured.  Year over year measurements imply that last year's prices are a valid starting point, which they are not since it can never be known where prices would be without the intervention.  In other words, perhaps prices should have been falling at 3% this year, so a 2% price inflation is actually 5%.  The effects of price inflation are felt differently depending on the spending patterns of the consumers.  Price inflation hurts poor people more than the rich, since poor people spend a greater percentage of their disposable income on food and energy consumption.  And don't forget those nasty redistribution effects of money printing, which lead to distortions in the economy and exacerbate the business cycle.

Other than that, why worry?

So mainstream economists cannot see this type of inflation.  They don't understand inflation, cannot admit that printing money will lead to inflation spirals, cannot admit that there is no accurate way to measure inflation, cannot admit that their interventions hurt poor people and make the rich richer, cannot admit to inflation as a cause of business cycles.

If they did, they'd have to re-evaluate their entire view and that's not going to happen.  Remember, they think they're smarter than you.

Let's take a look at two well known and popular economists and their views on Argentina last year:

Krugman.... Again

May 2012:

Matt Yglesias, who just spent time in Argentina, writes about the lessons of that country’s recovery following its exit from the one-peso-one-dollar “convertibility law”. As he says, it’s a remarkable success story, one that arguably holds lessons for the euro zone. 

Whoops!

Hold on there buddy.  I know you have a Nobel Prize in Geography, but I'm not certain that the Eurozone should follow this model. (Although they probably will anyway, LOL)

Note in Krugman's blog he does the usual: "here's a graph... my opponents are dumb!" routine.  I spoke about this in my last blog.  The charlatan tries to hide the caveats to his claims, since they weaken his position.  GDP is not a useful measure for gaging an increase in wealth, particularly if it is heavily influenced by government spending, which is generally only possible by printing vast amounts of new money.   Seems awful dumb to solely examine GDP and think, "well everything must be fine", without even peeking under the hood to see if the reasons for GDP growth are sustainable.

That Krugman post looks really dumb now. Then again, so do most of his posts in hindsight.  

Mosler Hearts the State

I know MMT folks can't stand me. I don't care.  If there's one thing the MMT "experts" prove again and again, it's that they trust the State and distrust the market.  It is nothing more than repackaged Keynesianism, inlcuding all its made-up unscientific concpets (e.g. aggregated demand).

In this article last year, not only does Mosler cast skepticism on anyone who claims inflation is higher than 10%

It is relatively easy to formulate a policy to bring down inflation (although implementing the policy will be more difficult). Despite what you hear all the time, wage and price controls work.

Got that?  Not only is it easy to combat inflation, Mosler advocates wage and price controls.  Again, never mind the 4,000 years of evidence to the contrary.  Never mind Ludwig Von Mises' warnings about interventions.  And of course, never mind the violence inherent in forcing individuals to disregard economic law at the point of a gun.  MMT is a very violent economic doctrine.  If A doesn't work, point gun at people and do B.  Lather, rinse, repeat. Eventually it'll work out.

Oh but wait:

So it is not so much a question of whether they [price controls] work, but of how you will get off them.

So it's easy to combat inflation, but then hard to get out of the price controls that you put in to combat inflation.  This guy is something else.  No sh*t, sherlock. This is why price controls failed for 4,000 years.  You can't unwind them.  You've destroyed the market system by implementing them and just delayed the necessary corrections.  

Here's the real whopper of the article:

no matter what the level of inflation in Argentina (10% or 25%), the central bank is not a significant contributor. 

Yeah, printing a ton of money is not the culprit for spiraling inflation.  Nice try, Mosler.

Who Got it Right?

Who do you think?  Those who follow my blogs know that I'm a big fan of Austrian School economist Robert Wenzel at Economic Policy Journal:

"This was not hard to see coming. Following up on a detailed WSJ report on Argentina, I wrote  in April of last year:

Two women have taken control of Argentina's central bank and are about to use it as if they are on a weekend shopping spree. Cry for Argentina.

In June, I wrote:

The Argentine central bank, under the supervision of  Mercedes Marcó del Pont, is pumping out pesos at a rate that may ultimately result in the destruction of the currency. The spending spree is now going to lead to even more bad consequences. The price controls just announced will result in shortages and even more pain for the people of Argentina."

Was that so hard to see?

For state worshipping boot-lickers, definitely.  For the rest of us, absolutely not.

Beware

Keep what happened in Argentina in the back of your head.  Particularly note that the people of Argentina clearly felt that inflation was under-reported by their government, and that all the hack statist economists swore up and down that those people were just rubes and conspiracy theorists.  Interesting, isn't it?  

And if you think the Motley Fool writing staff saw this coming, warned of Argentina's impending inflation spiral, or doubted their government's ability to handle any prices, just search Fool for "Argentina inflation".  You'll have a good laugh.

David in Liberty

34 Comments – Post Your Own

#1) On February 05, 2013 at 2:06 PM, Louebsch (< 20) wrote:

So is this basically saying that when price controls come to the US, empty your bank account and buy tangible assests because the currency is about to collapse or be severly inflated?

Any chance Argentina's situation will have an effect on gold in the near future?

Just trying to prepare for when this stuff shows up in the US.

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#2) On February 05, 2013 at 2:38 PM, whereaminow (42.34) wrote:

Lou, 

In Argentina, the currency controls came first.

As smart people tried to get out of the peso, the govt moved to prevent them.

Of course this stop the rising proces, so more direct price controls followed.

The parallels with America are interesting. Certainly we have a similar disconnect between official inflation measurements and the pain people are feeling. We also have the same class of rats smearing anyone who doubts official inflation as kooks and conspiracy nuts. And we have the MMTers promising us that it's an easy fix. Ha!

So yeah, nothing new. Keep some money in metals.

David in Liberty 

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#3) On February 05, 2013 at 4:34 PM, ChrisGraley (30.21) wrote:

I predict price controls on gasoline sometime this year.

I'm still trying to figure out if years from now, we'll admit we were socialists or fascists. 

 

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#4) On February 05, 2013 at 5:16 PM, outoffocus (23.71) wrote:

Oh yea! David I'm so glad you wrote a blog today.  I was actually saving this article just for you: 

US control is diminishing, but it still thinks it owns the world

 

http://www.guardian.co.uk/commentisfree/2013/feb/04/us-control-diminishing-own-world

 

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#5) On February 05, 2013 at 5:34 PM, whereaminow (42.34) wrote:

outoffocus,

That article made me laugh, and not because I found a bunch of disagreement.  Chomsky is pretty decent on foreign policy.

David in Liberty

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#6) On February 05, 2013 at 5:49 PM, ChrisGraley (30.21) wrote:

The article fits in with my idea on price controls for gasoline though. :D

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#7) On February 05, 2013 at 5:59 PM, whereaminow (42.34) wrote:

Chris,

Apparently, judging by his commentary above, Warren Mosler would approve of those controls should they become necessary.  That creeps me out, but I'm sure the MMTers will justify it as the State's prerogative (but remember, just like they tell you, they totally understand the Austrian School position).

Democrats will almost certainly engage in conspiracy rhetoric over evil speculators.  We can safely bet on that.

And the price controls will have as much "success" as the 1970s ones did.

David in Liberty

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#8) On February 05, 2013 at 6:39 PM, ChrisGraley (30.21) wrote:

IT's ok Dave.

Trust the government, they have it all under control.

;) 

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#9) On February 05, 2013 at 8:29 PM, HuellHowser (< 20) wrote:

I find it interesting, most of the people who I discuss politics with would be considered liberals or progressives politically speaking.  Very few of them have a deep understanding of economics and certainly none of them have studied it like you have David.  Yet, when our conversations turn from politics to economics we seem to share some inherit understanding that falls in line with the things you talk about.  Printing too much money = Bad.  Market manipulation = Bad.  Excessive government spending = Bad. 

I think the problem is that people just aren’t very educated on the subject matter (myself included).

Once again, a great read and as always thank you for giving me nuggets of information I can use to make myself look smart the next time I’m at a party. 

 

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#10) On February 05, 2013 at 8:48 PM, whereaminow (42.34) wrote:

Note:

Btw, I mistook L. Randall Wray (another MMT guru) for Mosler in my comments above.  Wray penned the article above concerning MMT views on Argentina's problems.

Not that it makes a difference, since they're both leaders in the MMT pseudo-science, but I need to make the correction anyway.

David in Liberty

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#11) On February 05, 2013 at 8:52 PM, whereaminow (42.34) wrote:

HuellHowser,

You got that right.  When I first started writing here, Progressives and Liberals would often engage me in debate.  But far too frequently, it became "well authority X says so, that's why you're wrong" on their part.  When pressed, they would say "economics is too complex, so I leave it to the experts."

Basically, they were told a few things here and there, maybe some in college, and just accepted it as fact.

Bottom line, it's far easier to fool people than to convince them they have been fooled.

Glad you liked the blog. I bet the hot chicks just throw themselves at you at these parties.... :)

David in Liberty

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#12) On February 05, 2013 at 10:42 PM, ChrisGraley (30.21) wrote:

HuellHowser... I'd take it a step further. I have never met a liberal that actualy understands economics. It's always "We are the best country in the world and we can get away with pretty much anything"

You need a theory like this to support un-abated spending  and a government that is both your mommy and your daddy.

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#13) On February 05, 2013 at 11:21 PM, smartmuffin (< 20) wrote:

Your point about GDP is well taken.  We really can't emphasize this enough.  It's honestly the #1 argument I think Austrians should be making to our non-converted friends out there.

GDP is a nearly useless statistic that does NOT accurately reflect the quality of life of the average American.  It needs to be wholly rejected when the statists and their propagandists imply otherwise.

 Of course, this will irritate the MMTers quite a bit, who worship NGDP more feverently than the average Christian worships Jesus. 

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#14) On February 05, 2013 at 11:33 PM, HuellHowser (< 20) wrote:

I always found that "We are the best country in the world and can get away with anything" attitude more prevelant on the other side.  The God bless the United States of America and no place else crowd. 

The Chomsky article outoffocus posted was a good illustration of that I thought and he's on the left.  Maybe it just depends on who's in office.  When Bush was in office it seemed like everyone on the right supported Iraq and while I wouldn't say everyone on the left supports all of the bs we do in the rest of the world now (killing whoever we want without due process) I would describe it more as abstaining from the debate than the saber rattling we heard from the right during the Bush years. 

But that's just one mans perspective.  Yours may be completely different.

And to answer your question David...I'm swimming in it every time I bust out a line from Mises's thesis, "Economic calculation in a socialist commonwealth".  :)   

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#15) On February 05, 2013 at 11:37 PM, HuellHowser (< 20) wrote:

...and by the way...I'm not saying I support abstaining from the debate.  "Sometimes to be silent is to lie" - Miguel Unamuno.  Or in this case sometimes to be silent is to be a hypocrite. 

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#16) On February 06, 2013 at 9:46 AM, warrenmosler (< 20) wrote:

It is relatively easy to formulate a policy to bring down inflation (although implementing the policy will be more difficult). Despite what you hear all the time, wage and price controls work.

I never said that, as you state, so please change your post, thanks.  And note that while Wray and I agree on quite a bit, we also have our differences.  For example, I immediately took issue with his '29 trillion bailout' calculation, as I categorically do not 'count' liquidity provision as a bailout.  Instead, I see cb liquidity provision for its member banks as a fundamental element of banking with a floating exchange rate policy.  For example, at the inception of the euro, I wrote about how the ECB was the underlying liquidity provider for the euro banking system, and that in a downturn the system can't function without it.     

Back to your artical, in fact I have made your same point about controls, and more so.  Wage controls keep down the wages of those under control while the rest benefit, so it's in general a highly regressive policy as well.

Regarding your comments on 'inflation', what I have said is that the dollar is a simple public monopoly, for better or for worse, and therefore the 'price level' is necessarily a function of prices paid by the issuer of a currency when it spends, and/or collateral demanded when it lends.  As the single suppliier of that which it demands for payment of taxes, that the govt. is necessarily price setter is a point of logic.  And, to that point, indexation of wages is has long been identified as the source of latin american 'inflations'.  

Note too the difference between what the fed calls 'relative value stories' and 'inflation stories.'  Often a cost of living increase due to relative value shifts is categorized an inflation increase, so beware the semantics.

If there is anything I actually have written that you don't agree with please let me know, thanks.  Most is on my website under 'mandatory readings'   

Warren Mosler

www.moslereconomics.com 

 

 

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#17) On February 06, 2013 at 10:03 AM, whereaminow (42.34) wrote:

Warren,

It has been corrected. See comment #10 above. Motley Fool does not allow editing of posts.  Oh well.  My apologies for assigning the article comments to you.

As for your commentary, thanks for pointing your differences with Wray.  The more I read of his work, the more hyper-interventionist he appears.  

He supports universal job programs provided by the government, ignoring or dismissing, the supply/demand of labor.  Is that something you would also disagree with?

As far as inflation indexes, many arguments presented by MMT supporters indicate:

1. They believe whole-heartedly the inflation measurements presented by American authorities as legitimate (I've briefly outlined Austrian School objections above)

and

2. MMT, if running the show, would use econometric inflation measurements as a benchmark to tune policy.

Would you agree this is a fair characterization?

David in Liberty

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#18) On February 06, 2013 at 10:27 AM, whereaminow (42.34) wrote:

Also, Warren, I do feel bad about assigning the article above to you.  Unlike Wray, you have engaged me in conversation before.  I think what happened there, and this is not to make excuses (even though it always is, right?), is that my initial Argentina search was for any articles you have written.  I somehow landed on the Wray article and assumed it was from the same search.

I wish I could edit the post because as soon as I realized it I was mortified.  But that's Motley Fool policy.  

David in Liberty

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#19) On February 06, 2013 at 10:38 PM, fiduke27 (< 20) wrote:

Hi David, 

 How do you feel about http://bpp.mit.edu/usa/ ? I ask because I am continually skeptical about the officially reported inflation numbers. However every trip I make over to MIT's page seems to mostly agree with the published numbers. Honestly I'm not concerned if the government is only underreporting by 1%, and I don't think their tentacles reach so far as to manipulate MIT, but I can't internally rectify the price discrepancies I see in every day life.

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#20) On February 07, 2013 at 5:57 PM, whereaminow (42.34) wrote:

fiduke27,

Honestly, I don't know a lot about it.  Do they use weighting or just a billion different prices equally weighted?  How are subsitutions handled, if at all?  What's the usefulness of measuring a billion prices if the consumer is impacted most heavily on the prices of items they need every day (food and energy, for example).

Let's put it this way.  Before Arab Srping, an Egyptian version of the BPP would have probably shown low inflation as well (how low, I do not know, but I guarantee it woud have been lower than the 36% yoy food price increases before the revolt).  But the Egyptians didn't give a f*ck about things they didn't need.  They needed food, and the price of food was skyrocketing.

It's an econometric approach and I don't put a lot of stock in it.  If anything, it does show there's no active conspiracy to cook the books in America (though there is ample evidence of it in Argentina.)  But then again, I have never claimed a CPI conspiracy.  I have only pointed out it's flaws and lack of usefulness.  My argument is that mainstream economists are lunatics, not evil conspirators.

(Some of my trolls on this site have often accused me of being a conspiracy theorist, though each of them has only proven that's their go-to smear when you question the validity of econometrics.)

Daivd in Liberty

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#21) On February 08, 2013 at 1:24 PM, smartmuffin (< 20) wrote:

Although I too don't allege an active conspiracy, we do have to keep in mind the cardinal rule of economics:  incentives matter.  So let's review the government's incentives to lie/fudge/manipulate the CPI: 

1.  Social security payments/entitlement programs are tied to it.  If the government says that the cost of living has only increased 2%, but it has actually increased 10%, they only increase payments by 2%, recipients get less real money in return, and the government pockets the difference.

2.  Same thing with most of their labor force.  Military pay raises, veterans benefits, and union contracts are primarily negotiated with pay and benefits tied to cost of living.  If they under-estimate the CPI, they keep the difference.

3.  TIPS.  Everyone insists TIPS are a great investment if you're worried about inflation.  I wouldn't touch one of these things with a ten foot pole.  TIPS are a good investment only if you trust that the government is completely telling the 100% accurate and objective truth about inflation.  When they have every incentive to lie, leaving the value of your securities low, and once again, keeping the difference for themselves.

Those are just the three examples that pop into my head first.  Now let's review the incentives the government has to over-estimate inflation.

Anyone?  Bueller?

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#22) On February 08, 2013 at 6:48 PM, whereaminow (42.34) wrote:

smartmuffin,

Interestingly enough, I posted a link a couple weeks from USA Today. In it, mainstream economists were congrulating themselves for proposing changes to the CPI that would save billions in entitlement benefits such as Social Security.

The State's boot lickers conveniently ignore this kind of stuff when they talk about "low CPI inflation".

David in Liberty

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#23) On February 09, 2013 at 1:34 AM, smartmuffin (< 20) wrote:

The irony of course being that keynesian economists can propose tweaks to certain key statistics (such as the CPI) and be lauded as geniuses and heroes for saving the government money, even if it means dramatic real cuts to social security.  The headlines will read "GENIUS ECONOMISTS HELP SAVE THE NATION"

 Yet, if any dope Republican congressman came out and said "Hey, we should fix the deficit by cutting social security payments by 1% in nominal dollars" he would be absolutely smeared and vilifed to no end.  Headlines will read "IDIOT REPUBLICAN WANTS YOUR GRANDMA TO STARVE"

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#24) On February 11, 2013 at 6:28 PM, fiduke27 (< 20) wrote:

> My argument is that mainstream economists are lunatics, not evil conspirators.

 Too funny =)

 Fair points on BPP, which is impressive despite you admitting you didn't dig into it. MIT BPP doesn't actually track one billion products, but they would if they could. To my knowledge, they track the price on just about everything at all major e-tailors. They also explicitly admit their system can not track purchases primarily offline - your electric bill, gas prices, etc. 

 So what I'm getting from this is the government is more concerned with tracking the prices of everyday trinkets, and not everyday necessities. After reading what smartmuffin said it sounds more and more plausible. 

 Also I thought the smartmuffin post was particularly brilliant. By changing the CPI, the government saves billions while the average American doesn't have a clue what just happened. But, if they left the CPI more honest and cutting payments instead - everyone rages. It's so simple I'm convinced it's true. 

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#25) On February 14, 2013 at 7:17 AM, warrenmosler (< 20) wrote:

I support offering a transition job to anyone willing and able to work, as an alternative to the current policy of unemployment.

At the same time we need a fiscal adjustment- tax cut and/or spending increase, depending on your politics- to increase aggregate demand/sales/private sector employment to the point where the number of people in the transition job program is at a minimim.  

Because those in a transition job are 'more liquid' with regard to obtaining private sector employment than unemployed, the transition job program should prove a far superior price anchor/buffer stock vs today's unemployment, which means we can sustain a lower level of buffer stock workers than would be needed for buffer stock unemployed.  So in fact the transition job both increase price stability and increases the size of the private sector.  (unemployed are not in the private sector)

http://www.moslereconomics.com/mandatory-readings/full-employment-and-price-stability/

By the way, Argentina did this in 2001 and it was an unqualified success.  It was called the Jefes program, or something like that.  Over 1 million people transitioned from long term unemployment to private sector employment in about 2 years.

Regarding inflation measurement, CPI is designed as a cost of living index rather than an 'inflation' index in the academic sense.  Presumably this is done for the further public purpose of making adjustments for changes in the cost of living for targeted populations, etc.

That's a political choice to be respected and debated.  What MMT can do is show how various policy adjustments can be used to influence cpi.  For example, tobacco tax is in cpi, so lowering that tax would lower cpi.  and if cpi is going up because of a foreign monopolist hiking oil prices mmt might, for example, be used to show how causing unemployment to go up isn't going to change the price of fuel in any meaningful way, and how we are always better off at full employment that with mass unemployment.

The important contribution of MMT is it's explicit identification of the currency itself as a simple public monopoly, and all the ramifications thereof:

http://www.moslereconomics.com/mandatory-readings/a-general-analytical-framework-for-the-analysis-of-currencies-and-other-commodities/  

 

 

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#26) On February 17, 2013 at 6:13 PM, lucas1985 (< 20) wrote:

"How do you feel about http://bpp.mit.edu/usa/ ?"

It's a reliable index. It shows the manipulation of statistics in Argentina and that the American CPI is basically fine.

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#27) On February 19, 2013 at 10:55 AM, whereaminow (42.34) wrote:

Warren,

I'm going to create a follow up post to address your Keynesian and Fabian Socialist ideas.  I'll put the link to it in a comment below when it is ready.

lucas1985,

lucas?  my old climate change troll?  Is that you?

David in Liberty

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#28) On February 19, 2013 at 11:32 AM, AvianFlu (35.29) wrote:

David:

 Great posting. Very refreshing after a steady diet of bleak collectivist utopian blatherings.

"Communism only killed 100 million people. Let's give it another chance!"

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#29) On February 20, 2013 at 10:09 PM, lucas1985 (< 20) wrote:

"lucas?  my old climate change troll?  Is that you?"

Yep, I'm the one who keeps pouring cold evidence in front of your feverish conspiracy theories, wacky schemes and just plain ignorance. But like a broken clock, you're on the side of reality this time: price controls never worked and they'll cause even more distortions in the Argentine economy. Inflation is (almost) always a monetary phenomenom and monetary expansion is the cause of Argentine inflation. And the Peronist government is so incompetent, perverse and corrupt that it decided to break the thermometer (the oficial statistics) because it started to show fever back in 2007.

I expect a reply along these lines: "See, even the Statist and warmonger of lucas1985 admits that the State is the source of all bad things" because your ignorance and dogmatism can't deal with nuance. The Argentine government is not the same thing as the State in a strong liberal democracy with functioning constitutional checks, effective rule of law, more dispersed power, etc.

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#30) On February 20, 2013 at 10:56 PM, whereaminow (42.34) wrote:

The Argentine government is not the same thing as the State in a strong liberal democracy with functioning constitutional checks, effective rule of law, more dispersed power, etc.

Ah, but isn't the nature of the State to always expand and centralize its power, thereby reducing those checks?

And wouldn't that lead us to believe that the proper political position should be to oppose not only State power grabs but the State itself - no matter its current administrative form - since it will always tend to towards centralization and control?

David in Liberty

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#31) On February 21, 2013 at 3:49 PM, rfaramir (29.51) wrote:

"The important contribution of MMT is it's explicit identification of the currency itself as a simple public monopoly, and all the ramifications thereof"

If this were just a value-neutral scientific observation of the facts about what has been done to our money, that would be one useful thing. But instead of merely uncovering the fraud, MMT *advocates* the fraud, loudly. This is not economic science, it is political capitulation to the exploiters and pandering to them.

 

I prefer "Tu ne cede malis sed contra audentior ito" or "Do not give in to evil but proceed ever more boldly against it"

Many rant about how too much money is in politics, but the bigger problem is that politics are in our money. The government has no business being in the money business. The free market created money in the first place and is better equipped to provide it. Demand the separation of Currency and State! (Or at the very least a return to Constitutional money)

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#32) On February 21, 2013 at 10:07 PM, NewAlchemist (44.06) wrote:

When pressed, they would say "economics is too complex, so I leave it to the experts."

People don't think anymore.  Thought is outsourced to "experts".  Listen to how the TV and print media always lead their stories with "experts say".  

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#33) On February 23, 2013 at 7:37 PM, lucas1985 (< 20) wrote:

"Ah, but isn't the nature of the State to always expand and centralize its power, thereby reducing those checks?!
There are incentives to expand and concentrate power and there are incentives and forces to counteract them: witness the recent developments in Burma, the progress in economic freedom worldwide, etc.

"And wouldn't that lead us to believe that the proper political position should be to oppose not only State power grabs but the State itself - no matter its current administrative form - since it will always tend to towards centralization and control?"
I prefer to base my opinions on data and empirics rather than pure theory. Anarcho-capitalism might be the logical conclusion of absolute individual freedom but there's not much evidence of a working society based on these principles. Medieval Iceland [1] is not enough.


1- http://www.daviddfriedman.com/Academic/Iceland/Iceland.html

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#34) On February 25, 2013 at 11:41 PM, whereaminow (42.34) wrote:

Warren,

My response to your comments:

http://caps.fool.com/Blogs/continuing-my-debate-with/800557

I'd like to continue this debate if you would be gracious enough, and have the time.

David in Liberty

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