LawTalkers - Pepper sprayed for public safety.

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Re: Pepper sprayed for public safety.

Quote:

Originally Posted by Hank Chinaski (Post 473407)

good thing for the rest of us that you and Adder don't get irony.

I don't get a lot of things, Hank. I've learned to live without.

Re: Pepper sprayed for public safety.

Quote:

Originally Posted by taxwonk (Post 473408)

I don't get a lot of things, Hank. I've learned to live without.

I just meant merely complaining about what she said by attacking sort of reinforces her point.

Ps you been back to the moth?

Re: Pepper sprayed for public safety.

Quote:

Originally Posted by taxwonk (Post 473405)

Even if I knew who she was, I still feel highly confident that I don't give a fuck about her opinion.

Given your interest in photography, you should read her book on Eadweard Muybridge -- it's very good.

Re: The case for a Sebby-style health care system

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So, in addition to the fact that there has been no pernicious inflation in essentials (just regular old inflation that's pretty much in line with headline CPI or PCE or GDP deflator or Billion Price Index, once you take out the noise), there has also been no decline in consumption, just a shift toward health care.

No shit there's been a shift toward health care. Your point would be what? That once we get HC under control (never), wages and by extension demand will increase?

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This is also entirely consistent with the common knowledge that health care spending has been increasing much faster than inflation.

Again, what is your point? How does this lead to a near term increase in demand? Are you suggesting health care inflation might create broader inflation and lead to increased wages across the board? This would curious, as you'd be turning the notion they should be controlled on its ear - a slightly controversial position.

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If we assume that this is roughly distributed across both public and private health care expenditures, that implies that total employee compensation has been going up faster than inflation.

Only none of it has accrued in the form of disposable income. Hence, weak demand.

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Ugh. The middle class hold very, very few long term fixed assets. They have bank deposits and CDs and other short term fixed assets. But they don't have, say, $1 trillion in mortgage assets.

Who does? Banks, hedge funds, other people who hold massive fixed rate portfolios.

Ugh indeed. Where do you think pension money flows? Do you think no pensions had exposure to the r/e collapse? And do you think the rate of return on deposits hasn't been impacted by the banking crisis, which necessitated such Fed easing? In your world, does money not flow between entities seeking returns? Are hedge funds and private equity shops invested in strictly by individual accredited investors?

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Here's a sketch of my plan if I were emperor of the economy:

Monetary Policy

- Maximize the opportunity cost of bank's refusing to lend. This means ending interest on excess reserves. Right now you have to be 25 basis points more attractive as a lending option because banks can get paid that much to sit on cash. That's bad.

Agreed.

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- Maximize the opportunity costs for everyone to sit on cash. This means communicating that the Fed will tolerate moderately higher future inflation to get catch up growth. QE3 and it's associated communications are a step in the right direction, with the goal being to make, for example, Apple's investment decisions look slightly different by changing expectations about the value of their massive pile of cash.

Already happening. And agreed.

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- Minimize the effect of nominally denominated consumer debt. Again, this means tolerating moderately higher inflation (e.g., Reagan second term, Bush I and Clinton levels).

Being attempted. And again, agreed.

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The risks of these policies are (1) moderately higher inflation, (2) an inflation spiral leading to hyperinflation, and (3) failure.

Obviously, (1) is actually a feature, not a risk, so no worries there. A few years of 3-5% inflation would help, not hurt. I think the changes of (2) are miniscule and easily counteracted if it comes about, so, no worries there. (3) would suck, but at least we would learn from it.

One risks making the middle class squeeze even worse. This would lead to more debt defaults. But, oddly, that may be a good thing. Every default turns into consumption somewhere else (imagine if we didn't have all the consumption provided by disposable income created from people not paying mortgages... that's scary). Two I think you dismiss too easily. Once hyperinflation kicks in, it isn't, according to history, easy to contain. I have no idea what three looks like.

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Fiscal Policy

- Directly stimulate demand with government spending. Another stimulus bill in whatever amount Christy Romer says is necessary. Half infrastructure spending and half block grants to states. Re-hiring teachers and nurse and cops and firemen helps undo the single biggest drag on employment: the depression in state and local government. It also has the long term benefit of improving education, and important investment.

- Long term investments in education and research.

- Significant increases immigration of high-skilled workers. Personally, I'd just say more immigration overall, but people have an easier time understanding how letting a chemical engineer from India in to the country helps than they do a low skilled worker, even though that principles are the same.

The risk here is a credit crisis that causes our borrowing costs to skyrocket. I don't see much chance of that, as the last several years have demonstrated, but even if there is, I'd address it with medium to long term fiscal balancing of the time Obama proposes, although I'd probably start by going back to Clinton levels of taxation. The tax increases are a drag on the stimulus effect of these policies, but not as big a drag as Republican (and Wall Street) like to assert. Regardless, I think the drag is more than offset by the rest of my proposal.

I agree on infrastructure and education. I wouldn't give the states shit. That's a recipe for waste. Regarding taxes, raise them across the board. Pump some of the stimulus money right back into the Treasury's coffers.

I'd also chop defense by 1/3, and start slicing every govt expenditure not based on, as Romney stupidly suggested, "whether we have to borrow for it," but whether it creates tax revenue down the road. All expenditures should be aimed at creating sustained employment. Means testing for SS? Yep. And Medicare.

Re: The case for a Sebby-style health care system

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Originally Posted by sebastian_dangerfield (Post 473442)

No shit there's been a shift toward health care. Your point would be what?

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Only none of it has accrued in the form of disposable income. Hence, weak demand.

Demand includes health care consumption.

You have this weird notion that the only demand is demand for consumer products. It's not.

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[Tolerance for marginally higher inflation] Being attempted. And again, agreed.

Not exactly, or not as explicitly as it should be. The Fed hasn't announced a higher inflation target or explicitly said it will tolerate higher inflation (that I can recall). Instead it's said it will keep rates low for a long time regardless.

That's close, but it's not the same thing.

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[One risks making the middle class squeeze even worse. This would lead to more debt defaults.

No. That's the whole discussion that we've been having. It's not the middle class that get's squeezed by inflation, it's holders of massive piles of nominal fixed assets.

And it means fewer, not more, defaults. It means nominal wages are rising (wages being the most important component of inflation), and nominal debts (i.e., mortgages) become relatively less burdensome.

You've got it all backwards.

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Every default turns into consumption somewhere else

No, every default is a loss of wealth to the system as a whole. It means less healthy banks and less lending, thus less investment, thus less employment.

Defaults are necessary, but they are not good.

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(imagine if we didn't have all the consumption provided by disposable income created from people not paying mortgages... that's scary).

Speaking of returns and pensions and squeezing consumers. They hold some of those mortgages.

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I wouldn't give the states shit.

I know you hate the states, but the single biggest problem in our labor markets is that we are still firing teachers, cops, firefighters and nurses (actually, last month might have been flat, but still). We've trimmed state and local government massively. It's time to return back to normal growth.

Re: The case for a Sebby-style health care system

But I had not seen them before. A pair of posts from Tyler Cowen on common mistakes of right and left wing economists.

I don't think many of them are limited to economists.

I'll quote just a few of particular relevance to this group (from the right wing mistakes, obviously):

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There is excess fear of inflation and hyperinflation in the current economic environment. Further there is often an excess estimate of the costs of inflation in the two to five percent range

3. Lower taxes don't spur economic development as much as it is often claimed, at least not below the "fifty percent or less of gdp" range.

5. I'm all for Health Savings Accounts, but unless done on a Singaporean scale, and with lots of forced savings, they're not a health care plan to significantly benefit most Americans. There is less of a coherent health care plan, coming from this side, than one might like to think.

6. There is already considerable health care cost control embedded in the ACA, most of all for Medicare, and this is not admitted with sufficient frequency.

9. The role of market failure in the recent financial crisis is underestimated. It is also believed that we can somehow commit to a policy of no future bailouts. Promoting that myth will make future bailouts more likely.

Feel free to cite any of the left wing ones back at me.

Re: these are old

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Originally Posted by Adder (Post 473494)

as common as your typos are I worry what you cut and paste is the wrong stuff.

Re: these are old

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Originally Posted by Hank Chinaski (Post 473495)

as common as your typos are I worry what you cut and paste is the wrong stuff.

Maybe he did this one on the Blackberry.

Re: these are old

Quote:

Originally Posted by Hank Chinaski (Post 473495)

as common as your typos are I worry what you cut and paste is the wrong stuff.

If only someone had given you a link you so you could check

Re: these are old

Quote:

Originally Posted by Adder (Post 473497)

If only someone had given you a link you so you could check

Hank is a technology lawyer. He doesn't check links.

Re: Pepper sprayed for public safety.

Quote:

Originally Posted by Hank Chinaski (Post 473409)

I just meant merely complaining about what she said by attacking sort of reinforces her point.

Ps you been back to the moth?

I was going to, but my heart decided it wanted to go to the ER instead. Three times, four procedures, in two months. It's like I said to Fugee on the FB: life extension is not necessarily its own reward.

Re: Pepper sprayed for public safety.

Quote:

Originally Posted by Tyrone Slothrop (Post 473419)

Given your interest in photography, you should read her book on Eadweard Muybridge -- it's very good.

Nah. I like Muybridge. In particular he provides an interesting counterpoint to Ansel Adams's early work in the large frame format. She still sounds pretentious, though.

Re: The case for a Sebby-style health care system

Quote:

Originally Posted by Adder (Post 473453)

My point, as I've said repeatedly, that your diagnosis of the demand problem is wrong. People are not consuming less because wages have been stagnant. Wages have been stagnant because their total compensation has been shifted toward health care, which is, by definition, consumption (i.e., demand).

Did you disappear for a week or whatever and forget the whole conversation?

The demand problems are these (1) too many people unemployed, (2) too little investment in housing, (3) too little business investment.

Demand includes health care consumption.

You have this weird notion that the only demand is demand for consumer products. It's not.

Not exactly, or not as explicitly as it should be. The Fed hasn't announced a higher inflation target or explicitly said it will tolerate higher inflation (that I can recall). Instead it's said it will keep rates low for a long time regardless.

That's close, but it's not the same thing.

No. That's the whole discussion that we've been having. It's not the middle class that get's squeezed by inflation, it's holders of massive piles of nominal fixed assets.

And it means fewer, not more, defaults. It means nominal wages are rising (wages being the most important component of inflation), and nominal debts (i.e., mortgages) become relatively less burdensome.

You've got it all backwards.

No, every default is a loss of wealth to the system as a whole. It means less healthy banks and less lending, thus less investment, thus less employment.

Defaults are necessary, but they are not good.

Speaking of returns and pensions and squeezing consumers. They hold some of those mortgages.

I know you hate the states, but the single biggest problem in our labor markets is that we are still firing teachers, cops, firefighters and nurses (actually, last month might have been flat, but still). We've trimmed state and local government massively. It's time to return back to normal growth.

Can I take a moment to point out the obvious here, since you both seem determined to leap above, around, through, and under it?

Wages are generally understood by consumers at the purchse point as cash in hand. That has been stagnant for at least two years. Compensation, on the other hand, includes benefits like health care. Compensation, which is what Adder is talking about, has not been stagnant. Rather, non-cash compenation has been taking a bigger piece of the total reward pie. Cash wages have been stagnating, as the costs of health care have made it more difficult for some employers to increase cash comp, and have provided cover for others to just not pay more.

Now I'm going to take my nap.