America The Land of the Free

[Neoteny]

there would be a revolution before tomorrow morning.

Agreed.

[patches70]

Glad my post about loss of personal freedoms in the US has sparked such a lively debate on currencies and inflation.

Well they are related aren't they? you don't consider debt slavery as a loss of personal freedom?

You don't think small groups of people who arbitrarily determine the value of the medium upon which all our labors are priced and use that power to rob us of our labors isn't a form of losing our personal freedoms?
Think the poor schlub living paycheck to paycheck working at a job he hates but can't quit because he has bills to pay is somehow not a loss of personal freedom?
Think the family that has both parents working jobs, sometimes one or both parents working two or more jobs just to struggle to keep a roof over their heads and food in their bellies isn't a loss of freedom?
You think people who have their savings eaten away by inflation isn't a loss of personal freedom?

<shrugs> I read the OP, something about a quasi dictatorship with zero examples or evidence given, just basically cliches and a call to "wake up sheeple" It just looks like Trump hating for the sake of hating Trump I guess, but not very constructive or useful. Maybe it was something of a catharsis for you to get that off you chest, and that's cool daddy-o. Whatever floats your boat I suppose. It might have helped to explain exactly what personal freedoms you were talking about and how that's the current administration's fault. At least that way we could all have a discussion about whatever it was you wanted to talk about instead of just a call to all virtue signal to each other about how much we live under a dictatorship. Hell, if you gave some specifics I might just agree with ya. But for the life of me I really can't think of much that this particular administration has done that is really any worse than what previous administrations have done.

Financial freedom is certainly a personal freedom, IMO something something I'm actually interested in and felt like commenting. Is that type of freedom not worthy of discussing? you can certainly join in if you have insight or something constructive to add, after all, it is your thread.

[patches70]

Ahh and if anybody doubts my characterization of the average US family today, in regards to their finances, here ya go-



69 percent, with less than a $1000 dollars in savings. That's pathetic, it's also unwise and dangerous. Just one bad luck break and those 69% of people are fucked financially, which of course leads to all kinds of other problems.

[mookiemcgee]

Well I absolutely agree that they serve the same purpose, I do disagree about the quality level and I personally don't really think that is subjective. Wine 2000 years ago was just bad, sure it got you drunk just as well but it was painful and gross to drink. Wine is just straight up better and more enjoyable (and will get you drunk much more effectively) than what they drank back then!

Oh, I'm not entirely convinced about that. Wine, beer ale in olden times was quite different than it is today. Those types of drinks are probably the only reason human beings survived to even make it to today. We learned to distill alcohol and it was one of the most important inventions ever, because before that you'd have to drink from a stream, a lake, a stagnated pool of cess water if you had to, and that could and would get you sick and all too often you'd die.
sure, the alcohol tasted a lot different, by your standards "bad" but people didn't drink those things with the intention of having fun, they drank it because it was the only thing safe to drink. Their alcohol was much more hearty, nutritious than our stuff today which is now relegated to a luxury product for the most part. We are more tech advanced than our ancestors, but we sometimes forget they were just as smart as we are today, they had the same brains we have. It just takes a long time since discoveries are built upon prior discoveries. We've reached a point where our sum total of knowledge is just vast compared to our forebearers, but don't let that make you think we are better or smarter than they were. We aren't.

But good discussion none the less! We need not agree.

Fair enough, we need not agree. But by your own standards here I think clean water is better than dirty water that gets you sick (which we have now vs then). As someone who is overly familiar with wine, I can tell you quite definitively that wine is better in virtually every way now than it was in Roman times. Is wine better now than 300 years ago? that is debatable, but now vs 2000 years ago it's not even close. there are huge problems in the way they made wine back then such as inconsistent ripeness, Rot, fungus, volatile acidity, brettanomyces among other things tend to make wine smell and taste bad. Virtually all of these things are nolonger a problem even in $2 wine from TraderJoes now.

So I'm not arguing that any individual is smarter now than one then, but I feel we very much do all benefit in a real way from that vast sum of knowledge.

[Lootifer]

Patches, we’ve talked, before. You know this isn’t my first rodeo (I battled with BBS back in the day).

I’ll read your dialog, but you can assume I have a pretty sound knowledge of economics (although my macro is a bit weak, hence the question). I know what inflation is lol, Amarati.

I’ll reply later (since I too have work to do).

[thegreekdog]

Patches, we’ve talked, before. You know this isn’t my first rodeo (I battled with BBS back in the day).

I’ll read your dialog, but you can assume I have a pretty sound knowledge of economics (although my macro is a bit weak, hence the question). I know what inflation is lol, Amarati.

I’ll reply later (since I too have work to do).

Lootifer! Nice!

[Lootifer]

2. Economics is not a science
.

Just like psychology, anthropology and other social sciences arrn’t Science amirite?!

Hate to go down the semantics argument, but I can't resist. Economics is a social science. Yes, the truth of any one theory can change if behaviours change (like any social science), but that doesn’t make the scientific study of these theories any less “scientific”.

[Neoteny]

Economics could be a science.

[Lootifer]

Lootifer! Nice!

Hey man, I hope you are well.

[Lootifer]

yes I can do that for you. Sorry for taking so long, some of us gotta work.

Anyway, to understand why fiat currencies directly affect purchasing power of families (adversely) you have to accept a couple of facts first.

First fact, everything is cheaper now than ever before in human history...

*snip*

...Our work today is priced in a fiat currency which lowers in value every time a new dollar is introduced into the market.

Now this should answer your question and you are welcome to research this on your own to confirm what I am saying, I encourage you to do so because it's a rabbit hole that will open up a whole new way of thinking about the world.

I should have clarified, good information, most of which I agree with. But you didn't need to write it all out.

But until then, let me let you in on something that's gonna make you mad, and illustrate one of the bad consequences of fiat money. You see, the market doesn't react instantly. When you introduce new money into the market it takes some time for the market to adjust and and reflect the lesser value of all the money in the market as a consequence of the new money added. What is going to make you mad about this is that the way new money is introduced and who benefits from it. You see, as Armati said I think, new money most often comes in the form of fractional reserve lending. When a bank loans money it doesn't have that money on hand, it literally creates that money out of thin air and it's legal. A bank in the US only needs to hold 10% reserves for all the money they lend out. Now when the bank creates this money the market hasn't seen this yet and so it hasn't been priced in yet. Thus, whomever it was that got the loan gets the full value of that new currency and buys things at a rate that is less than after the market adjusts to the new quantity of currency. Poor people aren't getting loans, are they? Yet, it is the little money poor people have that get hurt the most when the market prices in this new money and the poor people all of a sudden have less purchasing power than that meagerly had before. This is the so called "wealth disparity" we all hear so much about. It is the rich who take out loans and buy up stuff before that new currency suffers from inflation.

This is an interesting theory, and one I will think more on. My take on the wealth disparity is kinda similar, but kind of different: Those who have wealth now can find more wealth far easier (through access to capital) than those who have no capital.

It's just how the system works, and it's a fine system is your goal is exponential growth, but we already know from basic math classes that exponential growth of anything is unsustainable, and this includes fiat currency.

There is nothing inherently unsustainable about exponential growth, only material constraints in the environment the growth is operating in cause issues. And since fiat is inherently immaterial I am struggling to find an issue (with the growth itself, I am certainly not suggesting fiat currency doesn't have issues!!).

What's worse is the Fed has a target inflation rate of 2% a year, and as we already know when you have some like "x% growth over a given period of time = exponential growth". Thus, you see the effects on the above graph. And that's just the Fed's target rate for the macro economy, when you look at specific industries you'll find more disturbing inflation. Armati is correct, 2% growth a year equals a doubling of the price every 35 years. *healthcare example*
*college tuition example*
*housing example*

Edit: Oops, forgot to address this:
Those are all examples of government policies, and not the monetary policy itself. And when you make change, there will be short term shocks - that's what happens with change. This is also why 3-4 year terms for both politicians and CEOs are generally a bad idea, as their incentive is to game these shocks (lots of short term gains, avoidance short term losses), without thinking about long term implications (which often are the opposite, short term gains turn into long term losses, and vice versa for short term losses).

And all the while average people who don't know how to take advantage of the fiat system suffered the most. (*snipped rest as this is key point*)

This is the link I don't really see. I see issues in modern society, for sure, but I don't see a causal link between inflation, and wealth disparity.

For example, using FRED (handy source of economic data, I hope it is reputable), inflation from 1984 to 2016 averaged around 2.7%. Conversely, median household income has risen on average around 3.1%. In other words, real incomes have gone up.

Getting paid $20, when bread costs $0.2 is the same as getting paid $200, with bread @ $2 (and getting paid $2000, with bread @ $20!).

[armati]

Economics is not a social science
by Brian Davey


"As Yves Smith makes clear, the status and power of economics and economists is connected to its claim to be a social science. So let’s be clear…..it is no such thing.

What is currently taught as economics cannot possibly be described either as a science or even, for that matter, as a study of society. I make that assertion because the track record of economists in prediction is so poor that it is laughable for them to claim scientific status. This failure of predictive power has been pointed out over and over again – particularly after the failure of the bulk of the economics profession to predict the collapse of 2007/8. http://www.prophetsprofit.com.au/dismal.htm"


http://www.feasta.org/2011/10/05/econom ... l-science/

Thats just a piece of the article, there were a few authors to choose from.

I believe this author points out our economists never seem to get it right, which is a kind of indicator its not science.

But in any case, ive been talking economics with some pretty bright people for the last 10-15 years or so and as I said to Patches, I have found the economic discussion goes round and round.
Seems for every point there is a counter point, so Im gonna let you guys draw your swords and shoot each other for awhile.

Its a good topic tho and Im happy to see opinions posted.

[Dukasaur]

Economics is not a social science
by Brian Davey


"As Yves Smith makes clear, the status and power of economics and economists is connected to its claim to be a social science. So let’s be clear…..it is no such thing.

What is currently taught as economics cannot possibly be described either as a science or even, for that matter, as a study of society. I make that assertion because the track record of economists in prediction is so poor that it is laughable for them to claim scientific status. This failure of predictive power has been pointed out over and over again – particularly after the failure of the bulk of the economics profession to predict the collapse of 2007/8. http://www.prophetsprofit.com.au/dismal.htm"


http://www.feasta.org/2011/10/05/econom ... l-science/

Thats just a piece of the article, there were a few authors to choose from.

I believe this author points out our economists never seem to get it right, which is a kind of indicator its not science.

But in any case, ive been talking economics with some pretty bright people for the last 10-15 years or so and as I said to Patches, I have found the economic discussion goes round and round.
Seems for every point there is a counter point, so Im gonna let you guys draw your swords and shoot each other for awhile.

Its a good topic tho and Im happy to see opinions posted.

If failing to predict the exact date of the next stock market crash is to be taken as evidence that economics is not a science, then nothing is a science.

Ask an astronomer to predict the exact date when the next killer asteroid will hit earth. He can't do it.

Ask a biologist to predict when the last species of crab will go extinct. He can't do it.

Ask a doctor to predict the exact date when you will die. Unless he's about to kill you, he won't have much luck with that one either.

Ask a geologist to predict the exact date that the Yellowstone supervolcano will blow again. He can't do it.

All of these are examples of questions to which we can answer only in terms of probabilities and periodicities. We know that the Yellowstone volcano blows on a period that is more than 600,000 and less than 1,000,000 years, and the last one is fairly reliably dated to 630,000 years ago, so another one could be just around the corner, or it could be another 400,000 years away. That's a pretty big range.

We know that large invertebrate species last about a eleven million years from speciation to extinction, and there are 4,500 species of crab, so we can estimate that a randomly-chosen crab species will go extinct every 2500 years. Right now due to our catastrophic pollution of the benthic zone, marine animals are going extinct a lot faster, so perhaps we can shorten that to 1000 years. That's about as close as we can get it.

It's estimated that a really big asteroid impact like the Chicxulub impact that caused the K-T extinction comes around, on average about once every 200 million years. The last one was about 65 million years ago, so one might guess that the next one will be in about 135 million years. That guess, however, has an enormous margin of error. It might be next Monday or it might be in 500 million years. All astronomers can provide is a very vague approximate answer, sort of like picking where in an electron cloud you expect an electron to actually be.

Economists can similarly tell you that some kind of recession occurs about once every five or six years, that only about half of them are serious enough to actually disrupt people's lives. Asking them to predict a precise date is just as ridiculous as the other examples.

Like other sciences, economics provides you with ranges, constraints, and probabilities. It can give you policy guidelines. Economists can tell you within a range of probabilities, what the consequences of something are. Specific outcomes can be calculated with a great deal of precision, but only within narrow constraints.

In the words of Morley Gunderson, "economics is about how decisions are made in a world of uncertainty and limited information".

[Lootifer]

Economics is not a social science
by Brian Davey


"As Yves Smith makes clear, the status and power of economics and economists is connected to its claim to be a social science. So let’s be clear…..it is no such thing.

What is currently taught as economics cannot possibly be described either as a science or even, for that matter, as a study of society. I make that assertion because the track record of economists in prediction is so poor that it is laughable for them to claim scientific status. This failure of predictive power has been pointed out over and over again – particularly after the failure of the bulk of the economics profession to predict the collapse of 2007/8. http://www.prophetsprofit.com.au/dismal.htm"


http://www.feasta.org/2011/10/05/econom ... l-science/

Thats just a piece of the article, there were a few authors to choose from.

I believe this author points out our economists never seem to get it right, which is a kind of indicator its not science.

But in any case, ive been talking economics with some pretty bright people for the last 10-15 years or so and as I said to Patches, I have found the economic discussion goes round and round.
Seems for every point there is a counter point, so Im gonna let you guys draw your swords and shoot each other for awhile.

Its a good topic tho and Im happy to see opinions posted.

I feel like you, and the text you have cited, are conflating policy advisors and econometric forecasters with the body of work that is economics. I am neither (although guilty of using econometric forecasts), yet I would call myself an economist.

It seems from a quick skim, that classical economics is being accused of lacking scientific validity, but welcome to 2018 - Kahneman and others have been saying that for decades... You know a lot of science is based on proposing something, then finding out you are wrong right? In fact, arguably that's what science is all about. So classical economics isn't perfect? No kidding, neither are a lot of fields, especially ones where humans are involved.

In fact, what makes social sciences so interesting, is you can prove something almost beyond doubt, only for a cultural or behavioural shift or new tech that makes that entire causal link disappear in a moment.

[thegreekdog]

I'm sure I've missed it, but why does it matter whether economics is a science?

[Dukasaur]

I'm sure I've missed it, but why does it matter whether economics is a science?

Somebody posted some economic data. Posting economic data tends to summon one of Alex Jones' minions to come out of the ether and post "economics is not a science!"

[thegreekdog]

I'm sure I've missed it, but why does it matter whether economics is a science?

Somebody posted some economic data. Posting economic data tends to summon one of Alex Jones' minions to come out of the ether and post "economics is not a science!"

But economic data is just data... information... facts.

[Neoteny]

I'm sure I've missed it, but why does it matter whether economics is a science?

Somebody posted some economic data. Posting economic data tends to summon one of Alex Jones' minions to come out of the ether and post "economics is not a science!"

This is accurate if by "ether" you mean "the variety of authoritarian, xenophobic, and anti-semetic havens we call 'the threads in the off-topic forum.'"

[Dukasaur]

I'm sure I've missed it, but why does it matter whether economics is a science?

Somebody posted some economic data. Posting economic data tends to summon one of Alex Jones' minions to come out of the ether and post "economics is not a science!"

But economic data is just data... information... facts.

I don't disagree. But this is the world that collaborative filtering has left us.

[armati]

thegreekdog

"why does it matter whether economics is a science?"

It doesnt matter at all.

1. 95% of economics is common sense
You don’t need a degree to understand it

Schools of economic thought
In the history of economic thought, a school of economic thought is a group of economic thinkers who share or shared a common perspective on the way economies work

1 Ancient economic thought
2 Islamic economics
3 Scholasticism
4 Mercantilism
5 Physiocrats
6 Classical political economy
7 American (National) School
8 French liberal school
9 German historical school
10 English historical school
11 French historical school
12 Utopian economics
13 Georgist economics
14 Marxian economics
15 Neo-Marxian economics
16 State socialism
17 Ricardian socialism
18 Anarchist economics
19 Distributism
20 Institutional economics
21 New institutional economics
22 Neoclassical economics
23 Lausanne school
24 Austrian school
25 Stockholm school
26 Keynesian economics
27 Chicago school
28 Carnegie school
29 Neo-Ricardianism
30 Modern schools (late 19th and 20th century)
31 Heterodox schools (20th and 21st century)
32 20th century schools

Listen to a few university profs or on the net, mix and match write a book on your thinking, make a fortune.

Simply remember rule #1 95% of economics is common sense and your opinion is as good as any prof, maybe not as good as duks hero alex but heck, who is?

[Neoteny]

The problem with modern economics is plainly political bias. It deals in numbers and data but there is no real knowledge-base gleaned from it as far as for predicting/explaining trends and applying the field to policy. If you think wealth should be allowed to flow freely, there are models to drift toward that may loosely match reality, and if you are interested in egalitarian wealth distribution, then you can find the same there. I wouldn't rule out that it could be a science, but I don't think we're there now.

I can't believe I'm agreeing with Arnazi here.

[patches70]

Ok this is awesome!

One thing I'd like to have you clarify, do you think that monetary expansion is the principle driver of rising inflation?

Anyway, onto it!

This is an interesting theory, and one I will think more on. My take on the wealth disparity is kinda similar, but kind of different: Those who have wealth now can find more wealth far easier (through access to capital) than those who have no capital.

Oh, you are absolutely right, The rich do have far better access to capital. And usually that capital comes in the form of low interest loans, the rich don't use their own money to finance things after all. This is why my above question is important if we are going to get anywhere. If we agree that money (and credit, I should have said) drive inflation, then you have to accept that those who get the loan from credit conjured up from thin air from a bank, then you have to acknowledge that until the person starts spending that new money the market hasn't yet registered it's existence. When that money is finally recognized the market reacts and we see that reaction in the form of inflation. But the person who used that money first, uses it at pre market reaction, almost everyone else who uses that money later loses the value the original person had because by that time the market has reacted and decreased the value of that new money.
The rich also have an incentive to see inflation because it increases the prices of their assets which makes them richer or their portfolio richer at least. It's not the rich who get hurt by inflation after all.

There is nothing inherently unsustainable about exponential growth, only material constraints in the environment the growth is operating in cause issues. And since fiat is inherently immaterial I am struggling to find an issue (with the growth itself, I am certainly not suggesting fiat currency doesn't have issues!!).

Oh I gotta disagree. exponential growth is only sustainable if you have infinite time, resources and space (for material things that grow exponentially, like germs and bacterias). The market certainly isn't capable of infinite growth, there is always crashes and corrections that interrupt such growth because it literally can't go on forever. And this is true for anything, not just finance. It's almost always this very thing that ends up destroying fiat currencies in the end. You can print all you want but eventually everyone is going to lose faith and that's it for the currency, it's done. Just as Zimbabwe or Venezuela for the most recent example. Inflation has not only destroyed Venezuela's economy it's also destroying their very society. And absolutely, their government policies certainly didn't help the situation, they certainly didn't pay enough attention to economic realities I'd say.

The US dollar isn't anything special in this regard, eventually the same thing will happen to it. That doesn't mean we'll necessarily go through what Venezuela is going through, but the current economic system will eventually be scrapped for something else. Hell, the last time the US did this was in 1972 after all. Not that long ago in the scheme of things.

Edit: Oops, forgot to address this:
Those are all examples of government policies, and not the monetary policy itself. And when you make change, there will be short term shocks - that's what happens with change. This is also why 3-4 year terms for both politicians and CEOs are generally a bad idea, as their incentive is to game these shocks (lots of short term gains, avoidance short term losses), without thinking about long term implications (which often are the opposite, short term gains turn into long term losses, and vice versa for short term losses).

I gotta disagree a bit, government policies can certainly cause problems, bu I'm not talking about government policies, because when you start factoring those in everything starts getting really really complication with cause and effects that are sometimes foreseen and sometimes unforeseen. What I'm talking about is strictly the policies of The Federal Reserve, which contrary to popular belief isn't a government agency under control of government lawmakers. The Federal Reserve calls itself "an independent government agency" but that's not really the case. The President appoints the chair of the Fed but the board is decided by the Fed itself. Fed policies don't require approval from the Administrative or Legislative branches of government. Show me a single government agency that isn't under the control of a branch of government?
In the US, which I should have noted is the only system I'm talking about, the Federal Reserve and the Federal Reserve alone determine monetary policy. Supposedly for the good of the country, but I'll address this shortly.

This is the link I don't really see. I see issues in modern society, for sure, but I don't see a causal link between inflation, and wealth disparity.

For example, using FRED (handy source of economic data, I hope it is reputable), inflation from 1984 to 2016 averaged around 2.7%. Conversely, median household income has risen on average around 3.1%. In other words, real incomes have gone up.

Getting paid $20, when bread costs $0.2 is the same as getting paid $200, with bread @ $2 (and getting paid $2000, with bread @ $20!).

The macro inflation rate during that time might have been 2.7%, One problem you've got is that in your stretch of years you are combining 1984-1989 with 1990-2016. This is a bad idea, why? Because in 1990 the US government changed the way it calculates inflation. Previous to 1990 the government changed the way they calculate inflation in 1980 as well. When you start comparing you have to show this, like this-



This is inflation calculate from 2000 to 2018 using the 1990 method.

It gets even worse when you go back to the 1980 method-



Another problem is as I said you are quoting the macro inflation rate. Energy for instance averaged 3.19% a year from 2000-2018. Healthcare inflation is way greater than 2.7% over the same period. Healthcare inflation rose an average of 4.54 between 1984-2018-

http://www.in2013dollars.com/Medical-ca ... ation/1979

Now if you look at the individual years for the inflation of just the healthcare field, $1000 worth of healthcare in 1984 costs $2000 in 1995. It doubled in costs in just 11 years. That's just a little over 6% inflation. It then doubled again from $2000 to $4000 in 2014, 19 years. That's a rate of about 3.7%. It's even worse for housing. since people, average people, need a place to live and medical care, just these two areas of the average person's budget hammers that budget, hard.

Now I'm sure you know this is referred to as real inflation indexes, there are also real median household income charts as well, like this one-



In real adjusted dollars, those dollars based on the value of a March 2018 dollar, shows that real median household income only $1,103 more now than it was in the year $2000. That's not keeping up with inflation. No matter what methodology you use though, there are certain limitations you have to face. For instance, as the NYTimes points out-
https://www.nytimes.com/2017/09/12/busi ... ssion.html

But Census Bureau officials cautioned that those figures were not directly comparable because of a change in its methodology in 2013 that has tended to increase measured incomes.

The Economic Policy Institute, a liberal research organization based in Washington, estimated that without the change in methodology, median household income in 2016 was still 2.4 percent lower than in 1999 — and 1.6 percent below the level reached in 2007, before the recession began.

you have the census bureau warning you can't compare figures with previous years before 2013 as the methodology changed to an extent as to increase measured incomes. If they'd kept using the same methodology then you see we still haven't even gotten back to 1999 levels.

Your example of "Getting paid $20, when bread costs $0.2 is the same as getting paid $200, with bread @ $2 (and getting paid $2000, with bread @ $20!)" while true doesn't matter because it's not a reflection of actual reality.
But I guess that's the rub, eh? What is the reality? It's hard to determine when looking at reams of numbers and data. Since numbers will tell you whatever you want them to tell you if you torture them enough, all these numbers can be skewed to say whatever whomever is putting them together based upon their own agenda's and ideology.
The problem with government numbers is ya gotta trust the government, which is a tough sell because government, the US government at least, doesn't have a history of being very trustworthy....

So, that's your FRED stats, yeah, call em reputable, maybe they are. But it would be wise to be skeptical.



Now, for the conspiracy stuff.

First, the Fed and their enacting of monetary policy for the supposed good of the country. It's fine to say that, it's fine to think that, but I'm not sure if reality is that clear. One must admit that setting monetary policy is an awesome power because you control the very mechanisms of the foundation upon which virtually everything we call society is based upon. We should also pay heed to the adage absolute power corrupts absolutely. The Federal Reserve when making policy decisions, those decisions are made by human beings who suffer all the same shortcomings every human being suffers from. One shortcoming the temptation to use power to enrich one's self. The Federal Reserve does not answer to the President, does not answer to Congress, but does answer to the shareholders. The Federal Reserve can claim they are serving the best interests of the nation, but they are legally bound to serve the best interests of their shareholders. So long as the shareholder's interests are the same as the nation's, then that can be true. But not all the shareholders of the Federal Reserve are American citizens. They have no duty or compelling reason to act in the interests of the people of the United States. Unless you completely believe the Federal Reserve Board is composed of completely altruistic Angels, then you have to acknowledge that the temptation to do shady things is not only there, it's likely.

The second thing, the changing methodologies the government agencies use to report the data you and I are using and how often they change those methodologies. It's obvious that the stated reason for such changes is that it supposedly more accurately reflects and reports on the data coming in. The problem with this stated reason is that after every single change of the methodology the government does, without fail, shows a more positive interpretation of the data than the previous methodology would have. Changes in the calculations of inflation always report lower inflation than the previous calculations. Changes in the calculation of median income always shows a greater increase in median income than the previous calculations.
These reports are supposed to be reflecting a reality, and yet can we say that simply adding or removing certain variable changes actual reality? Or is it more likely that these changes are used to report a calculation that the government desires to see regardless of the reality?

Now, loot, I have to reiterate, I'm speaking only of the United States. I can't and won't speak to the situation in other countries. I can look up other country's data and try to make assumptions about them but I can't really be sure of any of those assumptions. If you are not American, living in the United States, then your picture of economic reality won't be the same as mine. I would have to say I probably would have a better feel for the reality in the US than you just as you could easily say you'd know the economic reality of New Zealand better than I ever could no matter how many numbers I pull up.

[patches70]

Patches, we’ve talked, before. You know this isn’t my first rodeo (I battled with BBS back in the day).

I’ll read your dialog, but you can assume I have a pretty sound knowledge of economics (although my macro is a bit weak, hence the question). I know what inflation is lol, Amarati.

I’ll reply later (since I too have work to do).

Yeah, I forgot. I know we've talked before but I can't remember any of the substance of those talks. Old age, it's a bitch. I'm just fascinated with the subject. I think, and I believe you'd agree, no matter what the economic system is, it is wise and good to get out of debt and stay out of debt if at all possible. Life is easier without having to pay back debts, don't ya think?

[Dukasaur]

The problem with modern economics is plainly political bias. It deals in numbers and data but there is no real knowledge-base gleaned from it as far as for predicting/explaining trends and applying the field to policy. If you think wealth should be allowed to flow freely, there are models to drift toward that may loosely match reality, and if you are interested in egalitarian wealth distribution, then you can find the same there. I wouldn't rule out that it could be a science, but I don't think we're there now.

Every economics textbook will tell you that it's a descriptive science. It's not there to answer normative questions.

Economics will teach you that if you raise the tax on fuel by x percent, y people will choose to leave their car at home and take the train. Whether it's right for government to try to force people to take the train is a completely different question, a political question, which is outside the scope of the economics. Ideally, an economist will just tell you what the relationship is and leave you to mull over what you want to do with that knowledge. (The fact that some economists overstep their bounds and make normative pronouncements is just a reality of human behaviour. Some practitioners in every field will overstep and make normative pronouncements.)

On the question you cited, I don't think there's much disagreement. Every major economist nowadays will agree with two indisputable facts:
1. The free market successfully generates great amounts of wealth.
2. The free market also generates great amounts of inequality.

From there, it's really a normative question. Do you favour wealth generation or egalitarianism? (Or something in between the extremes.)

There are two kinds of poverty, absolute and relative. Absolute poverty is when you really don't have enough. When you don't have enough food to eat, or you don't have a safe place to lay down at night, when you can't afford to heat your home in the winter or get basic items like shoes on your feet. Relative poverty is when you have lots of food and a nice house, but all your neighbours have a Mercedes-Benz and you're driving around in a rusty old Chevy Cobalt and you just feel like a total piece of shit.

You can say that capitalism reduces the former but increases the latter. I don't think any major economist, left right or centre, would disagree with that statement. The only question, and it's a purely normative question, is how much you worry about one over the other.

[thegreekdog]

Perhaps relevant:

https://www.politifact.com/truth-o-mete ... ge-worker/

Kamala Harris:
"In 99 percent of counties in America, someone making the minimum wage working full time can’t afford a 1-bedroom apartment."

[armati]

Patches,
" it is wise and good to get out of debt and stay out of debt if at all possible. Life is easier without having to pay back debts, don't ya think?"

Robert Kiyosaki (rich dad poor dad)would disagree with you big time. His mastery of debt has made him a billionaire. And owns much much gold.and oil and.......

Now I happen to think as you do about that, my point about economics, for every point there is an equal and opposite counter point.
Seems that way anyway.

thegreekdog

Minimum wage was never intended to pay rent or raise families etc
That is a brand new socialist idea.

Next thing ya know we will all get a guaranteed monthly income.

One minor problem with socialism, eventually you run out of other peoples money.