Re: Fraud in the CPI

On Mon, 3 Dec 2007 14:52:58 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
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On Mon, 3 Dec 2007 12:03:22 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
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On Mon, 3 Dec 2007 10:59:51 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message


<snip>


People first, not as a side-benefit. If you look at
business and assume as long as business is OK
then the people will be, they might not be.

Uh.....whatever. You still can't have one without the other.



Yes you can. There's the French aristocracy,

How did the French aristocracy earn money without any laborers?



Red herring. Your contention was that "you
can't have one without the other" regarding
the health of business and the health of people.

Incorrect read. My contention was that nobody (personal, business, whatever)
can earn money without laborers.


We were talking about whether a society should
focus on business or people. You only introduced
laborers in business in the last post, at least since
I've been posting here, but the earlier theme of
whether a society should focus first on what's good
for business or on what's good for people still has
my attention. You had contended that taking care
of business automatically takes care of people
because "you can't have one without the other",
which I said was not necessarily true, and gave
examples.

The hedge fund manager I noted was just a
particularly egregious example of a trend, of a
great many people taking big chunks out of the
commonwealth. The number is increasing
partly due to a business culture that I don't think
people should be as complacent about as they are,
but which is encouraged in no small part by a tax
code favourable to gathering enormous wealth.
I only spell that out because of what you wrote
below, that "a single exception doesn't make a
rule".




Nobody suggested, or would suggest, that money
could be made without labourers, in fact, that's
more in support of my point than yours.



and
the amazing thing Krugman said lately, that the top
hedge-fund manager in the USA made more money
last year than all 80,000 teachers in the NYC school
system made and will make for the next two years,
all added together. Don't try to tell me that doesn't
have much effect on people who aren't rich, even
that single instance!

Hm? You think the hedge fund manager doesn't have a staff? A company that
employs people?


We're talking about the money the hedge manager
himself made. Even if he had a thousand workers
and paid them out of his own pocket, he would
still make out astronomically.

Yes, he would.




The following isn't the particular talk I heard, but
here's a reference to that observation of Krugman's,
under "The New Gilded Age" three paragraphs
down from the top:
http://seattlest.com/2007/11/02/paul_krugman_on.php

Maybe you think it's OK. I think it's unspeakable.
It makes me want to look into plans for constructing
a guillotine, since it might be time to bring that back.

No, but I also realize that a single exception doesn't make a rule.

That's why I said "even that single instance".



(So does
Krugman, but when he gets political, he dissembles.)



A bit further down, "The Great Compression" is one
of the great phrases I heard in Krugman's talk that
I couldn't remember later.

<snip?


In the 1960's, one breadwinner could support a family.
Yeah, I know about computers and VCR's and whatnot,
but even families who don't have those things need
both parents working these days far more often than
before. That's one way it can be argued that quality of
life has decreased.

That's why reality is subjective. Many americans have jumped on the 50's
and
60's as an ideal, but to me, it's not reasonable to choose the only 30
year
block in human history when familes who were not rich could get by on a
single salary. Is it a decrease in quality of life? Sure. Was it
reasonable
to expect even a perfectly run economy to maintain that standard? No.


Why did it stop?

Inflation, mostly. Developing nations often experience a temporary wealth
boom, except it's not really a boom -- it's a moment in time where wealth
starts to pour into the hands of the people, but inflation hasn't acted on
the economy yet. You see it happening now in ASEAN, China, and India now.
Then, inflation follows the infusion of wealth, and the situation
stabilizes.


Nonsense. We were not a "developing nation".

Of course we were. We were building out an infrastructure. We didn't even
have a countrywide highway system until the 50's. A developing nation is one
that's pouring money into first-build infrastructure, and we were defintely
doing that after WW2.


Economic theory doesn't create wealth. Labour creates
wealth. Improvements such as better tools and better
organization may help out, but if the workers end up worse
off afterwards than before, the improvements weren't
improvements.

How can you maintain that if people are making stuff
they don't have yet, they'll be living well, but after they have
it, they'll have a tougher time getting by? It's like saying that
a fisherman can eat well when his freezer is empty, because
he's catching fish, but once his freezer is full of fish, he
can't eat as well even if he's still catching fish. The
contention makes even less sense than that, because now
that he has a backlog of fish, he can spend some of his time
improving his wealth in other ways. Yet despite this, you say
that of course he can't live as well as when he was
spending all his time catching fish.

I can imagine a possible counter-contention that when
he has enough fish, there's no job. Of course, though,
if there's no job, it's because there's no need for the job,
and the reason there's no need is because the fisherman
already has what he needs. find the idea that just
working, without producing anything worthwhile, counts
as being "productive" and provides the same benefit as
something that really is productive to be jaw-droppingly
nonsensical, though it really is something that I actually
hear. I check occasionally to see if it really is what
people mean to say, and though they unsurprisingly soon
get flustered when they try to defend it, it really was what
they meant to say.



Comparable
goods were being made in the 1960's as are being made now,
yet in the 1960's one person could support a family. There's
nothing about "now" that makes purchasing power magically
disappear into thin air which it didn't do in the 1960's. It's not
disappearing into thin air now - it's just not going as evenly
into the pockets of the people.

Contention disproven below.

As to inflation, it's the result of deficit spending which is in
effect "printing money" and thereby deflating the money
already in existence, because money represents the wealth
of the nation so if there's more printed, each piece
represents a smaller share in the nation's wealth. However,
if rewards were distributed the same, inflation would have no
net effect on money that was being made at the moment,
because although what cost $60 before now costs $80, the
worker would have another $20 bill in his paycheck because
although the money is worth less, his labour is worth the
same, not in dollars but in production. That's as long as the
money is being distributed as equitably as before.

"Louis XIV was a magician who could make people believe
that paper was money."




We could probably still do it, except
for the increase in wealth disparity.

Uh, no. The US citizenry has a net worth of 56T. Divide that equally
amongst
310,000,000 citizens, and you get 183K per person. That seems like a lot,
but as you well know living in SF, you can't buy a house for it. Or,
another
way of putting it would be that if you divided it up and told one spouse
to
stay home and live off the interest of the 183K, that would be between 10
and 18K per year depending on your rate of return., Most workers would
consider that to be a pay cut.

How did we do it in 1960 then? People weren't
two or three times as productive then than they are now.

Relative value of the dollar vs. the cost of goods and services.


As I've said often
in my commie way, it takes a lot of poor people to
support one rich person.

That's not commie -- it's capitalistic, you just have to turn it around. I
can't remember the name of the landed rich family -- but he was from San
Francisco -- who said "I'd rather have 10% of a thousand people's labor
than
100% of my own."


Of course, wealth always comes from the labour of other
people. Bill Gates wouldn't be rich if he had to build his
computers himself or if he were paid an hourly wage for
his labour developing his own operating systems.

Of course.

"Exorbitant" wealth comes from what has been called
the "exploitation" of other people, which just means paying
them enough less than their labour produces that you can
get a much bigger result for yourself. You can get away
with that because have "control the means of production"
and of distribution.

Businesses don't have the luxury of setting wage as you assume, however.
They are forced to pay according to the "other" free market, that being of
labor.



To avoid what is for me a side-diversion that I'm
probably responsible for starting up, I'll just restate that
families in 1960 could get by on one worker but families in
2000 need two. I've seen no satisfactory explanation
from you for that, Of course there is at least one
explanation that comes immediately to my mind, which I
suspect you may be avoiding because it's not flattering
to the wealth distribution in 2000 versus 1960 and you
don't want to 'fess up to anything that might put the
Reagan tax cuts for the wealthiest in a bad light. If so,
putting Reagan in a bad light is not something with
which I personally have any problem at all. If that's
not it, I don't know why you haven't mentioned the tax
cuts as one reason for the increasing disparity of
wealth, unless you maintain they stimulate the economy
which in turn helps the country, but the growth of the
national debt decisively demonstrates the failure of
that hypothesis.



.

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