Globalization
POSTED BY: deepgirl187
UPDATED: Tuesday, August 26, 2025 22:20
VIEWED: 9221
PAGE 7 of 15
"Imperfect". Yes, all theories are imperfect to some extent, but Keynes had considerable insight into the flow of money. And I see you haven't refuted the argument so far.
So, the dodge that Keynes came up with- and the lever that the Fed STILL uses to this day- is to increase the money supply. As money gets skimmed off into various pursuits, many of which reduce the amount of money that "folks" have to purchase "things" with, it is replaced with more money. The "dodge" is inflation. And this policy is all based on Keynes' "imperfect" theory. (Perhaps you never understood the genesis of the Fed's "monetary" policy. Now you know.)
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Always look upstream.
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FROM TODAY'S CNN MONEY
Gap between rich, poor seen growing
Quote:http://money.cnn.com/2007/10/12/news/economy/income/index.htm?postvers
Income disparity reaches highest since 1920s, paper reports
Citing Internal Revenue Service data, the Wall Street Journal reported that the wealthiest 1 percent of all Americans earned 21.2 percent of all the nation's income in 2005, up from the previous high of 20.8 percent in 2000. Conversely, the bottom half of working Americans earned just 12.8 percent of all the nation's income, down from 13.4 percent in 2004 and slightly lower than 13 percent in 2000.
ion=2007101209
The point is not... OH, THE POOR!!! The point is that as MOST people get poorer, they are less and less able to "buy things". And they way capitalism works, that is they way money flows: upwards.
You might look at this and think: Don't capitalists understand that unrestrained greed kills the goose that lays the golden eggs? That economic activity depends on the movement of capital (like flowing water) and once all the water is damned up you can no longer get useful work out of it? My guess is: apparently not.
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Always look upstream.
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Quote:
Originally posted by SignyM:
So, to continue the analysis:
So now, I'm ahead of the pack. I have a bigger market share, and more profits. Meanwhile, the competition is not sitting still. Factory B has invested in even better technology. They can operate with only 50 workers. Factory C has wrested a 55% wage and benefits concession from THEIR employees. Now, everyones' prices have gone down, but so has the consumer market.
If we are going to discuss debunked economic theories can I do Merchantilism? Because at least that has gunboat diplomacy and wouldn't be so boring.
Here's the problem with your analysis. Like your entire theis to date it relies on a static state theory, that you change one thing and nothing else changes. So let's look at that.
In truth labour is cheap and equipment is expensive. I have to invest in equipment I have to put cash down in front of seeing any real profit. Even if I automate a whole line rejigging that line is expensive. In reality the only people that ever invested time in huge scale industrial automation where the Japanese and that was because the cost of workers wages made it economic.
I may not be an economist but industrial automation is one thing I'm qualified in. Back in the early 1980's it seemed that what you are saying would be true. The fact I am not in that business now tells you how well that worked out.
If you look the world is not full of robot factories in the US it's full of factories with cheap workers in the developing world. In all cases the cheaper human is the better bet.
Ironically BTW it would be better for the local economy to have your 68 folks in Anytown USA on a semiautomated line than to have 120 or 200 folks doing the same job in China.
But that's an aside. People are a limited resource. Provided they are willing to retrain and move into new areas then they can find work as long as the economy remains boyant. So if letting those guys go kept Capitalist Inc in Anytown chances are the money the company and it's workers produce will create businesses in the local economy that will hire some of the folks laid off. Profit is income, if the robot company buys stuff, hires on extra support engineers. If the suppliers have to package components differently to feed an automated line chances are there will be jobs there. Once those jobs go to China all bets are off.
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Fletch2, if you'll notice, my example had one factory getting wage and benefit concessions. Whether you toss people out of work or pay them less, the effect is still the same: they're not going to buy as much as they used to.
Quote:Then why is there worldwide unemployment?
People are a limited resource
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Always look upstream.
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Quote:
Originally posted by SignyM:
"Imperfect". Yes, all theories are imperfect to some extent, but Keynes had considerable insight into the flow of money. And I see you haven't refuted the argument so far.
So, the dodge that Keynes came up with- and the lever that the Fed STILL uses to this day- is to increase the money supply. As money gets skimmed off into various pursuits, many of which reduce the amount of money that "folks" have to purchase "things" with, it is replaced with more money. The "dodge" is inflation. And this policy is all based on Keynes' "imperfect" theory. (Perhaps you never understood the genesis of the Fed's "monetary" policy. Now you know.)
---------------------------------
Always look upstream.
Are you sure you read Keynes? The idea is to inject money into the economy in a down cycle to stimulate demand the idea being that once money starts flowing it has a knock on effect. In an economy that is functioning it shouldnt be nescessary the expension of the economy is a consequence of the improved economic activity.
Like I said Profit == Income. If "profit is bad" then "income is bad" because they are exactly the same deal. One is a reward for investment and the other from labour. Capitalist societies view capital as being the dominant partner in the relationship rather than seeing the two as equal. Your wages are a drag on the economy... you basket!!
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Quote:So why has the Fed recently lowered rates? Are you saying this economy is not functioning? In fact, why have credit at all?
Are you sure you read Keynes? The idea is to inject money into the economy in a down cycle to stimulate demand the idea being that once money starts flowing it has a knock on effect. In an economy that is functioning it shouldnt be nescessary the expension of the economy is a consequence of the improved economic activity.
And I'll reiterate my last point so it doesn't get lost in the shuffle: Whether your toss people out of work or pay them less they're not going to buy as much stuff as before.
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Always look upstream.
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"second that and add the problems resulting from infringements on American soveriegnty (such as subverting economic interests to outside value judgements such as global warming...and the desire to place American servicemen under the jurisdiction of foriegn courts...and illegal immigration)."
Hero, you sound like a Ron Paul supporter and not a neocon ....What gives? Should have wrote.."from infringement on American sovereignty (such as subverting national sovereignty to outside economic interests such as NAU, CAFTA, NAFTA, WTO, UN} but your getting there. I will categorize you as Dangerous stupid with your foot in the door of Lazy stupid....hey, you can always brag to jongsstraw...
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Quote:
Originally posted by SignyM:
Fletch2, if you'll notice, my example had one factory getting wage and benefit concessions. Whether you toss people out of work or pay them less, the effect is still the same: they're not going to buy as much as they used to.Quote:Then why is there worldwide unemployment?
People are a limited resource
---------------------------------
Always look upstream.
All your examples are static state that's why they are bogus. In Sigworld workers leave the factory and pass the ragged starving bodies of their dismissed collegues while the cruel factory owner twists his moustache and wonders which of the factory girls to ravish and which gets tied to the train tracks.
Such melodrama!
In reality people laid off find other jobs. Repeat, Profit is Income and when that extra profit is spent it too generates economic activity just as the workers spending wages does. That in turn creates demand for stuff that someone has to be employed to make.
Your models dont work, you try to simplify them to make your point and I understand that but if you remove the effect on the wider economy you distort the results.
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Quote:
Originally posted by SignyM:Quote:So why has the Fed recently lowered rates? Are you saying this economy is not functioning? In fact, why have credit at all?
Are you sure you read Keynes? The idea is to inject money into the economy in a down cycle to stimulate demand the idea being that once money starts flowing it has a knock on effect. In an economy that is functioning it shouldnt be nescessary the expension of the economy is a consequence of the improved economic activity.
And I'll reiterate my last point so it doesn't get lost in the shuffle: Whether your toss people out of work or pay them less they're not going to buy as much stuff as before.
---------------------------------
Always look upstream.
The idea of "injecting" money into a system is fucking retarded. Where did the money come from? What, we praise an illegal private entity's willful inflation and debasement of our currency? Come on idiot ...THINK. How can money come out of thin air? Why is the dollar so low? How do we end this?
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Quote:
Originally posted by SignyM:Quote:So why has the Fed recently lowered rates? Are you saying this economy is not functioning? In fact, why have credit at all?
Are you sure you read Keynes? The idea is to inject money into the economy in a down cycle to stimulate demand the idea being that once money starts flowing it has a knock on effect. In an economy that is functioning it shouldnt be nescessary the expension of the economy is a consequence of the improved economic activity.
.
Liquidity. You want to open a business you want to borrow money from the bank. You walk in present your plan and the bank likes it because it's good (ok not really YOU someone that understands finance.) They want to lend you money because they want to profit from your success but as I explained to Rue banks dont really keep money in shoe boxes under the desk. They don't nescesarily have the idle money you need.
But your bank, let's call it bank A, knows that it can borrow short term from bank B to get the funds it needs to finace your neato idea. In a few days when it's repossessed the orphanage and thrown the orphans into the snow (actually mad up the shortfall but I thought you might get the idea better if I translated into Melodramatic) they pay bank B back with interest.
So far so good.
So we have the sub-prime morgage fiasco. Now bank B was heavily invested in subprime as was banks C through Z. So when bank A comes knocking the other banks say no-can-do.
So here is bank A, it has your sure fire, peachy money maker just sitting there... but it's a little strapped for cash right now.
So they could tell you to go away. In which case you get no investment dont make millions hire hundreds of workers and change the world and more importantly for them bank A doesnt get to profit from it.
Enter the Fed who loans to bank A at a peach low rate just the same as it would have got from bank B. They invest in you, you make huge taxable profits, hire hundreds of taxable workers and sell oodles abroad to ease the balance of payments.
You are happy because you get your business/profit.
Bank A is happy because they profit.
Uncle sam likes it because they got their money back + all the nice taxes on your enterprise and workers. Your workers get a job/life hell maybe a dog called Spot!
Economic life goes on, fade to black.
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