tag:blogger.com,1999:blog-6276561747841568697.post2389474723787705514..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Krugman: Markets are good -- when they supposedly endorse Krugman's positionWilliam L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger43125tag:blogger.com,1999:blog-6276561747841568697.post-39354109284400401642011-04-29T19:57:56.784-04:002011-04-29T19:57:56.784-04:00An excellent youtube skit would be some guy dresse...An excellent youtube skit would be some guy dressed up as a nerd and turning up at the supermarket checkout.<br /><br /><b>checkout chick</b>: Greetings sir, how are you today?<br /><br /><b>nerd</b>: Great! I'm from the Bureau of Labor Thtatithticth and thith is my bathket of goodth [hold basket under one arm].<br /><br />... after the goods are totaled up through the cash register ...<br /><br /><b>nerd</b>: [peers at the total] You theem to be uthing a linear thithtem there. May I thuggestht that geometric ith thtatithtically more appropriate?<br /><br />Nerd goes on to pull out reports and charts and try to explain (with plenty of arm waving) that the total for the goods should be something different. By this time the checkout chick has called in her supervisor.<br /><br /><b>supervisor</b>: So let me get this straight, you want to pay less for the basket of goods that what you would pay if you bought each item separately?<br /><br /><b>nerd</b>: In a nut-thell, yeth!<br /><br /><b>checkout chick</b>: We've been getting a lot of this lately.<br /><br /><b>security</b>: Sir, you gonna have to leave now.Telhttp://lnx-bsp.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-83475066686766119532011-04-29T18:47:10.104-04:002011-04-29T18:47:10.104-04:00Re the chocolate bar example. Let's suppose on...Re the chocolate bar example. Let's suppose on year 1 we have a purchase of 2 peanut butter bars, and 2 chocolate bars at $1 each real total $4, geometric total also $4.<br /><br />Then on year 2 we have exactly the same bars but chocolate is now $4 per bar so real total $10 but geometric total is $8.<br /><br />Now on year 3 the manufacturer of chocolate bars decides to sell "family size" bars instead of regular size and these bigger bars cost $8 (i.e. the price of chocolate has not changed). Now the equivalent purchase is 2 peanut butter bars and 1 large chocolate bar so real total is $10 but geometric total has changed to $6.<br /><br />Somehow we get deflation between year 2 and year 3 due to product repackaging. Does this make sense?<br /><br />Does the supermarket do a geometric total at the cash register? Does the bank do a geometric total of transactions to calculate your balance?Telhttp://lnx-bsp.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-74163001928779738392011-04-26T10:18:59.333-04:002011-04-26T10:18:59.333-04:00Correction - in my example the geometric estimate ...Correction - in my example the geometric estimate is $8.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-35786817465408963022011-04-26T10:17:30.421-04:002011-04-26T10:17:30.421-04:00Thanks for making my point. I am guessing you did ...Thanks for making my point. I am guessing you did not read what I suggested. Better to stuff your fingers in your ears and go "blah blah blah!" and call me names and threaten me physically - NOTE TO ANDERSON - if you do monitor this site, it seems common sense that comments like these should be removed.<br /><br />You are still just reciting that conspiracy stuff - the government forced the BLS to adopt geometric estimates rather than Laspeyeres to understate the the increased cost of living and hold down social security payments. There are so many points along that chain of causation that you need to prove past your own assertion. And then you need to prove that moving to geometric estimates even had that large of an impact. Shadow statistics somehow comes up with 3% divergence annually. But BLS reports the divergence - 0.28%. <br /><br />You also need to address all of the logical points of having geometric rather than upper-bound estimates. An example from the paper itself - peanut butter bars and chocolate bars all cost $1 each and you used to buy 2 each. Then the price of chocolate rises so that bar is $4. How should the BLS address this change. The upper bounds is $10 - or $6 inflation. That assumes that you are highly biased toward chocolate and that any shift to a lower cost product would lower your level of satisfaction. The geometric results - $10 and $4 inflation. The bias only really happens if the price of one product rises enormously while the price of the other falls drastically. <br /><br />That is a glimpse of the nitty gritty. You can always tell when someone has not really thought about something - they go directly to threatening them with violence.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-79597016679599163622011-04-26T08:30:14.991-04:002011-04-26T08:30:14.991-04:00Anon@5:28, it's really too bad there's no ...Anon@5:28, it's really too bad there's no way to punch people in the throat over the internet, because you desperately need to be punched in the throat. Nobody said anything about conspiracies, but no person with an IQ over the single digits (which category clearly doesn't include you) thinks that the BLS' adoption of geometric methods for calculating CPI was anything but a way of understating increases in the cost of living, primarily aimed at holding down Social Security payments. Of course, it also provides conveniently rosy inflation statistics, which may fool those who have their heads permanently lodged up their asses, but doesn't fool anyone else. Now please do humanity a favor and kill yourself, along with any children you've had, so that your stupidity won't pollute the gene pool any longer.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-12507344768422535462011-04-26T05:28:30.452-04:002011-04-26T05:28:30.452-04:00Ok this might be hard for your conspiratorial brai...Ok this might be hard for your conspiratorial brain - but please think about what you are saying, and do some basic research. <br /><br />Not everything is a conspiracy, and when you search for the conspiracy everyone else seems to have their head in the sand but it is really just you.<br /><br />Read this and give it the benefit of the doubt, the same way I gave Shadow Stats the benefit of the doubt. Leave behind all preconception and think for yourself. <br /><br />http://www.bls.gov/opub/mlr/2008/08/art1full.pdfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-15143620748211425292011-04-25T07:33:34.274-04:002011-04-25T07:33:34.274-04:00You do know that the BLS has been understating CPI...You do know that the BLS has been understating CPI for the past 30 years or so, right? If CPI were calculated the way it was in 1990, it'd be at 6%--10% if it were calculated the way it was in 1980. But don't let that stop you from keeping you head in the sand (or in some other place, depending on how flexible you are).<br /><br />http://www.shadowstats.com/alternate_data/inflation-chartsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-9223535349543353312011-04-25T06:29:13.461-04:002011-04-25T06:29:13.461-04:00Yeah because commodities are not by their very nat...Yeah because commodities are not by their very nature volatile. And not all commodities have risen - check out prices on natural gas, tea, rice, oranges, fishmeal, olive oil, or steel wire. <br /><br />And why ignore the lack of such volatility in core inflation, even after such a lag effect from monetary expansion? <br /><br />The data is really available, but you keep on clinging to some ideological Austrian adage. Even food inflation for the past year has been 2.7% - most of the non-core inflation is in energy costs. All commodities, absent the even more volatile food and energy has only increased by 0.2% But don't let that stop you, continue panicking. <br /><br />http://www.bls.gov/news.release/cpi.nr0.htmAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-49226889940318625002011-04-25T04:26:17.398-04:002011-04-25T04:26:17.398-04:00Gee, so every single commodity is rising in price ...Gee, so every single commodity is rising in price but no inflation? So all crops everyone and all minerals are increasing in cost because of worldwide weather, wars, disruptions of some kind, and not because the US Fed has printed trillions of more dollars and is buying our debt? Hmm.<br /><br />And someone thinks we won't have inflation because wages are falling? Oh, boy. I guess it's impossible under the infallible Keynesian theory to have both high inflation and high unemployment, right? Oops, wait. The 70's. Shoot. Don't worry, you'll see nominal wages rise at some point, just like prices for everything else.Unknownhttps://www.blogger.com/profile/11257937553028768684noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-10128140902959910722011-04-24T18:54:37.112-04:002011-04-24T18:54:37.112-04:00I was worried that inflation was happening but now...I was worried that inflation was happening but now I am not.<br /><br />Wages are falling! <br /><br />This will stop inflation dead in its tracks.<br /><br />Rising prices of natural resources and falling wages do not under any circumstances show a decline of a country either.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-80624857321783322022011-04-24T10:34:24.712-04:002011-04-24T10:34:24.712-04:00William, you're so right. We are headed for h...William, you're so right. We are headed for hyper-inflation! Unfortunately, inflation is part of the leftist conspiracy, so its hiding itself. Come out inflation, hurry up and increase to prove our theory right!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-70828263286264798852011-04-24T08:35:55.122-04:002011-04-24T08:35:55.122-04:00Everyone who is arguing against the idea that asid...Everyone who is arguing against the idea that aside from fuel and food prices increasing inflation is flat is missing the entire point. Of course fuel and food prices matter! Krugman never argued that. He argued that aside from fuel and food prices, inflation is flat.<br /><br />The reason fuel and food prices are going up are largely due to market volatility (e.g., Middle East uncertainty, it being a bad year for many crops, fuel prices driving up food prices, etc.). So yes, you can have fuel and food prices increase without an erosion of the value of currency.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-72809345344243421402011-04-23T03:16:03.640-04:002011-04-23T03:16:03.640-04:00Prof. Anderson,
I'm a Freshman student majori...Prof. Anderson,<br /><br />I'm a Freshman student majoring in Economics at UNC Greensboro, and I was hoping you could clarify your statement in the first paragraph on price theory. I've used price(P), quantity(Q), and GDP as axes in the past, so I understand that much, but not how the use of P in that situation relates to Keynesian economic theory specifically. What exactly were you referring to?<br /><br />Thanks!Wolkinnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-80772558863780510412011-04-22T09:38:35.919-04:002011-04-22T09:38:35.919-04:00So if AP Lerner is correct and the only signs of i...So if AP Lerner is correct and the only signs of inflation are in food and oil, then other commodities, say, cotton and copper should not have risen in price like the anomolies food and oil, right? Wrong. I supplied the links on an earlier post by this site makes my computer crash, so I'll let you look them up. And that's just two commodities off the top of my head. I bet MOST have risen in price. Gee, those Austrians seem to always get it right, don't they. Not so much for the MMTers or Krugmanites.Unknownhttps://www.blogger.com/profile/11257937553028768684noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-62195229253948818622011-04-22T03:29:50.699-04:002011-04-22T03:29:50.699-04:00"The other day someone asked if Paul krugman ..."The other day someone asked if Paul krugman ever wrote about personal liberty. I found.this.on his blog which would seem to indicate that he does.<br /><br />http://krugman.blogs.nytimes.com/2008/07/30/putting-it-together/"<br /><br />Anon, you dont speak krugman so ill translate.<br /><br />Krugman: It makes me physically ill to see george bush violating civil liberties, but as long as a democrat is trashing our rights, illegally detaining civilians, starting wars, and basically being a sociopath all is well with the world. <br /><br />That article does nothing to defend krugman's views on liberty and says everything about him being nothing more than a shill. Every single outrage he lists was continued or escalated under the obama administration and that is "democracy intact". you fail sir. You fail hard.ekeyrahttps://www.blogger.com/profile/17413110869433997820noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-25418340255081030282011-04-22T00:50:51.404-04:002011-04-22T00:50:51.404-04:00AP Lerner on Nov 10 last year said, "Here'...AP Lerner on Nov 10 last year said, <i>"Here's another free prediction for the folks on this blog: <b>be ready for the dollar rally</b>."</i> then I asked him to clarify and on Dec 4 he said:<br /><br /><i>The dxy was at 75 when I made that prediction in early Nov. It's now @ 79. Take 5 minutes and google what it's up against. FYI-it's up against the yen, which I'm short.</i><br /><br />Now the DXY is actually primarily up against the Euro, and anyone who wants to check will see that the low point of 75 happened earlier than Nov 10. To make it all the more laughable, the DXY has shown four months of continuous losses as the Chinese (in their inscrutable wisdom) have decided that pissing away their life savings in Greece and Spain is more fun that pissing away their life savings on US treasury bonds.<br /><br />Sure we all know that either the EU kicks out laggard nations such as Greece or else the Euro will fall apart... eventually. But right now, the US money printing machine is devaluing currency faster than the Greek dodgy accountants can achieve.Telhttp://lnx-bsp.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-82502512108598637212011-04-21T15:00:50.288-04:002011-04-21T15:00:50.288-04:00For those who are too lazy to read the article I p...For those who are too lazy to read the article I posted I will give the headline. That in itself should spell it out: <br /><br />'Dollar succumbs to weight of debt, loose Fed policy'<br /><br />Imagine that?!?Mike Cheelnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-67749251429200802452011-04-21T13:02:00.086-04:002011-04-21T13:02:00.086-04:00I want to hear the Ks and the MMTs defend this:
...I want to hear the Ks and the MMTs defend this: <br /><br />http://www.reuters.com/article/2011/04/21/us-markets-forex-idUSTRE73D6Z920110421Mike Cheelnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-91124683845802358012011-04-21T00:23:18.988-04:002011-04-21T00:23:18.988-04:00Can't post messages on my phone appearently Pa...Can't post messages on my phone appearently Paul Krugman not Truman :XAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-37294234301348403552011-04-20T18:01:56.560-04:002011-04-20T18:01:56.560-04:00The other day someone asked if Paul Truman ever wr...The other day someone asked if Paul Truman ever wrote about personal liberty. I found.this.on his blog which would seem to indicate that he does.<br /><br />http://krugman.blogs.nytimes.com/2008/07/30/putting-it-together/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-69429061040823186092011-04-20T02:22:01.423-04:002011-04-20T02:22:01.423-04:00Firstly: there is no need to search for conspiracy...Firstly: there is no need to search for conspiracy in order to find that the ratings agencies are useless -- you only need to observe their complete and total flub after the 2008 real subprime estate collapse and their rating of CDO's that turned out to be junk. Whether these people are corrupt, inept or possibly both really does not matter, the fact is their advice has been demonstrated to be worthless.<br /><br />Secondly, using the price of US government bonds as a measure of free market value is a waste of time. The Fed openly admits to manipulating that particular market. How could Greenspan have kept interest rates low for so many years if this was an open and free market?<br /><br />Finally: Krugman's recent quote pretty much explains where the brain-gap is sitting:<br /><br /><i>If an increase in debt-financed business investment expands the economy; if an increase in debt-financed consumer spending expands the economy; then how can it be that an increase in debt-financed government spending doesn’t do the same thing?</i><br /><br />... and the answer as given by many people before (and now repeated by myself) is that free-market spending and government-allocated spending do not spend money on the same things.<br /><br />Government-allocated resource spending can sometimes turn out to be very good, but this is rare. More often government spending fulfills a political requirement to buy marginal voters rather than considering any true economic justifications. Even if they did honestly intend to be delivering an optimal allocation, they generally don't actually know the correct answer. That's why centrally planned economies operate so inefficiently.<br /><br />Krugman once again clearly shows his presumption that all economic activity is homogeneous, and he continues to cling to this no matter how many people explain how wrong this is.Telhttp://lnx-bsp.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-9578762854886846932011-04-19T18:51:56.611-04:002011-04-19T18:51:56.611-04:00What about M2 and M3?What about M2 and M3?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-52063721040910383492011-04-19T18:32:50.793-04:002011-04-19T18:32:50.793-04:00One example comes to mind - 1998-2000 there was a ...One example comes to mind - 1998-2000 there was a big rise in food prices while M1 money supply declined.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-44079432137215163092011-04-19T18:15:53.744-04:002011-04-19T18:15:53.744-04:00'Then how come commodity prices have always fl...'Then how come commodity prices have always fluctuated so much more than core inflation, even during periods of no monetary expansion?'<br /><br />Could you be a bit more specific? Which period are you referring to?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-58665174915764898282011-04-19T16:17:05.577-04:002011-04-19T16:17:05.577-04:00Then how come commodity prices have always fluctua...Then how come commodity prices have always fluctuated so much more than core inflation, even during periods of no monetary expansion? And where does Krugman say that anything higher the core average must be attributable to something other than inflation? His point was that the fear of massive inflation is unwarranted, and in fact there is more evidence indicating deflation. <br /><br />And then how do you separate the impact of monetary expansion on food prices from the global growth in demand for food?Anonymousnoreply@blogger.com