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Crash test dummies

By Tom Toles

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Thought bubble

I am not an economist, which means that I can't explain exactly how or why the economy does what it is doing, and I can't tell you what it will do next. Which also means that NOBODY is an economist. The economy is another thing like the weather, in that there are a lot of variables in play, but don't start in about climate change being like that, too, because climate and weather are not the same thing. Short term economic forecasting difficulties does not mean that there are no large-scale economic principles that have a known effect.

One of those, which I remember from high school economics class, is one that you interestingly never hear mentioned anymore. Possible that it has been discredited in the meantime, but today I'll entertain a darker speculation. It has to do with inflation.

Inflation, which temporarily whacked the economy pretty hard in the '70's has been beaten into submission and beyond. In the teeth of a severe bout of unemployment and foreclosures, inflation is not only at the low end of the Fed's pretty restrictive target range, it's BELOW that range. And the Fed is moving as timidly as a tormented tortoise in doing anything about that. And few powerful people are prodding it to do more. Now let's see, the investor class owns more of the nation's wealth than ever before. And what was that rule I heard in economics class? That some inflation tends to help people who are in debt and tends to decrease the wealth of the wealthy. Hmm. Just wondering. --Tom Toles

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By Tom Toles  | October 26, 2010; 12:00 AM ET
Categories:  Democrats, GOP  
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Comments

so why is this 'page' mentioned on what's his name's... Ezra's page??? ... sorry if not correct name. I know he is male and that his name started with an E, course first or last name is up for grabs...I admit I am TERRIBLE when it comes to remembering names. Just ask my friends...and no...those little 'tricks' dont' work for me. Harder to remember the trick!

Posted by: bertzel | October 29, 2010 4:57 PM | Report abuse

Oh and dave, as dude put it so eloquently, I am just a “common tater”
likin' the ‘self portrait’ dave : )
Posted by: bertzel

My Reply...
We are all "common taters" when you consider the complexity of the world that we live in.


I am also interested as to how you think this ‘transformation’ could be achieved before we all self- destruct.

It would be necessary to establish a new national agenda that puts the efficient and equitable distribution of goods and services first. The Democrats would be responsible for social services and the Republicans would be responsible for quality goods and services. The present economic system would be modified to include a supper fund that would put people to work supplying the needs of the nation and its people.
Note: it was a "supper fund" that paid for fighting the second world war. There were also super funds that rebuilt Europe and the Middle East. They are nothing new.
All of the government agencies would have technical advisers to maintain efficiency and coordination with all other agencies.
The supper fund would pay for elections and national infrastructure. No outside organization would be allowed to influence government decisions. They could only submit proposals.

From what I have ‘gathered’ so far, would I be correct in suggesting that, you tend to lean towards a global, somewhat socialistic society?
Posted by Bertzel

My Reply
The society would be dedicated to the welfare of the people within their society and cooperate with all other nations that are doing the same. Every nation would be responsible for its own best interests.
The social systems would be designed to maximize the development of services and goods.
Those who administered their society would be trained to do so and people would be trained for what there talents indicate.

At the present, I have been using the first book Earthland: the Real and Ideal that I published to send people that are interested in social organization.
The name of my set of four books is Earthland: Meaningful Reality. I have Three books on CD's that need to be published.

People are very capable of rising to the occasion when they need to.
I am pressed for time and will try for some better answers tomorrow.
Till then.
Dave


Posted by: OchamsRazor | October 27, 2010 8:03 PM | Report abuse

that cat was making some weird gutteral noises...thought perhaps a hairball was coming up, when low and behold, some missing thread appeared! Simply miraculous! Do you believe in miracles dave?
here is the ball...I mean thread..

~~~you are a retired English professor that can no longer dissect student’s papers so that they look like they are bleeding to death~~~~~dave

Talk about adding insult to injury. Should I laugh or cry? What to do…

dave,I am not dissecting ‘your paper,’ I am dissecting your mind!

~~~ I have written four books that are an update of Plato's Republic that cover what government should be.~~

“what government should be”…should be according to…you?
Why did you write FOUR books on this topic instead of one if what you wrote was, indeed, just an ‘update’?
Speaking of ‘update’, do you mean you have added your own thoughts and ideals to those of Plato?

I am an avid reader dave and am always interested in a variety of topics especially when it comes to ‘knowledge’ as well as the bizarre. : )
Perhaps you will tell me what your books are titled and where I can purchase them?

From what I have ‘gathered’ so far, would I be correct in suggesting that, you tend to lean towards a global, somewhat socialistic society?
Where do you see yourself in this scenario dave? Would you be one of the farmers or a ruler? I don’t mean to ‘sound harsh’ dave, but it is a valid question… is it not?
I, personally, have a problem with being classified as a person who must ‘join’ a certain group or class of people only to be ‘stuck’ there in that ‘group’ because that is what I am told I was ‘born’ to do, simply, because I am good at it.

See, I would probably start out as a farmer or craftsman but would have to move on to something else…now according to Plato, I wouldn’t be able to do that…just doesn’t seem fair dave!

I am also interested as to how you think this ‘transformation’ could be achieved before we all self- destruct.

Oh and dave, as dude put it so eloquently, I am just a “common tater”
likin' the ‘self portrait’ dave : )


Posted by: bertzel | October 26, 2010 2:53 PM
btw...hope to return the favor : )

Posted by: bertzel | October 27, 2010 12:18 PM | Report abuse

funny 'toon' Toles and oh so true.
Since the car now appears to be compact, one could crank that wheel and putt, putt on out of there...just a thought.
Posted by: bertzel

My Reply
I lost the thread of our conversation but I hope to continue to keep you in stitches. (:-)>
I think therefore I think that the Conservatives have the steering wheel to the "Auto of State" locked in place so that it can only go back and forth with no control of any other direction. Without a nintey degree left turn there is no way out.
Obama is a closet Conservative and is preventing the necessary changes that are required to get us out of this mess. We are locked into the Bush/Cheney self-destruct mod. The meltdown clock is ticking and we are not getting anywhere.
Dave


Posted by: OchamsRazor | October 27, 2010 11:54 AM | Report abuse

cat got your tongue dave?
not surprised by your response or lack thereof.

Posted by: bertzel | October 27, 2010 9:01 AM | Report abuse

Germany and England are getting their respective houses in order. It is past time for us to do the same thing. We are the leader of the free world. We need to act like it.
Posted by: bobbo2

If we are going to be a world leader instead of a third world nation, we are going to have to scrap our caveman economics and deal with the fact that there is not enough gold in the ground to back up the amount of dollars it will take to provide the exchange of goods and services to meet the needs of our high-tech society with a mega population.
Not only that, the value of gold is variable. The value of money is only what ever the market will bear. The value of goods and services is also speculative.
In order to get the best bang for your buck; it is necessary to crunch the numbers, set reasonable prices that are consistent with the cost to produce and provide the product or services plus a reasonable profit. Most of these numbers are already established and all that is needed is to add the necessary numbers to cover the short fall.
Money is only a means to an end and the best results are quality people in a quality environment and a quality society
that makes possible meaningful and quality lives.


Posted by: OchamsRazor | October 27, 2010 1:33 AM | Report abuse

You seem to imagine that the politicians and their financiers WANT to raise the standard of living for the middle and lower classes. You seem to imagine that they innocently bungle in their earnest, well-meaning attempts to keep the ship of state on an even keel. You seem to imagine that their incompetence by SHEER COINCIDENCE happens always to further enrich the wealthy and impoverish the poor.
Guess again.
Posted by: HumanistPatriot

My Reply
Great post HumanistPartiot; I think the big problem is the Sociopathic Traitors that we have been generating for the last fifty years through our advertising and programming systems that are promoting greed and maliciousness that is undermining the quality of life and the stability of personalities.
There is a great disconnect between the promise of the American Dream and the reality of the American Dream.
People are making more money but the cost of living has gone up exponentially.
People are stressed to maintain their life styles.
The bubble has burst and reality is becoming self-evident. People want to believe the lies they have been served up despite their desperate situation.
The only reasonable choice now is to reinforce the demand side of economics with "New Money" this would increase wages and prices to balance the demand and supply and thereby enable people live within their means.
Economic stability is the roots of the social tree. Without roots, the tree comes crashing down with the first storm.
The only way that you can have a society is to have social systems. No socialism is not an option but it is important that the social systems work for the people not against the people.




Posted by: OchamsRazor | October 26, 2010 9:21 PM | Report abuse

heavens tom, for what you suggest to be true the nation would have to be secretly ruled by a rich monied class that wants to keep us proles in poverty and slavery, feeding us mindless tripe like religion and reality tv to keep our minds malable and mush-like.

so of course you are wrong.

speaking of wrong, the guy who asks which president ever, in the last 50 years, submitted a balanced budget.

It depends on how you define "balanced," but by most measures Richard Nixon and William Jefferson Clinton both achieved that minor miracle.

Posted by: summicron1 | October 26, 2010 5:07 PM | Report abuse

heavens tom, for what you suggest to be true the nation would have to be secretly ruled by a rich monied class that wants to keep us proles in poverty and slavery, feeding us mindless tripe like religion and reality tv to keep our minds malable and mush-like.

so of course you are wrong.

speaking of wrong, the guy who asks which president ever, in the last 50 years, submitted a balanced budget.

It depends on how you define "balanced," but by most measures Richard Nixon and William Jefferson Clinton both achieved that minor miracle.

Posted by: summicron1 | October 26, 2010 5:06 PM | Report abuse

How many balanced budgets have been submitted to Congress by the POTUS in the last, oh, 50 years? Anybody care to guess?

And how many "emergency" funding authorizations have been submitted by presidents, in order to fund the presidents' pet projects (i.e. wars) without acting within the restraints of the normal budgetary process?

Finally, how does all of this get laid specifically at the feet of Nancy Pelosi or the current Democratic majority? One response would be that Republican deficits are good, while Democratic deficits are bad, but that just sounds silly.

Bill Clinton left office with the budget pretty well off... so well off that the Republicans insisted on tax cuts. Might there POSSIBLY be a connection between tax cuts and the deficit?

How about a connection between war spending and the deficit? Or the new Department of Homeland Security? Nope. It's all on Pelosi.

Yikes!

But at least we're safe from people carrying shampoo or toothpaste or (gasp!) nail clippers onto passenger jets. And the economy improves marginally every single time a passenger has to replace any of these things upon reaching his destination, so IT'S ALL GOOD!! Maybe we should extend the same requirements to train and bus travel! (Please, no! I'm kidding!)

Posted by: jonroesler | October 26, 2010 4:47 PM | Report abuse

preach to me Tom! I have a ridiculous amount of student debt, and I would love to see inflation take a bite out of it.

But other than my own self interest, I agree with your reasoning: monetary policy should benefit the largest number of people, not the richest people. Seems like this issue is too obscure to go anywhere though.

Posted by: Matt90266 | October 26, 2010 12:32 PM | Report abuse

Great cartoon TT. Dems, Reps, very similar these days, it seems. I wish Paul Wellstone was still around.

Open comment to all elected officials: Getting reelected is not your job. It's nowhere in the job description.

Posted by: PrairieDog60 | October 26, 2010 12:30 PM | Report abuse

Ooops - I meant "inflation hawks."

Posted by: dougdupin@yahoo.com | October 26, 2010 11:58 AM | Report abuse

Yes . . . that's why they're called "deficit hawks". Whether in economics or foreign affairs, they promote hegemony.

Posted by: dougdupin@yahoo.com | October 26, 2010 11:55 AM | Report abuse


Today's cartoon captures my sentiments exactly. Toles just forgot to elaborate: Watching the ping-pong pendulum swing back and forth induces a hypnotic trance such that political spectators lose control of their brains, and their capacity to exercise free will gradually disappears.

Snap out of it, people!

As for the economy being like weather -- oy! Tom, step away from the kool-aid.

There are enough mysterians out there telling us that no one could have known, that it's all up in the air, that it's bigger than the both of us.

NO. We're living through an economic debacle that was engineered by the upper circles. OR, how big a mountain of coincidences are you willing to write off as "just coincidence"?

First, the Fed had to keep interest rates anomalously low for an anomalously long time. Then Congress had to pass legislation forcing banks to underwrite mortgages for people who didn't qualify. This process was aided by cheerleading from the Bush White House, with its theme of "The Ownership Society." Then, the banks had to invent bizarre new packages of derivatives to hide the bad mortgages. Then Bob Rubin, Larry Summers, and Alan Greenspan had to work overtime to keep Congress from listening to a minor bureaucrat, Brooksley Born, who warned against the dangers of the new unregulated, opaque instruments (great PBS Frontline investigation here: http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html ). Then the ratings agencies, such as Moody's and Standard & Poor's, had to give triple-A ratings to all the toxic junk. Then the SEC had to turn a blind eye to all the bogus ratings. Then the Fed, Wall Street, and Hank Paulson looted the US Treasury to cover the bankers' bad judgment at the casino.

Ah, the wondrous workings of coincidence.

Give

me

a

break.

You seem to imagine that the politicians and their financiers WANT to raise the standard of living for the middle and lower classes. You seem to imagine that they innocently bungle in their earnest, well-meaning attempts to keep the ship of state on an even keel. You seem to imagine that their incompetence by SHEER COINCIDENCE happens always to further enrich the wealthy and impoverish the poor.

Guess again.

Posted by: HumanistPatriot | October 26, 2010 10:29 AM | Report abuse

Well according to US Census (2010 Statistical Abstracts, table 1174), the stock holdings as % of total assets of the lowest 20% income group have grown since 2001, while the share of stock holdings of every other income group have fallen (except the 60 to 80% quintile, whose percent of stock holding rose from 52.0% to a whopping 52.5%).

Posted by: jimt222 | October 26, 2010 8:17 AM | Report abuse

The only logical response to these unquantified cherry-picked statistics is as follows: The lowest income Americans? They're rich! RICH I TELLS YA! There is no income disparity! They're all living off their fat dividend checks! You are all being HAD!

Posted by: jhnnywalkr | October 26, 2010 10:04 AM | Report abuse

Jimt222 writes
"In other words, the only investor class that "owns more of the nation's wealth then ever before" is the lowest 20% of income earners."


Uh, not even close. You quoted a report that measured "the stock holdings as % of total assets." Then made a statement about 'wealth'.

For instance, if the value of your house falls by half, and the value of your 401k only falls by a third, the value of your 401k as a percentage of your total assets has gone up. According to your conclusion, above, you'd call this an increase in wealth.

Posted by: bsimon1 | October 26, 2010 9:58 AM | Report abuse

funny 'toon' Toles and oh so true.
Since the car now appears to be compact, one could crank that wheel and putt, putt on out of there...just a thought.

Posted by: bertzel | October 26, 2010 9:22 AM | Report abuse

"I am not an economist . . . "

No news flash there.

"Now let's see, the investor class owns more of the nation's wealth than ever before."

Well according to US Census (2010 Statistical Abstracts, table 1174), the stock holdings as % of total assets of the lowest 20% income group have grown since 2001, while the share of stock holdings of every other income group have fallen (except the 60 to 80% quintile, whose percent of stock holding rose from 52.0% to a whopping 52.5%).

In other words, the only investor class that "owns more of the nation's wealth then ever before" is the lowest 20% of income earners.

Of course Toles' secret desire to see the return of inflation would hammer that income group disproportionately.

Progressive logic!

Posted by: jimt222 | October 26, 2010 8:17 AM | Report abuse

Hey, bobbo2, it is spelled England, not Englad. Jeesh.

Posted by: bobbo2 | October 26, 2010 7:01 AM | Report abuse

The more money there is the less it is worth, especially when it is backed by absolutely nothing but the word of the Federal Government. Since Nancy Pelosi became Speaker and said that there would be no new deficits and touted "pay as you go" over 5 trillion dollars has been added to the debt. FIVE TRILLION DOLLARS IN THREE YEARS! Pelosi is the Speaker of the House of Representatives, spending starts in the House of Representatives, how good is her word? Talk about making our money worthless. To pay the Government's bills they must borrow the money or print the money. Gold sits at over 1,300 dollars an ounce. Does anyone think that our ruinous fiscal policies have anything to do with this? These people in Congress know nothing about economics. They only know how to feather their political nests with the Government printing press at the Bureau of Engraving and Printing and with our hard earned money. Government will borrow over 40% of it's budget next year. Germany and Englad are getting their respective houses in order. It is past time for us to do the same thing. We are the leader of the free world. We need to act like it.

Posted by: bobbo2 | October 26, 2010 6:58 AM | Report abuse

Gee, Tom, what does inflation do for those of us with no debt, but on a fixed income?

Posted by: Wrily | October 26, 2010 6:34 AM | Report abuse

What happened to the American economy is that the FED commoditized American workers. Whenever it became difficult for businesses to attract workers for minimum wage, no benefit jobs the FED saw a bubble to burst. People are not the same as bushels of wheat, or cars of coal or barrels of oil. We need innovation in society, economics and politics that isn't capitalism, socialism, or communism. We need to reorient and build around what every American can become, not the cannibal capitalism of the pseudo-conservatives that tells every American you're not necessary!

Instead of shoveling free money out the windows and loading docks of the FED and Treasury Department for pseudo-banks to usurize the world, why not expand the economy by educating and training every American with a dream. We need the best work and ideas of everyone, not two or three pukey experimental mantras endlessly repeated by left and right wing morons!

Posted by: gradya3 | October 26, 2010 1:46 AM | Report abuse

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