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Well I'm sure there are specific things and reforms that could be done. But I've been coming to the conclusion that we're getting the government and the economy that a majority of people want. When Obama pushed TPA and TPP and the Democrats who claim they're for the middle and working class went along not many in the public seemed to care. They were too busy talking about and even protesting things like how police aren't nice enough to black suspects or other such baloney.
I'm wondering if a majority of the public doesn't want America to soon become a two-class 'diverse' Brazil. And if not, how to make politicians responsive to the public's interests is a good question.
You make interesting remarks, mtl1.
It is a big problem that so many corporatist/Wall Street democrats alienate what should be their core constituency. If we look at opinion polls of what the American people want, there is a huge disconnect between public opinion and public policy being set in Washington. The American people want to see policies that improve the quality of life in America, not more wars, NAFTA deals, tax cuts for the wealthiest, deregulation/bailouts, military spending and $1m cancer treatments. People are angry and distracted by football, gossip and other stuff that doesn't affect their lives. We know what the Koch suckers want, as you point out, it's a Brazilianization of America. A stratified nightmare for salt of the earth Americans. We share a common concern, mtl1. For me, Bernie Sanders is the right candidate to address these issues for working class America:
For one, you are wrong. As Milton Friedman famously said, "Inflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output."
What do you think happens with the money supply, when the wages keep increasing? Money supply is how much money there is in the economy, and when wages increase there will be more money in the economy.
If you want some real world evidence, take a look at Argentina money supply.
Actually you didn't understand Friedman atgument. He is arguing against the people who claim inflation is due to supply side shocks. (AD–AS model)
Quote:
Without a change in output or a change in the money supply, there cannot be inflation. Thus, even if they tried to push up their own wages, they wouldn't be able to do so, because they would hit a monetary brick wall.
That brick wall only exist if the central bank refuses to increase the money supply. If they refuse to do so, then they will destroy businesses and create unemployment.
In practice, strong unions who demand big wage increases, has always lead to inflation.
It's worth noting that Scandinavia has very high union density, high GDP growth, $15-20 wage for store clerks and fast food workers and very low inflation.
What do you think happens with the money supply, when the wages keep increasing? Money supply is how much money there is in the economy, and when wages increase there will be more money in the economy.
Wrong friend, you need to go learn how the Federal Reserve works. Higher wages do not create new money. Creating new money creates new money.
If you want some real world evidence, take a look at Argentina money supply.
Thats because Argentina is effectively "printing money". Money supply is the total dollars in circulation. It can only come from the actions of a Central bank creating new money from debt, or the government printing new dollars into existence. It is not caused by unions demanding higher wages.
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Originally Posted by Camlon
That brick wall only exist if the central bank refuses to increase the money supply. If they refuse to do so, then they will destroy businesses and create unemployment.
Wrong again. The United States had basically no ability to increase the money supply until 1913. And prior to that, we had a fairly strict gold standard(in fact, a lot of our currency in the 1800's was in the form of actual gold and silver coins). But even then, there was no high unemployment, nor did businesses suffer during that period of time.
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Originally Posted by Camlon
In practice, strong unions who demand big wage increases, has always lead to inflation.
Look, what the unions themselves do has effectively nothing at all to do with inflation. For the most part, only the Federal Reserve can create inflation. Look at this chart...
It's worth noting that Scandinavia has very high union density, high GDP growth, $15-20 wage for store clerks and fast food workers and very low inflation.
Unions in Scandinavia work differently from the US. In Scandinavia they got a few big unions, who decide what kind of raises each sector should get. This makes their system inflexible, but it prevents small unions to force high wage increases.
US unions are more similar to the South American ones or unions in the UK in the 70s. And when they get strong, then they start demanding huge wage increases. When the inflation start to get high, then they will ask for even higher wage increases to compensate for inflation.
Wrong friend, you need to go learn how the Federal Reserve works. Higher wages do not create new money. Creating new money creates new money.
Thats because Argentina is effectively "printing money". Money supply is the total dollars in circulation. It can only come from the actions of a Central bank creating new money from debt, or the government printing new dollars into existence. It is not caused by unions demanding higher wages.
And when the unions demand higher wages, the government and the central bank will print extra money to avoid businesses from collapsing.
Quote:
Wrong again. The United States had basically no ability to increase the money supply until 1913. And prior to that, we had a fairly strict gold standard(in fact, a lot of our currency in the 1800's was in the form of actual gold and silver coins). But even then, there was no high unemployment, nor did businesses suffer during that period of time.
Really?
As a result of the panic, stock prices declined. 500 banks were closed, 15000 businesses failed, and numerous farms ceased operation. The unemployment rate in Pennsylvania hit 25%, in New York 35%, and in Michigan 43%. Soup kitchens were opened to help feed the destitute. Facing starvation, people chopped wood, broke rocks, and sewed in exchange for food. In some cases, women resorted to prostitution to feed their families.
And you never said your argument is dependent on the US going back on the gold standard. You said "unions are acceptable if there is no trade or immigration". You never mention the gold standard.
Unions in Scandinavia work differently from the US. In Scandinavia they got a few big unions, who decide what kind of raises each sector should get. This makes their system inflexible, but it prevents small unions to force high wage increases.
US unions are more similar to the South American ones or unions in the UK in the 70s. And when they get strong, then they start demanding huge wage increases. When the inflation start to get high, then they will ask for even higher wage increases to compensate for inflation.
Good point. Unions have to be responsible and take into consideration the national impact of their demands.
That brick wall only exist if the central bank refuses to increase the money supply. If they refuse to do so, then they will destroy businesses and create unemployment.
I do want to expound on this statement though, because you aren't entirely wrong.
Unlike what many libertarians believe, if we abolished the Federal Reserve, our entire economy would collapse like a rock. In fact, our economy would never recover without a fiat-central bank, and we would, in short time, fall into poverty and obscurity.
There is a reason why every single country on Earth abandoned the gold standard and instituted a fiat-currency system. If the gold standard was superior, someone else would still be using it.
The Austrian economic model really only works in either a closed economic system(IE no international trade), or if every other country also adopts a gold-standard, based around the economic principles of Adam Smith. It does not work with currency manipulation from foreign fiat-currencies.
As I pointed out before, it would be impossible for the United States to have an annual trade deficit of $500 billion without the ability to create new dollars at will. Nor could we give away tens of billions a year in foreign economic and military aid. Nor could we have ~700 foreign military bases.
The American economy is getting hugely subsidized right now, as the world's reserve currency. If we lose the petro-dollar, America will cease to exist.
To understand a bit more, you should really read this article.
And when the unions demand higher wages, the government and the central bank will print extra money to avoid businesses from collapsing.
Really?
As a result of the panic, stock prices declined. 500 banks were closed, 15000 businesses failed, and numerous farms ceased operation. The unemployment rate in Pennsylvania hit 25%, in New York 35%, and in Michigan 43%. Soup kitchens were opened to help feed the destitute. Facing starvation, people chopped wood, broke rocks, and sewed in exchange for food. In some cases, women resorted to prostitution to feed their families.
And you never said your argument is dependent on the US going back on the gold standard. You said "unions are acceptable if there is no trade or immigration". You never mention the gold standard.
Look, as I said repeatedly, the only way unions can work, is through a closed system. The panic of 1893 did not originate from within the United States. Had the United States been a closed system in 1893, there never would have been a panic.
The problem, as I mentioned several times before, is that we have a "global economy". As long as we continue to trade with other currency and economic manipulators(IE every other country on Earth). Then we cannot have a hard currency, and we must be able to match currency manipulation with currency manipulation.
As I said before, America benefits tremendously from this financial system, possibly to the tune of a trillion a year, in our ability to have so many foreign military bases, to provide so much foreign assistance, and to have such a huge trade deficit. And trust me, if we weren't doing it, someone else would.
This is probably the best video you can watch if you actually want to learn about the Federal Reserve. But its long.
This is a good video to watch, if you begin to understand the power of these bankers, and how dangerous they were even in the early days of our Republic.
Look, as I said repeatedly, the only way unions can work, is through a closed system. The panic of 1893 did not originate from within the United States. Had the United States been a closed system in 1893, there never would have been a panic.
Complete BS, The Argentinan coup was a trigger not the cause. If US was 100% sealed off, then some internal event would have caused the crash instead.
Are all of these crisis caused by foreigners too?
Panic of 1819
Panic of 1837
Panic of 1857
Panic of 1873
Or does crisis happen under the gold standard too?
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