I've read the devils and too big to fail and several others but our problems were and remain institutional starting with basic misinformation about and corruption of how the monetary and banking system works which paralyzes reform. Just about any fair system can be made to work but there is also nothing that says any system by necessity has to be the way that it is though I personally continue to favor the divine right of kings ;-). The history of money link is interesting and compliments the blow by blow described in the devils and too big to fail.
Let's talk about money and where it comes from.
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Woolleybugger
Mayor
Scary but true...that is why we have laws about raffles and lotteries I guess...
Then why does it take money to pay for public works? But maybe you are right and it's really love that makes the world go round ;-).
And financial speculation? I'm not so sure.
Woolleybugger
Mayor
Managing money is never going to be easy and it is even more difficult in a world wide economy with computers linking everyone together. My beef is that all this new banking is really only good for skimming profits so a few bookies (traders) can make money on the pot as it moves around the table. There is nothing there of value to anyone but themselves. I heard Roubini say that all SEC filings of US banks are frauds. The only thing they serve is to show us how much money bankers pay themselves. Nothing on the balance sheet is accurate and no one can figure out where the income came from either. I think he is right.
Woolleybugger
Mayor
I saw the link to Mises...I figured as much. I cannot figure out why your comments differ from mine but hey, if Mises says something its like Moses saying something...only change one letter and you have God talking!
Lukey
Senator
So what was in the link (or my post, for that matter) that was factually wrong?
Lukey
Senator
The value of money isn't "based upon it's ability to function as an intermediary exchange mechanism." That is it's "utility." Its "value" is based on its relative scarcity in relation to its utility (like every other commodity or resource). This, however, is spot on: "The key is to link the amount of money in circulation to the amount of wealth created by dairy farmers and wheat farmers." When there is no limiting factor on monetary creation (like a hard link to commodities) the tendency is for politicians (and bureaucrats) to create too much, and then you get inflation.
Woolleybugger
Mayor
I don't waste any time on the Austrians or Mizes. Sorry but I DQ them immediately. When you have some proof that their ideas work and have worked running a modern nation for a while, come on back and tell us all about it. Until then, I have enough work to do rummaging through all the other crackpot right wing ideas without adding a bunch of cranky economists to the list.
I disagree in part. It isn't enough to just link money to the milk and wheat because then it has no value to the farmers who have more than enough of both. Why would they give away their produce for pieces of paper no mater how few or rare they are? If I start out with ten bushels of wheat and trade nine for pieces of paper that I can do nothing with it makes no sense. The value is based on the total past, present and future productivity of the society and expectation that there will be things the possessors of money will want be able to exchange it for. Also not everything increase in value the more rare it is. One nail is of little use as is one board, one pearl or one page or a book but if I have enough I can build a house, create a full necklace or have something to read. I don't think I have enough time to write about it now but I believe we have to think about what is a bank and where they come from if we want to understand things that are going on around us. Wikipedia has great article on money by the way.
http://en.wikipedia.org/wiki/Money http://en.wikipedia.org/wiki/Money_creation
And this link to a PDF article on the tally stick is fascinating
http://scholar.google.com/scholar?hl=en&lr=&q=related:7tsCTuosFi4J:scholar.google.com/&um=1&ie=UTF-8&ei=TJPzTqOqKKbfiALYtI2fDg&sa=X&oi=science_links&ct=sl-related&resnum=9&ved=0CFUQzwIwCA
Woolleybugger
Mayor
Lukey is making a good point in that the value of money has to be managed or controlled or it's utility as a medium representing some intrinsic value would be meaningless. Say money was nothing more than things anyone could print on a laser printer at home. I trade you my newly minted money for your bushel of wheat. Since my newly minted money could just as easily be printed by your kid in the bedroom, why would you trade your bushel of wheat that represented all that hard work for something that anyone and everyone could just print at will? This is why money has to be managed, controlled, regulated and yes, kept relatively scarce or tied to the output of a nation in some fashion. What has happened over the years is that banking has created money out of thin air to increase wealth for the banking system itself without any linkage to the value created by the people of the world making things like cars, steel, food and so on. His love for a gold reserve system attempts to control this artificially but it too will fail just as it did before. I am not sure what the answer is but I sure as hell know that when my 23 year old kid finally has 1000 bucks in her checking account at Wells Fargo and they immediately try to put her on a credit card with a 2 grand credit limit, something is wrong.
G
Greenridgeman
Guest
And how is that wealth created?
A press can print money, it cannot create wealth.
I have yet to find a lefty that can write a one sentence definition of what it takes to create wealth in the form of goods and services.
A press can print money, it cannot create wealth.
I have yet to find a lefty that can write a one sentence definition of what it takes to create wealth in the form of goods and services.
It takes work to create wealth and generally money to make people work. Some people don't seem to be able to accept that
work = wealth = money is not different from work = money = wealth, wealth = work = money, wealth = money = work, money = wealth = work or
money = work = wealth. If they are an equality the order doesn't matter and one can lead to an increase in another something the Tea Party does not accept.
work = wealth = money is not different from work = money = wealth, wealth = work = money, wealth = money = work, money = wealth = work or
money = work = wealth. If they are an equality the order doesn't matter and one can lead to an increase in another something the Tea Party does not accept.
Sgt Staples
Mayor
Money and wealth are two different things. Wealth is determined by how many goods and services are in a society, as the the only value of money is in what it will purchase in goods and services. It is the production of goods and and services that provides employment and economic growth.
In other words, profits from production of goods and services creates jobs and opportunities to earn money which allows the purchase of those goods and services.
That is supply side economics.
Government cannot create wealth, it can only confiscate it and redistribute it.
What liberal economists such as Paul Krugma have never understood is that you cannot tax supply to reward demand and create more supply; it's like taking water out of one side of pool and pumping it into the other.
If printing money and deficit spending were the solution to our economic problems, we wouldn't have any economic problems.
We simply have to increase supply by lowering penalties on profit, which creates employment which allows consumption of more goods and services. That's called TAX CUTS!
In other words, profits from production of goods and services creates jobs and opportunities to earn money which allows the purchase of those goods and services.
That is supply side economics.
Government cannot create wealth, it can only confiscate it and redistribute it.
What liberal economists such as Paul Krugma have never understood is that you cannot tax supply to reward demand and create more supply; it's like taking water out of one side of pool and pumping it into the other.
If printing money and deficit spending were the solution to our economic problems, we wouldn't have any economic problems.
We simply have to increase supply by lowering penalties on profit, which creates employment which allows consumption of more goods and services. That's called TAX CUTS!
I agree as you say. "Money and wealth are two different things." But tell me again why then do conservatives scream like stuck pigs when there is talk about taking some of their money in taxes? If you think the answer is to hold on to all your money then you will lose all your wealth.
"Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also. (NIV, Matthew 6:19-21)"
"No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money."(NIV, Matthew 6:24-25)
"Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also. (NIV, Matthew 6:19-21)"
"No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money."(NIV, Matthew 6:24-25)
fairsheet
Senator
I would suggest that health and healthcare represents wealth. I'm not talking specifically about any particular individual's ability - or not - to pay for his health and healthcare. I'm talking about the very existence of our incredible American health and available healthcare product, as compared with say 50 years ago in America, or in many places around the world today. We're umpteen times more happy, energetic, and productive than we'd be without this tremendous wealth. (Which sort of bugs me when people think only in terms of health and healthcare as "costs")
So anyway.....how do we account for this exponential increase in this aspect of our "wealth"? If say....The Fed were to "print" umpteen dollars against this "wealth", what would be wrong with that? How is health and healthcare, necessarily different from say...gold?
So anyway.....how do we account for this exponential increase in this aspect of our "wealth"? If say....The Fed were to "print" umpteen dollars against this "wealth", what would be wrong with that? How is health and healthcare, necessarily different from say...gold?
Very good point. Healthcare is in one of the insufficiently tax funded pillars along with the military industrial complex keeping our economy going and funding them by simply increasing the money supply is an option preferable to just letting them collapse if the Republicans will not allow taxation to play an appropriate role.
There is a problem that you can't sell excess old people or weaponry (other than to to oppressive government ins general) so we do have to decide what our values are.
There is a problem that you can't sell excess old people or weaponry (other than to to oppressive government ins general) so we do have to decide what our values are.
solutions4
Council Member
Great points... Awesome!
