I don't disagree with a lot of what you say, but I have to take issue with this in particular:
"Of course, those evil right wingers tried to set up a system where poor parents could send their kids to the schools only previously accessible to the rich, but your lefty Democratic brethren shot it down."
Not true. There was a school voucher system, remember? Only as it turned out, the reality was that the vouchers were not enough for middle-and-low income people to send their children to private school. So the only people who actually got any advantage out of the voucher system were the parents who could (or could almost) afford to send their children to private school anyway.
I agree that the other poster is way off base about "right-wing" takeover of academia. But the reality of the voucher system was as I described. It might have been well-intended, but it ended up being nothing but a giveaway to the already well-to-do.
"Capitalism has nothing to do with "laissez faire." What you're thinking of is called the "free market". Capitalism is about the Owners controlling trade, which they do by having the government enforce their policies.
In a laissez faire free market, the market has no designated controller. Anybody that can produce can participate, and the marketplace takes on a life of its own."
Nope. Sorry. You are the one who is confused.
It is true that capitalism is based on investing accumulated capital in the production of goods. But it has nothing at all to do with "owners" controlling anything. If anybody is controlling it (by which we must infer monopoly or oligopoly influence), the it isn't, by definition, capitalism which *is* fundamentally based on free markets. Adam Smith's definition of capitalism includes free markets in which people voluntarily exchange goods for mutual benefit. You cannot separate that from "laissez faire", which is a governmental policy, not a market definition. Less laissez faire means more government influence in the economy, therefore less free market, therefore less real capitalism.
You simply cannot separate capitalism from free market. The latter is part of the definition of the former. If you don't have free markets, i.e., the government interferes in the economy, then you don't have capitalism, plain and simple. You have somebody doing "central planning", which is inherently socialist (in the economic sense, I'm not casting aspersions here), not capitalist at all.
Free markets are not planned. Planned markets are not free. You can't have that both ways.
Google or not, that's a simplistic and somewhat distorted definition.
Capitalism is an economic system, whereby capital is accumulated by private parties and invested in the means of production.
Certainly, it has become popular to speak of countries with "capitalist" governments, but those are really not the same thing. You can have a political system that is supportive of a capitalist economic system, but capitalism itself is not, fundamentally, a matter of politics. They can even be mutually exclusive.
In fact, the U.S. has (ostensibly) a capitalist economic system, but the greater the extent of government involvement in the economy, the less it represents true capitalism, which is based on free markets, and free trade for mutual benefit.
"I understand that they need to protect the interests of their members..."
Really, though, that begs the question: are they in fact helping their members?
Remember the teachers' union protests in Wisconsin? How getting rid of the teachers' union was going to make the teachers suffer and lose jobs and wages? Well, guess what?
As it turns out, the insurance company that supplied health insurance to all the teachers in the state was wholly owned by the teachers' union. The state paid the premiums... 90% in some cases, and 100% in others. Almost none came out of the teachers' paychecks. So they didn't even really know how much it cost. As a consequence, that insurance company was jacking rates up EVERY YEAR, and the teachers did not care because the taxpayer was paying for it... all of it in many cases. And to add insult to injury, where did all those excess insurance profits go? To the campaigns and political funds for the Democrat politicians who supported the Teachers' Union. Imagine that. And it's all documented.
Guess what else?
Now, it's true that some right-wing editorials exaggerated the positive results of "busting" the union... but in truth, there is little doubt that the teachers, and school districts themselves, are better off as a result. Even if the teachers are paying a bit more for health insurance now. Many teachers are even getting raises.
Faculty and unions are not necessarily the same things. Sure, the Unions are composed of faculty, but that doesn't mean that they all share ideas or ideals.
Pardon me, I want to correct another typo. I wrote:
"Prices go DOWN when there is a surplus of goods and money to purchase them. Prices go up when there is a restriction in the money supply. This is simple, self-evident economics; the law of supply and demand."
That is of course, not correct. Prices go up when there is a shortage of goods and/or a surplus of dollars. That is what I meant.
They don't? Please elaborate then, upon just who the Fed supplies money to. Governments? Yes. Banks? Yes. You and me? Hell, no.
"It's "principal", not "principle"."
Yes, it is. Thank you for correcting my late-night typo.
"Sure. But banks would get their interest in any case. So how do they benefit from the inflation?"
They don't benefit from it, per se. But it doesn't hurt them like it does everybody else. With a fiat money system they don't have much reason to care whether we have inflation. Everybody else does.
"Uhm. WRONG! Goods would cost get more and more 'expensive' (in dollar value), so it's depreciation MINUS inflation. Of course, pure dollar value is irrelevant anyway."
You are nitpicking, and at the wrong thing. My words:
"worth significantly less... depreciation PLUS inflation"
were accurate. The value has gone DOWN by an amount that equals the depreciation, PLUS the value lost to inflation. They are both subtracted from the initial value. There was nothing wrong with my math.
"That's simply a lie, there were lots of recessions..."
No, it was not a lie, because reports about those recessions and even depressions leave out an important factor that was very different then that it is now: the actual money supply. As I stated before, I have hard figures regarding the money supply and purchasing power during that entire period.
While those recessions and even the depression you mention resulted in relatively high unemployment, unlike today commodity prices did not inflate. In fact, in 1892, the Brown Phelps and Hopkins price index was 996. In 1895, it was 968 (prices had gone DOWN by about 3%), and in 1899 it was 950 (almost another 2%). In those same years, the Composite Commodity Price Indexes were 75.8, 73.7, and 72.3, respectively. Showing similar reductions.
Prices go DOWN when there is a surplus of goods and money to purchase them. Prices go up when there is a restriction in the money supply. This is simple, self-evident economics; the law of supply and demand.
So while employment might have been down, and the financial markets suffered a great deal, you need to keep in mind that those recessions and depressions were very different animals than what we see today: the real money supply remained relatively constant, and purchasing power did not in fact go down on the average, but up. The recessions affected a much lower percentage of the population, and in particular the more rural areas were scarcely affected at all.
Contrast that to the recessions and depressions we have had in the 20th Century, in which, with the fiat money system, high unemployment has as often as not (and as we are just beginning to see right now, as a result of this last recession) coupled with relatively high inflation. Prices get higher, and purchasing power goes down.
So no, it was not a lie: yes there were ups and downs, but they did not have the profound overall effect they have today, and the real money supply remained pretty much constant.
The problem here is, my economic knowledge is actually considerably greater than yours. You only know half of the truth, as presented in that article, and haven't looked into the surrounding economic circumstances with render it of much lower impact than you (and that article) imply. You are attempting to compare apples and oranges. But I have the numbers that show apples vs. apples.
"And traditionally these big financial corporation give it away as loans. Which directly benefit consumers they are 'first movers'. And then inflation grinds away their debts."
No, you completely missed the point. The financial corporations get it before it has been inflated; at full value. By the time the principle and interest on the loan are paid back, the money has been significantly inflated. But the original loaner doesn't care much, because they got those dollars for "free", anyway. Somewhat inflated interest is still profit to them. When money is inflated, it isn't a loss, it's just lower profits.
But whoever made the purchase with that loan is now looking at goods that are worth significantly less than what they originally paid, and I am not just talking about depreciation, but depreciation PLUS inflation. Their money wasn't "free", in the beginning, as it was to the financiers who get it from the Fed. Every bit of it cost them, all the more as time went on. To the loan-takers, inflation actually represents a monetary loss.
And you have deflation exactly backward: deflation benefits the consumer. It is the "finance industry" that suffers under deflation, which is precisely why they have been fighting it so strenuously, even though right now it probably would have been healthy for our economy. They aren't doing it for YOU, they are doing it for themselves. Don't be stupid.
"Also, a 300 years of flat economic development and very stable bad living conditions for most of working class. So yes, if you want feudalism or crony capitalism then hard money is still the answer."
Which sounds pretty good, except that nothing of the sort occurred. The economy was actually extremely robust (which was one of the things that CAUSED the Revolutionary War in the first place), and it was steadily growing. You're talking about the days of the huge growth of agriculture and then the Industrial Revolution, dude. If you think the economy was stagnant during those times, you don't know squat about history. The standard of living was increasing steadily throughout the entire time.
I hate to be the one to tell you this, but you, too, should really pick up a history book. You might actually learn something.
No, I did not make any mistake. You were apparently referring to "Chartalism" as "Modern Monetary Theory", but they are not synonymous. There are several "Modern Monetary Theories", the most common of them today being Keynesian Economics. If you meant Chartalism then you should say Chartalism.
"Your claim that fiat money is the basis of all our problems is like saying that vehicles with wheels are the cause of all road accidents."
That's the second biggest line of BS I have seen in the last couple of days. Never mind what the first one was.
I have been studying this for years, and my statement was dead on. Get your hands on the book "How Much Is That In Real Money?", by John McCusker, which is one of the few authoritative works on the subject. The fact is that when the colonies (and later U.S.) used hard money, consisting of gold or silver, the purchasing power of that money remained nearly flat for almost 300 years. You could bury money in the backyard and your great-great-grandson could dig it up 100 years later, and it would be worth just as much as it was when it was buried. This is according to the best economic data that exists for those periods.
Yet, once we created the Fed and adopted a system of Fiat money, and especially since abandoning the gold standard... in those 80 years the dollar has been devalued by inflation over 96%. A dollar today is worth less than 4 cents compared to a dollar 80 years ago. And don't forget that the Great Depression occurred a full 16 years AFTER the Fed was created, ostensibly to keep us from falling into economic depressions in the first place.
If you plot the purchasing power of a dollar (or its economic equivalent) for those 300+ years on a graph, you can see precisely when those events occurred: the creation of the Fed, the elimination of the basic gold standard, and again in 1971 when Nixon threw out the last vestiges of any kind of actual hard standard for the dollar. There is a kink in the graph at precisely those spots, to the exact year, getting steeper each time.
So I'm sorry to have to tell you this, dude, but simple economic history proves you wrong. A large part of our problem *IS* the simple fact that we have a fiat currency at all. Without that, there could be no "bubbles" created to the degree they are now, by artificially propping up the money supply... because when you have a hard currency, the money supply is more-or-less fixed; you can't just inflationarily create it out of thin air anymore. (And as a corrollary, neither can it simply disappear back into that same thin air, as much of it did back in 2008).
"The alternative is far worse, and in your support of it, you're right in line with the Randians of the Tea Party."
Sounds rather ominous, but you haven't given me any reason at all to actually think so. Why is the alternative worse? Where is your evidence? I have cited sources, where are yours? Again, the lessons of history show otherwise: almost completely flat purchasing power for well over 200 years. The only exceptions that lasted for any length of time (more than a couple of weeks) were around wartime when the governments borrowed money to finance the wars. And right after the wars, purchasing power rose right back up to where it was before, with hardly any delay. I have the hard figures right here, fella. And you can find them yourself: get a copy of that book I referenced earlier, and put its numbers on a chart.
Second, most "tea partiers" are not "Randians", nor vice versa. And for that matter, most Austrians are also not Randians... or vice versa. Your finger-pointing is actually pretty pointless, because it's just plain wrong.
"You say that MMT worships the current system, but nothing could be further from the truth."
When I stated that Chartalism practically worships "the very systems" that created the problems, I was referring to fiat currency in particular, not Keynesian-style econom
It isn't... I shouldn't have put it that way. I don't have a problem with a 'core CPI' that measures different things, though I do have a problem with it being called 'core' when it's not.
My biggest issue -- other than the way actual CPI is calculated, which appears to have been determined by a band of monkeys -- is when one is cited as though it were the other.
You make a good point. But for something that's "illegal", people actually do it all the time. I see products advertised all over the place claiming compatibility with "USB 2.0", while I have never, even once, seen a product advertised as "Hi Speed" USB.
I mean, come on, folks. Korea is claiming performance in the cloned dogs that has never been proven in the original dogs. If they are correct, it would have to be some kind of magic.
Considering that recent, careful studies have shown that the abilities of drug-sniffing dogs are little more than police wet dreams anyway, the efficacy of the "clones" has to be questioned too.
In most cases, the dogs responded to cues (intentional or not) on the part of the dog's handler, rather than any actual detection of drugs. Double-blind studies have shown how effective they actually are in the real world, which is... not.
"How about a candidate that understands Modern Monetary Theory?"
Because "modern" monetary theory is what got us into this mess in the first place. DUH. But that begs the question... the real issue here is that just because something is new, that doesn't mean it's right. Chartalism has many obvious flaws, amongst them that it actually advocates fiat money with floating exchange rates, when history actually rather powerfully indicates that such a system is in fact the cause of most of our current problems.
At least Austrian economics has a long history of contributing essential math and concepts to economic theory, and has enjoyed an excellent record (unlike either Keynesian economics or "Chartalism") of actually predicting major economic events. And prediction, as any scientist will tell you, is all a theory is worth.
I agree that government misapplication of monetary policy has contributed greatly -- or even caused -- our current economic woes. But I am far from convinced that a system that practically worships the very systems that have failed us would make things any better.
"I'd like him not to be Libertarian so his ideas could be more like sound policy and less idealistic drivel that would drive the country back to the days of the Robber Barons. Seriously, there's a reason so many of his most vocal supporters are 20-something single men."
What do you consider to be "sound policy" then? Democrat policy? We've see how well that worked. Republican policy? We've also seen how well that worked. So what do you call "sound policy"? If neither of the major parties have the answer (and it is obvious to the merest idiot today that neither of them do), then what do you suggest?
History is solidly against what you are saying.
By the way: if you knew your history, you would know that the so-called "Robber Barons" did a wonderful job of lowering the prices of major goods and services, and boosting the economy as well... while today's equivalent owns far more of the country's wealth, as a percentage, than the Robber Barons ever did, and THEY haven't been helping the economy or lowering prices at all, but rather driving us into a hole and inflating the money supply!
Pardon me, but if I had to choose between the two, I'd choose the Robber Baron days without hesitation.
And by the way: those "Robber Barons" who did it without government subsidies were usually more successful -- and had cheaper prices -- than those who had government assistance.
It pays to actually study history, rather than just swallow the government-whitewashed sound-bites that were fed us in public school. The true picture is far different than you probably think.
"Using folksy language and insisting on "facts" while you present misinformed distortions is not an effective argument."
You are asserting that what I have stated is somehow incorrect? Where are your own facts to back them up? Am I the one ignoring facts here? Funny you should say that.
Like that link you gave as "evidence". I have already stated the well-known fact that Paul is personally against abortion, and has made no secret of it. However, what YOU are leaving out is that he has consistently opposed Federal abortion regulation. That is fact. Look it the hell, up, fool. Presenting only some of the facts, while pretending the more relevant facts don't exist, is a form of lying. The only fool here is you, but apparently you're expecting us to be, too.
And what you call his "dancing around" is actually a perfectly consistent 30-year-long voting record against any kind of Federal regulation of marriage, sex, or abortion. Are you honestly trying to tell me you think he has been faking it for 30 years, just so he can sneak into the White House and fool us all??? Sheesh. That's the stupidest thing I've ever heard.
As for other "facts" (which you have refused to cite, instead linking to inflammatory sites that present only half-truths at best) the FACT is that the majority of the Federal government's claim to authority for passing the Civil Rights Act of 1964 was the Interstate Commerce Clause, which is one of the biggest piles of bullshit they have ever pulled. The Feds have used the Commerce Clause to excuse everything from gun laws and regulating home gardens to the War on Drugs. And it's all BS. True students of history know that the commerce clause had a restrictive meaning; it was never intended to extend Federal power to anything like it is now.
I have been an avid student of American history for many years now, and it is not I who has a misconception about the Constitution. However, a full discussion of that is beyond Slashdot. So I will have to be content to say that the Commerce Clause does not come close to authorizing Congress to pass the Civil Rights Act, any more than it authorizes anything like the War on Drugs. Regardless of whether you love or hate either of those things.
There are two CPIs: the one we usually think of at the CPI, and the "core" CPI. The core CPI in fact does not include food. But: if you're listening to someone quoting government figures, you are as likely as not getting the core CPI, instead of the more relevant one, which tends to be higher.
So yeah, they're blamed for both, because they do both.
"Are the economic dynamics going to shift and bring all of the manufacturing back to the States? Is the dollar going to suddenly start appreciating and being worth more?"
The short answers are: no, but irrelevant, and yes.
Outsourcing has nothing to do with "economic dynamics". It has to do with greed, lack of adequate regulation, and a refusal by government to enforce fairness.
Why is outsourcing unfair to domestic labor? Because it bypasses exchange rates and tariffs, and so it isn't "fair" one-on-one competition. The playing ground is anything but level. Let me give you an example. Suppose I want to hire a software developer. I can hire one in the U.S. for $30 an hour (he works cheap), or one from Pakistan for $15 an hour. On the face of it, it looks like the Pakistani is "outcompeting" the U.S. laborer. But that is not true, for at least a couple of reasons. For one thing, at today's rates, $1 US will buy more than 4 times as much rice in Pakistan as it does in the US. Presumably, other basic foodstuffs and costs of living exchange at a similar rate. So even though you paying the Pakistani $15, to him it is worth what $60 per hour would be to someone in the U.S. That is not "fair" competition, because the economies are dissimilar. That's WHY we have exchange rates in the first place!
Prior to this, such outsourcing was not practical. It is our instant communication that has changed that situation, not anything to do with "economic dynamics".
The traditional answer to such unfair trade has been exchange rates and tariffs. But our government has been essentially gifting all this money to other countries in the name of "free trade" (it isn't), and "free competition" (it isn't). Mainly in order to benefit their Corporate friends by giving them a shot at cheap labor. We have seen what that has done to the economy.
But it is anything but hopeless. If you had been following the trends, you would know that outsourcing has already slacked off a great deal, and probably will even more. The reason? Unreliable companies and workers, and inferior product. It's just a fact. Look it up. They are finding that it isn't so cheap after all. Another reason is that public sentiment has turned very darkly against outsourcing, since the public believes (rightly) that it is profiting Corporations, but at great cost to our overall economy.
But if that isn't enough, an honest President can probably bull through Congress a bill to simply directly tax corporations that continue to outsource. This could be considered a "fair" tax, like those tariffs designed to balance trade: it simply keeps the money in our local economy rather than pissing it away overseas.
As for your second question, the answer is yes. But the reasons are not so simple. In essence, our changeover to fiat money during the 20th century has given government control over the money supply (no, they did not in fact have that earlier), AND it gives the big finance corporations first shot at all that money, before inflation saps away its worth. So it is in their best interest to keep control, and keep a fiat currency, and inflate it away. Because they still profit. You don't... we don't... but they do.
A gold standard, or other "hard money" standard, prevents this. Money can no longer be "created" in the fashion that fiat money can, so financiers do not get fresh, not-yet-inflated supplies of it whenever they want. It would no longer be any more in their interest to inflate the money, than it is in yours. So while it may not necessary "appreciate" (though that is possible), it would no longer "depreciate" like it has over the last 80 years. After nearly 300 years of prices so stable they were almost flat for that entire time (not always in terms of "dollars", but an equivalent amount of hard money), over the last 80 years, since we have had fiat money, the dollar has depreciated by over 96%.
Haha! Did you really swallow this tripe? Everything there is a deliberately architectured sound-bite intended to give a distorted impression. I quote:
"But Ron Paul is much, much more than that. He's the anti-Civil-Rights-Act Republican. He's an anti-reproductive-rights Republican. He's a gay-demonizing Republican. He's an anti-public education Republican and an anti-Social Security Republican. He's the John Birch Society's favorite congressman. And he's a booster of the Constitution Party, which has a Christian Reconstructionist platform. So, if you're a member of the anti-woman, anti-gay, anti-black, anti-senior-citizen, anti-equality, anti-education, pro-communist-witch-hunt wing of the progressive movement, I can see how he'd be your guy."
Point by point:
(1) Paul stated that he would vote against the Civil Rights Act, not because it was not well-intended, but because it is unconsitutional! And it is. He takes pride in the fact that he votes on principle, and for the Constitution, every time, no exceptions. The fact that the Civil Rights Act was well-intended is irrelevant; it is in fact unconstitutional. His position is that if somebody wants to pass something like the Civil Rights act, fine! You just have to amend the constitution first to make it legal. It has absolutely nothing to do with race or racism. Sorry, but playing the race card here won't work, for the simple reason that it's BS. His statements are on the record and there is no trace of racism anywhere in them.
(2) He is not an "anti-reproductive-rights Republican". That is simply a lie. Does he personally believe in abortion? No. He has repeatedly, and honestly, stated that he is personally against abortion. However, you can't leave out the rest without lying by omission: he has also repeatedly refused to back Federal abortion legislation. He believes (quite properly) that is unconstitutional and is to be left up to the individual states. The fact that he opposes Federal abortion laws, on principle and in the face of his own personal beliefs, says much for Paul's integrity. This is a point in his favor, not against him.
(3) "He's a gay-demonizing Republican". Now, you simply can't get more BS than this. Again, his personal beliefs aside (yes, he has stated that he personally believes marriage should be between a man and a woman), again Paul has opposed Federal legislation in that regard, because marriage is simply none of the Federal government's business. He has fought attempts by the Federal government to "define" what marriage ought to be. If you happen to be gay, you should be thankful for this, rather than "demonizing" Paul himself for imaginary harms.
(4) It is true he is opposed to Federal involvement in public education and also Social Security. (But not against public education! That's not the same thing!) For the simple reason that Federal involvement in either of those is unconstitutional. So what? You should be against them too. If you're not, it is you who has a problem. A government that ignores the constitution is no government worthy of the name.
(5) "He's the John Birch Society's favorite congressman." I don't know if that is true or false, but so what? What is he trying to say here? That because one group of people likes him, other people should not? Talk about guilt by association... what a nasty, unethical thing to do to somebody. Paul has no control over who says they like him and who doesn't. This is so far the most BS argument of them all.
(5) He is not a "booster" of the Constitution Party, for the simple reason that the Constitution Party, despite its name, supports too many UN-constitutional things. Paul does support, to a certain degree, the Libertarian party, but the Libertarian party actually tends to alienate right-wing Christians. Rather, it probably contains more atheists.
(6) "So, if you're a member of the anti-woman, anti-gay, anti-black, anti-senior-citizen, anti-equality, anti-education, pro-comm
"1) Deregulation - that's what allowed banks to create CDO bubble."
True. But are you sure THAT kind of deregulation is what Paul advocates? You would be wrong. Ron Paul actually voted against the bill that tore down Glass-Steagall! Ron Paul has shown quite clearly, from his voting record, that he is not "anti-regulation at all costs". He has opposed what most people now see as insane deregulation. So what are you trying to say here? Or are you just using implication to spread false impressions?
"2) Invisible hand of the market - like the rating agencies grading junk as AAA?"
Adam Smith's "invisible hand" was intended to apply to markets for goods, not money speculation. You are conflating two different things. Again, as I pointed out above, Paul did not support letting the financial market be a free-for-all.
"3) Gold standard and hard currency - the bubble has happened in the shadow banking system that over-leveraged the debt. Nothing in gold standard could have prevented it by itself."
If you think so, then you don't understand how Keynesian money-multiplication and fractional-reserve banking work.
Essentially, those concepts allow financial speculators to create money out of thin air. And Keynesian economics counts fiat currency as real money. But as we have clearly seen, most recently in 2008, such fiat currency can disappear as fast as it is created, or even faster.
Hard currency would indeed solve the problem, because speculators could no longer create nonsense "money" through mere financial transactions, and therefore neither could that money "disappear". It might move around, but somebody still has it. The money supply would be near-constant, and much more resistant to bubbles and crashes.
"There is not anything that Ron Paul, or anyone else can do about it. The dynamics of the world have shifted. The American standard of living will only decline from here on out."
Wow. That's about the most pessimistic statement I think I have seen yet, and I have seen some doozies.
I think we are all agreed that we are in a mess, but I very much disagree with your dismal outlook.
You're both nuts if you're paying much attention to those figures. Anybody who takes Krugman seriously has to get their head examined anyway.
Neither Shadow Stats or BPP (not BPI) are reflective of an actual CPI. For example, MIT's BPP collects reported retail data only... which is not very reflective of short-term commodity prices.
The way US BLS CPI is calculated is very questionable especially since about 1980. Their theory about "substitute" goods is on particularly shaky mathematical and logical ground. Further, about 40% of CPI is based on housing, and with the housing market a shambles, there is no way in hell it could reflect actual consumer prices... people simply aren't buying homes. So the CPI is bound to be grossly distorted downward.
As usual, the best measure of CPI is your own pocketbook. And I don't know about any other parts of the country, but around here prices for just about everything have gone up considerably in the last year. Much more than just a few %.
"Ron Paul was 'predicting' the current situation since well into 90-s. So no, it doesn't count. And during the crisis he's been constantly mis-predicting, well, everything (runaway inflation, hellllo?)."
Uh... I think you're confused. Have you forgotten the recession of 2000-2001, which itself lasted a few years? And then this one came hot on its heels, before we were even completely recovered from that one. So no, he wasn't wrong.
As for inflation, there are several things that need to be said about that:
First, inflation as a result of bad monetary policy does not generally happen overnight. It takes a couple of years, at least, to build.
Second, inflation has been kept artificially low by the Fed (irationally, one might even say insanely) keeping the interest rates artificially low, which will be disastrous in the long run if they don't pull their heads out.
And third, we ARE seeing it... or at least the beginnings of it. Have you checked your grocery bill lately? And compared it to last year?
Oh, but I forgot... food is no longer part of the official government Consumer Price Index. How insane is that? The fact is that the "inflation" figures being fed to you by the government don't even remotely reflect reality.
Slashdot Mirror
"Of course, those evil right wingers tried to set up a system where poor parents could send their kids to the schools only previously accessible to the rich, but your lefty Democratic brethren shot it down."
Not true. There was a school voucher system, remember? Only as it turned out, the reality was that the vouchers were not enough for middle-and-low income people to send their children to private school. So the only people who actually got any advantage out of the voucher system were the parents who could (or could almost) afford to send their children to private school anyway.
I agree that the other poster is way off base about "right-wing" takeover of academia. But the reality of the voucher system was as I described. It might have been well-intended, but it ended up being nothing but a giveaway to the already well-to-do.
"Capitalism has nothing to do with "laissez faire." What you're thinking of is called the "free market". Capitalism is about the Owners controlling trade, which they do by having the government enforce their policies.
In a laissez faire free market, the market has no designated controller. Anybody that can produce can participate, and the marketplace takes on a life of its own."
Nope. Sorry. You are the one who is confused.
It is true that capitalism is based on investing accumulated capital in the production of goods. But it has nothing at all to do with "owners" controlling anything. If anybody is controlling it (by which we must infer monopoly or oligopoly influence), the it isn't, by definition, capitalism which *is* fundamentally based on free markets. Adam Smith's definition of capitalism includes free markets in which people voluntarily exchange goods for mutual benefit. You cannot separate that from "laissez faire", which is a governmental policy, not a market definition. Less laissez faire means more government influence in the economy, therefore less free market, therefore less real capitalism.
You simply cannot separate capitalism from free market. The latter is part of the definition of the former. If you don't have free markets, i.e., the government interferes in the economy, then you don't have capitalism, plain and simple. You have somebody doing "central planning", which is inherently socialist (in the economic sense, I'm not casting aspersions here), not capitalist at all.
Free markets are not planned. Planned markets are not free. You can't have that both ways.
Google or not, that's a simplistic and somewhat distorted definition.
Capitalism is an economic system, whereby capital is accumulated by private parties and invested in the means of production.
Certainly, it has become popular to speak of countries with "capitalist" governments, but those are really not the same thing. You can have a political system that is supportive of a capitalist economic system, but capitalism itself is not, fundamentally, a matter of politics. They can even be mutually exclusive.
In fact, the U.S. has (ostensibly) a capitalist economic system, but the greater the extent of government involvement in the economy, the less it represents true capitalism, which is based on free markets, and free trade for mutual benefit.
"The free market consistently fails when the population is compelled to participate in the market."
Uh... I hate to tell you this, but if anybody is being forced to participate, then it's not a "free" market. You can't have that both ways.
"I understand that they need to protect the interests of their members..."
Really, though, that begs the question: are they in fact helping their members?
Remember the teachers' union protests in Wisconsin? How getting rid of the teachers' union was going to make the teachers suffer and lose jobs and wages? Well, guess what?
As it turns out, the insurance company that supplied health insurance to all the teachers in the state was wholly owned by the teachers' union. The state paid the premiums... 90% in some cases, and 100% in others. Almost none came out of the teachers' paychecks. So they didn't even really know how much it cost. As a consequence, that insurance company was jacking rates up EVERY YEAR, and the teachers did not care because the taxpayer was paying for it... all of it in many cases. And to add insult to injury, where did all those excess insurance profits go? To the campaigns and political funds for the Democrat politicians who supported the Teachers' Union. Imagine that. And it's all documented.
Guess what else?
Now, it's true that some right-wing editorials exaggerated the positive results of "busting" the union... but in truth, there is little doubt that the teachers, and school districts themselves, are better off as a result. Even if the teachers are paying a bit more for health insurance now. Many teachers are even getting raises.
How's that for "suffering"?
Faculty and unions are not necessarily the same things. Sure, the Unions are composed of faculty, but that doesn't mean that they all share ideas or ideals.
"Prices go DOWN when there is a surplus of goods and money to purchase them. Prices go up when there is a restriction in the money supply. This is simple, self-evident economics; the law of supply and demand."
That is of course, not correct. Prices go up when there is a shortage of goods and/or a surplus of dollars. That is what I meant.
"No, they don't."
They don't? Please elaborate then, upon just who the Fed supplies money to. Governments? Yes. Banks? Yes. You and me? Hell, no.
"It's "principal", not "principle"."
Yes, it is. Thank you for correcting my late-night typo.
"Sure. But banks would get their interest in any case. So how do they benefit from the inflation?"
They don't benefit from it, per se. But it doesn't hurt them like it does everybody else. With a fiat money system they don't have much reason to care whether we have inflation. Everybody else does.
"Uhm. WRONG! Goods would cost get more and more 'expensive' (in dollar value), so it's depreciation MINUS inflation. Of course, pure dollar value is irrelevant anyway."
You are nitpicking, and at the wrong thing. My words:
"worth significantly less... depreciation PLUS inflation"
were accurate. The value has gone DOWN by an amount that equals the depreciation, PLUS the value lost to inflation. They are both subtracted from the initial value. There was nothing wrong with my math.
"That's simply a lie, there were lots of recessions..."
No, it was not a lie, because reports about those recessions and even depressions leave out an important factor that was very different then that it is now: the actual money supply. As I stated before, I have hard figures regarding the money supply and purchasing power during that entire period.
While those recessions and even the depression you mention resulted in relatively high unemployment, unlike today commodity prices did not inflate. In fact, in 1892, the Brown Phelps and Hopkins price index was 996. In 1895, it was 968 (prices had gone DOWN by about 3%), and in 1899 it was 950 (almost another 2%). In those same years, the Composite Commodity Price Indexes were 75.8, 73.7, and 72.3, respectively. Showing similar reductions.
Prices go DOWN when there is a surplus of goods and money to purchase them. Prices go up when there is a restriction in the money supply. This is simple, self-evident economics; the law of supply and demand.
So while employment might have been down, and the financial markets suffered a great deal, you need to keep in mind that those recessions and depressions were very different animals than what we see today: the real money supply remained relatively constant, and purchasing power did not in fact go down on the average, but up. The recessions affected a much lower percentage of the population, and in particular the more rural areas were scarcely affected at all.
Contrast that to the recessions and depressions we have had in the 20th Century, in which, with the fiat money system, high unemployment has as often as not (and as we are just beginning to see right now, as a result of this last recession) coupled with relatively high inflation. Prices get higher, and purchasing power goes down.
So no, it was not a lie: yes there were ups and downs, but they did not have the profound overall effect they have today, and the real money supply remained pretty much constant.
The problem here is, my economic knowledge is actually considerably greater than yours. You only know half of the truth, as presented in that article, and haven't looked into the surrounding economic circumstances with render it of much lower impact than you (and that article) imply. You are attempting to compare apples and oranges. But I have the numbers that show apples vs. apples.
"And traditionally these big financial corporation give it away as loans. Which directly benefit consumers they are 'first movers'. And then inflation grinds away their debts."
No, you completely missed the point. The financial corporations get it before it has been inflated; at full value. By the time the principle and interest on the loan are paid back, the money has been significantly inflated. But the original loaner doesn't care much, because they got those dollars for "free", anyway. Somewhat inflated interest is still profit to them. When money is inflated, it isn't a loss, it's just lower profits.
But whoever made the purchase with that loan is now looking at goods that are worth significantly less than what they originally paid, and I am not just talking about depreciation, but depreciation PLUS inflation. Their money wasn't "free", in the beginning, as it was to the financiers who get it from the Fed. Every bit of it cost them, all the more as time went on. To the loan-takers, inflation actually represents a monetary loss.
And you have deflation exactly backward: deflation benefits the consumer. It is the "finance industry" that suffers under deflation, which is precisely why they have been fighting it so strenuously, even though right now it probably would have been healthy for our economy. They aren't doing it for YOU, they are doing it for themselves. Don't be stupid.
"Also, a 300 years of flat economic development and very stable bad living conditions for most of working class. So yes, if you want feudalism or crony capitalism then hard money is still the answer."
Which sounds pretty good, except that nothing of the sort occurred. The economy was actually extremely robust (which was one of the things that CAUSED the Revolutionary War in the first place), and it was steadily growing. You're talking about the days of the huge growth of agriculture and then the Industrial Revolution, dude. If you think the economy was stagnant during those times, you don't know squat about history. The standard of living was increasing steadily throughout the entire time.
I hate to be the one to tell you this, but you, too, should really pick up a history book. You might actually learn something.
"Your claim that fiat money is the basis of all our problems is like saying that vehicles with wheels are the cause of all road accidents."
That's the second biggest line of BS I have seen in the last couple of days. Never mind what the first one was.
I have been studying this for years, and my statement was dead on. Get your hands on the book "How Much Is That In Real Money?", by John McCusker, which is one of the few authoritative works on the subject. The fact is that when the colonies (and later U.S.) used hard money, consisting of gold or silver, the purchasing power of that money remained nearly flat for almost 300 years. You could bury money in the backyard and your great-great-grandson could dig it up 100 years later, and it would be worth just as much as it was when it was buried. This is according to the best economic data that exists for those periods.
Yet, once we created the Fed and adopted a system of Fiat money, and especially since abandoning the gold standard... in those 80 years the dollar has been devalued by inflation over 96%. A dollar today is worth less than 4 cents compared to a dollar 80 years ago. And don't forget that the Great Depression occurred a full 16 years AFTER the Fed was created, ostensibly to keep us from falling into economic depressions in the first place.
If you plot the purchasing power of a dollar (or its economic equivalent) for those 300+ years on a graph, you can see precisely when those events occurred: the creation of the Fed, the elimination of the basic gold standard, and again in 1971 when Nixon threw out the last vestiges of any kind of actual hard standard for the dollar. There is a kink in the graph at precisely those spots, to the exact year, getting steeper each time.
So I'm sorry to have to tell you this, dude, but simple economic history proves you wrong. A large part of our problem *IS* the simple fact that we have a fiat currency at all. Without that, there could be no "bubbles" created to the degree they are now, by artificially propping up the money supply... because when you have a hard currency, the money supply is more-or-less fixed; you can't just inflationarily create it out of thin air anymore. (And as a corrollary, neither can it simply disappear back into that same thin air, as much of it did back in 2008).
"The alternative is far worse, and in your support of it, you're right in line with the Randians of the Tea Party."
Sounds rather ominous, but you haven't given me any reason at all to actually think so. Why is the alternative worse? Where is your evidence? I have cited sources, where are yours? Again, the lessons of history show otherwise: almost completely flat purchasing power for well over 200 years. The only exceptions that lasted for any length of time (more than a couple of weeks) were around wartime when the governments borrowed money to finance the wars. And right after the wars, purchasing power rose right back up to where it was before, with hardly any delay. I have the hard figures right here, fella. And you can find them yourself: get a copy of that book I referenced earlier, and put its numbers on a chart.
Second, most "tea partiers" are not "Randians", nor vice versa. And for that matter, most Austrians are also not Randians... or vice versa. Your finger-pointing is actually pretty pointless, because it's just plain wrong.
"You say that MMT worships the current system, but nothing could be further from the truth."
When I stated that Chartalism practically worships "the very systems" that created the problems, I was referring to fiat currency in particular, not Keynesian-style econom
It isn't... I shouldn't have put it that way. I don't have a problem with a 'core CPI' that measures different things, though I do have a problem with it being called 'core' when it's not.
My biggest issue -- other than the way actual CPI is calculated, which appears to have been determined by a band of monkeys -- is when one is cited as though it were the other.
You make a good point. But for something that's "illegal", people actually do it all the time. I see products advertised all over the place claiming compatibility with "USB 2.0", while I have never, even once, seen a product advertised as "Hi Speed" USB.
No, I have plenty of "problems" with the government, including how they calculate CPI.
I mean, come on, folks. Korea is claiming performance in the cloned dogs that has never been proven in the original dogs. If they are correct, it would have to be some kind of magic.
Considering that recent, careful studies have shown that the abilities of drug-sniffing dogs are little more than police wet dreams anyway, the efficacy of the "clones" has to be questioned too.
In most cases, the dogs responded to cues (intentional or not) on the part of the dog's handler, rather than any actual detection of drugs. Double-blind studies have shown how effective they actually are in the real world, which is... not.
"How about a candidate that understands Modern Monetary Theory?"
Because "modern" monetary theory is what got us into this mess in the first place. DUH. But that begs the question... the real issue here is that just because something is new, that doesn't mean it's right. Chartalism has many obvious flaws, amongst them that it actually advocates fiat money with floating exchange rates, when history actually rather powerfully indicates that such a system is in fact the cause of most of our current problems.
At least Austrian economics has a long history of contributing essential math and concepts to economic theory, and has enjoyed an excellent record (unlike either Keynesian economics or "Chartalism") of actually predicting major economic events. And prediction, as any scientist will tell you, is all a theory is worth.
I agree that government misapplication of monetary policy has contributed greatly -- or even caused -- our current economic woes. But I am far from convinced that a system that practically worships the very systems that have failed us would make things any better.
"I'd like him not to be Libertarian so his ideas could be more like sound policy and less idealistic drivel that would drive the country back to the days of the Robber Barons. Seriously, there's a reason so many of his most vocal supporters are 20-something single men."
What do you consider to be "sound policy" then? Democrat policy? We've see how well that worked. Republican policy? We've also seen how well that worked. So what do you call "sound policy"? If neither of the major parties have the answer (and it is obvious to the merest idiot today that neither of them do), then what do you suggest?
History is solidly against what you are saying.
By the way: if you knew your history, you would know that the so-called "Robber Barons" did a wonderful job of lowering the prices of major goods and services, and boosting the economy as well... while today's equivalent owns far more of the country's wealth, as a percentage, than the Robber Barons ever did, and THEY haven't been helping the economy or lowering prices at all, but rather driving us into a hole and inflating the money supply!
Pardon me, but if I had to choose between the two, I'd choose the Robber Baron days without hesitation.
And by the way: those "Robber Barons" who did it without government subsidies were usually more successful -- and had cheaper prices -- than those who had government assistance.
It pays to actually study history, rather than just swallow the government-whitewashed sound-bites that were fed us in public school. The true picture is far different than you probably think.
"Using folksy language and insisting on "facts" while you present misinformed distortions is not an effective argument."
You are asserting that what I have stated is somehow incorrect? Where are your own facts to back them up? Am I the one ignoring facts here? Funny you should say that.
Like that link you gave as "evidence". I have already stated the well-known fact that Paul is personally against abortion, and has made no secret of it. However, what YOU are leaving out is that he has consistently opposed Federal abortion regulation. That is fact. Look it the hell, up, fool. Presenting only some of the facts, while pretending the more relevant facts don't exist, is a form of lying. The only fool here is you, but apparently you're expecting us to be, too.
And what you call his "dancing around" is actually a perfectly consistent 30-year-long voting record against any kind of Federal regulation of marriage, sex, or abortion. Are you honestly trying to tell me you think he has been faking it for 30 years, just so he can sneak into the White House and fool us all??? Sheesh. That's the stupidest thing I've ever heard.
As for other "facts" (which you have refused to cite, instead linking to inflammatory sites that present only half-truths at best) the FACT is that the majority of the Federal government's claim to authority for passing the Civil Rights Act of 1964 was the Interstate Commerce Clause, which is one of the biggest piles of bullshit they have ever pulled. The Feds have used the Commerce Clause to excuse everything from gun laws and regulating home gardens to the War on Drugs. And it's all BS. True students of history know that the commerce clause had a restrictive meaning; it was never intended to extend Federal power to anything like it is now.
I have been an avid student of American history for many years now, and it is not I who has a misconception about the Constitution. However, a full discussion of that is beyond Slashdot. So I will have to be content to say that the Commerce Clause does not come close to authorizing Congress to pass the Civil Rights Act, any more than it authorizes anything like the War on Drugs. Regardless of whether you love or hate either of those things.
There are two CPIs: the one we usually think of at the CPI, and the "core" CPI. The core CPI in fact does not include food. But: if you're listening to someone quoting government figures, you are as likely as not getting the core CPI, instead of the more relevant one, which tends to be higher.
So yeah, they're blamed for both, because they do both.
"Are the economic dynamics going to shift and bring all of the manufacturing back to the States? Is the dollar going to suddenly start appreciating and being worth more?"
The short answers are: no, but irrelevant, and yes.
Outsourcing has nothing to do with "economic dynamics". It has to do with greed, lack of adequate regulation, and a refusal by government to enforce fairness.
Why is outsourcing unfair to domestic labor? Because it bypasses exchange rates and tariffs, and so it isn't "fair" one-on-one competition. The playing ground is anything but level. Let me give you an example. Suppose I want to hire a software developer. I can hire one in the U.S. for $30 an hour (he works cheap), or one from Pakistan for $15 an hour. On the face of it, it looks like the Pakistani is "outcompeting" the U.S. laborer. But that is not true, for at least a couple of reasons. For one thing, at today's rates, $1 US will buy more than 4 times as much rice in Pakistan as it does in the US. Presumably, other basic foodstuffs and costs of living exchange at a similar rate. So even though you paying the Pakistani $15, to him it is worth what $60 per hour would be to someone in the U.S. That is not "fair" competition, because the economies are dissimilar. That's WHY we have exchange rates in the first place!
Prior to this, such outsourcing was not practical. It is our instant communication that has changed that situation, not anything to do with "economic dynamics".
The traditional answer to such unfair trade has been exchange rates and tariffs. But our government has been essentially gifting all this money to other countries in the name of "free trade" (it isn't), and "free competition" (it isn't). Mainly in order to benefit their Corporate friends by giving them a shot at cheap labor. We have seen what that has done to the economy.
But it is anything but hopeless. If you had been following the trends, you would know that outsourcing has already slacked off a great deal, and probably will even more. The reason? Unreliable companies and workers, and inferior product. It's just a fact. Look it up. They are finding that it isn't so cheap after all. Another reason is that public sentiment has turned very darkly against outsourcing, since the public believes (rightly) that it is profiting Corporations, but at great cost to our overall economy.
But if that isn't enough, an honest President can probably bull through Congress a bill to simply directly tax corporations that continue to outsource. This could be considered a "fair" tax, like those tariffs designed to balance trade: it simply keeps the money in our local economy rather than pissing it away overseas.
As for your second question, the answer is yes. But the reasons are not so simple. In essence, our changeover to fiat money during the 20th century has given government control over the money supply (no, they did not in fact have that earlier), AND it gives the big finance corporations first shot at all that money, before inflation saps away its worth. So it is in their best interest to keep control, and keep a fiat currency, and inflate it away. Because they still profit. You don't... we don't... but they do.
A gold standard, or other "hard money" standard, prevents this. Money can no longer be "created" in the fashion that fiat money can, so financiers do not get fresh, not-yet-inflated supplies of it whenever they want. It would no longer be any more in their interest to inflate the money, than it is in yours. So while it may not necessary "appreciate" (though that is possible), it would no longer "depreciate" like it has over the last 80 years. After nearly 300 years of prices so stable they were almost flat for that entire time (not always in terms of "dollars", but an equivalent amount of hard money), over the last 80 years, since we have had fiat money, the dollar has depreciated by over 96%.
Yes, hard money was, and still is, the answer.
"But Ron Paul is much, much more than that. He's the anti-Civil-Rights-Act Republican. He's an anti-reproductive-rights Republican. He's a gay-demonizing Republican. He's an anti-public education Republican and an anti-Social Security Republican. He's the John Birch Society's favorite congressman. And he's a booster of the Constitution Party, which has a Christian Reconstructionist platform. So, if you're a member of the anti-woman, anti-gay, anti-black, anti-senior-citizen, anti-equality, anti-education, pro-communist-witch-hunt wing of the progressive movement, I can see how he'd be your guy."
Point by point: (1) Paul stated that he would vote against the Civil Rights Act, not because it was not well-intended, but because it is unconsitutional! And it is. He takes pride in the fact that he votes on principle, and for the Constitution, every time, no exceptions. The fact that the Civil Rights Act was well-intended is irrelevant; it is in fact unconstitutional. His position is that if somebody wants to pass something like the Civil Rights act, fine! You just have to amend the constitution first to make it legal. It has absolutely nothing to do with race or racism. Sorry, but playing the race card here won't work, for the simple reason that it's BS. His statements are on the record and there is no trace of racism anywhere in them.
(2) He is not an "anti-reproductive-rights Republican". That is simply a lie. Does he personally believe in abortion? No. He has repeatedly, and honestly, stated that he is personally against abortion. However, you can't leave out the rest without lying by omission: he has also repeatedly refused to back Federal abortion legislation. He believes (quite properly) that is unconstitutional and is to be left up to the individual states. The fact that he opposes Federal abortion laws, on principle and in the face of his own personal beliefs, says much for Paul's integrity. This is a point in his favor, not against him.
(3) "He's a gay-demonizing Republican". Now, you simply can't get more BS than this. Again, his personal beliefs aside (yes, he has stated that he personally believes marriage should be between a man and a woman), again Paul has opposed Federal legislation in that regard, because marriage is simply none of the Federal government's business. He has fought attempts by the Federal government to "define" what marriage ought to be. If you happen to be gay, you should be thankful for this, rather than "demonizing" Paul himself for imaginary harms.
(4) It is true he is opposed to Federal involvement in public education and also Social Security. (But not against public education! That's not the same thing!) For the simple reason that Federal involvement in either of those is unconstitutional. So what? You should be against them too. If you're not, it is you who has a problem. A government that ignores the constitution is no government worthy of the name.
(5) "He's the John Birch Society's favorite congressman." I don't know if that is true or false, but so what? What is he trying to say here? That because one group of people likes him, other people should not? Talk about guilt by association... what a nasty, unethical thing to do to somebody. Paul has no control over who says they like him and who doesn't. This is so far the most BS argument of them all.
(5) He is not a "booster" of the Constitution Party, for the simple reason that the Constitution Party, despite its name, supports too many UN-constitutional things. Paul does support, to a certain degree, the Libertarian party, but the Libertarian party actually tends to alienate right-wing Christians. Rather, it probably contains more atheists.
(6) "So, if you're a member of the anti-woman, anti-gay, anti-black, anti-senior-citizen, anti-equality, anti-education, pro-comm
"1) Deregulation - that's what allowed banks to create CDO bubble."
True. But are you sure THAT kind of deregulation is what Paul advocates? You would be wrong. Ron Paul actually voted against the bill that tore down Glass-Steagall! Ron Paul has shown quite clearly, from his voting record, that he is not "anti-regulation at all costs". He has opposed what most people now see as insane deregulation. So what are you trying to say here? Or are you just using implication to spread false impressions?
"2) Invisible hand of the market - like the rating agencies grading junk as AAA?"
Adam Smith's "invisible hand" was intended to apply to markets for goods, not money speculation. You are conflating two different things. Again, as I pointed out above, Paul did not support letting the financial market be a free-for-all.
"3) Gold standard and hard currency - the bubble has happened in the shadow banking system that over-leveraged the debt. Nothing in gold standard could have prevented it by itself."
If you think so, then you don't understand how Keynesian money-multiplication and fractional-reserve banking work.
Essentially, those concepts allow financial speculators to create money out of thin air. And Keynesian economics counts fiat currency as real money. But as we have clearly seen, most recently in 2008, such fiat currency can disappear as fast as it is created, or even faster.
Hard currency would indeed solve the problem, because speculators could no longer create nonsense "money" through mere financial transactions, and therefore neither could that money "disappear". It might move around, but somebody still has it. The money supply would be near-constant, and much more resistant to bubbles and crashes.
"There is not anything that Ron Paul, or anyone else can do about it. The dynamics of the world have shifted. The American standard of living will only decline from here on out."
Wow. That's about the most pessimistic statement I think I have seen yet, and I have seen some doozies.
I think we are all agreed that we are in a mess, but I very much disagree with your dismal outlook.
You're both nuts if you're paying much attention to those figures. Anybody who takes Krugman seriously has to get their head examined anyway.
Neither Shadow Stats or BPP (not BPI) are reflective of an actual CPI. For example, MIT's BPP collects reported retail data only... which is not very reflective of short-term commodity prices.
The way US BLS CPI is calculated is very questionable especially since about 1980. Their theory about "substitute" goods is on particularly shaky mathematical and logical ground. Further, about 40% of CPI is based on housing, and with the housing market a shambles, there is no way in hell it could reflect actual consumer prices... people simply aren't buying homes. So the CPI is bound to be grossly distorted downward.
As usual, the best measure of CPI is your own pocketbook. And I don't know about any other parts of the country, but around here prices for just about everything have gone up considerably in the last year. Much more than just a few %.
"Ron Paul was 'predicting' the current situation since well into 90-s. So no, it doesn't count. And during the crisis he's been constantly mis-predicting, well, everything (runaway inflation, hellllo?)."
Uh... I think you're confused. Have you forgotten the recession of 2000-2001, which itself lasted a few years? And then this one came hot on its heels, before we were even completely recovered from that one. So no, he wasn't wrong.
As for inflation, there are several things that need to be said about that:
First, inflation as a result of bad monetary policy does not generally happen overnight. It takes a couple of years, at least, to build.
Second, inflation has been kept artificially low by the Fed (irationally, one might even say insanely) keeping the interest rates artificially low, which will be disastrous in the long run if they don't pull their heads out.
And third, we ARE seeing it... or at least the beginnings of it. Have you checked your grocery bill lately? And compared it to last year?
Oh, but I forgot... food is no longer part of the official government Consumer Price Index. How insane is that? The fact is that the "inflation" figures being fed to you by the government don't even remotely reflect reality.