ECONOMICS 101 REVISITED
- Thread starter jimmoyer
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Re: RE: ECONOMICS 101 REVISITED
You don't think the "Tech Bubble" was fuelled by capital making its way from the IMF "excabrated" Asian recession to the American easy-money environment of the late 90s?
honestly, now. not this "devil's advocate" crap you've just confessed to.
Toro said:
You don't think the "Tech Bubble" was fuelled by capital making its way from the IMF "excabrated" Asian recession to the American easy-money environment of the late 90s?
honestly, now. not this "devil's advocate" crap you've just confessed to.
typingrandomstuff said:
I believe in influencing the market no less than is required to ensure social justice. I also believe that doing so does not stifle incentive to the point individuals cannot readily prosper in relative autonomy but rather such influence enhances each person's ability to achieve their own goals to the benefit of all.
BitWhys said:
I think with a small edit I can agree
I believe in influencing the market no more or less than is required(1) to ensure "social justice"(2). I also believe that doing so does not stifle incentive to the point individuals cannot readily prosper in relative autonomy but rather such influence enhances each person's ability to achieve their own goals to the benefit of all.
(1) The amount required is up for debate.
(2) "social justice" is a subjective term and also up for debate.
Graeme said:
re: "no more"
I've been thinking about that but actually think the top end is found more towards the point at which we can attain sufficient and substainable growth. and such. Its the not having a handle on the "and such" part that prompted me to leave it out for now.
points 1 + 2 are entirely valid but I don't think that means we should abandon the effort just because we will probably never fit the whole endevour on a spreadsheet. Optimistically, we should be able to find the answers we need as we need them from within the democratic process as long as it remains healthy. or healthy enough. :wink:
Re: RE: ECONOMICS 101 REVISITED
No.
IMF lending is in fact a small fraction of global capital flows. Very little of it made its way into the developed nations during that time. In fact, in the last half of the decade, private capital flowed into the emerging markets. There was too much money sloshing around the world at the time - as there is today - and those private capital flows exacerbated the volatility of the financial markets and economies of those emerging nations.
The stock market bubble of the 1990s was due to easy money and the advent of new technology. Asset bubbles do not occur without easy credit and are usually driven by a catalyst, which is often new technology.
Nor have we eliminated the causes of the stock market bubble as money growth has exploded over the past five years. We now have/had asset bubbles in real estate and bonds. The catalyst this time has been the meaningful inclusion of China into the global economy.
BitWhys said:
No.
IMF lending is in fact a small fraction of global capital flows. Very little of it made its way into the developed nations during that time. In fact, in the last half of the decade, private capital flowed into the emerging markets. There was too much money sloshing around the world at the time - as there is today - and those private capital flows exacerbated the volatility of the financial markets and economies of those emerging nations.
The stock market bubble of the 1990s was due to easy money and the advent of new technology. Asset bubbles do not occur without easy credit and are usually driven by a catalyst, which is often new technology.
Nor have we eliminated the causes of the stock market bubble as money growth has exploded over the past five years. We now have/had asset bubbles in real estate and bonds. The catalyst this time has been the meaningful inclusion of China into the global economy.
Government has a role two ways.
First, in ensuring markets work efficiently and smoothly. This often entails enacting laws that increases the dissimenation of information so that individuals can make better choices. In Econ 101, you learn that the laws of supply and demand you assume all participants have perfect knowledge. That isn't the case. So not only do laws increasing transperancy in markets push the price of a good to a natural clearing price, but also increases the utility of individuals. A simple example is requiring food companies to display nutritional contents on their products, or full-disclosure laws for companies wishing to sell stock on publicly traded stock exchanges. This also includes anti-trust laws. Most industries do not tend towards monopoly, especially in the long-run. But it can happen occassionally in the short-term. Laws preventing monopolization ensures that entities aren't able to extract economic rents from the economy.
Second, to internalize costs that society deem too important to be left to the market, or when markets fail. People often think of healthcare or social programs in this manner, but it also includes other services people naturally associate with government, such as the army or the police. There will always be some who are left behind in the market economy for whatever reason. As a society gets richer, it is more willing to spread the costs around to protect those who are left behind. An example where markets fail is in education since markets aren't particularly good as assessing the costs one should incur for primary education. In theory, one should be willing to pay for an education based on the future earnings stream provided by that education. However, most people don't know what they want to be when they're 5 years old - unless you count "cowboy" or "princess" as serious occupations. So society pays for education because not only can some not afford to pay for education, but because it impossible to assign a cost based on future income at that age. As people get older, and are more apt to know what it is they want to do for a living, they can shoulder more of the cost of their education, i.e. at University.
First, in ensuring markets work efficiently and smoothly. This often entails enacting laws that increases the dissimenation of information so that individuals can make better choices. In Econ 101, you learn that the laws of supply and demand you assume all participants have perfect knowledge. That isn't the case. So not only do laws increasing transperancy in markets push the price of a good to a natural clearing price, but also increases the utility of individuals. A simple example is requiring food companies to display nutritional contents on their products, or full-disclosure laws for companies wishing to sell stock on publicly traded stock exchanges. This also includes anti-trust laws. Most industries do not tend towards monopoly, especially in the long-run. But it can happen occassionally in the short-term. Laws preventing monopolization ensures that entities aren't able to extract economic rents from the economy.
Second, to internalize costs that society deem too important to be left to the market, or when markets fail. People often think of healthcare or social programs in this manner, but it also includes other services people naturally associate with government, such as the army or the police. There will always be some who are left behind in the market economy for whatever reason. As a society gets richer, it is more willing to spread the costs around to protect those who are left behind. An example where markets fail is in education since markets aren't particularly good as assessing the costs one should incur for primary education. In theory, one should be willing to pay for an education based on the future earnings stream provided by that education. However, most people don't know what they want to be when they're 5 years old - unless you count "cowboy" or "princess" as serious occupations. So society pays for education because not only can some not afford to pay for education, but because it impossible to assign a cost based on future income at that age. As people get older, and are more apt to know what it is they want to do for a living, they can shoulder more of the cost of their education, i.e. at University.
Re: RE: ECONOMICS 101 REVISIT
not the lending. the capital flight.
I'm starting to think that on one scalar or another the bubbles are an alternate to consumer inflation. Gotta tuck those numbers somewhere.
btw, the penny dropped.
you ARE agruing the same point on both boards (not that I agree with it).
my attention to detail last night was rather hit and run.
Toro said:
not the lending. the capital flight.
I'm starting to think that on one scalar or another the bubbles are an alternate to consumer inflation. Gotta tuck those numbers somewhere.
btw, the penny dropped.
Toro said:
you ARE agruing the same point on both boards (not that I agree with it).
my attention to detail last night was rather hit and run.
Government has a role two ways.
First, in ensuring markets work efficiently and smoothly. This often entails enacting laws that increases the dissimenation of information so that individuals can make better choices. In Econ 101, you learn that the laws of supply and demand you assume all participants have perfect knowledge. That isn't the case. So not only do laws increasing transperancy in markets push the price of a good to a natural clearing price, but also increases the utility of individuals. A simple example is requiring food companies to display nutritional contents on their products, or full-disclosure laws for companies wishing to sell stock on publicly traded stock exchanges. This also includes anti-trust laws. Most industries do not tend towards monopoly, especially in the long-run. But it can happen occassionally in the short-term. Laws preventing monopolization ensures that entities aren't able to extract economic rents from the economy.
Second, to internalize costs that society deem too important to be left to the market, or when markets fail. People often think of healthcare or social programs in this manner, but it also includes other services people naturally associate with government, such as the army or the police. There will always be some who are left behind in the market economy for whatever reason. As a society gets richer, it is more willing to spread the costs around to protect those who are left behind. An example where markets fail is in education since markets aren't particularly good as assessing the costs one should incur for primary education. In theory, one should be willing to pay for an education based on the future earnings stream provided by that education. However, most people don't know what they want to be when they're 5 years old - unless you count "cowboy" or "princess" as serious occupations. So society pays for education because not only can some not afford to pay for education, but because it impossible to assign a cost based on future income at that age. As people get older, and are more apt to know what it is they want to do for a living, they can shoulder more of the cost of their education, i.e. at University.
---------------------------Toro-----------------------------
Excellent post.
Reasonable for all spectrums of ideologues.
Practical.
Well written.
First, in ensuring markets work efficiently and smoothly. This often entails enacting laws that increases the dissimenation of information so that individuals can make better choices. In Econ 101, you learn that the laws of supply and demand you assume all participants have perfect knowledge. That isn't the case. So not only do laws increasing transperancy in markets push the price of a good to a natural clearing price, but also increases the utility of individuals. A simple example is requiring food companies to display nutritional contents on their products, or full-disclosure laws for companies wishing to sell stock on publicly traded stock exchanges. This also includes anti-trust laws. Most industries do not tend towards monopoly, especially in the long-run. But it can happen occassionally in the short-term. Laws preventing monopolization ensures that entities aren't able to extract economic rents from the economy.
Second, to internalize costs that society deem too important to be left to the market, or when markets fail. People often think of healthcare or social programs in this manner, but it also includes other services people naturally associate with government, such as the army or the police. There will always be some who are left behind in the market economy for whatever reason. As a society gets richer, it is more willing to spread the costs around to protect those who are left behind. An example where markets fail is in education since markets aren't particularly good as assessing the costs one should incur for primary education. In theory, one should be willing to pay for an education based on the future earnings stream provided by that education. However, most people don't know what they want to be when they're 5 years old - unless you count "cowboy" or "princess" as serious occupations. So society pays for education because not only can some not afford to pay for education, but because it impossible to assign a cost based on future income at that age. As people get older, and are more apt to know what it is they want to do for a living, they can shoulder more of the cost of their education, i.e. at University.
---------------------------Toro-----------------------------
Excellent post.
Reasonable for all spectrums of ideologues.
Practical.
Well written.
Worth Saying Again Again Again Again
Government has a role two ways.
First, in ensuring markets work efficiently and smoothly. This often entails enacting laws that increases the dissimenation of information so that individuals can make better choices. In Econ 101, you learn that the laws of supply and demand you assume all participants have perfect knowledge. That isn't the case. So not only do laws increasing transperancy in markets push the price of a good to a natural clearing price, but also increases the utility of individuals. A simple example is requiring food companies to display nutritional contents on their products, or full-disclosure laws for companies wishing to sell stock on publicly traded stock exchanges. This also includes anti-trust laws. Most industries do not tend towards monopoly, especially in the long-run. But it can happen occassionally in the short-term. Laws preventing monopolization ensures that entities aren't able to extract economic rents from the economy.
Second, to internalize costs that society deem too important to be left to the market, or when markets fail. People often think of healthcare or social programs in this manner, but it also includes other services people naturally associate with government, such as the army or the police. There will always be some who are left behind in the market economy for whatever reason. As a society gets richer, it is more willing to spread the costs around to protect those who are left behind. An example where markets fail is in education since markets aren't particularly good as assessing the costs one should incur for primary education. In theory, one should be willing to pay for an education based on the future earnings stream provided by that education. However, most people don't know what they want to be when they're 5 years old - unless you count "cowboy" or "princess" as serious occupations. So society pays for education because not only can some not afford to pay for education, but because it impossible to assign a cost based on future income at that age. As people get older, and are more apt to know what it is they want to do for a living, they can shoulder more of the cost of their education, i.e. at University.
---------------------------Toro-----------------------------
Excellent post.
Reasonable for all spectrums of ideologues.
Practical.
Well written.
Government has a role two ways.
First, in ensuring markets work efficiently and smoothly. This often entails enacting laws that increases the dissimenation of information so that individuals can make better choices. In Econ 101, you learn that the laws of supply and demand you assume all participants have perfect knowledge. That isn't the case. So not only do laws increasing transperancy in markets push the price of a good to a natural clearing price, but also increases the utility of individuals. A simple example is requiring food companies to display nutritional contents on their products, or full-disclosure laws for companies wishing to sell stock on publicly traded stock exchanges. This also includes anti-trust laws. Most industries do not tend towards monopoly, especially in the long-run. But it can happen occassionally in the short-term. Laws preventing monopolization ensures that entities aren't able to extract economic rents from the economy.
Second, to internalize costs that society deem too important to be left to the market, or when markets fail. People often think of healthcare or social programs in this manner, but it also includes other services people naturally associate with government, such as the army or the police. There will always be some who are left behind in the market economy for whatever reason. As a society gets richer, it is more willing to spread the costs around to protect those who are left behind. An example where markets fail is in education since markets aren't particularly good as assessing the costs one should incur for primary education. In theory, one should be willing to pay for an education based on the future earnings stream provided by that education. However, most people don't know what they want to be when they're 5 years old - unless you count "cowboy" or "princess" as serious occupations. So society pays for education because not only can some not afford to pay for education, but because it impossible to assign a cost based on future income at that age. As people get older, and are more apt to know what it is they want to do for a living, they can shoulder more of the cost of their education, i.e. at University.
---------------------------Toro-----------------------------
Excellent post.
Reasonable for all spectrums of ideologues.
Practical.
Well written.