What is the role of Government in CST?

[Tigg]

Oh I know. I was merely stating its name. Even if it were all government-based, I would still oppose the debasing of our currency. I support a full and 100% gold standard. (heck, id settle for a silver standard)

Just another long list of ‘progressive’ evil from Wilson. You’re preaching to the choir my friend!

GOOD FOR YOU! Now how do we get the rest of the world to understand this?

Blessings!

 

[Pius_IX]

How would you deal with the problem of deflation?

‘Deflation’, as the problem named by Chicagoites as the cause of the Great Depression, is one I disagree with. However, it depends on the sort of gold standard implemented. (There are 3 types possible - A total free gold standard w/o the Fed (pre 1913), a Gold Standard with the Fed (1913-1933) or a ‘fixed’ price of Gold w/ Fed (1933-1971).

Without veering any further off topic, right now, with the dollar as poor as it is, I would PREFER some deflation.

 

[Pius_IX]

GOOD FOR YOU! Now how do we get the rest of the world to understand this?

Not sure its going to happen, not while the welfare-warfare state is intact. Personal responsibility is only going to continue to decline.

As much as we, as Catholics, would like fairness, I dont prefer statism as the path to this.

 

[stinkcat_14]

Without veering any further off topic, right now, with the dollar as poor as it is, I would PREFER some deflation.

I take it you don’t have a mortgage, nor do you have any money invested in the financial services industry?

 

[Pius_IX]

I take it you don’t have a mortgage, nor do you have any money invested in the financial services industry?

I do indeed have a mortgage. Notice my choice of words - ‘some’ deflation.

Please do not take my posts as an attack on you at all. I realize a more free market at this stage isnt popular.

 

[stinkcat_14]

I do indeed have a mortgage. Notice my choice of words - ‘some’ deflation.

Please do not take my posts as an attack on you at all. I realize a more free market at this stage isnt popular.

I am actually a somewhat of a Chicagoan. My guess is that you are more Austrian. Hopefully the Chicagoans and Austrians can live together peacefully. I do like Hayek though.

 

[Pius_IX]

I am actually a somewhat of a Chicagoan. My guess is that you are more Austrian. Hopefully the Chicagoans and Austrians can live together peacefully. I do like Hayek though.

You are 100% correct. I am an ‘Austrian’ so to speak.

You’re right - Chicagoites and Austrians probably agree on about 75% of things related to economics. My main problem with the Chicago school is they cannot let go of central banking.

 

[Verisimilitude]

The gilded age was gilded only for a very few. And government was involved, indeed, the deck was stacked in favor of big business and against the little man. We had no worker safety laws, no child laborl laws, no decent housing laws, and as a result the workers were exploited, literally, to death. There was no unemployment insurance, no healtcare…you get the idea. Sure, some made fortunes then but it was generally on the backs of the others who were exploited. Food was often unsafe (ever read “The Jungle”), air and water were filthy. The reason we have the government restrictions we have now is because all these folks thought of was $$$. Since they were so short sighted and greedy, government steeped in to regulate certain areas. Now kids can’t be forced to work until a machine rips their arm off, for example. You can be forced to work with asbestos. We have housing standards and product safety standards. Had the businesses taken care of these things on their own, government would not have needed to respond. But they did not. That is why government has the role it does. I suggest you read a little more about the plight of the urban worker during the gilded age and try to imagine how you would have liked it.

The government created the AFL-CIO, meat-packers unions, carpenter unions, collective bargaining…? Really?

Ralph Nader with whom I disagree politically was a pioneer in product safety testing and requirements. Oraginzations like UL is a private orgainization that help people be safe with products on the market. The AMA, NICET, and many other private orgainzations self police themselves and do so better than any government oversight could ever do.

Companies want to sell food to people, not make them sick with it so they have proceedures to ensure food is safe in processing and cooking, clean resturants and storage. Times changed and society adapted, no longer feeling it neccessary or safe to have children work in mines and farms instead of going to school. Government didn’t do that, people did.

If a milk producer sells bad milk people won’t buy it if they can get good milk from someone else. What good does the FDA do you if Farmer John sells you bad milk? Why can’t you take Farmer John to court instead of allowing the government to take him to court for you. Now Farmer John says he abided by the rules set by the government to provide safe milk- whether he did or not, but you can’t sue the FDA for bad rules or bad inspections. For you the consumer it is a stacked deck.

The role of government is to provide a fair environment (court) for individuals (workers/consumers) to bring grievences against business owners that took advantage of them or treated them unfairly. No more- no less.

 

[Pius_IX]

First off, ‘collective bargaining’ is a made up right. If the employer really wanted to, he could fire every union worker and hire non union workers. After all, he owns the property, not some union mob. That being said, I dont oppose unions per se. I work for a car parts supplier, and I have seen union thuggery first hand.

Ralph Nader with whom I disagree politically was a pioneer in product safety testing and requirements.

Ralph Nader, whom I also disagree with but like as a person, had this odd idea that car companies want to kill their customers.

If a milk producer sells bad milk people won’t buy it if they can get good milk from someone else. What good does the FDA do you if Farmer John sells you bad milk? Why can’t you take Farmer John to court instead of allowing the government to take him to court for you. Now Farmer John says he abided by the rules set by the government to provide safe milk- whether he did or not, but you can’t sue the FDA for bad rules or bad inspections. For you the consumer it is a stacked deck.

Oddly you make a good point - abolish the FDA !

 

[bilop]

I do indeed have a mortgage. Notice my choice of words - ‘some’ deflation.

Please do not take my posts as an attack on you at all. I realize a more free market at this stage isnt popular.

Deflation is devastating to the economy. It causes the value of any debt to go up (in terms of purchasing power) causing massive defaults by individual and corporate borrowers. A mild deflation caused a 10 year depression in Japan in the 1990’s. Deflation caused the Great Depression.

The problem with the gold standard is that it links the money supply to the amount of gold. If the economy is growing, and not enough new gold is being mined, it causes deflation.

This is why the 19th and early 20th century had such a boom/bust economic cycle. Since WWII, when the gold standard was effectively abandoned, recessions have been much milder and there have been no real depressions in the U.S.

God Bless

 

[Pius_IX]

Deflation is devastating to the economy. It causes the value of any debt to go up (in terms of purchasing power) causing massive defaults by individual and corporate borrowers. A mild deflation caused a 10 year depression in Japan in the 1990’s. Deflation caused the Great Depression.

The problem with the gold standard is that it links the money supply to the amount of gold. If the economy is growing, and not enough new gold is being mined, it causes deflation.

This is why the 19th and early 20th century had such a boom/bust economic cycle. Since WWII, when the gold standard was effectively abandoned, recessions have been much milder and there have been no real depressions in the U.S.

God Bless

One could easily argue the flip side to that. Inflation (which the Fed is great at) hurts many, especially the elderly. In a sense, it is an invisible ‘tax’. It was part of the destruction of the economy of Argentina, for example, and they still have not totally recovered.

I recognize your points (about deflation), but I disagree with you completely about gold, as well as blaming it as the cause of the depression. Andrew Jackson had it right when it came to fiat currency - “the instrument of the swindler and the cheat”.

 

[Oscarthecat]

First off, ‘collective bargaining’ is a made up right. If the employer really wanted to, he could fire every union worker and hire non union workers. After all, he owns the property, not some union mob. That being said, I dont oppose unions per se. I work for a car parts supplier, and I have seen union thuggery first hand.

I think that the Church upholds the right of workers to operate in a collective fashion (i.e. unions), but also balances this against the right of the employer to protect the viability of his business and property. But I agree with you that the modern incarnation of unionized labor has far outstripped the original intention that unions should work with their employers toward the common good of both worker and employer, not so that they can cannibalize their employer and effectively run them into the ground, as is the case with so many unions today.

 

[Verisimilitude]

First off, ‘collective bargaining’ is a made up right. If the employer really wanted to, he could fire every union worker and hire non union workers. After all, he owns the property, not some union mob. That being said, I dont oppose unions per se. I work for a car parts supplier, and I have seen union thuggery first hand.

True, I’m not a fan of unions myslef but realize they played a significant role in bringing about workers rights and safe working conditions to society at large. They serve a purpose but should not become an institution as they have. If we promoted being fair and honest to people I think it would mostly work with less exceptions than now.

Ralph Nader, whom I also disagree with but like as a person, had this odd idea that car companies want to kill their customers.

Some cars seemd to be carelessly designed and were dangerous. I like the Ralph’s and Mr. Rogers of the world even if I don’t want to live their full view of it. It’s better than Washington DC or New York helping me.

Oddly you make a good point - abolish the FDA !

How odd?

 

[Oscarthecat]

Oddly you make a good point - abolish the FDA !

Verisimilitude; 3846033:

How odd?

Not that odd-

The FDA has these food recalls and contamination crisis all the time- something new is in the news at any given time about bad meat, bad tomatoes, etc.

But my cats’ (yes, plural cats) food is voluntarily and privately regulated, and in all the years that I’ve been feeding them, there has only been one major food recall.

How is it that the pet food industry has more success privately regulating their food, while our FDA can’t seem to keep the food lines safe for more than a couple of weeks at a time??

Sometimes I think I’d be safer eating cat food!

 

[bilop]

One could easily argue the flip side to that. Inflation (which the Fed is great at) hurts many, especially the elderly. In a sense, it is an invisible ‘tax’. It was part of the destruction of the economy of Argentina, for example, and they still have not totally recovered.

I recognize your points (about deflation), but I disagree with you completely about gold, as well as blaming it as the cause of the depression. Andrew Jackson had it right when it came to fiat currency - “the instrument of the swindler and the cheat”.

I did my senior thesis in college on deflation

Moderate and predictable inflation hurst no one, b/c it is built into interest rates through expectations. Only suprise inflation is an invisible tax.

The late 19th century say several very severe depressions due to deflation due to lack of gold. One lasted most of the 1880’s. This cycle was only broken by the massive gold discoveries in S. Africa, Alaska and Australia, in the 1890s. Again, in 1921, and 1929, severe depressions were caused by deflations.

Since WWII, when we have had a, generally mild, but sometimes not, inflationary environment, recessions have been much less severe, and we have had no depressions.

Inflation can be bad, but deflation is devastating.

Read Friedman and Schwartz “Monetary History of the U.S.” if you’re interested in detail.

God Bless

 

[Pius_IX]

I did my senior thesis in college on deflation

Read Friedman and Schwartz “Monetary History of the U.S.” if you’re interested in detail.
/QUOTE]

I have indeed read it. I was a Friedmanite before becoming an ‘Austrian’. There seems to be a little confusion about what I advocate. ‘Deflation’ is not my ultimate means. Ultimate means would be a free market of currency - roughly the situation before the Civil War. A return to the ‘gold standard’ is the more probable solution, however.

Of course I can see now I wont change any minds. But it is nice to encounter a Chicagoian that knows his stuff - It’s alright - Ludwig Von Mises and Milton Friedman never saw eye to eye, either.

 

[bilop]

bilop;3848651:

I did my senior thesis in college on deflation

Read Friedman and Schwartz “Monetary History of the U.S.” if you’re interested in detail.
/QUOTE]

I have indeed read it. I was a Friedmanite before becoming an ‘Austrian’. There seems to be a little confusion about what I advocate. ‘Deflation’ is not my ultimate means. Ultimate means would be a free market of currency - roughly the situation before the Civil War. A return to the ‘gold standard’ is the more probable solution, however.

Of course I can see now I wont change any minds. But it is nice to encounter a Chicagoian that knows his stuff - It’s alright - Ludwig Von Mises and Milton Friedman never saw eye to eye, either.

I like von Mises and Hayek very much, also. I just find Austrian economics to be a little naive on the financial system. I think regulation of the financial system is actually a legitimate government activity, and a currency “free market” would be too chaotic and impose too many costs on society. We probably agree on 98% of economics, so no need to argue the 2% too vehemently

God Bless

 

[Verisimilitude]

bilop;3848651:

A return to the ‘gold standard’ is the more probable solution, however.

Could other resources be used such as timber and oil? I ask because if the US had vaults filled with gold bars and printed money to the value of that gold as is intended could they not do the same with other resources?

 

[bilop]

Pius IX;3848832:

Could other resources be used such as timber and oil? I ask because if the US had vaults filled with gold bars and printed money to the value of that gold as is intended could they not do the same with other resources?

Well that’s not my quote, originally, but I’ll take a shot.

The problem with any commodity standard is that it limits the supply of money to the supply of a specific physical good or goods.

If the economy grows faster than the commodity supply, it will tend to cause deflation, as a shortage of money causes the “price of money” to rise, meaning other prices must fall.

Fiat currency works fine, with a responsible monetary authority.

The current weakness of the US dollar is caused by our trade policy. We continue to import massive amounts of consumer goods from Asia (esp. China) while those countries don’t buy our goods. They either have tariffs, or flat out refuse to pay, by pirating software, movies, pharmaceuticals, etc.

This led to a trade deficit of approx 7% of GDP by 2006. This means we are consuming 7% more than we produce.

There are only 3 ways to resolve this. 1) impose tariffs to increase the cost of foreign goods and lower imports 2) a depression that reduces U.S. consumption by 7% 3) devalue the dollar to increase the price of imports, and make our exports cheaper.

We won’t do 1) (which I think we should), 2) is completely unacceptable, so we’re left with 3).

God Bless

 

[Verisimilitude]

Thanks. I was just thinking other resources could also be used as collateral to the value of our currency.

The current weakness of the US dollar is caused by our trade policy. We continue to import massive amounts of consumer goods from Asia (esp. China) while those countries don’t buy our goods. They either have tariffs, or flat out refuse to pay, by pirating software, movies, pharmaceuticals, etc.

I was under the impression that the weakness of the dollar is also due to massive borrowing from other nations to fund the WOT, WOD, promised entitlements to Americans, and an expansive overseas military.