Stagflation Nation

[bokworker]

I was around in the early 80"s...in the banking business. It was during this time that we saw the effects of deflation and why it is so imprtant to avoid it nationally. The only good thing about that period is that our deflation, from collapsing oil prices, was hugely stimulative to the rest of the nation and helped reduce inflationary pressures and spur economic growth.

NG, it would seem to me, is a victim of its own success in that we have found huge deposits so supply has outstripped our infrastructure to use the new supply.

[Townsend]

I was around in the early 80"s...in the banking business.

Mr. Keating?

[we vs us]

In another thread WevsUs quoted a portion of Bill Gross' most recent monthly newsletter. The snippet quoted indicated a support of further govermental stimulus. As I read the entire piece though the interesting part, to me, was the type of additional "stimulus" Bill was calling for. To whit, "put a shovel in every man's (and woman's I suppose) hand that needs a job from 8 am to noon and then have them study in a classroom from 1 to 5 pm". I wonder how our populace would react to the requirement to do something good for society in order to recieve society's largesse?

Will they get paid? Then I bet yes.

I followed you all the way up to your last sentence, where you decided to undermine your macro argument by tying it to a very specific moral assumption -- which is that the job we'd require them to do is "for their own good,"  or more specifically as paying a debt to society.  This is one of my major problems with how the conservative formulation is built:  having a moral debt is always brought up as a primary motivator, and as a policy lever (usually paired with "personal responsibility") and especially now when safety nets are strained, that moral debt idea is now rampant, and seemingly applies to individuals and voting blocs and even municipalities and states.  But that's not how capitalism is supposed to work.  Moral debt is a useful motivator, but isn't the main driver.  Self interest is the main driver.  

So if we offer work in the morning and training in the afternoon with the implication that it's based on a societal debt to be paid -- "we're offering this to you because you owe us." -- you've turned it into a penal system with all the freight that comes along with that. If they join up because we're specifically hiring them and then offering them free training, you have an entirely different workforce, and one that will understand it's debt in a way that encourages self interest.  

[bokworker]

No... but the bank I worked for at the time, FNB OKC did fail. Along with a lot of others. FNB OKC is now bank of America...

[Breadburner]

As long as speculators are allowed to trade oil on paper, it will remain high.

I still can't figure out natural gas.  We saw a slow down in midstream treatment plant activity, yet companies are spending billions drilling for it right now as well as running high risks of future EPA fines for fracking disasters.  I guess the idea is plough current profits from oil into having all this natural gas tapped as the price goes up in the future.  I also think people like TBone are probably really unhappy no one is carrying their water for them like they'd hoped on legislating er exploiting NG.

TBone is a self-serving jack-donkey....He wants to make all OTR trucks natural gas vehicles....I wonder why...

[Teatownclown]

I was around in the early 80"s...in the banking business. It was during this time that we saw the effects of deflation and why it is so imprtant to avoid it nationally. The only good thing about that period is that our deflation, from collapsing oil prices, was hugely stimulative to the rest of the nation and helped reduce inflationary pressures and spur economic growth.

NG, it would seem to me, is a victim of its own success in that we have found huge deposits so supply has outstripped our infrastructure to use the new supply.

Victimized by lack of demand....again stagflation.

[bokworker]

Will they get paid? Then I bet yes.

I followed you all the way up to your last sentence, where you decided to undermine your macro argument by tying it to a very specific moral assumption -- which is that the job we'd require them to do is "for their own good,"  or more specifically as paying a debt to society.  This is one of my major problems with how the conservative formulation is built:  having a moral debt is always brought up as a primary motivator, and as a policy lever (usually paired with "personal responsibility") and especially now when safety nets are strained, that moral debt idea is now rampant, and seemingly applies to individuals and voting blocs and even municipalities and states.  But that's not how capitalism is supposed to work.  Moral debt is a useful motivator, but isn't the main driver.  Self interest is the main driver.  

So if we offer work in the morning and training in the afternoon with the implication that it's based on a societal debt to be paid -- "we're offering this to you because you owe us." -- you've turned it into a penal system with all the freight that comes along with that. If they join up because we're specifically hiring them and then offering them free training, you have an entirely different workforce, and one that will understand it's debt in a way that encourages self interest.  

I wasn't making that assupmtion...merely asking the question as to what the response might be. Where I do have a problem is in the policies we have in place that do NOT encourage a response based on self interest. Or better put, they do, but the self interest response is to take the benefit and not work. When did society's perception of public assistance change from one where a person felt like they had to work in order to even take assistance to one where we demand assistance for no work?
We can't even agree to do drug testing for public assistance but require it to work in the private sector. So again I ask, what do you think the response would be for the type of "stimulus" Bill proposed?

And yes, I am making the assumption they would be paid.

[Conan71]

Will they get paid? Then I bet yes.

I followed you all the way up to your last sentence, where you decided to undermine your macro argument by tying it to a very specific moral assumption -- which is that the job we'd require them to do is "for their own good,"  or more specifically as paying a debt to society.  This is one of my major problems with how the conservative formulation is built:  having a moral debt is always brought up as a primary motivator, and as a policy lever (usually paired with "personal responsibility") and especially now when safety nets are strained, that moral debt idea is now rampant, and seemingly applies to individuals and voting blocs and even municipalities and states.  But that's not how capitalism is supposed to work.  Moral debt is a useful motivator, but isn't the main driver.  Self interest is the main driver.  

So if we offer work in the morning and training in the afternoon with the implication that it's based on a societal debt to be paid -- "we're offering this to you because you owe us." -- you've turned it into a penal system with all the freight that comes along with that. If they join up because we're specifically hiring them and then offering them free training, you have an entirely different workforce, and one that will understand it's debt in a way that encourages self interest.  

What's the benefit in a society or economy paying people to be un-productive?

[bokworker]

WevsUs.... I guess I view public assistance as a penal system. Give a person a job that accompishes a goal, for them and society, and they have something that in the end is for them. Nobody has a job that they get paid for nothing, except rock band members, and while I am benefitting my employer then I am benefitting me.

Ultimately we should want as much of our society as possible to support themselves without public assistance. There will always be those that cannot and it is our collective responsibility to take care of them. But we have bastardized our support system to a point that it is no longer recognizable and a detriment to our society's long term success.

[we vs us]

What's the benefit in a society or economy paying people to be un-productive?

You guys are really leaning on this whole dependency thing.  It's only unproductive if you don't get something from it in the end.  In the Gross scenario, you pay people to work and then train them in the afternoon.  They build things for the gov, they get money to spend, and get retrained into a modern workforce. 

The dependency idea is really crippling, because it keeps us from preserving and improving one of our biggest national resources, which is our labor pool.  If any investment whatsoever in an idle workforce is verboten because dependency is the inevitable and only result [because people are lazy and stupid and can't be trusted and subject only to their most venal impulses rather than logic or planning or working to better themselves or their families and to improve their positions in society] then what's to be done?  Where does a conscientious policy maker turn if every societal investment immediately infantilizes its members?

[Conan71]

You guys are really leaning on this whole dependency thing.  It's only unproductive if you don't get something from it in the end.  In the Gross scenario, you pay people to work and then train them in the afternoon.  They build things for the gov, they get money to spend, and get retrained into a modern workforce. 

The dependency idea is really crippling, because it keeps us from preserving and improving one of our biggest national resources, which is our labor pool.  If any investment whatsoever in an idle workforce is verboten because dependency is the inevitable and only result [because people are lazy and stupid and can't be trusted and subject only to their most venal impulses rather than logic or planning or working to better themselves or their families and to improve their positions in society] then what's to be done?  Where does a conscientious policy maker turn if every societal investment immediately infantilizes its members?

You are totally losing me here.

Either you think it's a good idea for a government to pay for idleness or you think it's a bad thing to want something in return for for those people and to expand their job skills because you somehow place a moral equivalence on it?  Which is it?

There's the pragmatic issue of a government with a crumbling infrastructure, public school systems falling apart, etc. yet we spend money to keep people out of the workforce when they could be adding something of value back to the country in exchange for receiving an income from the government.  Either you can put a shovel in their hand or they can help as a teacher's aide, or doing bookkeeping, being a museum guide, or a widget maker.  You also offer them the benefit of expanded educational opportunities.  I really fail to see what is wrong with that and really don't see why it's necessary to extract a bunch socially conceptualized mumbo-jumbo out of it.

[Gaspar]

On the contrary, free people are innovative, creative and entrepreneurial.  The work to better themselves naturally.  They strive to be successful and live their dreams.

Dependency is created, cultivated, and harvested in the form of votes.  It is learned behavior that is difficult and in many cases impossible to escape.  It creates it's own communities of slaves serving politicians willing to turn them out on the streets with messages of hope at the feet of generous and benevolent masters.

I'm OK with government programs that ask people to work in exchange for temporary wages.  I'm also OK with temporary programs that improve training for victims of poor education systems, but that's not what we have.  

Any mention of "work programs" for the unemployed is lashed at with violent protest.  Any assertion that in tough economic times employed state workers take some responsibility for their own secondary benefits brings state governments to a halt with protest.

We are not cultivating a workforce, we are building layer upon layer of dependency that once deployed is very difficult to revoke.

[bokworker]

WevsUs....I think we are on the same page. I wasn't trying to make any kind of moral statement, I was merely asking a question. You obviously think the people currently getting assistance will sign up immediately for a work program in which they are paid and retrained per Mr. Gross' idea. I have serious doubts as to the validity of that opinion. Not because I don't want it so, but because we have for a very long time not required any output for a government benefit. I would hope I am wrong.

[nathanm]

Uh, what? On what basis do they suggest that there is/will be any significant inflation in the next year or two?



Including the massive runup in gasoline and corn (that seems to be reversing now), we were up 3.5% over last year. In other words, pretty normal overall. We're probably in the midst of month-on-month disinflation if you include food and energy. The volatility makes it terrible for making short-term policy.

[nathanm]

QEIII is coming....mark my words. Why do you all worry so much about our debt rating? Could it be a way to stymie every political action? Just raise the debt ceiling....kick the can down the road another 40 years unless you foresee revolution in the US.

And it will be as useful as QEII. As bokworker noted, it's like pushing on a string when you do it that way. We pretty much have two choices at this juncture. Live with a stagnant economy (useful for the Republicans right now, who are desperate to deny Obama even the slightest whiff of success by opposing nearly every one of his policies) or more stimulus. War spending sort of works, but is limited in its breadth. Better to have plow more money into roads, rail, bridges, flood control, and other large scale projects. It's not as if we're lacking in people to do such work or wanting for cheap money (at least if you're the federal government).

And as for the national debt, people often think of it the way they do credit card debt. The difference is that since the debtor controls the currency, and the debtor is perfectly willing to inflate the currency, the debtor won't ever pay back the full value. In a high interest rate environment where the debtor does not control the currency in which the debt is denominated, your every day experience with personal finance is actually applicable. Luckily for us, we're not in that position.