Has time proven Ron Paul correct?

[makattak]

Lack of large amounts of inflation is not necessarily deflation.

Huh??

The rest of the post is very cogent, but inflation is the opposite of deflation. Therefore, large amounts of inflation can never be deflation.

[roo_ster]

Huh??

The rest of the post is very cogent, but inflation is the opposite of deflation. Therefore, large amounts of inflation can never be deflation.

The lack of one in quantity does not necessarily imply the other.  Going from the usual ~2-4% of inflation we have seen since the early 1980s to less than 1% inflation does not deflation make.  Similarly, going from Zimbabwean hyperinflation to 2-4% inflation is also not deflation, just less inflation.

IOW:
Less Inflation != Deflation

We have seen only the tiniest smidgen of deflation in month-to-month figures in late 2008...a year that had higher annual inflation than 2007. 

jfruser's speculation:
I would put forward the notion that the only reason we have not had steep inflation (greater than 4% up to 10%-ish) is the fall in oil/gas/energy prices since JUL2008.  The drop in energy prices has has the stimulative effect of an across the board tax cut in addition to attenuating the inflationary pressures of dumping obscene amounts of gov't-debt-increasing cash on to the financial sector.

If we see oil/energy prices start to climb up near to JUL2008 levels, we'll see stagflation rise from the grave to kick our asses for a good 10+ years.

[makattak]

The lack of one in quantity does not necessarily imply the other.  Going from the usual ~2-4% of inflation we have seen since the early 1980s to less than 1% inflation does not deflation make.  Similarly, going from Zimbabwean hyperinflation to 2-4% inflation is also not deflation, just less inflation.

IOW:
Less Inflation != Deflation

We have seen only the tiniest smidgen of deflation in month-to-month figures in late 2008...a year that had higher annual inflation than 2007. 

jfruser's speculation:
I would put forward the notion that the only reason we have not had steep inflation (greater than 4% up to 10%-ish) is the fall in oil/gas/energy prices since JUL2008.  The drop in energy prices has has the stimulative effect of an across the board tax cut in addition to attenuating the inflationary pressures of dumping obscene amounts of gov't-debt-increasing cash on to the financial sector.

If we see oil/energy prices start to climb up near to JUL2008 levels, we'll see stagflation rise from the grave to kick our asses for a good 10+ years.

Ah, ok I understand what you were saying.

Your point was a decrease in the inflation rate is not deflation. Deflation is only a decrease in the value of money.

To me it sounded like you were saying a large amount of inflation can be deflation. Hence my confusion.

[roo_ster]

Ah, ok I understand what you were saying.

Your point was a decrease in the inflation rate is not deflation. Deflation is only a decrease in the value of money.

To me it sounded like you were saying a large amount of inflation can be deflation. Hence my confusion.

Me get good eventually writing with for communicate better-wise.


Hey, in my defense, I can write and understand at least (...counting...) 15 languages .  Of course, I claim proficiency in only one usually associated with communication between humans, the rest being means of communication with computers.

[longeyes]

Many people have espoused in whole and in part what Ron Paul actually ran on.  RP lacks the political charisma to win an election but more to the point we are not yet at the point where people in the mass are ready to embrace the kind of "intensive care" RP is proposing.  That doesn't mean the patient isn't sick and that Paul's diagnosis isn't correct.  I think it is essentially on point, although I don't really agree with RP on all aspects of foreign policy or immigration policy as I understand his positions.  RP is another John the Baptist type, more prophet than political leader, I'm afraid.

Government statistics are to be trusted the way government budgets are.

[Perd Hapley]

Medved or Reynolds were complete idiots for attacking Paul in the way they did even while commenting about how Ron Paul's campaign post-November 5th was completely mismanaged.

Maybe that's where you and I see things differently.  I am struggling to recall any derogatory remarks made about Paul from the punditry, and the only thing that comes to mind has to do with the episode in which Hannity was chased and badgered by Paulistinians.  Mostly, they seem to have ignored Paul.  The only Reynolds I know is Mal, and I don't listen to Medved.  Not that I don't like him; he just isn't on in this market that I know of. 

[longeyes]

MicroBalrog is right about Medved.  He consistently dismisses anyone who strays outside the two major parties.  He likes to refer to the libertarians as "losertarians."  Medved is very sharp, encyclopedic on American history, but when he gets into that snide, smart-ass mocking mode, he just sounds like a Republican shill.

[roo_ster]

MicroBalrog is right about Medved.  He consistently dismisses anyone who strays outside the two major parties.  He likes to refer to the libertarians as "losertarians."  Medved is very sharp, encyclopedic on American history, but when he gets into that snide, smart-ass mocking mode, he just sounds like a Republican shill.

That is because he is the biggest Republican shill on the air.  He is a textbook definition neo-conservative.   If I weren't sure he was sincere, I'd think him a parody of a big gov't neo-con.

I will also tip my hat in acknowledgment of his historical literacy. 

[GigaBuist]

jfruser's speculation:
I would put forward the notion that the only reason we have not had steep inflation (greater than 4% up to 10%-ish) is the fall in oil/gas/energy prices since JUL2008.

We're not seeing inflation right now because the money isn't trickling down to us unwashed masses. With the interest rate this low bank to bank lending isn't exactly very profitable and a bit dicey considering the state of the economy is scarier than a hunting trip with Dick Cheney.

I know one business owner that received a call from his bank after a loan for somewhere between $1 and $2 million was approved.  They told him they either had to cancel it or re-negotiate because they couldn't get any of the bigger banks to loan them money.  They were going to have to use savings and checking accounts of their customers for it and that'd require a higher interest rate.

When the day comes and that money is flowing freely into our economy we're finally going to see the inflation.

[Headless Thompson Gunner]

Deflation?

Lack of large amounts of inflation is not necessarily deflation.  Neither is a drop in some commodity prices and the (notional) wealth-destruction of adjustment in the housing market in the 5 states where that sort of thing has been a kick in the jimmy.

Official CPI stats went barely negative (month-to-month) in only OCT-DEC2008 and are again positive (IOW, inflationary), and the annual 2008 CPI was up 3.8% relative to 2007 (2007 was up 2.8% relative to 2006, BTW).
http://www.bls.gov/news.release/cpi.nr0.htm
http://www.usinflationcalculator.com/inflation/consumer-price-index-and-annual-percent-changes-from-1913-to-2008/

As is usual, the shadowstats folks show a greater inflation that official stats:
http://www.shadowstats.com/alternate_data

FEB2009 inflation is pinned at 0.4%.

I guess I have not bought into the notion that 2-4% annual inflation is A Good Thing in perpetuity.  Holding inflation close to zero while we undergo economic and population growth seems the best policy.  Also, if a positive 2-4% inflation for years on end is harmless, deflation of a similar magnitude for a much shorter length of time ought to be similarly harmless.

But, then, we'd have to actually experiencing deflation.  Which we are not.

None of this is to endorse Paulistinian economics, but merely to point out that using a fiction to refute Paul's goldbuggery is not effective.

Yes, deflation. 

We're seeing massive amounts of debt being destroyed.  We're seeing prices in virtually all asset classes going down.  We're seeing people hoard cash.  We're seeing people eschew borrowing, even at near zero interest rates.  We're seeing retail goods from cars to clothes being discounted all over the place. 

We're seeing the Fed do it's damnedest to push money out into the economy.  And we're seeing them fail.

Deflation.  Cold, ugly deflation.  There is no question in my mind.

The simplistic definitions of inflation/deflation that look solely at CPI miss the point.  Inflation/deflation is a matter of the value of money, but CPI cannot measure the value of money.  All CPI measures is the price of a small handful of consumer goods.

CPI cannot account for what's happening right now. Almost everything has gotten cheaper these past few months.  The only notable exception is cash and its equivalents. 

Deflation.

(Interesting discussion on what inflation is here.)

[MicroBalrog]

[ilbob]

Ron Paul has a lot of good things to say, along with a bit of quackery.

Unfortunately, he had the baggage of being supported by a lot of highly visible kooks. That would have sunk him if nothing else.

There is also the problem that the US does not have much of a history of 3rd party success. There are occasional exceptions, such as TR, but that was not so much about a political party as it was about an individual.

The LP has wasted what little resources it has on futile campaigns for the presidency. Thats why many of the serious people in the LP deserted it eventually an formed the RLC side of the Republican party. It is way to early to tell if they can bring about change to the RP.

[Jamisjockey]

Ron Paul has a lot of good things to say, along with a bit of quackery.

Unfortunately, he had the baggage of being supported by a lot of highly visible kooks. That would have sunk him if nothing else.

There is also the problem that the US does not have much of a history of 3rd party success. There are occasional exceptions, such as TR, but that was not so much about a political party as it was about an individual.

The LP has wasted what little resources it has on futile campaigns for the presidency. Thats why many of the serious people in the LP deserted it eventually an formed the RLC side of the Republican party. It is way to early to tell if they can bring about change to the RP.

Because the left and right don't have kooks?

[bk425]

...and I am more or less normal...

YOU'RE the one! Dang I thought I would meet one but never figured it'd happen on Algores inyernet. Just when you least expect it, live throws you a curve.
 

[MicroBalrog]

Thats why many of the serious people in the LP deserted it eventually an formed the RLC side of the Republican party.

Headed by... oh wait...

[Perd Hapley]

Because the left and right don't have kooks?

Ron Paul is on the right, but I think we all get your meaning.  Yeah, the two established parties have kooks like me.  But the thing is, kooks hurt you a lot worse in the court of public opinion, when you're already a small fringe element and a relative new-comer. 


RLC?  Never heard of it.

[ilbob]

Because the left and right don't have kooks?

The left certainly does.

It is very hard for people to look at a campaign like Ron Pauls and not see the kooks. They are right out there in front for all to see. The mainstream parties tend to hide the kooks better.

[ilbob]

Ron Paul is on the right, but I think we all get your meaning.  Yeah, the two established parties have kooks like me.  But the thing is, kooks hurt you a lot worse in the court of public opinion, when you're already a small fringe element and a relative new-comer. 


RLC?  Never heard of it.

Republican Liberty Caucus. Basically the more serious people in the LP deserted it and returned to the RP with the intent of reforming it from within.

http://www.rlc.org/

[MicroBalrog]

Republican Liberty Caucus. Basically the more serious people in the LP deserted it and returned to the RP with the intent of reforming it from within.

http://www.rlc.org/

You do of course realize that Ron Paul is formerly chair of the RLC and a member of it?

The trouble is, the agenda of libertarianism and radical conservatism is revolutionary in nature. You can't have a revolution without kooks.

[Perd Hapley]

You do of course realize that Ron Paul is formerly chair of the RLC and a member of it?

And? 

[MicroBalrog]

And? 

Ilbob was pointing out the RLC as some form of reasonable alternative to RP and people like him. WHich struck me as ironic.

[Perd Hapley]

Umm, no, he was pointing it out as an alternative to the LP. 

A little over-protective of Ron, are we?   

[MicroBalrog]

I'm reminded of that line H&K fans used to have.

"I'm not an H&K fan, I'm a 'whoever makes the best firearms in the world' fan".

When another politician appears with views like Ron Paul's, I'll be backing him too.

In fact, if we can manage to get a young, handsome guy with those views to run for office, I'll be shifting my support to him. :D

[Balog]

I'm reminded of that line H&K fans used to have.

"I'm not an H&K fan, I'm a 'whoever makes the best firearms in the world' fan".

When another politician appears with views like Ron Paul's, I'll be backing him too.

In fact, if we can manage to get a young, handsome guy with those views to run for office, I'll be shifting my support to him. :D

Does that mean RP hates us 'cause we suck?  And comparing yourself to obnoxious, delusional fan boys is hardly a compelling argument. 

[MicroBalrog]

Does that mean RP hates us 'cause we suck?  And comparing yourself to obnoxious, delusional fan boys is hardly a compelling argument. 

See, I already explained the serious reasons for my argument above. I think they basically got ignored by everybody. So I'm now resorting to humor.