Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: TimF who wrote (352555)	9/28/2007 8:59:19 AM
From: combjelly	Read Replies (1) of 1576155

"It was more the opposite." Huh? "When the money supply was tightened, you had people fired, or companies go out of business, more than you had continued operation with the same employees at lower pay. " Right. And why was the money supply tightened? Because productivity was exceeding wages. Because the economy was growing faster than wages, people tended to take on more and more debt for a variety of reasons. The debt accumulation was causing inflation, so the money supply was tightened. See the pattern? "but paying people more without them actually producing more leads more to inflation" Well, duh. But that wasn't the case through the 1920's, just the opposite. Because of the introduction of the assembly line and improvements in communication and transportation, productivity was increasing at a rapid clip. Wages weren't. So the increases went mainly to profitability, not so much to wages. The percentage of the economy due to dividends almost doubled throughout the decade of the '20s and the gap in wealth between the upper 10 percent and the rest grew to its highest level. Now, I'd point out to similarities to today, but what would be the point?

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