Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (165)	11/20/2002 8:26:53 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 621

Okay Ahaahaha, if you are serious, I guess my puny jokes are a waste of space. I did reply to what seemed to me like a silly verbal game re the definition of deflation. Message 18227015 To have wild inflation running rampant but to call it deflation is destruction of language. We have to start with the meaning of words. I had thought that deflation means prices decreasing [overall as measured by a consumers price index or some way or other]. You mean it to mean the rate of increase in prices reducing, which of course means that about half the time we'll have deflation and slightly more than half the time inflation. That is unless prices drop more quickly than prices rise, which would reduce the time of deflation, or, unless prices rise more quickly than prices fall in which case we would normally live in deflationary times with inflation being abnormal, even if it runs for decades at a time with prices rising at perhaps 20% per year. Sometimes prices would rise at 24% a year and then deflationary times would occur and price rises would reduce gradually to 16% per year, then we'd have inflationary times again .... I think you will already be bamboozled because the words are NOT used like that. Deflation means prices dropping. Inflation means prices rising. I'm not prepared to try to have a discussion unless the words have some meaning - preferably of common usage so others can understand the Alice in Wonderland world we would create with inflation running at 18% but we'd be calling it deflationary. I haven't yet found [other than a couple of instances] that this dictionary conflicts at all with my understanding of meanings: dictionary.reference.com <A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit. > Here's disinflation: dictionary.reference.com < Downward movement of inflated prices to a more normal level.> If we can agree to the meaning of words, we could make a quantum leap in discussion. Mqurice

To: ahhaha who wrote (165)	11/20/2002 8:56:29 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 621

Ahahaha, I agree with your 1980 stuff [as far as I understand what you are saying] regarding tax cuts for the rich as being a non-inflationary way to give a turbo boost to development. I've ranted several times about 'philanthropic investing' which is a phrase I came up with as being the nearest way I could describe the idea of rich people with "high marginal disutility for marginal increases in net income" [if I understand what that jargon means] doing excellent stuff with their oodles of money. Once upon a time [and still to a minor extent] I was a philanthropic investor. As you wrote, once you have enough to buy the groceries, there's a marginal disutility thingamy kicks in. So thoughts turn to investing in something cool rather than just eating more or buying a bunch of stuff. Message 17905942 Message 17905942 Message 17776998 Message 16962024 Message 16317140 Message 16288702 Message 16282706 Message 16276976 I made it quite a hobby horse! If Irwin Jacobs had taken his pile of money back in 1985 and played golf instead of developing CDMA, the world would have been much worse off. Same for $ill Gates when he'd made his mountain. Mqurice

To: ahhaha who wrote (165)	11/21/2002 2:29:09 AM
From: JF Quinnelly	Read Replies (1) \| Respond to of 621

That's fascinating, but it evades the issue of what Friedman knows about the issue of deflation in the '30s. By 1980 Mundell and Friedman had long been debating the issue of fixed vs floating exchange rates, an important issue after Nixon closed the gold window. I don't know of their views, if any, on marginal tax rate cuts. It's my understanding that the term "supply-side tax cuts" was unknown to the Reagan economists- this according to Martin Anderson, who was certainly in a position to know. It's rather the parlance of some WSJ cheerleaders who set themselves up as authorities on Reaganomics, much to the annoyance of the Reagan economic advisors.

To: ahhaha who wrote (165)	11/21/2002 3:17:07 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 621

<The Reagan tax cuts proved me right.> How did they prove you right? The biggest deal in the early 1980s was the decline in the price of oil from $40 per barrel to $10 a barrel. The biggest deal in the 1970s was the dramatic increase in oil from $2 a barrel to $40 a barrel when oil was numero uno and cyberspace wasn't even a gleam in $ill Gates' eyes. Even the PC was far from replacing Fortran IV card punch machines. Now, oil is small change in the economic tides of the world. How did you separate that stuff and all the other stuff and conclude that Reagan's tax cuts proved much of anything? The stock market boom beginning in the early 1980s was more to do with the reducing OPEC oil tax. Remember the worries about "recycling the petrodollars"? Well, at the time, it seemed easy enough to me and sure enough, the OPECers soon figured out that spending money is easy. Or, if they put it in the bank, the banks soon loaned it to somebody else. I should have been an economist! This is easy. Mqurice