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.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (463783)	3/14/2009 1:51:18 PM
From: bentway	Read Replies (1) \| Respond to of 1578494

I'm seeing a lot of deflation NOW. Houses, cars, TV's, computers - there ALL deflating, and quite rapidly. I just bought 4gb of ram for my 'puter for $20!

To: combjelly who wrote (463783)	3/14/2009 5:31:53 PM
From: tejek	Respond to of 1578494

Cutting wages would have only made the problem worse, not better. Tim prides himself on being logical but his arguments are anything but.

To: combjelly who wrote (463783)	3/17/2009 9:49:22 PM
From: TimF	Read Replies (1) \| Respond to of 1578494

Cutting wages would have been better than layoffs some are better without the job at the lower pay, because they can get another one, or because they have other income or wealth or support to fall back on, but they have the option of quitting. You get more job losses, and thus also more fear of job losses, when wages are sticky. That the stickiness of wages is a problem in such situations is accepted by economists of all different "schools", they just have different opinions about how to deal with it, from the Keynesian's talking about more government spending (or in some cases tax cuts), to the monetarists arguing for increasing the money supply (in the most extreme cases with quantitative easing), to the Austrians arguing that the private sector needs to adjust and recover from its malinvestment... Hoover and FDR didn't just face problems from the relatively "natural" stickiness of wages, they pushed them up, at a time when corporations couldn't afford them, this reduced employment, and production, thus making people poorer, and likely to consume less.