Free Market Fundamentalist Ideology is based on a Logical Fallacy.

Yes -- and obviously, they have been. People have a right to make mistakes.

No, that they have no right to do. They have a right to vote away their own rights, but not to vote away others' rights to vote.

No, it's only a question of their having rights. Trust does not enter into it.

Trust is nothing but a red herring. There are lots of possibilities for economic regulation, but the alternative to political self-regulation is tyranny. Economic relationships are (theoretically) consensual, but as Washington so astutely observed, "Government is force."

No, that's just puerile, "Meeza hatesa gubmint!" nonsense. Criminals and the state both use force, but unlike a democratically accountable state, criminals don't give their victims votes in how that force is used.

You are just spewing self-contradictory nonsense. Elected officials are not criminals, as proved above.

Democratic legitimacy is not a mere pretense (maybe in your country). Or perhaps you have some reason to pretend that outright criminality that intends to violate people's rights is no worse than democratically accountable authority that intends to secure them....?

 

But his emphasis on "saving" showed that he did not understand that almost all money is created by commercial banks when they lend, and destroyed by bank loan principal repayments.

It's more that government spending buys production, whereas bank loans buy existing assets. Keynes did not understand that.

Banks want collateral, so their lending is focused on purchases of existing assets, not productive investment.

Which misunderstands money.

But investment doesn't come only from savings, and more importantly private banks create money for asset purchases, then destroy it as the loan principal is repaid.

They both ignore the role of the landowner in creating unemployment.

 

I see. But, people don't have the right to engage in peaceful economic exchange?

The other alternative to political self-regulation is no political rule.

Washington made that observation. Even more true is that government is institutionalized violence. Therefore, when you seek to "regulate" what people do, you call for violence to be threatened against them or done to them to force them to conform to your values, morals, and preferences. You say that trust doesn't enter into it, but if that is the case, why regulate? You don't trust that they'll behave the way you believe they should (in the normative sense) behave, thus you want violence threatened to force that behavior.

I believe that it's wrong to initiate aggression against peaceful individuals for any reason. Perhaps you consider that "peurile"; I consider your quasi-religious faith in government authority to be just as puerile. The difference being that my activities are not violent nor do I demand others do violence on my behalf. You, on the other hand, want violence done to people who express different morals, behaviors, and preferences. You aren't the bully in the schoolyard; you just want the schoolyard bully to do your bidding.

I see. 50%+1 turns wrong into right and right into wrong. And that's why I say statism is a religion. It's a divine transfer or appointment of moral authority.

Proved by what? Your circular argument? "They have power because we voted for them. Their power comes from the vote." Tautologies are not proof of anything.

Do you know the history of the first democracy, the city state of Athens? Do you know why it collapsed? One of the primary reasons is because, in their desire to bring more glory, they voted to raid the city of Syracuse in order to subjugate it, take their wealth, and enslave their people. At the same time, they voted to indite their top general, Alcibiades, for treason. Alcibiades fled to Syracuse, warned them of the impending invasion, and the Syracusans managed to wipe out the Athenian navy. In the end, an entire generation of Athenian men were killed or enslaved and Athens quickly devolved after that.

According to your "proof", the Athens made the invasion of Syracuse a rightful act by voting for it. It was the will of the people and 50%+1 makes right, you've said that's proof of morality.

 

The "invisible hand" is NOT "rhetoric", it refers to the real outcome of the decisions of ALL the individual players in a free market.

No. By definition, state intervention in the free market is (hopefully) intelligent policy to counter the undesirable social effects of the "invisible hand"; eg farmers faced with ruin due to collapsing prices as a result of a good harvest,,,

You missed out.... By the people, For the people.....'By' means by elected representatives, 'For' means ALL citizens; 'Of' refers to the governed, by their chosen representatives.

Wrong, as explained above.

Ironically, this a good argument to counter Churchill's famous statement about 'democracy'.

Particularly apposite at the the moment, as the Chinese are observing..... and seeing the advantages of their own authoritarian one-party meritocracy based on Marxist principles, compared with the blind-leading-the-blind, adversarial, two party rabble aka 'democracy', in the US....

However, to answer your question directly - while noting Smith's "invisible hand" refers to markets, not to the entire electorate; hopefully there are some capable, honest persons to be found among the "rabble"; and that the "invisible hand" (wrongly referenced by you) rabble in this case will find those people....

 

The Counter-Revolution of Monetarism​

Economist Phil Pilkington marks the monetary policy era from year 1969 to today. However, economist John Kenneth Galbraith chronicles the rise of monetarism starting much earlier in 1951 when under pressure of the banks both the Treasury and the Federal Reserve agreed to allow interests to rise.

Why did monetary policy fail in the 1930’s? Keynes already provided the answer—liquidity preference. The Roosevelt administration tried monetary policy at the advice of Professor George F. Warren of the New York State College of Agriculture at Cornell University, and his colleague, Frank A. Pearson. The monetarist policy was based on an insight of John Stuart Mills which he stated in his 1852 book, “Principles of Political Economy,” as “The value or purchasing power of money depends, in the first instance, on demand and supply...the supply of money... is all the money in circulation at the time...The demand for money, again, consists of all the goods offered for sale (Ibid., p. 26).” If there were less money to buy goods, prices would fall; also, the reverse is true, an increase in money will cause prices to rise. In 1930 American economist and mathematician Irving Fisher later refined this monetary principle with his famous formula for calculating inflation, MV=PT (where m=money supply, v=velocity, that is rate money is spent, p=price, and t =amount of transactions). Formally stated, prices are determined by the volume of money in circulation, and the rate at which money is spent including the volume of bank deposits and their rate of transactions. Economists knew that an increase in the supply of money increased prices causing bank borrowing and deposits to grow which would increase the supply of goods available for sale, and thus stimulate business activity. Therefore, monetarists reasoned, that increasing money supply caused higher prices, and then higher business activity.

So the Federal Reserve started in 1932 increasing the money supply by accumulating reserves to expand loans and cause expanding deposits. Unfortunately, the monetarist policy did not work. Galbraith has the statistics for this period of monetary experimentation:

The money supply expansion solution failed because of the agents’ preference for cash in a bad economy makes monetary policy like a string, “You could pull it, but you cannot push it.” With such large reserves of cash sitting around unused, the Federal Reserve feared that once this money began to be loaned and deposited massive inflation would result. Consequently, in 1936-37 the Federal Reserve raised the banking reserve requirements, increased interest rates, and reduced loans causing a general reduction the supply of money. Additionally, Congress took the anti-inflation step of cutting the Federal deficit by half in 1937. The macro-economic effect of reducing money supply and reduced fiscal spending was to cause another deep recession just as the depression was moderating. Roosevelt then turned to Keynes for a fiscal solution since money creation was not enough, money had to be spend—money needed velocity—otherwise it just sits in the banks.

Monetarists like Warren preferred this strategy to fiscal policy because they believed it was less market intrusive than the New Deal programs and deficit spending. As Galbraith wrote, “They are monetary radicals because they are political conservatives (Ibid., p. 256)." This tradition of conservatives continues even today. They conveniently forget monetarism policy past failures. And during the early fifties, when memories had sufficiently faded, monetarists regained their old enthusiasm and confidence.

Monetary restrictions and fiscal spending reductions were employed by the Eisenhower Presidency during 1953 to 1961 to dampen a growing economy with rising prices, but this resulted in the unhappy combination of increased unemployment along with prices still increasing. Unfortunately, Richard Nixon was running for president against John F. Kennedy just when the Republican administration ended in high prices and unemployment.

next...Richard Nixon Goes Socialist!

 

They do.

That's just rule by the strongest -- and most ruthless and unscrupulous. No thanks. We know how that turns out.

No, that's indisputably false, as societies with governments are less violent than societies without governments almost 100% of the time. History proves beyond any possible doubt that a government has to be very bad indeed to be worse than no government.

Which are mainly that they not be permitted to do violence to, or force their values, morals and preferences on, me.

See how that works?

To secure and reconcile the equal individual rights of all to life, liberty, and property in the fruits of their labor.

That is correct: "...to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed." Remember?

What if you have reason to believe that they carry a contagious disease that will kill 90% of the people who come into contact with it?

What if they are keeping domestic animals that, should they escape captivity, you have reason to believe will exterminate the wild species your community relies on for food?

And most unanswerably, what if they begin to fence off land you would like to use for grazing your livestock, or graze their livestock on land you would like to plant with crops??

What are you going to do then, hmmmmmmmmmmmmmmmmmmmmmm?

But it is not faith in government authority, merely recognition of the facts of objective reality: an economy above the hunter-gatherer and nomadic-herding stages requires secure, exclusive land tenure, and there is no possible way to achieve that but by force. I believe it is better that that force be wielded by a government accountable to the people than just by whoever happens to be strongest, most ruthless and unscrupulous.

If you seek exclusive land tenure, you seek to do violence to others, or want others to do violence on your behalf. There is no way around that.

When those expressions of their morals, behaviors and preferences violate, or credibly threaten to violate, others' rights. Correct.

No, that claim is false. I want the bully stopped, and the only way to do that is by force.

GET IT????

No. It merely provides a means for people to live together in peace when they DISAGREE about what is right and what is wrong.

GET IT?????

But you are just objectively incorrect on that point, as proved above. There is nothing divine or even moral about it. It's pure material practicality: the alternative is even more violence.

Facts and logic.

There is nothing circular about it.

That is not a tautology, and it is not circular. In a democracy, authority comes from votes. The votes do not come from authority but from the people. You stand refuted.

Yes.

I've said no such thing. Voting only provides a peaceful way of resolving disputes when people disagree about what is right or moral. It is not a guarantee of morality, wisdom, peace, or anything else other than political authority.

 

Richard Nixon Goes Socialist​

Nixon was not to forget the impact restrictive monetary policy would have on the economy years later on August 15, 1971. During a similarly bad economy of restrictive monetary policies, Nixon shocked his economic advisors by freezing wages and prices, liberalizing the budget, and relaxing monetary policy. These were the very policies he said days before were favored by “extremists of the left.” It was this reversal that a phased coined by Milton Friedman was attributed to Nixon, “We are all Keynesians now.” Nixon’s new policy actions were temporary and poorly administered so that monetarism remained in place as the preferred means of control.

And again during the Reagan administration Milton Friedman’s monetarist policy of fighting inflation with recession, a policy known as sado-monetarism, keep the volume of money down causing the highest unemployment since the Great Depression. Tight monetary policy is good for commercial bankers when inflation subtracts from interest bearing financial instruments, but bad for almost everyone else causing recession, unemployment, bankruptcy, and unnecessarily prolonged recovery. Most of all monetarism is the macroeconomic methodology of choice for the reactionary Right-wing. CUNY economist Robert Lekachman warned in 1982,

Conservatives favor monetary policy because it gives them indirect intervention into markets and yet still allows them to claim adherence to free market principles which is important politically when claiming publicly direct fiscal intervention as anti-Capitalistic. The less understood mechanics of monetarism allows Conservatives secret access to market controls albeit less effective and unpredictable, but without the inconveniences of public debate and congressional scrutiny.

Monetary policy has a clear history of limited effectiveness and dangerous consequences. Monetary manipulation has become an end in itself transforming business into a game of speculation on abstract occult financial instruments unconnected with real productive activity of manufacturing goods and services. Galbraith wrote, “control must be—as it was in the United States during the war years and the good years following—over the forces which cause firms and persons to seek loans and not over whether they are given or not given loans (Ibid., p. 370).” In 1975 Galbraith described the unavoidable consequences of monetarism and inadvertently predicted the following 45 years of economic activity that characterizes our economy even today.

Monetarism alone is ineffective in countering a depressionary business cycle. Today, we hear Conservatives in both political parties giving the same bad advise from the past of relaying only on tax cuts and easy monetary policy, but without utilizing fiscal tools like temporary deficit spending to add velocity to money. Today they favor easy money policies to flood Wall Street with liquidity, but starve Main Street with high interest rates combined with austerity cuts citing budget deficits and inflation as the real dangers. The lesson that has not been learned is “If monetary policy is unavailable for regulating aggregate demand in the economy, only fiscal policy remains (Ibid., p. 371)."

 

What biased conception of human-motivation?

Customers are free to buy what they want where they want. The motivation in humans is the simple fact that they need certain necessities in order to subsist. Namely food and cover from the elements.

Beyond the physical necessities is a desire to "belong" that allows humans to congregate - and, by doing so, to formulate societal communities. Which is the very foundation of any nation.

Most of the rest of our existence, once basic needs are fulfilled, is a desire to see "what more" can we get. Because humans think that having more and showing so is a desirable societal outcome.

Humans aggregate since the dawn of time for self-protection - which is far more important than any social desire to mix-'n-mingle. We humans are animals by nature and as such we spend most of our lives simply surviving.

The desire to impress those around us is prevalent in many but not all humans. And when that desire to impress becomes the sole reason for our existence, then we lose context. What context?

That the whole is far, far more important than just the singular entities that constitute the aggregate. Particularly in any economy Demand is the most singular factor that determines how, where and why people both Produce and Consume goods/services.

We are all just simple elements in a very complex mechanism that allows us to exist and procreate, which is essential to humanity ...

 

Never mind ...

 

Neoliberalism’s Flawed Arguments against Higher Minimum Wages​

Free Market Neoliberal ideologues argue against higher wages claiming increased wages will raise “costs” for employers. I want to add a few counter arguments against this Neoliberal position of keeping wages low as the employer desires. They make empirical claims, and mostly pose questions and then played the skeptic in response to arguments to raise wages.

Framing is an important strategy in debating economic issues. Neoliberal economists frame the rise in wages as a “cost” to producers. But wages can also be seen as investment that leads to higher productivity directly by raising aggregate demand that spurs further investment in technology that also raises productivity indirectly.

There are also hidden costs to having a wage structure that is too flexible with many unskilled jobs paying low wages and skilled jobs paying relatively higher wages. And again this frame narrows the debate to being between skilled and unskilled labor. A more insightful analysis to reveal the hidden costs of low wages is to view the debate in terms of income inequality. Below is the summary of their thesis in support of maintaining low minimum wages for unskilled labor:

• ”The fact is unskilled labor today is worthy much less than unskilled labor was one hundred years ago. The economy is not an unskilled economy anymore. It used to be unskilled wage labor where relatively higher because unskilled work was a bigger part of the economy.”
• ”Why should not wages be set competitively? If someone is willing to work at this job for fifty cents an hour less than me? Why shouldn’t they get the job? Why shouldn’t the wages be determined by the level at which people are willing to do the work?”
• ”Why should every job pay enough to live on? The whole idea of the diverse economy is that there are many, many jobs on which you can make a living and there are many jobs which are not intended, they are at the bottom of the scale, they are not jobs you should be able to live on.”
• ”When you are unskilled you should not expect to be able to make a living off of your ordinary day’s labor…combine your income so that you can have enough income to support your household if you are unskilled, or you can get some skills and no longer be unskilled.”

I find it amazing that free-market ideologists actually argue for jobs that pay non-subsistence wages. It doesn’t seem productive for the employer to hire a non-surviving employee. Many Americans have already combined their incomes with a spouse’s income and now it takes two incomes to support what one income earner could support in the past. And get skills for higher wages? Well, it has been the trend for business to make every job an unskilled job. This is true in manufacturing where each process is broken down to the simplest task so an employee is unskilled, paid low, exchangeable, and replaceable. Even a skilled profession like teaching is reduced to training students for a standardized test making the teacher just a monitor for upcoming exams—again low paid, and replaceable by any minimally literate person. So the number of skilled jobs will be massively outnumbered by unskilled jobs making an education less essential for most jobs resulting in unemployed highly skilled workers. We are already seeing this trend now as college degrees are seen as less valuable. Who does that benefit? Corporations benefit of course.

And that is what Neoliberal think tanks are about: defending the interests of the corporations with fallacious economic arguments about wages, inflation, profits, and employment. How are they fallacious arguments? James K. Galbraith has done studies on income inequality in many nations and presented some of his finding in a lecture entitled, James K. Galbraith on “Inequality and Instability: What’s Ahead for the World Economy.” I found his economic arguments so powerful that I decided to transcribe some of his key findings because they address many of the false arguments that Neoliberalism present over and over again about wages and unemployment.

Neoliberalism often argues that the inequality of incomes between skilled and unskilled labor is the result of technological change.

Alternatively, labor economists saw globalization increasing the supply of unskilled labor and increasing inequality. There are measures of economic inequality that can be gleaned from national administrative data like payroll, employment, and industry categories. Galbraith, and his poor graduate students, has done Theil's statistical calculations of inequality for many countries, and for the United States from 1920 to 2004. For Galbraith, inequality is not an issue of “either/or,” but one of balance. True to his Keynesian roots, Galbraith constructs a medical metaphor to explain the existence of inequality. There is definitely a difference between skilled and unskilled labor with each having its own pay range—Neoliberal economists argue this distinction tautologically ad infinitum. But the question here isn’t about definition, but the macro-economic question of the influence low wages has on economic stability. Again, Neoliberals like to keep the debate focus as narrow as possible.

Another favorite argument of Neoliberalism used in both the United State and Europe is that high wages creates chronic unemployment. (My bold highlight for emphasis)

Galbraith argues that higher wages increases efficiency and has found that higher wages does in fact increase productivity and efficiency.

So the raising of minimum wages, eliminating extremely low wage subsistence jobs, has proven to be a successful strategy. It’s not just theory, but actual economic history.

But since 2000 Europe has been facing high unemployment. Why? What has changed in Europe?

 

In markets that are insufficiently competitive, that first statement above is quite true. The problem is that by the massive buyouts over the past 30/40 years many industries have suffered from severely reduced competition. This has happened due to technological improvements in many instances.

And it will not get any better until a PotUS insists upon bringing before courts several cases that just might settle the matter as regards the present lack of sufficient competition.

I would also suggest that his goes in hand with a much higher incidence of income-taxation. The only reason for a CEO to push for lower-competition is to improve profits and therefore their total remuneration.

It's an old, old and boring "game". One would think that we would have noticed it by now. But no. And why?

Because Replicant administrations simply will not bring such a claim before any court-of-law. The PotUS would find him/herself at a great loss come the ... uh, need to finance their election-campaigns.

It's all so simple to see that it is almost boring.

Well worth a read from the Harvard Business Review: Is Lack of Competition Strangling the U.S. Economy?

And I could not agree more with that last statement in red above ...

 

Highly charged ideological environment? What planet do you live on?

No such thing. Not with Covid - everybody is scared they will die.

And even if there were no Covid, the economic mindset in the US is NOT for significant change. Americans just want to get back to spending money. Besides, it is only a tiny few who understand and support efforts to bring about real Economic Fairness.

And in that quest, the US is light-years behind the EU ...

 

Hi Las Vegas conned suckers! Elon got your money!

More billionaire Elon Musk fraud. He is a grifter. He can't do anything but commit fraud and fire people--like Trump! Elon invented a new technology: underground tunnels. Amazing! It's a very, very small tunnel, with no ventilation, nor emergency exits that runs Tesla electric carts that automatically turn into in a roadway flare when it breaks down.

Elon Musk ****s over Las Vegas and they like it! 52.5 million tax dollars
​

 

Fake Auto Microchip Shortage, and Market Manipulation Price Gouging.

“People have too much money now and causing inflation!”--Classic old Republican saw to keep wages and benefits low.​

In order to justify cutting benefit and stimulus payments to Americans, the Republican talking meme is now that people have too much money and driving up price inflation.

But big business propaganda does NOT say what kind of inflation!

Currently, the media is reporting the May 2021 CPI is 4.8%. This is last month’s inflation annualized for one year. The U.S. is the only country that calculates cost of living inflation this way.

The Consumer Price Index is a measure of urban cost of leaving inflation.
Core inflation is CPI minus the cost of food and energy.
Headline CPI adds the cost increase of food and energy.

The Feds use the PCE (Personal Consumer Expenditure Index) that is a more accurate measure of national inflation.

So Core inflation for May 2021 is only 3.8 percent. The April and May 2020 CPI benchmark used to calculate today’s CPI was inordinately low because base inflation rate was deflated by the pandemic shutdowns so that now the CPI today looks higher than normal. Core Inflation is really only about 1 or 2 %.

There are four key types of inflation:

1. Demand-pull inflation is caused by high consumer demand for goods & services.
2. Cost-push inflation is caused by increase in price from a shortage of supply.
3. Speculative inflation is caused by market manipulation of commodities
4. Exchange-rate inflation is caused by relative price changes of national currencies.

What we are seeing today is market manipulation by corporations to test the ceiling costs the consumer will tolerate.

The May 2021 CPI increase is due to the higher costs of airline fees and used cars.The Biden Infrastructure Bill had a massive subsidy for the auto industry and the airlines still want higher prices. (See report by Economist Dr. Jack Ramus for more details at 32 minute mark)

1. Airline fares increased by 24.1% even with lower customer demand than in 2019. The airlines received $50 billion subsidies in 2020. This increase of CPI today is due to airline fee increase as they test the market for future increases.
2. Used auto prices increased due to the auto industry cutting back on production after falsely claiming there is a semi-conductor shortage. Biden’s Infrastructure Bill is giving $50 billion in subsidies for auto chip production in the distant future. Even though the automakers claimed a chip shortage, they immediately announced opening production this week.

Joe Biden is totally Neo-Liberal so don't expect any help from his administration. According to economist Dr. Jack Ramus there will be massive price increases in the near future caused by market commodity price gouging manipulation, and not from consumers having too much money to spend causing demand-pull inflation.

 

As if anybody could tell the difference between the two ... they are both very separate manifestations of human-behaviour.

I doubt seriously that Americans have too much money in their pockets. American banks and corporations, yes, but not generally the American public ...​

 

When the prices of the rich's assets increase by 30% in a year, that's "a booming market." But when working people's wages increase by 3% in a year, that's "dangerous cost-push inflation."

 

But, of course! They're incapable of original thought.

 

How is this *******?

1. KeysenianJune 13, 2021 at 10:14 pm
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I'm not going on a link chase with you. You seem to be trying to drive traffic to another site. If you have answers to the simple and sensible questions I asked, post them here where you located the OP and discussion. Trying to take the discussion to another website makes no sense.

And you misspelled "Keynesian" in your post, a rather odd error since you also claim this is your posting name for over a half decade on some other site.

 

We do a terrible job monitoring and responding to asset inflation. I've wondered if that wasn't deliberate in order to keep our vast pension funds solvent.

Rising wages matched by rising productivity aren't a problem.

​

It looks to me like the data shows that Wage growth has been exceeding Productivity growth for a decade.

 

Up dated link to my Keynesian account.

 

Wall Street needs more taxpayer bailout money! Get ready for another massive financial crash emanating from Wall Street. This means savings, retirement funds, and interest generating financial instruments will be wiped out. We have seen this movie before.

Experts Have Been Warning for Months of an Unprecedented Stock Market Bubble Set to Explode by Pam Martens and Russ Martens: June 21, 2021​

Five of the largest Wall Street banks made with the SEC for the quarter ending December 31, 2020, hold a combined $2.66 trillion in stock – either for themselves, their customers, or highly-leveraged hedge funds like Archegos. The breakdown is as follows:

Bank of America: $776.2 Billion
JPMorgan Chase: $680.6 Billion
Morgan Stanley: $647.47 Billion
Goldman Sachs: $388.6 Billion
Citigroup: $169.39 Billion

In addition common stock holdings, the federal regulator of national banks, the Office of the Comptroller of the Currency (OCC), reports that as of December 31, 2020 JPMorgan Chase is also sitting on $2.65 trillion in stock derivatives.

$2.65 trillion that JPMorgan Chase holds in equity derivative contracts, 72 percent of them are private, bilateral contracts, known as over-the-counter contracts. This means that federal regulators likely have little to no knowledge of the terms of those contracts.

$1 Trillion dollars in $100 dollar bills
​

 

Thank you for this, it is well written and precise. I would also add that another logical fallacy is that, since your point is correct, it's not to be used as a justification for the elimination of markets. We need markets, and, depending on the market, they need to be regulated ( some more than others ).