I have a new article on the news and commentary website, "EpicTimes" on, "Don't Fear 'Deflation,' Unless Caused by Government."
I argue that the general fear of "deflation" -- a general fall in the level or scale of prices -- is misplaced when brought about by cost efficiencies and productivity increases that expand the quantity of goods produced at lower costs of production, since producers are then able to sell more at lower prices for all in the society to gain through a rise in the real value of what their money can buy.
Deflation only has "negative" effects when in the face of dynamic change sellers of resources and labor serves are not willing to adapt and adjust their prices and wages to new market conditions, or when governments plan or institutionally bring about through central banking a decrease in the quantity of money in the economy.
When governments get out of the way, and markets are sufficiently competitive and flexible in the face of market change, "deflation" is almost always an indication of a growing and improving economy with rising standards of living for all in society.
http://epictimes.com/article/
No mention of patent protection in the entire article. That tells you immediately that the article is not really about getting rid of regulations that stifle production. It's another "give more money to rich people" article.
ReplyDeleteAlso, he makes the false claim that this is the most sluggish recovery in terms of employment since World War II.
The first Bush recession ended in Nov 2001. There were 109.669 million private payroll jobs in Nov 2001. Three years later in Nov 2004, there were 110.552 million private payroll jobs. Private payroll employment grew a mere .26%/year during the 3 years following the end of the recession.
The second Bush recession ended in June 2009. There were 108.435 million private payroll jobs in June 2009. Three years later in June 2012, there were 111.616 million private payroll jobs. Private payroll employment grew .97%/year during the first three years of this recovery.
Unless you can figure out a way for .97%/year to be less than .26%/year, his statement is simply false.
It's too bad he did not bother to check his numbers because he could have used this fact to support the claim that deflation boosts job creation. Prices fell 2% from June 2008 to June 2009. Oh well, that's what happens when you're promoting ideology rather than discussing economics.
Can you please explain how a Federal Reserve policy of essentially zero percent interest rates, a deliberate effort to bolster the stock market and a desire for general price inflation helps the poor?
ReplyDeleteIt seems the Fed is a "give more money to rich people" policy