tag:blogger.com,1999:blog-6245381193993153721.post198162226316449752..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Bob Murphy on 1970s InflationLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger42125tag:blogger.com,1999:blog-6245381193993153721.post-22081385857358230982014-08-15T12:38:38.923-07:002014-08-15T12:38:38.923-07:00Oh, Lord Keynes, how come the rapid changes in the...Oh, Lord Keynes, how come the rapid changes in the PPI in 2008 had no effect whatsoever on the CPI less food and energy?<br /><br />I don't believe the idea that "supply shocks" are explanations for either inflation or unemployment in modern advanced capitalist economies.pithomhttps://www.blogger.com/profile/13997094225496018110noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-40395940928412392562014-05-01T08:42:34.228-07:002014-05-01T08:42:34.228-07:00" loss of confidence in the currency,"
A..." loss of confidence in the currency,"<br />As far as I can tell, hyperinflation is always caused by loss of confidence in the currency. <br /><br />If we have a huge internal devaluation of the currency (as France did sometime during the 1950s) without any loss of confidence in the currency, even though it is very high inflation, we don't call it hyperinflation for some reason.<br /><br />I tend to think that loss of confidence in the currency seems to require loss of confidence in the currency issuer in general -- not merely due to financial behavior, but a government being perceived as generally incompetent, lawless, unstable, and prone to being overthrown. I can't prove this but I'm strongly suspicious. The example of private bank-issued currencies reinforces this analysis. It seems to be possible sometimes to retain confidence in the currency *despite* all of this, and a better question might be why.Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-63226211666244630152014-05-01T08:36:47.255-07:002014-05-01T08:36:47.255-07:00Maybe it's just because I'm sensible, but ...Maybe it's just because I'm sensible, but when I first read the Quantity Theory of Money I assumed Joan Robinson's interpretation, which made sense.<br /><br />Prices are sticky in the short run (and always sticky downward). Demand for money is often sticky in the short run, and always "sticky downward" (it can jump suddenly up, but not suddenly down).<br /><br />So the quantity of money equations, in either form, then tell us that if we suddenly reduce the quantity of money, we will see a sudden drop in the transaction volume -- in short, sudden drops in the money supply (such as the "demonetization" of something formerly considered money) can induce market "freezeups".<br /><br />So far so good.<br /><br />But apparently there were economists who were making ludicrous causality interpretations for the quantity of money equations? This shouldn't shock me, given how dumb most economists can be, but it does.<br />"But the tradition of Chicago consists in reading the equation from left to right. "<br />What unbelievable rot! Who introduced this misinterpretation? I'm not sure this Chicago interpretation even qualifies as the "Quantity Theory of Money" -- it's a perversion.Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-41602828168342915372014-04-28T03:59:51.602-07:002014-04-28T03:59:51.602-07:00on the blog. The link to the comment is above. The...on the blog. The link to the comment is above. The other stuff about the border wall and prison camps comes from other comments.Philippenoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-75086011268597420522014-04-27T14:50:07.890-07:002014-04-27T14:50:07.890-07:00Did you ask him on the blog, or in email?
As I sai...Did you ask him on the blog, or in email?<br />As I said, he semi believes all this stuff. Worse he takes his belief that theory X is plausible as evidence for theory Y, even if X and Y are contradictory. I do not have a link but have seen the reasonimg laid out more than once. Ken Bhttps://www.blogger.com/profile/12976919713907046171noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-57783516104548466792014-04-27T10:14:32.494-07:002014-04-27T10:14:32.494-07:00i asked him whether he believes in the NWO conspir...i asked him whether he believes in the NWO conspiracy theory and got this response:<br /><br />"I have said repeatedly and explicitly that I think the government would kill Bundy if they could get away with it. So him offering his opinion on “the Negro” is an unforced error.<br /><br />Do I believe in a “NWO conspiracy”? Well, George Bush Sr. explicitly said there is a NWO, so that’s not a conspiracy theory in the pejorative sense. There are secret meetings of bankers etc. That’s not a conspiracy theory.<br /><br />But I don’t necessarily subscribe to all the stuff that comes out of that train of thought."<br /><br /><br />But he does think the government is maybe building a wall along the border with Mexico to stop US citizens from escaping, and he also apparently thinks the government would like to stick everyone in prison camps...<br /><br />http://consultingbyrpm.com/blog/2014/04/yes-you-need-to-choose-your-words-carefully-when-youre-fighting-against-an-evil-empire.html#comment-464837Philippenoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-67405970919565344982014-04-26T14:45:42.142-07:002014-04-26T14:45:42.142-07:00Philippe,
Murphy seems to believe in chemtrails. C...Philippe,<br />Murphy seems to believe in chemtrails. Criticism of the idea clearly angers him. He believes or semi believes almost every conspiracy that has the feds as the villain.<br />Murphy seems to have a need to be the voice in the wilderness, the one guy who sees through the plot, the one thinker to reject the mundane, the one with the secret and dangerous insight. He seems like a very smart guy actually, but with poor judgment, and almost incapable of dispassion or any other bulwark against raging confirmation bias. Ken Bhttps://www.blogger.com/profile/12976919713907046171noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-86502673633929864552014-04-26T14:12:08.751-07:002014-04-26T14:12:08.751-07:00Also, off-topic but I miss also Isaac Marmolejo...Also, off-topic but I miss also Isaac Marmolejo's Radical Subjectivist blog, which was actually the best Austrian blog I've ever seen. If only the Austrian school had more economists in the tradition of Ludwig Lachmann, it might be able to make some progress in its economic thought.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-20146429855732738902014-04-26T14:11:14.334-07:002014-04-26T14:11:14.334-07:00I genuinely used to enjoy Bob's blog when he w...I genuinely used to enjoy Bob's blog when he wrote posts like this:<br /><br />http://consultingbyrpm.com/blog/2011/07/is-keynes-from-heaven-or-hell.html<br /><br />Or, say, for his work on Sraffa versus Hayek and even his PhD, because all this work showed him to be an unconventional Austrian of some interest.<br /><br />But now the increasingly bizarre content of Free Advice posts is just turning me off even wanting to read the comments section, really.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-49314472606691112772014-04-26T09:17:19.971-07:002014-04-26T09:17:19.971-07:00Is it just me, or dies this post from Bob appear t...Is it just me, or dies this post from Bob appear to suggest that Bob Murphy also believes in the NWO conspiracy theory?<br /><br />http://consultingbyrpm.com/blog/2014/04/yes-you-need-to-choose-your-words-carefully-when-youre-fighting-against-an-evil-empire.html<br /><br />I've asked Bob to clarify if that is the case, as wasn't sure what to make of it:<br /><br />"Yes you need to choose your words carefully when you're fighting against an evil empire...<br /><br />...if you believe (as many of Bundy’s supporters do) that there is a group of people coordinating governments around the globe to usher in a New World Order etc. etc., then yes you have to choose your strategy and tactics wisely. I wasn’t saying Cliven Bundy was racist, I was saying he was reckless."Philippenoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-33640859407333425802014-04-26T08:57:57.702-07:002014-04-26T08:57:57.702-07:00Goodness, no, you're a voice of sanity there i...Goodness, no, you're a voice of sanity there in the wasteland of intellectual desolation that is the comments section of that blog, Philippe.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-52704288398879905562014-04-26T08:48:18.947-07:002014-04-26T08:48:18.947-07:00LK, I hope it wasn't my comments you found wei...LK, I hope it wasn't my comments you found weird and disturbing..?Philippenoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-34415786403917188612014-04-26T08:34:46.987-07:002014-04-26T08:34:46.987-07:00Does Bob Murphy believe in chemtrails?Does Bob Murphy believe in chemtrails?Philippenoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-79637435681882099842014-04-26T07:38:28.944-07:002014-04-26T07:38:28.944-07:00Well put.
So the BLM just want to kill Bundy, the...Well put.<br /><br />So the BLM just want to kill Bundy, the same govt that can keep perfect secrecy for 50 years on killing a president, keep chemtrails a secret, cannot quietly off an old rancher Ken Bhttps://www.blogger.com/profile/12976919713907046171noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-30818763505119306712014-04-26T02:07:01.515-07:002014-04-26T02:07:01.515-07:00Even before you get to the comments section, Bob&#...Even before you get to the comments section, Bob's analysis in the actual post is utterly loopy.<br /><br />His implied claim that the Branch Davidians were not religious nutjobs is itself ludicrous.<br /><br />And, oh my lord, Ken B, did you see this comment by Bob Murphy:<br /><br /><i>"Grane Peer wrote:<br /><br />>We would do well to not care about the <br />>opinion of the average american.<br /><br />No, it is the opinion of the average American that is keeping Cliven Bundy alive, <b>and you and me out of prison camps."</b></i><br />http://consultingbyrpm.com/blog/2014/04/lessons-from-waco.html#comment-461301<br />--------------------<br />Holy bejesus. Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-73477728719762360072014-04-26T00:49:35.702-07:002014-04-26T00:49:35.702-07:00I have the same reservations.
The problem here is...I have the same reservations.<br /><br />The problem here is that theorists are not 'running' these ideas on actual currency exchanges to see how they work. <br /><br />You can't work from the accounts - which has a tendency to 'convert' currency artificially due to the manner of their drafting.<br /><br />You have to go to cash. You have to understand exactly where the exchanges took place, who was the other side of the exchange and what they did with the actual denomination they had.<br /><br />To what extent is convertibility suspended at this time in history for example. Are there any hidden backdoors. <br /><br />In modern times money is used to buy foreign currency (the modern name is 'liquidity swaps'), and that money is buried by the now foreign owners to avoid exchange rate fluctuations. That's how the Chinese manage their economy for example. <br /><br />So there is a danger with too much high level analysis, without getting down and dirty with the actual underlying transactions. You can end up inferring liquidity where there is none, or conversions where none happened. <br /><br /><br /><br /><br /><br /><br />NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-39997426430610711322014-04-25T14:14:04.671-07:002014-04-25T14:14:04.671-07:00You should see the comments on Murphy's Lesson...You should see the comments on Murphy's Lessons from Waco thread. WOW.Ken Bhttps://www.blogger.com/profile/12976919713907046171noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-64788684803305342912014-04-25T10:24:52.301-07:002014-04-25T10:24:52.301-07:00Philip wrote:
"Yes and no. The issuance of th...Philip wrote:<br />"Yes and no. The issuance of the Marks didn't cause the inflation. It was their use to buy foreign currencies that crashed the value."<br /><br />I don't want to seem overly picky but this cannot as stated be right. If the French had taken those newly minted Marks and papered their walls with them, would there have been hyperinflation? Clearly not. Nor would there have been had the French agreed to a ton of blank paper in payment, or cancelled the debt. It was the recirculation of the bills that can only be the culprit in your sequence. And so we are back to rapid exogenous expansion of the money supply as a strong causal factor.Ken Bhttps://www.blogger.com/profile/12976919713907046171noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-41882156272702037712014-04-25T09:52:08.882-07:002014-04-25T09:52:08.882-07:00in Zimbabwe the real government fiscal deficit wa...in Zimbabwe the real government fiscal deficit was equal to around 75% of GDP:<br /><br />'Central Bank Quasi-fiscal Losses and High Inflation in Zimbabwe: A Note'<br /><br />Sònia Muñoz (IMF)<br /><br />http://www.imf.org/external/pubs/ft/wp/2007/wp0798.pdf<br />Philippenoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-71481275561592925802014-04-25T03:50:55.915-07:002014-04-25T03:50:55.915-07:00Well, given that the owner of the blog thinks that...Well, given that the owner of the blog thinks that the 'They' are building walls to lock you in and poison you with chemtrails I guess old school slavery might not look so bad.Philip Pilkingtonhttp://fixingtheeconomists.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-33915083564131541152014-04-25T01:04:17.505-07:002014-04-25T01:04:17.505-07:00That thread has a weird and disturbing quality. That thread has a weird and disturbing quality. Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-36753465724985278532014-04-24T16:56:19.751-07:002014-04-24T16:56:19.751-07:00I will try to find time tomorrow to continue with ...I will try to find time tomorrow to continue with Phil. But right now I just want to direct you to Murphy's astonishingly disingenuous post on Cliven Bundy's racist remarks. Philippe nails him, but look at the reactions. Especially Bob's: he cannot imagine that Philippe is serious but assumes he's just "being provocative." <br />http://consultingbyrpm.com/blog/2014/04/free-advice-for-cliven-bundy.html Ken Bhttps://www.blogger.com/profile/12976919713907046171noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-69105172294932534772014-04-24T12:41:10.583-07:002014-04-24T12:41:10.583-07:00"monetising the debt" has nothing to do ..."monetising the debt" has nothing to do with hyperinflation. CB could not stop hyperinflation in Weimar or Zimbabwe by "not monetising the debt". Or then again, It could have collapsed the payment system by "not monetising the debt". If you consider that an option to prevent hyperinflation under those circumstances(massive government deficits).Kristjanhttps://www.blogger.com/profile/09592440548093816331noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-41840892477912838582014-04-24T12:00:54.383-07:002014-04-24T12:00:54.383-07:00In that particular instance it was the most import...In that particular instance it was the most important cause. I think that the Argentine hyperinflation was similar (the military junta bought dollars to buy weapons). But the Chilean hyperinflation under Allende was primarily due to redistribution and outlandish social spending.<br /><br />Robinson is right, of course, in that money wages rose in response to the rise in import prices. But the true cause of this rise in money wages was the inflation and hence the depreciation. So, the depreciation is the root cause. The budget deficit was almost wholly an effect of wage and exchange rate dynamics.Philip Pilkingtonhttp://fixingtheeconomists.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-2397069954755035962014-04-24T11:51:37.461-07:002014-04-24T11:51:37.461-07:00OK, so you're endorsing the balance of payment...OK, so you're endorsing the balance of payments theory of the hyperinflation as the fundamental cause, right?<br /><br />Joan Robinson (in her Review of <i>The Economics of Inflation</i> by C. Bresciani-Turroni,” <i>The Economic Journal</i> 48.191 [ 1938]: 507–513) takes a form of this view, but puts the emphasis on how the soaring wage levels were a missing link in how the inflation exploded into hyperinflation.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.com