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Author Topic: Stagflation
bruce_the_vii
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posted 05 August 2008 10:37 PM      Profile for bruce_the_vii     Send New Private Message      Edit/Delete Post  Reply With Quote 
I have a statistic about high family income.

The top 20% of families earned 45.8% of all income circa 2001-04 which is up from 38.7% circa 1976-79.

I see this as the professional class winning by stagflation rather than rich people with capital. Essentially highly qualified people can demand ever better wages. There's an implication that recruitment to these fields is restricted.

The other thing is there has been growth at the bottom.

45.8% of all income is rather rich for 20% of families.

(The statistic is from the newspaper but I ommitted to record who calculates these figures.)

[ 05 August 2008: Message edited by: bruce_the_vii ]


From: Toronto | Registered: Dec 2006  |  IP: Logged
George Victor
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posted 06 August 2008 03:42 AM      Profile for George Victor        Edit/Delete Post  Reply With Quote 
If you look at the top 5% (buried within that 20%) I think you'd get a better picture of the other 15 Pilgrim.

Remember , lies, damned lies and statistics?


From: Cambridge, ON | Registered: Oct 2007  |  IP: Logged
Fidel
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posted 06 August 2008 08:46 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
Here's what Canadian William Krehm said about stagflation:

The “Stalinization” of Economic Theory

quote:
Let me quote from a work of Frances Hutchinson, and two collaborators, The Politics of Money (Pluto Press, 2002): “In the US there is evidence of a purge during the 1990s of non-neo-classical and non-mathematically orientated economists from university faculties. This has been described as a ‘stalinization’ of the profession with history of economic thought particularly targeted.”

When their inflation theory proved lame, right-thinking economists proclaimed it a mystery: “stagflation.” However, COMER identified a new factor in price behaviour. In the postwar, the neglect of ten years of depression and six of war was caught up with. Housing, hospitals and schools were provided for one of the greatest refugee movements in history Inevitably this led to a deeper layer of taxation in price. This I called the “social lien.” When even an economist moves from a town of 10,000 to New York City, he is not fool enough to expect his living expenses to stay the same. How then can he expect the living costs of the nation to do so when it makes a similar move? Try to squeeze out of existence with higher interest rates the resulting price rise having nothing to do with an excess of demand over supply, and you only steepen this “structural price gradient.” For it shrinks the tax-base while increasing the need for more government services.



From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
George Victor
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posted 06 August 2008 03:20 PM      Profile for George Victor        Edit/Delete Post  Reply With Quote 
Good stuff Fidel. Thank you very much.
From: Cambridge, ON | Registered: Oct 2007  |  IP: Logged
Doug
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posted 06 August 2008 03:43 PM      Profile for Doug   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by bruce_the_vii:
I have a statistic about high family income.

The top 20% of families earned 45.8% of all income circa 2001-04 which is up from 38.7% circa 1976-79.

I see this as the professional class winning by stagflation rather than rich people with capital. [ 05 August 2008: Message edited by: bruce_the_vii ]


It's both, actually. Both increasing returns on capital and higher wages for specialists.


From: Toronto, Canada | Registered: Apr 2001  |  IP: Logged
George Victor
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posted 06 August 2008 04:30 PM      Profile for George Victor        Edit/Delete Post  Reply With Quote 
ANd the top 5% of that 20% took how much of the 45.8 %?(Just to make sure you are talking about a "working" element, not just "coupon clippers"?

And I can't imagine how "stagflation" came into this division of the spoils, since it refers to stagnation of growth while inflation soars, and the conservative central bankers of the U.S. and Canada make sure that inflation will not harm investment earnings over the long term. Not like 25 and 30 years back. Now THERE was "stagflation".

[ 06 August 2008: Message edited by: George Victor ]


From: Cambridge, ON | Registered: Oct 2007  |  IP: Logged
DrConway
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posted 06 August 2008 07:35 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
It is widely held that the official inflation rates of Canada and the US are "massaged", the US's more so than Canada's, though the BoC has a vested interest in at least pretending that inflation is low.

The fact that the BoC has quietly shifted to monitoring "core" inflation is an implicit building of an inflationary bias into monetary policy and an inchwise retreat from the no retreat no surrender stance of John Crow and Gordon Thiessen.

The true inflation rate of the US is between 8 and 12 percent (shadowstats.com) and that of Canada's, probably 6 or 7 percent (my guess). Canada is not yet in stagflation but the US definitely is, as inflation rates above 8% in the industrial nations have been shown to choke off growth and provoke recessions.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
bruce_the_vii
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posted 06 August 2008 08:36 PM      Profile for bruce_the_vii     Send New Private Message      Edit/Delete Post  Reply With Quote 
I think the professional class can inflate despite oversupply. The specialists just corner the market. So that is stagflation. I suppose slow growth associated at the same time is true stagflation.

If the problem was the top 5% of income earners I suppose that would have been reported rather than the 20% figure.


From: Toronto | Registered: Dec 2006  |  IP: Logged
George Victor
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posted 07 August 2008 04:43 AM      Profile for George Victor        Edit/Delete Post  Reply With Quote 
Your faith in the fella doing the reporting, Bruce, is that of a Christian in the arena. You don't suppose that if the top 5 accounted for half of that 48.5 it might lead to some editing for appearances? It would certainly skew the basis for your chat about who's doing what on the inflation side.
From: Cambridge, ON | Registered: Oct 2007  |  IP: Logged
bruce_the_vii
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posted 07 August 2008 05:08 PM      Profile for bruce_the_vii     Send New Private Message      Edit/Delete Post  Reply With Quote 
If memory serves the statistic is from the Toronto Star's serial on poverty in Toronto and Canada, not the worst source. I can't recall who produced the data. To me it's rather a big slice of the pie for 20%.
From: Toronto | Registered: Dec 2006  |  IP: Logged
jester
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posted 07 August 2008 05:40 PM      Profile for jester        Edit/Delete Post  Reply With Quote 
What does income disparity have to do with stagflation?

Stagflation, by definition is a period of negative growth coupled with monetary expansion that results in price inflation.

Deflation is failure of debt to perform.

Its really simple. 1) Live within your means. 2) Use good debt sparingly - that which will furthur your wealth creation. Avoid bad debt - consuption- entirely (see #1)

NO problemo - small house, small car, big bank account.


From: Against stupidity, the Gods themselves contend in vain | Registered: Jan 2006  |  IP: Logged
Fidel
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posted 07 August 2008 11:09 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
The Yanks have had a head start over the rest of the world with respect to technological advancements since turn of the last century. They have to stop spending hundreds of billions on war economies and military campaigns to destabilize various countries every year and start leading by example. They have to get rid of Dick Cheney and the military-industrial complex.

How to beat stagflation The world is running short on energy, food, and water. The answer: a massive dose of technology by Jeffrey Sachs


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
bruce_the_vii
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posted 08 August 2008 01:40 AM      Profile for bruce_the_vii     Send New Private Message      Edit/Delete Post  Reply With Quote 
I thought Stagflation simply refered to the situation of wage inflation occuring with high unemployment, which baffles economists. So this keeps interest rates up and slows growth. It's troubling because lowering interest rates wouldn't fix it. In the 1970s and 1980s there was some growth to go with the stagflation but unemployment was 11% so it was a problem.
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Fidel
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posted 08 August 2008 09:32 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
If they choose to invest in new power generating technologies and sustainable agriculture ie. public investment, then that's socialism.

If they choose to prop up a military-industrial complex and war economy in order to make lebensraum of countries like Iraq and Afghanistan and continue using cold war NATO alliances to menace the globe, that's barbarism.


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jester
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posted 08 August 2008 02:23 PM      Profile for jester        Edit/Delete Post  Reply With Quote 
Stagflation is a useful tool to put the unwashed in their place when a booming economy has allowed the rabble to acquire talkin back money.

In the US, it allows financial entities to gain control of both depreciated assets AND the debt used to acquire the assets in the first place.

Canada's bankruptcy laws are a barrier to similar fiscal artistry on a grand scale but its liberal interpretation of usury still allows some predations on the less financially literate among us.


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Fidel
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posted 08 August 2008 10:12 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
I think "stagflation" is a demo of just how boneheaded neoliberal ideologues really are. More financial and commodities bubbles on the way. Their credibility and political capital among a large minority of first past the majority voters in North America are at stake.
From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
jester
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posted 08 August 2008 11:14 PM      Profile for jester        Edit/Delete Post  Reply With Quote 
This latest rally in the USD is the result of a concerted effort to talk up the greenback with collusion from central bankers. Its no surprise that the Bank of England and the Euro central bank have held firm on interest rates and that the ECB is pooh-poohing concerns.

If the USD,which has rebounded from .72 to .75 on the USDollar index falls below .72, there is nothing to stop it plummeting. In that case,a global financial catastrophy will ensue.

The problem is the consequences of the US financial fiasco will not go away. They are being postponed by the market's refusal to face reality via the orchestrated "the worst is over, business as usual now" soothing spin from government stooges BUT these consequences must be faced,sooner rather than later.

The foreign custodial balance at the Federal Reserve has risen to $2.4 trillion of which 1 trillion is agency debt and 1.4 trillion is Treasury debt.

The reported debt is to come close to $10 trillion but the Bush admin keeps warfighting costs off the books,as well as a lot of geopolitical hankypanky expenses to avoid congressional oversight.

There is no fundamental reason to buy USD because the Treasury's promise to pay an investor's dollars is simply another piece of paper promising to pay.

If the conjurers and colluders cannot continue the pretense that the emperor is finely dressed,negative growth, asset deflation,price inflation and failure of debt to perform will wipe out the middle class.

The poor have nothing to lose, the rich will protect themselves but the mortgaged,consumer debt addicted, pay cheque dependent middle class will pick up the tab for all the consequences via a massive transfer of wealth to foreign debtholders.

The biggest fear from stagflation is not financial,but from our barefoot and hungry neighbours to the south. Barefoot,hungry and armed to the teeth.


From: Against stupidity, the Gods themselves contend in vain | Registered: Jan 2006  |  IP: Logged
Fidel
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posted 10 August 2008 11:47 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
http://mcalvany.com/
(2006-2007)

Total U.S. government, private and corporate debt: $44 trillion

Counting unfunded liabilities payable within ten years: another $44 trillion

Inflation not 2-3%, more like 8-10%

No way U.S. GDP is where they say it is, it's about 75% less

Total U.S. housing mortgage debt is $8.7. trillion, up $4 trillion from just four years ago
Half of mortgage lenders have gone under

Total U.S. household debt(credit cards, auto loans etc): is over $12 trillion dollars and growing 10 times faster than household income. 1.82 million Americans declared personal bankruptcy in 2006. And the financial pain hadn't really started at that point. Too much debt http://www.bankslovedebt.com/


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
jester
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posted 10 August 2008 01:13 PM      Profile for jester        Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Fidel:
http://mcalvany.com/
(2006-2007)

Total U.S. government, private and corporate debt: $44 trillion

Counting unfunded liabilities payable within ten years: another $44 trillion

Inflation not 2-3%, more like 8-10%

No way U.S. GDP is where they say it is, it's about 75% less

Total U.S. housing mortgage debt is $8.7. trillion, up $4 trillion from just four years ago
Half of mortgage lenders have gone under

Total U.S. household debt(credit cards, auto loans etc): is over $12 trillion dollars and growing 10 times faster than household income. 1.82 million Americans declared personal bankruptcy in 2006. And the financial pain hadn't really started at that point. Too much debt http://www.bankslovedebt.com/


Yeah,its difficult to get hard numbers on the unfunded liabilities, but whether it is 20 trillion or as high as 90 trillion, all this debt added together puts the US in a very vulnerable position.

To put these numbers into perspective, a billion seconds ago, it was 1959.

The only option for the US is to keep on printing money and the only option for debtholders is to keep on believing that this money is actually worth anything because defaulting on the defacto world currency will cause global pain on a massive scale.

The US is trying to offload debt onto foreign shoulders but in a controlled way that contains the damage and foreigners are accepting the downloading because it is marginally better than a USD crash.


From: Against stupidity, the Gods themselves contend in vain | Registered: Jan 2006  |  IP: Logged

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