Entries Tagged 'honest questions' ↓

I’m going to go all out here and reveal my ignorance of general economic theory.  Anyone should feel free to bitch slap me back into reality.  But before you do be sure to read to the end to see what my real point on this is (’cause I’m gonna ramble for a minute).

Deflation has been widely cited as something to avoid, a negative.  What is it?

In economic theory, deflation is a general reduction in the level of prices below zero percent annual inflation. Deflation should not be confused with temporarily falling prices; instead, it is a sustained fall in general prices once inflation passed zero percent to the downside.  Since this idles capacity, investment also falls, leading to further reductions in aggregate demand. This is the deflationary spiral. (Wikipedia)

Haven’t we been seeing this is some sectors for years?  For example, the items no longer manufactured in the US — textiles, electronics, etc — those prices have fallen.  It’s idled capacity in the US, changed investment in the US and eliminated aggregate demand for US provided versions of these.

Yeah, I get that I’m contextualizing it, localizing it to a certain impacted area, which may certainly be abusing the concept of “deflation” a bit more than I should, but if we look at deflation and the deflationary spiral from within these localized contexts, can’t we argue that there are entire populations formerly tied to these now outsourced industries that have been in stuck in this for years, ever since off shoring proved useful?

So then here’s my (first) point on this.  If it’s fair to look at these already offshored industries as deflationary spiral microcosms, isn’t it fair then to also ask if some of the pundits flogging this particular demon are looking at it from within their own context?  And if so, isn’t it fair to also then assume we have to be ridiculously careful about how we look at this issue right now?

In other words, we have to be open to the idea that some of the people getting us hyped up over potential deflation are simply working in industries that no longer provide the value they once did.  Think auto industry.  Think financial advisers (and thanks Kate for your earlier insightful comments on the financial industry).

My second and final point on this is that the government — our government — of, by and for the people — should err here on the side of the people employed by these industries and not on the industries themselves.  Businesses will look out for themselves.

The government can spend a lot of (our) money putting industries on life support only to see them fail anyway.  Or, they can spend a lot of money on the people employed by those failing industries and see at least some of them make a healthy transition to whatever is next.  Spend the money on education — help people get degrees, help those with degrees get advanced degrees, help people through the inevitable change.  It will be hard.  Better now than later.

Wide spread, cross context deflation is certainly and issue to be wary of.  At the same time the government and the people need to look at industries that are still growing. We can’t simply raise the specter of “deflation” and start running around like chickens with our heads cut off.  It won’t work.

PS Full disclosure: I’m lucky enough to be in one of those growing areas, an industry radically transforming IT spend, so my perspective may be slightly skewed.  For those who aren’t — I’m sorry.  I know it’s tough out there.

Is it just me, or do these gas companies who advertise that we should save energy always steer clear of driving less?  There’s probably research on this I could do that I haven’t done but it just strikes me as odd that they always tell us to improve efficiency in our house but never (at least that I recall and feel free to correct me) tell us we should simply consume less of their primary products.

Just wondering.

PS Although I usually take the train I’m driving today. No need to point out the hipocracy. Thx.

In fairness, there is almost no measure by which I can be said to have actually had “one rock n roll too many”.  And I’m on record as describing musical theater as an expensive nap.

So what’s the deal with Syesha Mercado’s version going through my head?  The Wednesday night version more than the Tuesday.

Probably a trick of the light and not enough caffeine.  Or maybe it’s just catchy.

Like a lot of you out there, the lovely J and I have relatives.  Some of them have a tendency to send out conservative junk emails.  This got me thinking:

First, where are all the junk liberal emails?  And if you’re a liberal, do you forward them to everyone you know?

Second, what’s a good way to start the conversation with the conservative-junk-mail-sender that lets them know there’s an alternate point of view to the one they just sent you and you’d like to talk about it?

Finally, as a corollary, you know those ain’t god grand and jesus saved me and yada yada yada emails?  Where are the I LOVE ATHEISM emails?  Where are the atheism saved me emails?

Just asking.  If you know, I’d love to know.