The Truth About the Economy

[hippifried]

Anybody who thinks wages cause inflation is full of shit. It's a spiral, & wages always lag. Since it hasn't stopped in 40 years, the gap just keeps getting wider. You can date the current spiral to August 15, 1971. If you don't look back to that point, you're missing the point. This isn't natural. Compared to the day before the shock, the dollar now buys about 8 cents worth. For wages to keep up with that, the average trade would be paying from $45 to $50 an hour right now. You can't get an accurate picture by looking back a decade or 2.

[joeninety]

Very well put across Bluegrass, Faldur take note, I thought you would of got it by now with my references to the super rich and how you can skew figures, its a case of the minority rich are doing very nicely with the majority of the wealth, whilst the majority workers are doing quite badly with the a minority share of the wealth.

The gap is widening at an alarming rate, with people having to put in more man hours on less pay and being as the rich control the system they have major infuence and vested interests in keeping it so, hopefully now you will understand, figures are nothing if they don't show the physical reality, yours clearly do not, whereas Bluegrasses show more of a true representation of the picture its not a dig its a case of look at things carefully, make sure the theoritical ties to the reality of the situation.............

[Faldur]

The numbers I'm using come from ssa.gov, the people who calculate and publish the national wage index or AWI.* They provide a nice chart of the averages by year and we can see that in 1998 the AWI was 28,861.44 and in 2008 the AWI was 41,334.97.* Obviously these numbers have NOT been adjusted for inflation unless you think the average wage in 1998 was 28K in today's dollars, which, of course, you might if you had an ideological axe to grind and nothing but contempt for the facts.* But let's adjust the 1998 AWI for inflation provided by the by Consumer Price Index or CPI (which tracks purchasing power) into 2008 dollars. So now the adjusted AWI for 1998 is 38,122.42 compared to 41,334.97.* This is an increase of 8.4%, not 50% and not 24%...8.4%.* So much for the Bush boom.
But wait, remember how median wages actually DECREASED over this same decade? How could median wages drop but average wages increase?* As anyone who has taken statistics could tell you, this is the sign of a skewed distribution, meaning the very wealthy have seen increases in their incomes while the vast majority of Americans' incomes stagnated or deteriorated.* And wasn't that exactly what Reich said in his quite-accurate presentation? Yes, I believe it was.

SSI cost of living adjustments periods of 1997 - 2008, (totaling 27.9%)
SSI COLA
National average wage indexing series from SSI site, (40% increase, 12.1% increase even using SSI statistics. Thats 1.21 percent above the rate of inflation, still can not be considered "barely increased".
National average wage indexing series, 1951-2009

[Faldur]

Anybody who thinks wages cause inflation

Who claimed that?

[trish]

The numbers I'm using come from ssa.gov, the people who calculate and publish the national wage index or AWI.* They provide a nice chart of the averages by year and we can see that in 1998 the AWI was 28,861.44 and in 2008 the AWI was 41,334.97.* Obviously these numbers have NOT been adjusted for inflation unless you think the average wage in 1998 was 28K in today's dollars, which, of course, you might if you had an ideological axe to grind and nothing but contempt for the facts.* But let's adjust the 1998 AWI for inflation provided by the by Consumer Price Index or CPI (which tracks purchasing power) into 2008 dollars. So now the adjusted AWI for 1998 is 38,122.42 compared to 41,334.97.* This is an increase of 8.4%, not 50% and not 24%...8.4%.* So much for the Bush boom.
But wait, remember how median wages actually DECREASED over this same decade? How could median wages drop but average wages increase?* As anyone who has taken statistics could tell you, this is the sign of a skewed distribution, meaning the very wealthy have seen increases in their incomes while the vast majority of Americans' incomes stagnated or deteriorated.* And wasn't that exactly what Reich said in his quite-accurate presentation? Yes, I believe it was.

Once again, right on the mark.

[BluegrassCat]

Once again, right on the mark.

Thanks, Trish. You're one of the dependably informed voices of reason on this forum. The more you post the better this place is.

[hippifried]

Who claimed that?

Since the Reagan administration; the Republican position has been that if wages stay down, it can be claimed that inflation rates are low because half the equasion isn't moving. Supply side theory can't work unless you buy into the idea that money is a finite commodity that can be traded on the market.

Personally, I'm thinking that Adam Smith was every bit as big a crackpot as Karl Marx, & all this shit needs a total rethink. There's no limit to the money supply. Ergo, all this nonsense about inflation is just that, & you'll never know "the truth about the economy" unless you toss out all the lame theories & stop paying attention to the professional liars.

[NYBURBS]

Since the Reagan administration; the Republican position has been that if wages stay down, it can be claimed that inflation rates are low because half the equasion isn't moving. Supply side theory can't work unless you buy into the idea that money is a finite commodity that can be traded on the market.

Personally, I'm thinking that Adam Smith was every bit as big a crackpot as Karl Marx, & all this shit needs a total rethink. There's no limit to the money supply. Ergo, all this nonsense about inflation is just that, & you'll never know "the truth about the economy" unless you toss out all the lame theories & stop paying attention to the professional liars.

Wanna explain the bolded part, por favor?

[hippifried]

Wanna explain the bolded part, por favor?

It's pretty self explanitory. Money's not a commodity. It's just numbers in a ledger. It's how we keep track of real trades of goods & services, & the differences in valuations. There's no limit to the supply because it's not tangible in the first place, & it's created by debt. There's no supply & demand pressures on money itself. It's all bullshit & the currency exchange is a fraud. This current inflation spiral is artificial, & coincides with the demise of Bretton Woods by the Nixon shock. Speculative slight of hand has been devaluing money for the last 40 years. It's all short selling because the only way to make profit on the FOREX is by betting on the rate of decline.

[NYBURBS]

It's pretty self explanitory. Money's not a commodity. It's just numbers in a ledger. It's how we keep track of real trades of goods & services, & the differences in valuations. There's no limit to the supply because it's not tangible in the first place, & it's created by debt. There's no supply & demand pressures on money itself. It's all bullshit & the currency exchange is a fraud. This current inflation spiral is artificial, & coincides with the demise of Bretton Woods by the Nixon shock. Speculative slight of hand has been devaluing money for the last 40 years. It's all short selling because the only way to make profit on the FOREX is by betting on the rate of decline.

I know it's not a commodity, but it is a standard of valuation, and while I realize some of the issues with pegging it to any one thing (such as gold), it seems to me that it is not quite limitless, otherwise it really couldn't accurately reflect value. Tbh, I'm not sure that was your point anyway, and this isn't an area I'm entirely clear about, but the earlier statement struck me as strange (hence the request).