comment176

16년 전discuss

One problem with opening the upper echelons to lower classes, is that the lower classes are more desperate for money and thus more easily corrupted. You couldn't offer GW Bush much that he didn't already have as a result of his family's status, but you might have more luck with the son of a poor steel worker like Rod Blagojevich.

comment176

16년 전discuss

Restuarants regularly give away free samples to gain "word of mouth" reputation.

comment176

16년 전discuss

Earlier you argued that people are not saving too much. However, your article says that people are in fact saving so much that the Fed is trying to turn them away. According to the article, the Fed first dissuaded savers by lowering the interest rate to zero, and when that proved ineffective they bought back the treasuries they had previously issued. I assume you have withdrawn your earlier argument.

I think your point now is that the government should not have bailed out the financial sector. That's a different discussion that should have its own thread. Perhaps your point is that the Fed and the Treasury are working against each other? I don't distinguish between the two and believe Bernanke/Geithner work hand in hand, but again that's a different discussion.

Also, for accuracy's sake, treasuries are not paying anything close to 4%, unless you're looking at very long term rates which are neither here nor there.

You jump around a lot, which makes it difficult to see the point you are trying to make. Unless you want to revive your "society can never save too much" argument, I would like to end this discussion.

comment176

16년 전discuss

The Fed can't manipulate interest rates down. They have to offer a high enough rate to sell their notes. Right now there is such over-saving that the fed can clear the sales by offering almost zero (really negative rates if you factor in inflation) interest rates. For all the talk I hear of the Fed printing at record rates, I have yet to see anyone point to a treasury auction that failed.

"we are printing money like crazy instead of letting the dollar adjust in value as it should." I can read that as you advocating for a variety of different things, and so I can't tell exactly what point you are trying to make.

Any way, thanks for the discussion and good luck in your engineering career.

comment176

16년 전discuss

What's the use of getting a good at a lower price if you've lost your job?

To get back to your original question, I think the global economy may have been hurt due to China's mercantilist policies. Some perceive China to be adopting non-cooperative "I win, you lose" strategies that will motivate defensive and non-cooperative measures from other countries. This is bad, potentially very bad.

Also, even if the global economy is better now than it was when China was undeveloped, that doesn't mean China's policies are ideal. The world economy might be even better than it is now if China changes its policies, increases its internal demand and spends down its surplus.

comment176

16년 전discuss

Think of this way. What if today, everyone decided to spend nothing and invest all their money. What will happen to the world economy? You can't make money investing in a business if no one is buying their product. That proves that there is a point at which savings can be harmful.

Excessive savings will drive down the interest rates, and they have. Despite the fact that government borrowing is through the roof, interest rates barely hover above zero because of excessive savings.

I don't mean to deny the importance of savings but be careful that you don't take demand for granted.

comment176

16년 전discuss

True. In our specialized economy everyone's dependent on each other.

comment176

16년 전discuss

The problem with your analysis is that a business needs investors and customers to succeed. Excessive saving can harm an economy.

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