Re: 1970's redux and where do we go from here?

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

We don't disagree that much.  We agree on the first point.  On the third point, you
are probably correct, but I think that the technical changes that have held the
raw materials prices in check will proabably fall short in the future.  Intellectual
property fits in here because it counteracts the 2d point about manufacturing.


On Sat, Apr 22, 2006 at 06:03:26PM -0700, Jim Devine wrote:
> On 4/22/06, Perelman, Michael <MPerelman@xxxxxxxxxxxx> wrote:
> > I am not sure that I buy Loren's inflationary interpretations.  I see 4
> > conflicting forces.
>
> > 1. Speculation, as in housing, which is probably cyclical, not a long
> > term trend.
>
> it doesn't matter if it's secular or cyclical (or seclical, for that
> matte) if the speculation is accompanied by unsustainable accumulation
> of consumer debt. A cyclical housing-price boom followed by a
> housing-price slump creates a stagnationary trend if house-owners
> accumulated too much debt while prices were up.
>
> > 2. Manufacturing, which has a long run deflationary trend.
> > 3. Raw materials, which have a long run inflationary trend.
>
> how far are real raw material costs up relative to the trend since the
> end of WW2?
>
> > 4. Intellectual property, which has a long run inflationary trend.
>
> isn't the "inflation" or intellectual property only relative to the
> cost of production (rather than being absolute inflation)?
>
> > I am not sure about how effective governments are in reflating if the
> > economy begins
> > to sink.
>
>
>
> --
> Jim Devine / "There can be no real individual freedom in the presence
> of economic insecurity." -- Chester Bowles

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu