"Freedom" thread or something

The abuse of Federal Aid programs is well discussed at least and I assumed well documented in a more formal way. But like all cash cows, folks are going to expend energy to maintain the revenue stream.

JJLehto wrote: Equality 7-2521 wrote: ^There's jobs for these people in the trades. Some of them are just dying for workers. Some developing regions in the US in particular are paying huge salaries for these types of workers (North Dakota being one for example). I don't think there's any doubt that Federal aid programs have driven the price of higher ed sky high. Well there ya go. I'd agree, it makes economic sense (doesn't a subsidy always increase price for the whole?) but no research I found can concretely support it (at least among public universities), so I guess it's just us crazies making assumptions based on guesses and not reality eh?

If it doesn't happen, then I think some basic economic principles are failing. The subsidy allows marginal users to enter the market. Thus we have an increase in demand for the product. Furthermore, given the medium through which you pay and the societal pressure to go to college, consumers already have a small elasticity. Basic economic theory calls for a price increase.

Well exactly, that's what is frightening to me!
It's tough to find a conclusive answer out there, even though basic economics says it should be happening.
I learned that at college too, so not even these "Austrian lie machines that enslave our minds"

I guess I just can't believe it's not realized, not accepted, or not spoken about out there.
Except among those crazies like Ron Paul of course!
Thus dismissed as horse hockey :(





Edited by JJLehto - May 10 2012 at 15:25

@ Brian
There's a tend in popular politics that focuses only on the benefits of an action while ignoring the costs. Politicians operate with a "Is it good?" mindset while everyone else in the world must operate with a "Is it good relative to the cost." mindset.

On my way out the door so I'll read your post later Negoba.


Edited by Equality 7-2521 - May 10 2012 at 15:26

Negoba wrote: Because the individual agent no longer knows what he's actually exchanging. And different people are trading something that has vastly different meanings to different agents.   i.e. The vast majority of the populace (including me) have little understanding what a dollar really is. My best guess is that it is a promise between members of society to honor that this idea can be exchanged for things of value. Yet that promise gets abused and manipulated to the point that it is a dishonest way to mediate the allocation of goods.

Yeah I think the benefits and unavailability of a medium exchange kind of outweighs that though.

A dollar isn't that mysterious. It's something people will accept in trade. You can't make everything you want feasibly, so you do one activity and receive a good in return for it that everyone will take. I think people get that without ever thinking about the situation.

Equality 7-2521 wrote: Yeah I think the benefits and unavailability of a medium exchange kind of outweighs that though. A dollar isn't that mysterious. It's something people will accept in trade. You can't make everything you want feasibly, so you do one activity and receive a good in return for it that everyone will take. I think people get that without ever thinking about the situation.

Negoba wrote: I'm not saying that we abandon money completely, just that we need a more diversified way to exchange goods.   A dollar is illusory in terms of what it really represents. It's an assumption that I can hold raw value and use it to leverage something later. What it's value is extremely slippery, despite the tacit assumption that a dollar = a dollar = a dollar.   The fact that a car depreciates 20% the moment you drive it off the lot tells you something about value. The fact that economies of scale change the cost of items, the contractual price alterations that are abundant in business. All of these are expressions of the fact that people will try to manipulate the exchange and the dollar only partially standardizes this.   I'm still wrapping my brain around this but recent reading about the definition of credit, interest, backed vs. non-backed currency, etc. has made me realize even more than before that money is a social contract, and that most of us only understand the most basic of the rules. A contract isn't really a contract without both parties knowing their obligations and what is obliged to them. Therefore, money as it now exists is a flawed institution.

I think you're mixing together some issues which are really different here.

Diversified currencies exist. They just tend to be more inefficient as the diversity increases so that a common exchange medium emerges in most situations. Unless I'm misunderstanding you, you suggest a type of system where laborers exchange their product for a sort of luxury money and a necessity money which do not cross boundaries. This just would not work for many reasons. I'll go into all of them, but I want to make sure you're actually suggesting this first.

You start talking about the manipulation of the value of a good. This can only be done in a nominal sense. One can manipulate how much of a particular currency another would be willing to pay for a good. But the overall value of the good exists only as an amalgamation of individual subjective evaluations. As such, this cannot be change or altered by anybody. Difference in value, like a car losing 20% of its value, exist because the mass of people value a car 20% less after it has been driven off the lot. People feel this way. They express this feeling through their purchasing. Cars don't lose 20% of their dollar value from this, they lose 20% of true value reflected in a dollar price or the price of any other exchange medium be it direct or indirect.

There's nothing mysterious about a hard currency ignoring volatile fluctuations in the rate of production. It's really just as simple as it seems. I don't see what people have to understand about it that they already don't. It just gives a common denominator for a "wants profile". Rather than accepting a job that offers them 3 meals, 1/8 of a mortgage payment, and 1/3 of a car payment per day of work, they accept a job based on a certain dollar amount which they can then use to calculate their return among a near infinite basket of possible goods. Fiat currencies get a little more mysterious, and I can agree that people don't fully understand what these actually represent in the abstract. However, the result of this ignorance doesn't tend to manifest itself on the scale of daily transactions among most people.

Equality 7-2521 wrote: Negoba wrote:   The politics of both the anesthesiologist and the host are sadly over the top.   Well it's a political and not a scientific or economic podcast. It's made for anarchists.

Equality 7-2521 wrote: I think you're mixing together some issues which are really different here. Likely so, I'm still trying to wrap my brain around this all. Diversified currencies exist. They just tend to be more inefficient as the diversity increases so that a common exchange medium emerges in most situations. True, hence the failure of many attempts at local currencies.   Unless I'm misunderstanding you, you suggest a type of system where laborers exchange their product for a sort of luxury money and a necessity money which do not cross boundaries. This just would not work for many reasons. I'll go into all of them, but I want to make sure you're actually suggesting this first. I'm not really suggesting anything yet. I'm just trying to figure out how to deal with the fact that the dynamics of the stuff banks and investors swap around is really quite different than the stuff you and I use to buy a candy bar one day and sell a bird house I made the next. You start talking about the manipulation of the value of a good. This can only be done in a nominal sense. One can manipulate how much of a particular currency another would be willing to pay for a good. But the overall value of the good exists only as an amalgamation of individual subjective evaluations. As such, this cannot be change or altered by anybody. Difference in value, like a car losing 20% of its value, exist because the mass of people value a car 20% less after it has been driven off the lot. People feel this way. They express this feeling through their purchasing. Cars don't lose 20% of their dollar value from this, they lose 20% of true value reflected in a dollar price or the price of any other exchange medium be it direct or indirect. This is a leap of faith. This is how the free market is supposed to work. The free market ideal assumes a continuous bottom-up fluidity that only deals with a part of the actual dynamics of how the economy works. Inertia and top-down imposition of boundary conditions are strongly at play. Government is one of these top-down agents but not the only one. This is one of the fundamental flaws in the libertarian position. You cannot eliminate top-down dynamics entirely, especially if you don't correctly name all of the actors. There's nothing mysterious about a hard currency ignoring volatile fluctuations in the rate of production. It's really just as simple as it seems. I don't see what people have to understand about it that they already don't. It just gives a common denominator for a "wants profile". Rather than accepting a job that offers them 3 meals, 1/8 of a mortgage payment, and 1/3 of a car payment per day of work, they accept a job based on a certain dollar amount which they can then use to calculate their return among a near infinite basket of possible goods. Fiat currencies get a little more mysterious, and I can agree that people don't fully understand what these actually represent in the abstract. However, the result of this ignorance doesn't tend to manifest itself on the scale of daily transactions among most people. There have been some good demonstrations that hard and fiat currencies really don't differ in the end. Gold buried in the ground has absolutely no economic value. Whatever is actually part of the percieved value in ongoing transactions is what matters. As you mentioned in price and value, the only thing really governing exchanges is the perceptions of the actors involved. Money works because you and I believe in it. The moment you think gold has the same value as granite and I think gold has more value, our hard medium of exchange becomes useless.

Edited by Negoba - May 11 2012 at 13:53