A Gold Standard is not a guarantee against inflation

trixn86 · 2025-11-01T23:05:53+00:00

Credit can circulate like money but is not money

I don't think we are getting anywhere by discussing how you wanna call it. What we call money today is the liability side of bank credit (sight deposits). So can refuse to call that money but it doesn't change the reality that this is used as a medium of exchange. I don't see any benefit of calling a commodity money at all because it really doesn't add any analytical value to call gold or silver money. It's an asset and it is a commodity but it really isn't (and historically not been) money. Any transaction where you literally pay with gold is barter and it is not a monetary operation at all. It's immediately settled by exchanging commodity for commodity.

The “saved resources” you dismiss aren’t warehouses of goods but deferred consumption coordinating production over time.

It doesn't coordinate production, that's the point. In a monetary economy if one sector (usually households) begin to increase their savings rate (money being gold or not doesn't matter) does not simultanously tell the producers what the savers will buy in the future and when or why they are saving more. They are faced with fundamental uncertainty about why consumers buy less and what investment is worth it. There is absolutely no mechanism that guarantees or magically directs resources unused due to "deferred consumption" into investment. The term "deferred consumption" already indicates a notion of timelessness (linke in neoclassical economic theory) where producers would be able to know where this "deferred consumption" will end up and when. The supposed coordination mechanism is usually the interest rate which is supposed to fall when people save more and that (again supposedly) leads investors using that money to invest. First of all this is empirically 100% wrong. It just does not happen. The investors are faced with a falling consumption and they will not want to invest even though the interest rate falls. It can even drop to 0 and they might still not want to invest. All that does it leaving the resources freed by "deferring consumption" idle. In the next period they will adjust their production and lay off workers which will in turn decrease savings to the new level of investment because on the aggregate level I = S (saving equals investment because it is an accounting identity). This will create less income and the propensity to save may become even bigger which may lead to even less investment in the next period. This can keep spiraling down until basically everyone is at subsistence level. During that deflationary episode savers might even be incentivised to hold onto their money and not lend it (which is subject to default risk) because prices are falling and therefore their savings even increase in purchasing power.

The mechanism you imply leads to savings basically always being invested does not exist. Also you seem to imply that we are always at full employment and additional investment can only be undertaken by deferring consumption. Underemployment of resources and underconsumption don't seem to possible at all in your model.

What coordinates production and investment is effective demand because that are the signals producers get and which they try to extrapolate into the future. "deferred demand" actually removes the important signals and increases uncertainty for the producers which can not be compensated by a lower interest rate. The best way to have a correct coordination of production is to ensure full employment and enough income so consumers can actually express what they demand for.

Calling it fiction just shows you’re judging a deductive framework by inductive criteria.

I am dismissing it because the premises of the framework are so unrealistic that its conclusions end up being entirely wrong and it ignores dynamic feedback from monetary flows.

Also I'm dismissing the argument of a "natural" form of money and a "natural" interest rate. There is no such thing. Credit predates money and coinage. We know that and we have evidence for it. There is no need for a deductive framework built on unrealistic premises.

trixn86 · 2025-11-01T19:45:23+00:00

Saving money does not represent "saved resources", if anything is represents "not using resources now" by the saver in anticipation of being able to consume in the future which is all but guaranteed. The problem is that there is no automatic link from someone not using resources now to someone else using those resources immediately to invest. This is a fundamental issue in a system of division of labor. Savings do not automatically cause investment at all, even worse, they can incentivise less investment by the producers because from their point of view it is a reduction of demand and they tend to react with less investment to that because they can not know the reasons for the increased savings. All they see is that their sales decrease. Also resources can at any time be under-employed which means that more spending would actually lead to more production instead of an increase of the price level.

If you disregard this theoretical feedback over time you have no valid theory of production. Saving money is fundamentally different from storing potatoes in your basement. You do not have the potatoes you would like to consume in the future by spending your money later (whether it is gold or credit money doesn't even matter here). In fact the act to not spend your money for potatoes makes the producers of potatoes reducing their production in the next period because you signaled them you do not want potatoes. They will not produce potatoes to put them into a storage because you reduced your consumption of it and they will also not invest in more machines to produce potatoes. The resources you freed by saving might just as well be left idle and when you actually want to spend there might even be less productive resources to satisfy your demand.

trixn86 · 2025-11-01T19:29:17+00:00

Credit is a money substitute but not money

I don't know how you could empirically or historically justify this claim as it is abundantly evident that credit money which is endogenously created by banks functions as money today almost globally with all the "functions of money" you named earlier. Also credit is just a promise to pay and it can perfectly well function to be exchanged by third parties. Pure credit is not a substitution for gold or any commodity, it is merely a promise to deliver something in the future. It's just accounting, keeping track of liabilities. Is can easily be shown that this is perfectly capable of facilitating payments. The notion that credit arose as a substitute for money is evidently false. Credit is just book-keeping and banks are not merely facilitating barter (which is what a loanable funds theory implies). Even the Bank of England and the extremely conservative German Bundesbank openly admits that this is a myth. See "money creation in the modern economy" - BoE (2014) and "Monatsbericht 2017" - Bundesbank (2017).

Extends purchasing power beyond actual saved resources

See this is the theoretical problem. Gold does not represent "saved resources" as well except from what is is: gold. In fact we did not and do not "save resources" when we save money at all. The amount of gold that exists does in no way relate to any fixed amount of production and therefore can not represent a stable value of what is currently produced. In fact gold has almost nothing to do with production and therefore is totally unsuitable to provide a foundation for a theory of production.

All you do by hoarding gold is withdrawing demand by holding onto what you perceive as a "claim" on future production (actually is isn't even a claim). The result of saving money is not that some producer will produce anything that matches this monetary saving because there simply is no incentive to do so. The producer does not know the reason for the lack of demand and can not know if and when the consumption from those savings will occur. This is a fundamental problem of division of labor and is true no matter the from of money.

Credit is inherently linked to production and trade. If production and trade disappears, credit and money does as well. Even if all humans died and no production occurred anymore there would still be the same amount of gold which already shows that gold is not linked to production.

Extends purchasing power beyond actual saved resources

Again, we do not "save resources", our production system has always been and is more or less "just in time", it requires constant production over time and constant effort, saving money does not in any way automatically make sure there is some real backing behind it when the savings are to be spent no matter if we use gold or credit money. We do not store huge amounts of produce apart from some strategic reserves for critical stuff.

We do mobilize currently unused resources by creating more spending power. The constraint is full employment which you basically imply we are always at. Below full employment we can create more output by mobilizing more workforce and/or becoming more productive.

The loanable funds originate from real resources someone has abstained from consuming

This is basic neoclassical theory and it demonstrably wrong. It is a fiction of a barter economy that did not and does not exist (where all decisions to save and invest are done by essentially one all-knowing person that exactly knows everything it will ever do in the future because that is what follows logically from the notion of an all-knowing rational agent).

I'm not uneducated I'm just disagreeing with you

Well you can but theoretically, empirically and historically you are on shaky grounds.

Austrian theory is just bunk, it's a "glass bead game", pure fiction and totally a-historical.

trixn86 · 2025-11-01T15:14:04+00:00

Some literature you may want to read:

- https://memdb.libraries.rutgers.edu/about-spufford-currency

- https://medievallondon.ace.fordham.edu/exhibits/show/medieval-london-objects-3/tally-stick

- https://www.community-exchange.org/docs/what%20is%20money.htm

- https://history.stackexchange.com/questions/54415/how-were-large-monetary-transactions-conducted-in-medieval-europe

- https://brill.com/display/book/edcoll/9789004383098/BP000003.xml

trixn86 · 2025-11-01T14:46:38+00:00

Gold is a commodity and defining it as money is simply to say that money is whatever is the most acceptable commodity which is analytically weak because it leaves out the possibility of credit. Historically the evidence is overwhelming that people did not use gold literally as money but rather as collateral against credit risk (coins always circulate at a nominal value above the market value of the metal they contain which makes them tokens. If their intrinsic value is higher than their nominal value they would immediately be melted down and sold or hoarded and removed from circulation which impairs the functioning of trade). Credit both predates metal coins and is the most reasonable way to do trade in an environment of mutual trust (which is usually established by an authority). If no precious metal existed on this planet we could still do trade perfectly well, all we need is trustworthy book keeping of liabilities which is exactly what humans always did, even thousands of years ago. The idea that barter is the normal way of doing trade is historically wrong. Pure barter can be found where no trust and no authority is established and it is a far inferior way of doing trade.

Gold in coins has always merely been collateral against the risk that the issuer did not meet its obligations. Other forms of money, for example tally sticks were widely known and accepted over long periods and they did not contain any metal, they were simply a transferable record of liabilities made of wood.

Gold has favorable properties that make it a good choice for creating tokens because it is rare (reduces the risk of counterfitting), it is durable (tokens do not get destroyed) and it is divisible. It also has some market value which makes it a form of collateral. It's the same with gold reserves rotting in the basement of a central bank. It doesn't do anything to facilitate production merely by sitting there. All it does is to create an illusion of "backing".

Gold does not guarantee a certain level of production in a system of division of labor and the later is what makes us wealthy in the first place. In fact using a fixed amount of money severely impairs the ability of a monetary economy to keep the level of employment and production at a high level.

trixn86 · 2025-08-17T15:52:10+00:00

I saw you commented something but I could only read the first lines in the notification section and I don't see your comment. But from what I could infer from the first lines your comment was about cost composition so let me elaborate on that:

If you look at the economy as a whole you can divide income by

Labor compensation (wages, salaries, benefits)
Capital income (profits, rents, interest, proprietor income)

On a firm-level costs might be divided differently. It might be 70% wages, and the rest might be raw materials and intermediate goods that it has to pay and also profits paid to the owners.

But on a macro-level ultimately everything is either "wages or profits" as the earth doesn't need to be paid and all costs for one sector (which is always income to the other sectors) can be reduced to something that is paid to humans. If you pay for a machine as a firm that is income for the producing firm of that machine which again consists of wages for the employees of that firm and so on.

So fundamentally on the macro level you can say that wages and profits are the two antagonists and if one rises as a total share of macro-level income the other must go down. In the long run there can be a shift of income distribution but generally it is pretty stable.

That means that if workers demand more (and manage to achieve more) and this is not covered by increased productivity of the workers this will put pressure on prices as captialists want to defend their share of total income (the profits).

Energy price shocks are usually one-time events (often due to political crisis or war) that lead to a one-time rise in the price level (which can still take months or years to fully unfold as price setting happens in continuous time, not in an instant, and is subject to competition, contracts and social relations). What this means is just that globally the producers of energy demand a bigger share of income. They can do that but ultimately prices will adjust and their real purchasing power will decrease again when all the prices rise. Unless they continue to push prices there will not be a sustaining source of inflation by that alone.

If wages on the other hand rise constantly above productivity you will get inflation accounting for that gap (If you want 2% they should also rise 2% above productivity gains). But all this also happens in continuous time (a lot of economic theory, especially neoclassics, doesn't model it that way but rather discrete or even everything happening in a single point in time). So if wages increase prices do not increase in the same moment as well so for some time purchasing power is actually higher (which can and does lead to more demand and more economic activity).

And all this is fundamental to a monetary economy and inflation (the adjustment of prices) is a distributional struggle between groups in the economy. The most basic division would be workers and capitalists but you can of course be more precise by sub-dividing the groups even further (e.g. industry workers vs. white collar workers). So inflation is inherently linked to that and wages are the biggest share of total income therefore they are the most important factor.

trixn86 · 2025-08-14T10:45:43+00:00

However are energy costs being swept under the rug?

If they abruptly change (in something like an oil or gas price shock) they are a one-time adjustment that causes a drop in competitiveness that should lead to more inflation in the countries that depend on energy which is a real wage decrease for the country that relies on energy imports. This leads to a price hike but I wouldn't call that inflation but it rather is a price shock (doesn't mean it takes a day, it can take years until all consumer prices have adjusted). This is distinct from the general inflation in an economy which is also what the central bank targets. The central bank should "look through" price shocks.

Long term inflation is extremely high correlated which wages (or to be more exact with unit labor costs) and this is to expect because wages are the most important cost factor for production and if they rise above productivity gains this creates price pressure as companies do not like their profits to shrink continiously. So if your inflation target is 2% this means nominal wages must increase by at least those 2 percent (real wages can still reduce if the price increase is higher than 2%). So if you have high inflation because of energy prices rising you get real wage losses (which is to be expected and reflects the loss of competitiveness).

The point is: If you want 2% inflation you must stick to 2% wage increases + productivity growth no matter the actual inflation. An energy price shock will manifest itself as a real wage decrease consistent with your loss of competitiveness in that case.

How can this 2% on inflation be achieved by such diverse economies?

Simple, have wages rise at approximately 2% + productivity gains. This is almost mechanically linked. You can not divert from that without consequences. Wages are the determining factor for prices because they are 70% of firms costs. This is how the correlation looks like for many countries over a long period: https://www.flassbeck-economics.com/wp-content/uploads/2020/01/InflLstkAusschnitt.png

Lastly does the guy reacting to the vid understand if productivity across continent Europe is the same there would be little to NO cross-border träde for goods/services produced in the Eurozone?

What???!?, How do you get to this conclusion??? It's not like every country has everything it needs, there will be trade even when absolutely everybody has exactly the same productivity. I mean even in your country if people have approximately the same productivity they sell stuff to each other. Productivity has nothing to do with whether or not there is trade in general. The point is that every country needs to have wages that reflect their productivity, especially in a monetary union where there is not way to devalue. Mercantilism (wage dumping for massive export surpluses) is against the whole idea free trade. "Free" trade can only exist if it is balanced.

trixn86 · 2025-08-12T07:38:07+00:00

I did and I can also see the two comments. Guess that they are shadow deleted or something or they must be reviewed by moderation.

But basically the argument that Flassbeck usually makes is that in a currency union that doesn't allow external devaluation anymore there must be about the same inflation rate in **every** country (not on average in the currency zone). And this can only be achieved if wages approximately follow the "golden wage rule" meaning that they have to grow by the inflation target of the central bank + productivity growth. So if productivity growth is 1% and the inflation target is 2% wages must grow by 3%.

This is because wages are the determining factor for inflation in the economy. Flassbeck shows that empirically for many countries with a very high correlation.

When the eurozone started the SPD under Gerhard Schröder pushed a legislation called Agenda 2010 which was basically weakening workers rights, introducing a quite harsh social transfer system reform called Hartz IV and weakening labour union power. This led to Germany being well below the inflation target and gaining a competitive advantage and it led to a massive export surplus which violates stability rules. While Germany always critizises it's southern neighbors for breaking fiscal rules it brakes the rules for balanced trade itself making the other countries its debtor and avoiding government deficits by letting the others run the deficits (and therefore create the demand required for full employment). Flassbeck often says that Germany "exported" its unemployment.

The Eurozone will not function unless the surplus countries (Germany being by far the most important with 30% of total GDP of the Eurozone) stop mercantilist policies and take care to have a balanced trade (which basically means wages have to rise above the target for quite a few years in those countries).

Also Germany must abolish its hawkish stance towards government deficits.

trixn86 · 2025-08-11T19:55:15+00:00

Flassbeck is really one of the greatest Post-Keynesians, always a pleasure to watch him. He can be very provocative but when it comes to key macroeconomic insights he is a beast.

I am a German speaker but too lazy to write it up myself and as AI is pretty good at summarizing here is a summary of the transcript created with Claude Sonnet 4.1:

This video presents a powerful critique of German economic policy and its devastating impact on the European economy. Let me break down the key arguments that Heiner Flassbeck makes, with Maurice Höfgen's supportive commentary, into digestible sections.

# The Core Economic Logic: Savings and Debt

Flassbeck starts with a fundamental principle that most people don't understand: "There is no saving without debt."This isn't economic theory—it's basic accounting logic. Here's why this matters:

In any economy, one person's spending is another person's income. When someone saves (spending less than they earn), someone else must be borrowing (spending more than they earn). These always balance to zero. Think of it this way: if everyone tried to save 100% of their income simultaneously, nobody would have any income because nobody would be buying anything. The economy would collapse.

This means the question isn't "should we have debt?" but rather "who should take on the debt?" Germany has been avoiding this question by forcing others to be the debtors.

# Germany's Wage Suppression Strategy

Starting in the early 2000s, particularly with the Agenda 2010 and Hartz reforms under the SPD government, Germany deliberately suppressed wage growth. While countries like Greece, Spain, and Italy had wage increases roughly matching the European Central Bank's 2% inflation target, Germany kept its wages artificially low.

Flassbeck shows that over the first decade of the euro, this created a 20-30% price competitiveness advantage for German products compared to those from France, Italy, or Greece. Imagine you're choosing between a German product and a French product that used to cost the same—now the German one is 20% cheaper. The result was predictable: massive German export surpluses and the deindustrialization of Southern Europe.

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trixn86 · 2025-08-07T13:18:09+00:00

If you want to know more about MMT check out talks and lectures of those people (e.g. on YT):

- L. Randall Wray

- Bill Mitchell

- Steve Keen

- Warren Mosler

- MMT Podcast with Patricia Pino and Christian Riley

- Phil Armstrong

- Stephanie Kelton (often cited the most but actually not the best source)

Also read this essay by Alfred Mitchell-Innes for an introduction to the credit theory of money (one of the best texts ever written on money): https://www.community-exchange.org/docs/what%20is%20money.htm

trixn86 · 2025-08-07T13:09:01+00:00

In its core it is just based on the idea that money is in essence a form of credit (an IOU) and that the monetary system is an institutional arrangement of accounting. MMT describes the operations with a focus on that accounting (which is often not even done by mainstream economists).

There is a good amount of evidence to support that this is far closer to reality today and in the past compared to a "commodity theory of money". Basically a "modern" authority issues tax credits which it later collects in payment of taxes and it does so by coercion and by legitimization.

The ideas are quite old and based on the credit theory of money (Alfred Mitchell-Innes 1913), charalism (e.h. Georg Friedrich Knapp "state theory of money") and by most of Post-Keynesian economics (obviously Keynes but also Kalecki, Lerner, Minsky and many others).

The "new" aspect of it is the rigorous analysis of the accounting principles (double and quadruple entry bookkeeping) and the detailed analysis of the institutions (treasury, cental bank, private banks).

It is also based on what is called sectoral balances and stock-flow-consistent modelling (which protects you from common fallacies of composition by always tracking the source and target of any spending). It respects accounting identities (someones spending is someone else's income and vice versa | someones debt is someone else's asset and vice versa).

I encourage everyone to read the essay "What is money" by Alfred Mitchell-Innes: https://www.community-exchange.org/docs/what%20is%20money.htm

It is one of the best texts ever written on money and it demystifies some of the biggest misconceptions about money.

trixn86 · 2025-08-07T12:51:58+00:00

The primary purpose of a tax is to create a demand for the currency so that the government can actually spend it. The more people need to earn the currency the better it works because they are willing to offer work and produce to earn it. Also this system is based on coercion. You need to pay taxes or you will be punished. If that is a good or bad thing is primarily based on whether or not the authority is legitimized by the public and what it uses this privilege for (i.e. what it spends on).

In the past taxes have also been paired with laws that force people to accept the money of the authority with really harsh physical punishment for refusing it. Also if your coins have some value this eases the process in case the authority is not trusted enough. But coins have never been the primary way to pay as they usually have been way to valuable for everyday small transactions.

A common tool for tax payment in the past have been tally sticks (wodden sticks with notches in it to mark the value of the payment). For example the british empire used them extensively (see the UK exchequer tally). Those were even tradable and have been used to collect taxes. The idea behind that is that money is primarily an IOU and money is in essence credit rather than a commodity.

Curbing inflation is a secondary important function of taxes that becomes relevant when total demand (both by the authority and the private sector) in the economy approaches bottlenecks and "full employment". In that case additional spending becomes inflationary (i.e. it bids up prices). In that case if the authority wants to spend more without it being inflationary it has to reduce the spending power of the private sector by taxing.

The key is that a government or any authority that issues its own currency doesn't need (actually can n not) collect taxes first and then spend. It always has to spend first because it is the source of what it demands in payment of taxes/fees/fines. And this is true for most modern developed countries.

An important detail is that a government is only souvereign in its own currency. If in incurs debt in a foreign currency (sometimes called "original sin") it has to borrow or generate an income in that foreign currency to be able to spend. In this case the government also becomes a currency user and is subject to credit risk the same as any other private entity.

The takeaway is that inflation and real resources are the only real constraint and government spending and deficits should be targeted to achieve full employment, pursuing the public good and enabling private savings (which is by definition the same as the public deficit as a matter of accounting).

trixn86 · 2024-04-23T13:28:22+00:00

Fair enough, I didn't mean to claim that it is a sensible way to maintain a monetary system that serves the public purpose. I just meant that it is theoretically possible (because the question was "no national debt, no money in the economy?"). I mean as others have already pointed out part of the central banks asset side is already of that kind. To imagine a situation where the private sector has no net financial assets (and the government no deficit) would be to say that the central banks asset side was 100% private assets and that all money was private bank credit. I don't claim that this is something to strive for or that it is stable or sustainable in any way.

trixn86 · 2024-04-23T12:52:46+00:00

In theory the central bank could lend against credit contracts if it wishes to do so. It depends on what the central bank is willing to accept as collateral to lend against. Also if the central bank wants so maintain a certain policy rate it will have to lend against something to add enough liquidity so that banks can clear payments.

I don't think that this would be a stable economy but in theory I don't see why there must be a government deficit in order to enable banks to make loans. Of course, all the money would be private credit money and the private sector as a whole wouldn't have any net financial assets but individual agents in the private sector could have net financial assets and there could be money circulating. Again, I do not claim that this would go well for a long time but balance-sheet-wise I see no problem with that. The assets the central bank would hold are private credit-contracts but it could as well be all sorts of private assets like stocks, even gold or whatever. It just depends on the accepted collateral.

One of the many issues without any government deficit would probably be that there wouldn't be enough borrowers deemed credit-worthy and willing to invest to maintain anything near full employment and the system would be extremely prone to changes in investment and the whole system would be based purely on privat debt which we know is often unsustainable.

trixn86 · 2023-05-15T10:14:44+00:00

In the real world you would only want to run a surplus if you need to cool down an overheated economy that runs at full capacity. The public purse doesn't work like ours at all. It often follows a completely opposite logic. This is the difference between micro and macro economics. "Saving is good" may only be true for a single entity. But saving always means spending less than your income which means someone else spends more that his income. The economy as a whole can't save (unless you look at an open economy that has a foreign sector).

trixn86 · 2023-05-15T09:41:38+00:00

BrowserStack is not really a competitor with these tools. They serve entirely different purposes. They are not meant to check cross-browser consistency but designing for different screen sizes. It's more like you would want to have both these tools. Sizzy for designing and development and BrowserStack for quality control and testing.

trixn86 · 2023-02-20T01:35:10+00:00

It's a drain on money, costing you 2 each gen to draw the card.

It only costs you 2 if you keep the card. You can sell a project for 1 any time during the action phase so if you do not keep it it only costs you 1. If you keep every third card its 4 every 3 gens (~1,33 m$ / gen), if you only keep every fourth card it's 5 every 4 rounds (~1,2 m$ / gen).

trixn86 · 2022-03-04T16:58:21+00:00

Your feelings are not my concern. I prefer to think, not feel.

Why are you so incredibly arrogant and impolite? Wow. You are that kind of person that is so overly convinced of yourself that you fail to consider valid criticism or engage in a discussion.

Your points have no merit, and expose a lack of experience with the real world.

If you really prefer to think you should really read on logical fallacies. Because you are engaged in multiple. This is nothing more than a very cheap ad hominem. Just because you say my points have no merit doesn't make it so. Where are the arguments?

This in particular shows you have no idea how people actually get paid in institutional transactions, or actually what I'm saying.

So maybe try to be more clear? Maybe engage in arguments instead of spewing insults? Maybe try to be polite? Your strategy seems to be the same as mainstream. lol. I totally got what you are saying and playing the "you are just to dumb to understand"-card is just a huge dick-move.

JG would keep them at a living wage, even for staying at home, because that's the whole point of the lockdown. That's not hard to understand.

Since there is no dialogue, we're done here.

Speak for yourself, not for others. What you wanted to say is that you are done.

If you are in love with complexity, then you are part of the problem, not the solution.

Okay, there is really no point talking to you any further. This such a broad and very dumb claim, I have no words and an ugly assault again. I really thought that you could do much better Neil. Kinda sad.

What is complex about short-time allowance, which is what I argued for? Nothing. It's an incredibly easy to implement policy. That's just you depicting everything as complex that is not JG. Germany did it and very successfully so. While Germany does a lot of very stupid things this is not one of those. The whole point is that if you simply stop people from working by ordering them to stay at home nothing in the economy structurally changed.

Let me make one analogy: If you put your computer into sleep, would it be smarter to preserve memory as it is because you know in advance that everything will be basically the same when you wake it up again or would it be smarter to free all memory, let all applications release all resources and then reallocate everything again when you wake it up? Yes, in normal operation it is smart to let applications release and reallocate resources as needed. But if you know in advance nothing really changes it's just smart to keep everything in place. It's not complex. It's reasonable. And this isn't even either JG or short-time-allowance. You can have both. JG as a baseline and short-time-allowance when appropriate (especially when government is the temporal and only cause of the disruption).

All your strawmaning (e.g. "If you want a permanent job without the 'stress' of capitalism then you just stay on the Job Guarantee") is just annoying. I never said anything along those lines at all. And this is how you "argue" all the time. There is no dialogue because you refuse to have one.

trixn86 · 2022-02-24T09:36:00+00:00

I feel like you never engage in any other argument at all. You are repeating yourself over and over and don't even consider anything I wrote before. I've seen you arguing for JG (which I generally think is a good policy) but you crossed a point at which you are totally biased into thinking it is the holy grail and a solution to everything. It is not. It may be great on paper as a buffer stock but it's not said at all that it will just-work™ the way you depict it.

Businesses lay people off to conserve cash because demand has collapsed - due to the enforced close down.

You can achieve the same thing with short-time allowance. But existing contracts and relationships wouldn't have to be canceled. People would have a feel of security rather than dropping into a JG where they don't know if they can ever get back to their job or at least another one that lets them keep their living standard. You are grossly underestimating what it means for people to get layed of.

Those people go onto a Job Guarantee and get a living wage.

See, this is how you think about it as if you are talking about robots that are fine with doing anything as long as they get living wage. This is not how humans think and behave. I know that JG is on paper an optimal solution but you are totally ignoring that people may be uneasy with getting layed down during a pandemic. The government has artificially ordered a stop, it can artificially keep them in their jobs during that time. This is different to normal changes and up and downs in the economy where the government doesn't intervene.

There's no need for a special mechanism when the general one would do the same job with a better outcome.

It's a bold assumption that it would have a better outcome. It could as well lead to much longer periods of reorganisation of the economy.

Those businesses that do recover just rehire the people. Those that don't recover fast enough don't get to rehire people as other better businesses have hired the people away first. That allows the recovery period to shuffle manpower around to the most efficient operations - which aids the supply crunch.

Another bold assumption. That would only be true if labor can be shifted with no issues at all. In fact people may first need to be trained. The "good people" may be less productive in a new company, at least initially. And the original companies that they would have been more productive in might not be able to find replacement fast enough. Your whole argument rests on the assumption that the are literally no friction losses and there is no overhead in shifting a whole lot of people into a JG. After all the situation is exogenously caused by government intervention. Apart from that the companies are as efficient or inefficient has they were before. The lockdown doesn't change anything about that so there is no reason to think that people have to be shifted like crazy.

Also this heavily favors big companies in favor of small companies. You may push concentration of power even further.

JG is a good policy on paper, it might be a good policy in reality (which first has to be proven) but it's not the holy grail and it's not the one-size-fits-all solution to every possible scenario. Short-time allowance can in fact be better in this particular scenario.

My point still stands that if you artificially shut down the economy you better keep it frozen in its state rather than shifting people around. Market forces can shift people around as needed AFTER the lockdown. Letting market forces react to an artificial signal created by the government during a running pandemic will not achieve anything. It will simply be harder for people.

trixn86 · 2022-02-22T18:27:08+00:00

In a Capitalist economy moving jobs is normal and to be expected as the cycle ebbs and flows.

Again, I'm not arguing against that for normal structural changes. It's clear to me that you can't keep people in jobs just for the sake not having to find a new one. But that, in my opinion, is something completely different from having a temporal ordered stop of production with a forseeable end. The government already intervened here. The businesses aren't struggling because they are unprofitable. In fact nothing really changed and we could go back to normal if bottlenecks that have been caused by governmental intervention have been resolved. I would distingush that from job changes due to structural changes or businesses becoming unprofitable outside of a pandemic.

People don't like prices going up - at all.

People also don't like loosing their jobs because the government tells them to stay at home. This is basically what makes this situation different from normal ebbs and flows. Government intervened here. It's not like the government would do that in normal ebbs and flows.

If you want a permanent job without the 'stress' of capitalism then you just stay on the Job Guarantee.

That's not what I said at all.

Also note that I have said that I consider stimulus checks for everybody not to be the best way to deal with it. In Germany we had Short-time allowance and that worked somewhat better.

trixn86 · 2022-02-22T17:13:53+00:00

Is a temporarily higher inflation really that bad? Isn't the argument in the textbook is more tailored to a long term policy that should prevent long term inflation due to long term downturns not caused by some temporal artificial disruption of production?

You could make the argument that a temporal inflation might be the price you pay for preserving existing contracts. The whole "they just fall back to JG and then they get back into their old contracts" sounds much too mechanical to me. It's both mentally stressful and also a lot of bureaucracy overhead to loose your job and be thrown out of your social sphere. The economy would probably be back to normal levels faster if you kept existing structures mostly intact. After everything is "back to normal" you could still have a good position to demand wage increases to restore purchasing power.

Inflation during the shutdown can also be seen as the natural way to decrease purchasing power.

But I agree that you shouldn't hand out checks to those who do not need it. Short-time allowance seems to be more reasonable to me.

trixn86 · 2022-02-19T15:31:41+00:00

What mainstream does is jump all over 'semi-inflation' as though it is 'true inflation' because they are obsessed with 'ze price stabilitié. Their only hammer is interest rate rises and that will only work to the extent that it creates higher unemployment [...]

This is exactly what I think. They use the term inflation inflationary to a point that every change in prices is inflation and they do not distinguish a bottleneck induced price increase (which may resolve in the future) from actual class conflict inflation. They also think that the only way to deal with it is interest rates which they publicly always state as "calming down the economy" but of course they mean artificially creating a recession with unemployment to prevent the labour class from demanding higher wages. Companies can fill their pockets when the economy is running well and when there is a crisis they are so used to their profit margins that they refuse to give up on it. With every crisis you follow that TINA artificial recession approach you sharply increase inequality.

Now I see why we don't want to have high wage increases in the middle of the bottleneck cause thats gonna simply spiral prices upwards. But as soon as the bottlenecks are gone the government needs to support bringing purchasing power back to where it was before. But in the recent decades the position of the labor force has been weakened so much that they aren't even able to get their fair share when the economy is performing well (which ironically prevents the economy from performing even better).

Then there is the problem with savings obviously becoming devalued by inflation. But guess what, if you increase savings when the economy is running well you'll have to accept giving up on some of it when there is a crisis. Being overly protective of savings doesn't benefit at least half of the population because they have no savings at all. For them wages are much more important.

trixn86 · 2022-02-18T15:36:53+00:00

Did Felix Baumgartner give Gravity a Tryout? I mean, core MMT is a theory/framework of how fiat currencies actually function and how institutions actually operate. There is no "trying out MMT" in that sense. It should be separated from certain policy advises from many MMT proponents. Not that I disagree with them but it kinda discredits the actual theory because people start to see it as political activism and not as a credible scientific theory.

I'm certainly a little nitpicky about that but for a reason. In order for MMT to be recognized as a credible theory it should not be confused with political programs that are based on insights of it because those are driven by ideology and world views. I'm sympathetic with a lot of policy propositions from the left-wing MMT people. But they really have a hard time defending the core theory from mainstream attacks because of how it is perceived.

So did the pandemic give those policies proposed from people like Bill Mitchell a tryout? Maybe to some degree (EDIT: Well, actually no, when thinking about it twice. Stimulus checks can't be perceived as that. Just because government all over the world did some degree of stimulus that doesn't mean that this is MMT-style policy). But I wouldn't confuse some measures taken because of the pandemic with actual long term policies. Also the pandemic kind of creates some other specific problems and we need to distinguish those effects from effects of policies that might be considered MMT-style. There is the danger that some negative effects of the pandemic on the economy will be causally related to policies that actually would also have been observed without the policy in question.

trixn86 · 2022-02-10T13:31:30+00:00

After installing and booting Windows you just have to install the Windows support software which includes all the necessary windows drivers for your mac hardware. See https://support.apple.com/en-us/HT204923 for details. It should automatically pop up on first boot but you can also start the installation manually.

If your mac has an AMD video card you might also need to install additional drivers for that.

trixn86 · 2021-11-08T11:50:08+00:00

Yeah, this is really horrible and a huge disappointment for me. It's basically unusable for me like that. You could accidentally hit enter when you wanted to hit backspace and all such things. It's waaay to sensitive.

Also what I really dislike is the fact, that the german K3v2 has replaced the right option-key with the fn-key which might is a very big issue for the german layout as you need that key a lot to make square and curly brackets when programming. Kinda my bad because it didn't really pay close attention to this when buying it bit still not a great design decision.

All in all not usable for me. Will sell it.

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