Why do we measure inflation in dollars, instead of in hours of labor?

[imagep]

I am sure that during the recent Great Recession what you describe happened. But no employment-contract on earth stipulates employment forever.

During any contraction of business volume, it is simple management practice to adjust production to level of demand for products/services. If that means getting rid of workers, it produces layoffs.

There is no simple way to get around that "law of the jungle" ... the best logic is to avoid the worst.

The Replicant Party must reform itself around other values ...

So, I say, be careful about the Replicant Party that refused Stimulus Spending the objective of which was to sustain Economic Demand, thus preserving employment with the objective if increasing it.

This party was wicked to have refused spending that would have created jobs, just for the sake of unseating a PotUS they disliked immensely. That sort of political nonsense is decidedly NOT "fair play".

Which is why America is going down the tubes. When emotion takes the place of good reason in politics, then the worst happens ...
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I agree 100%.

 

[austrianecon]

Actually, that would be 95.87%.

Yes but the buying power of that $1 from 1913 is 2419% which is where I was heading.

 

[austrianecon]

Unless they get fired and try to get back to work at the same general wage-rate.

They got fired. So would fit into the category of unemployed. Thus not part of the sticky wage crowd.

There is no Economic Law on earth that dictates that wages must be either forever constant or growing.

And nobody is saying it does but there is an ABSOLUTE floor in the lower spectrum of wages and that's minimum wage laws.

Labor is most often the "key" input to the production process (of economic goods and services); and like material or energy is subject to the laws of Supply & Demand. It is we humans who think that wages must always go up and never down. Those, that is, who do not understand the immutable law of Supply & Demand even for Labor inputs to any commercial activity.

I am not disputing most of this. All I said, which is an economic fact, that those who stay employed (meaning never laid off) in recession period have sticky (set) wages which will NOT decline in a recession period. But again, Labor is actually defined by supply and demand as well. So in recession periods when layoff happen the most, the largest drop in wages is seen. Keynes central theme for boosting AD is because of the phenomenon known as sticky wages with in the supply and demand world.

What's an economy to do, especially in terms of policy? Market Oversight authorities can help by making sure that a market-economy is fair and equitable. That is, that no "illegal manipulation" of either input to the market of Supply or Demand occurs. As the US failed to do with in the Personal Computer Market explosion of the 1980s.

And this is the 2010s. EU ( ECC at the time didn't either).

My Opinion: America failed miserably at the task of allowing dual Operating Systems to compete in a wholly new market for Personal Computers. It did this when Oversight Authorities should have interfered with the outcome of CP/M in its version as DR-DOS (that belonged to Digital Research) to compete with Microsoft's MS-DOS by directing that both Operating Systems be purchased as PC Operating Systems by the US government. Instead of letting it become "absorbed" by Microsoft. This is, I suggest, a prime-example of Market Oversight Failure to promote competition on the part of governments.

Which underlines the key-fact of any particular market having truly multiple- and competitive-players, and which does NOT consolidate into just two or three (where connivance becomes possible).

No, regulators didn't fail there. MS-DOS was the better system at the time and offered better deals to it's buyers who bought in large quantities (IBM via US Government). The Government could order to violate contract law without having to pay Microsoft.

I don't recall at any moment that anybody at the Federal Trade Commission or the DofJ ever evoked this premise as a key to market-oversight and control by any government authority. The most recent example being that the neither the FTC nor the DoJ tried to prohibit the massive consolidation in Banking pre-2008 ...
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Because the premise is actually pointless. US Government can't break contract law without it being tied up in court for decades unless it's a case of anti-trust. Microsoft was hit with an Antitrust lawsuit over it's IE in what is the "browser wars". Microsoft lost and reached a settlement which is why we can now use Firefox, Chrome and whatever browser you use on Microsoft OS.

 

[austrianecon]

I am sure that during the recent Great Recession what you describe happened. But no employment-contract on earth stipulates employment forever.

During any contraction of business volume, it is simple management practice to adjust production to level of demand for products/services. If that means getting rid of workers, it produces layoffs.

There is no simple way to get around that "law of the jungle" ... the best logic is to avoid the worst.

The Replicant Party must reform itself around other values ...

So, I say, be careful about the Replicant Party that refused Stimulus Spending the objective of which was to sustain Economic Demand, thus preserving employment with the objective if increasing it.

This party was wicked to have refused spending that would have created jobs, just for the sake of unseating a PotUS they disliked immensely. That sort of political nonsense is decidedly NOT "fair play".

Which is why America is going down the tubes. When emotion takes the place of good reason in politics, then the worst happens ...
__________________

What values must it reform itself too? The values of the DNC which picked winners and losers in Green Energy schemes? That caused people to get laid off? Or a Stimulus bill that didn't actually only saved certain jobs over others such as Government workers over private workers who competed with Government employees (charter schools) or Obama and DNC's position to kill Coal jobs that have effected Ohio, West Virginia, PA, Kentucky, Wyoming, and Colorado in which these states have lost a total of 50,000 high paying jobs in 5 years (2010-2015)?

You have little clue what is really happening in the US and this is the reason that an asshat like Trump could really become President in the US. The Democrats pushed too far left. Now we are gonna end up pushing too far right. In the end real people are gonna get screwed because Politicians and activist wanted their plan done and screw the rest.

Imapeg can tell you.. I am open to many ideas on spending money on the right things that needs to be spent on (it's gotta make sense) and not picking winners and losers in the grand scheme. So I am not against spending, I am against stupid spending. Don't like picking winners or losers but favor contract law.

 

[RetiredNSmilin]

In the Navy, because we visited many different ports in many different countries we had a pretty good system of gaging costs and inflation.

1. How much for a beer

2. How much for a short time.

Those two were very accurate and effective in gaging the local economy.

Once in Naples, Italy the first day a beer was 2,000 Italian lira(sp). By day five it was over 9,000.

When I was on carriers I thought the prices I paid were normal. Then when I was on a frigate, I could not believe how cheap things were. A carrier and her escorts bring something like 10,000 sailors to the port, much like a convention being in town. When I was on a frigate, we had many 200 sailors, so we really were not enough people for them to raise their prices.

Now that I am happily married she "loves me long time". No more "short time" for me.

 

[gavinfielder]

Yes but the buying power of that $1 from 1913 is 2419% which is where I was heading.

Either your phrasing is wrong or you're thinking of it backwards. 2419% would be the case if we took a dollar from 2015 and took it to 1913, but that's thinking about inflation in reverse, which is just silly. The buying power of $1 from 1913 to 2015 is the inverse 1/24.19 = 4.13%, and 100 - 4.13 = 95.87% would be the buying power it has lost from 1913 to 2015.

 

[Lafayette]

You have little clue what is really happening in the US and this is the reason that an asshat like Trump could really become President in the US. The Democrats pushed too far left.

A distortion of facts. (I.e., BS)

Obama brought America back from a Great Recession the origins of which (Toxic Waste) were in Lead-head's Administration, which Dubya let happen right under his nose. Obama spiked Unemployment at 10% (with Stimulus Spending in 2009/10), when it could have reached Great Depression proportions (around 15%).

I am open to many ideas on spending money on the right things that needs to be spent on (it's gotta make sense) and not picking winners and losers in the grand scheme. So I am not against spending, I am against stupid spending.

We are all against "stupid spending". That's easier said than done,however, in our system of governance that is highly politicized.

What we disagree over is the fact that Stimulus Spending (of any kind whatsoever) adds compensation-revenues to consumer-pockets with which they start-spending, and thereby the economy recovers.

Obama's ARRA-bill Stimulus Spending in 2009 is how the Unemployment-to-population Ratio was stopped dead at 10%, because consumers started spending once again sufficiently for companies to stop firing people after 2009/10.

But without Stimulus Spending absolutely nothing happens and the economy moves sideways.. Which is what happened after 2010, when the Replicants took control of the HofR.

Stimulus Spending is one whole helluva lot better than the mindless "Austerity Budgeting" spouted by the Replicants in the HofR as a reason to "cure budget indebtedness". Of which there was no real need, since:
*Only new-spending by consumers allows tax-receipts as a result of income- and sales-taxes to the Treasury, and
*America is lucky to have a Reserve Dollar, so countries holding it will tend to keep it rather than sell-off dollars - since they know that once the economy recovers budget maintenance, ipso facto, recovers as well. Which is what has happened.

Yes, our debt is still "too high" - but if the question is "The Awesome Budget" or "The Awesome Unemployment", the HofR after 2010 should (but did not) opt to address the latter. Which is why the US took FOUR MORE YEARS before the economy started to add jobs in 2014 due to Replicant intransigence in the HofR.
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[austrianecon]

Either your phrasing is wrong or you're thinking of it backwards. 2419% would be the case if we took a dollar from 2015 and took it to 1913, but that's thinking about inflation in reverse, which is just silly. The buying power of $1 from 1913 to 2015 is the inverse 1/24.19 = 4.13%, and 100 - 4.13 = 95.87% would be the buying power it has lost from 1913 to 2015.

I am thinking of it from the perspective, if I have $1 from 1913, what could I buy with it today vs how many dollars today would I need to buy something in 1913. I need $24.19 to buy something for $1 in 1913.

 

[Riveroaks]

Is there a published metric for units of production purchased by a specific unit of labor? I mean is that like a "thing"?

I brought this up in a earlier thread, and the idea was pretty much poo pooed, but the purchasing power of the median labor hour seems to be a much better metric than inflation for measuring our economic health. Is there a name for this? If not, can I claim the concept as my very own and get an award or something?

Anyone got a suggestion on what I should name this concept? Maybe PPPMWH (Purchasing Power Per Median Work Hour). Or 3PH for short? How about 3CPO, no, that conjures up images of a gold tin man.

Straw man.

We do not measure inflation in "dollars" we measure it in %'s or as an index quotient with a certain given base year.

 

[austrianecon]

A distortion of facts. (I.e., BS)

Obama brought America back from a Great Recession the origins of which (Toxic Waste) were in Lead-head's Administration, which Dubya let happen right under his nose. Obama spiked Unemployment at 10% (with Stimulus Spending in 2009/10), when it could have reached Great Depression proportions (around 15%).

Obama didn't bring American back from anything. What you fail to understand that Obama stimulus didn't improve the US economy at all during it's program life span. Unemployment never fell below 9% while the Stimulus was running.

We are all against "stupid spending". That's easier said than done,however, in our system of governance that is highly politicized.

What we disagree over is the fact that Stimulus Spending (of any kind whatsoever) adds compensation-revenues to consumer-pockets with which they start-spending, and thereby the economy recovers.

No, we slightly disagree on this. I'd rather see $1t spent on infrastructure rebuild then do little $100,000 projects to plant trees in a neighborhood (as that **** can be done for cost of tree and a citizen(s) caring).

Obama's ARRA-bill Stimulus Spending in 2009 is how the Unemployment-to-population Ratio was stopped dead at 10%, because consumers started spending once again sufficiently for companies to stop firing people after 2009/10.

But without Stimulus Spending absolutely nothing happens and the economy moves sideways.. Which is what happened after 2010, when the Replicants took control of the HofR.

Really? So since 2011 when Republicans stop Obama spending cold in it's tracks the US economy is still sitting 9% unemployment right?

Stimulus Spending is one whole helluva lot better than the mindless "Austerity Budgeting" spouted by the Replicants in the HofR as a reason to "cure budget indebtedness". Of which there was no real need, since:
*Only new-spending by consumers allows tax-receipts as a result of income- and sales-taxes to the Treasury, and
*America is lucky to have a Reserve Dollar, so countries holding it will tend to keep it rather than sell-off dollars - since they know that once the economy recovers budget maintenance, ipso facto, recovers as well. Which is what has happened.

Yes, our debt is still "too high" - but if the question is "The Awesome Budget" or "The Awesome Unemployment", the HofR after 2010 should (but did not) opt to address the latter. Which is why the US took FOUR MORE YEARS before the economy started to add jobs in 2014 due to Replicant intransigence in the HofR.
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I think you should look at US growth since 2011 and Republican budget "cuts".

 

[Lafayette]

Obama didn't bring American back from anything. What you fail to understand that Obama stimulus didn't improve the US economy at all during it's program life span. Unemployment never fell below 9% while the Stimulus was running.

And what you fail to understand is the underlying forces (stimulus spending of the ARRA-bill in 2009, aka "The Recovery Act*") that spiked the historical Unemployment Rate at 10% in 2010, as shown here:

.

Which further stopped the descent of the Unemployment-to-Pöpulation Ratio at 58.5% as shown here:

.

Furthermore, you are blind to the fact that, with the HofR in the hands of the Replicants (as of 2010) they refused all further stimulus-spending; which is why the E-to-P ration stagnated at around 58.5% for a further four lonngggggg years.

Bravo, the Replicants! You (plural) really have the American worker's interests at heart!!!

*From WikiP, about ARRA:

The approximate cost of the economic stimulus package was estimated to be $787 billion at the time of passage, later revised to $831 billion between 2009 and 2019. The Act included direct spending in infrastructure, education, health, and energy, federal tax incentives, and expansion of unemployment benefits and other social welfare provisions. It also created the President's Economic Recovery Advisory Board.

The rationale for ARRA was from Keynesian macroeconomic theory, which argues that, during recessions, the government should offset the decrease in private spending with an increase in public spending in order to save jobs and stop further economic deterioration. Shortly after the law was passed, Nobel laureate Paul Krugman, while supportive of the law, criticized the law for being too weak because it did not "even cover one third of the (spending) gap".

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[DA60]

Why?

Because the word 'inflation' means:

'Economics. a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency'

Inflation | Define Inflation at Dictionary.com