What plan for the upcoming inflation?

[Pliny]

I understand what you're saying about bailouts, and fully agree. If an industry is outdated, let it fall. As for the human costs, we can always retrain the workers for new industries, but there's no point in maintaining the horse and buggy industry just to preserve jobs.

Not just outdated but poorly managed as well, such as GM which results in an inefficient use of materials. They basically became a finance company that made cars on the side.

[msj]

Time for an update from John Mauldin on this issue.

As Dennis Gartman is quoted:

“Effectively the Fed had become a cash machine rather than a monetary expansion machine. At the end of last year, the multiplier had actually fallen to less than 1.0 and the trend remains downward. If anyone had told us five years ago that the money multiplier would be down to 1.0 we would have laughed. The laugh, however, would have been upon us, for it is there and it is still falling. Hard it shall be to sponsor strong economic growth when no one really wants to take a loan or when few banks want to make a loan. The “game” of banking has been turned upon its head, and the strength of the economy suffers while inflationary pressures (at least for now) remain virtually non-existent.”

See: So Where's the Inflation?

So far, John Mauldin has been very smart on this issue while many other "experts" haven't been. And that has important implications for any government that is trying to "plan" for any upcoming inflation.

If you don't listen and plan for what many different "experts" say could happen, and if you fail to recognize which scenario is the best solution to the problem, then what does it matter that you made a plan in the first place?

Given that few people seem to have even a small clue for what has happened in the US (John Mauldin, Barry Ritholtz, Calculated Risk, Yves Smith, Nouriel Roubini and a few others have a clue - all of them are better known as blogsters rather than MSM guys) I really don't have much confidence in anyone else in government, or the private sector for that matter, planning their way out of a wet paper bag.

Edited February 27, 2010 by msj

[bloodyminded]

If you know what the government is going to do you can plan for the consequences.

About your signature.

Sterilization was a legally sanctioned practice in several provinces during the thirties and the Alberta sterilization act wasn't repealed until 1972.

It is interesting to note that it was enacted as a preventative measure to the expensive warehousing of mental patients, derelicts and such. Eugenics was a popular science especially among governments during the first part of the 20th century. Socialism, in all it's collectivist forms, and engineered societies were all the rage. It is true many people were abused by the system.

So they were just trying to prevent bad genes from being passed on and curtail future burdens to the State.

This is an example of what socialism is about. Do you think it is wise to support a centralized power that can be abused where the "cures" for societies ills are more than often worse than the disease?

You're right that eugenics was embraced by left-leaning types. Shamefully. But you overgeneralize from this--presumably using Goldberg's discredited "Liberal Fascism" thesis.

Goldberg doesn't understand fascism, or liberalism, or the left. Real historians--including scholarly experts in fascism--very compeltely tore his politicized little anti-left screed to shreds. Including his interesting omissions--like fascism's tight allegiance with conservative factors of society, just as the fascists and the left turned away from each other.

Unfortunately, non-historians who are predisposed to hate the left have been gobbling it up. But they're ignorant.

Edited March 3, 2010 by bloodyminded

[Pliny]

You're right that eugenics was embraced by left-leaning types. Shamefully. But you overgeneralize from this--presumably using Goldberg's discredited "Liberal Fascism" thesis.

Goldberg doesn't understand fascism, or liberalism, or the left. Real historians--including scholarly experts in fascism--very compeltely tore his politicized little anti-left screed to shreds. Including his interesting omissions--like fascism's tight allegiance with conservative factors of society, just as the fascists and the left turned away from each other.

Unfortunately, non-historians who are predisposed to hate the left have been gobbling it up. But they're ignorant.

Eugenics was embraced by socialists of the left and the right.

Unfortunately, invoking the term "scholarly experts" doesn't discredit Goldberg. History is history. The fact remains that the roots of right wing fascism can be found in left wing socialism. Fasicism may be called Corporatism but it is just a different term for government control of the economy.

[bloodyminded]

Eugenics was embraced by socialists of the left and the right.

Unfortunately, invoking the term "scholarly experts" doesn't discredit Goldberg. History is history.

I didn't say that invoking the term "scholarly experts" discredits Goldberg. I said scholarly experts dicredit Goldberg.

Those whose career endeavour revolves around the study of fascism say that Goldberg is wrong. In fact, catastrophically wrong.

Robert O. Paxton, professor emeritus at Columbia University and the author of The Anatomy of Fascism, leads off the essays with "The Scholarly Flaws of Liberal Fascism."

Roger Griffin, professor of political science at Oxford Brookes and the author of The Nature of Fascism, has a piece titled "An Academic Book - Not!"

Matthew Feldman, professor of history at University of Northampton, and a co-editor of several academic texts on fascism, offers his assessment on why refuting Goldberg still matters: "Poor Scholarship, Wrong Conclusions".

Chip Berlet, senior researcher at Political Research Associates and the co-author (with Matthew Lyons) of Right-Wing Populism in America: Too Close for Comfort, has penned a history of Goldberg's arguments, "The Roots of Liberal Fascism: The Book."

http://www.huffingtonpost.com/david-neiwert/historians-vs-jonah-goldb_b_435881.html

There are links to the precise arguments by the historians against Goldman's thesis. And they demolish it.

The fact remains that the roots of right wing fascism can be found in left wing socialism.

In part. It also has as its foundation a deep-rooted conservatism, to the point of being outright reactionary. Fascism found its primary niche among the right, not the left.

Edited March 13, 2010 by bloodyminded

[Pliny]

Time for an update from John Mauldin on this issue.

As Dennis Gartman is quoted:

“Effectively the Fed had become a cash machine rather than a monetary expansion machine. At the end of last year, the multiplier had actually fallen to less than 1.0 and the trend remains downward. If anyone had told us five years ago that the money multiplier would be down to 1.0 we would have laughed. The laugh, however, would have been upon us, for it is there and it is still falling. Hard it shall be to sponsor strong economic growth when no one really wants to take a loan or when few banks want to make a loan. The “game” of banking has been turned upon its head, and the strength of the economy suffers while inflationary pressures (at least for now) remain virtually non-existent.”

See: So Where's the Inflation?

So far, John Mauldin has been very smart on this issue while many other "experts" haven't been. And that has important implications for any government that is trying to "plan" for any upcoming inflation.

If you don't listen and plan for what many different "experts" say could happen, and if you fail to recognize which scenario is the best solution to the problem, then what does it matter that you made a plan in the first place?

Given that few people seem to have even a small clue for what has happened in the US (John Mauldin, Barry Ritholtz, Calculated Risk, Yves Smith, Nouriel Roubini and a few others have a clue - all of them are better known as blogsters rather than MSM guys) I really don't have much confidence in anyone else in government, or the private sector for that matter, planning their way out of a wet paper bag.

You are right to suspect the MSM or government (aren't your blogsters members of the private sector?)in planning economic matters. Basically it depends upon the economic theory the businessman or economist cleaves to that determines how right they are.

As for inflation, which is in essence an increase in the money supply, either through currency itself or credit, derivatives can't be written off fast enough. The huge credit expansion that the housing bubble created is mainly held by Fanny Mae and Freddie Mac. The government keeps on pushing banks to expand credit, make loans and float the economy but it isn't happening. I think a lot of people are in kind of limbo waiting to see what government is going to do next. Pity, it amounts to lack of confidence in government to make correct decisions or any decision. Barack seems to be on a course to spend America out of it's problems. Americans, I think, understand this isn't a correct plan.

But as the American dollar loses value we are starting to see some inflationary tendencies and if Obama doesn't change course it will really take hold.

[msj]

You are right to suspect the MSM or government (aren't your blogsters members of the private sector?)in planning economic matters. Basically it depends upon the economic theory the businessman or economist cleaves to that determines how right they are.

As for inflation, which is in essence an increase in the money supply, either through currency itself or credit, derivatives can't be written off fast enough. The huge credit expansion that the housing bubble created is mainly held by Fanny Mae and Freddie Mac. The government keeps on pushing banks to expand credit, make loans and float the economy but it isn't happening. I think a lot of people are in kind of limbo waiting to see what government is going to do next. Pity, it amounts to lack of confidence in government to make correct decisions or any decision. Barack seems to be on a course to spend America out of it's problems. Americans, I think, understand this isn't a correct plan.

But as the American dollar loses value we are starting to see some inflationary tendencies and if Obama doesn't change course it will really take hold.

Nope, you still don't get it.

[maple_leafs182]

I've said this a few times already, we are living The Greatest Depression right now.

engineered...

Obama is nothing but a puppet in this puppet show we call politics. It seems to keep most of us entertained. Kinda distracts us from the real problems though.

The military industrial complex profits from wars.

[bush_cheney2004]

I've said this a few times already, we are living The Greatest Depression right now.

engineered...

Nope....methinks you wouldn't recognize a real "Greatest Depression" compared to what you are trying to preserve.

Obama is nothing but a puppet in this puppet show we call politics. It seems to keep most of us entertained. Kinda distracts us from the real problems though.

Obama is the president of a foreign country....if you need him to save your ass either way, you are already doomed.

The military industrial complex profits from wars.

Most definitey....and farmers profit from hunger.

[Bonam]

I've said this a few times already, we are living The Greatest Depression right now.

Greatest depression ever eh? I'm finding it oddly prosperous.

[maple_leafs182]

Nope....methinks you wouldn't recognize a real "Greatest Depression" compared to what you are trying to preserve.

We'll see.

Obama is the president of a foreign country....if you need him to save your ass either way, you are already doomed.

I do not need him to save my ass.

Most definitey....and farmers profit from hunger.

you mean agri-giants profit from hunger.

Greatest depression ever eh? I'm finding it oddly prosperous.

Trillions have been pumped into the economy world wide, it's only temporarily prosperous.

We live in a time where corporate/political/banking oligarchs control the world.

[bush_cheney2004]

....We live in a time where corporate/political/banking oligarchs control the world.

Would you mind explaining the much "happier" times when they didn't "control the world"? Just what do you have in mind that would be "better" besides worrying about whatever Obama is doing?

[Pliny]

Those whose career endeavour revolves around the study of fascism say that Goldberg is wrong. In fact, catastrophically wrong.

The trouble is he isn't wrong.

I read Paxtons diatribe against Goldberg and if Goldberg had nothing to say or was totally wrong Paxton wouldn't bother to comment. It wouldn't be worth his time.

Obviously, Goldberg speaks some sooth. Paxton seems to forget the definition of the term Conservative in his critique.

Simply said, the left/right political spectrum offers no insight into why the extremes are both socialist yet are apparently opposites. It is true they will fight each other but totalitarians of any stripe are not about to share power.

There are links to the precise arguments by the historians against Goldman's thesis. And they demolish it.

These left-wing academics have a lot to lose. I see why they are mobilizing against Goldberg. He simplifies their "science" too much.

Who cares if it is left or right that is promoting big government. They are progressives/socialists and progressives/socialists are not limited to liberals or conservatives. Liberals used to be about small government and conservatives were, and have always been about, the maintaining of the status quo. If there is a communist government in power conservatives would be communists. Paxton at least acknowledged Goldberg's correct description of "classical liberalism". The socialists did highjack the term liberal since liberals were not about "conserving" the status quo which by definition excluded socialist ideology.

Once we have achieved a certain level of social liberalism they will become the new conservatives wishing to maintain the status quo and the liberals will be the old conservatives. This keeps the general public confused enough about politics that they just throw up their hands in frustration. "How come Republicans are growing government faster than the Democrats? It just doesn't make sense"

In part. It also has as its foundation a deep-rooted conservatism, to the point of being outright reactionary. Fascism found its primary niche among the right, not the left.

Fascism is a totalitarian "socialist" ideology. Left and right, as you have said yourself, are irrelevant.

[maple_leafs182]

Would you mind explaining the much "happier" times when they didn't "control the world"? Just what do you have in mind that would be "better" besides worrying about whatever Obama is doing?

That's the problem, I can't tell you a time where we didn't live under the control of Oligarchs.

As for better, Freedom.

No more patent or copyright laws.

No more war on drugs.

No more debt slavery.

Can't you guys see threw their poor disguise.

They don't want to see us unite:

All they want us to do is keep on fussing and fighting.

They don't want to see us live together:

All they want us to do is keep on killing one another.

-Bob Marley, Top Rankin'

Edited March 15, 2010 by maple_leafs182

[bush_cheney2004]

That's the problem, I can't tell you a time where we didn't live under the control of Oligarchs.

But I can, and it wasn't all peaches and cream. That's the problem with ideas like yours....they were tested in the 20th century and failed miserably.

As for better, Freedom.

No more patent or copyright laws.

No more war on drugs.

No more debt slavery.

Can't you guys see threw their poor disguise.

No....there is too much smoke from that big-ass blunt.

[Bonam]

No more patent or copyright laws.

That would destroy the incentive for innovation, research, and development. Why invest millions or billions of dollars in developing something new only to have it get immediately copied by a competitor who themselves did not sink the research cost?

No more war on drugs.

Sure. More worthless people on drugs just means less competition for the rest of us.

No more debt slavery.

Don't borrow if you don't feel like having debt. Seems simple enough to me.

[Pliny]

That would destroy the incentive for innovation, research, and development. Why invest millions or billions of dollars in developing something new only to have it get immediately copied by a competitor who themselves did not sink the research cost?

That happens now.

I think the absence of copyright and patent laws deserves looking into. Innovation, research and development may lose monetary incentives but curiosity will never die.

Certainly, the right people should profit from their work but should millions or billions be the incentive?

I haven't fully studied the arguments for and against the protection of intellectual property rights but is an "idea" property and would patent and copyright laws then prevent people from having the same idea as someone else? Those laws may themselves kill the incentive to pursue invention.

Fear that an idea will be stolen is why intellectual property rights exist but those same IP rights seem to be rather ineffectual in protecting the inventor instead having the system rip him off.

Sure. More worthless people on drugs just means less competition for the rest of us.

Well, I think before drugs are legalized, I agree they should be, we should place a little more empahasis and value on what's important in our lives. If drugs destroy lives we would do best to not abuse them. Use and abuse are different things.

The abuse of drugs often leads to death.

Don't borrow if you don't feel like having debt. Seems simple enough to me.

Like, don't abuse drugs if you value your life.

Our governments have indebted us, and future generations, to them. Mostly by debasing our money. Do we feel satisfied when we have collected enough fiat tokens to purchase what we need or do we feel we have to spend them for what we want and before they disappear under our noses. If we had real money and it was our property not to be taxed away just because we worked to collect some then we would feel less like slaves and we could hold real "savings".

Edited March 16, 2010 by Pliny

[Bonam]

That happens now.

I think the absence of copyright and patent laws deserves looking into. Innovation, research and development may lose monetary incentives but curiosity will never die.

You are right, curiosity will never die. But we live in a time where simple curiosity is almost never sufficient to come up with something new and useful. Developing something new and useful now takes large investments in facilities, equipment, personnel, etc.

Certainly, the right people should profit from their work but should millions or billions be the incentive?

The cost of development can be millions or billions or tens of billions, and the potential reward needs to reflect that or it will simply not be worth it. Patents have a fixed term to allow people to benefit from their innovation, after which they pass into the public domain. They can also be bought and sold.

I haven't fully studied the arguments for and against the protection of intellectual property rights but is an "idea" property and would patent and copyright laws then prevent people from having the same idea as someone else? Those laws may themselves kill the incentive to pursue invention.

No, the idea is not property. When a patent is filed, the information becomes public. Anyone can read the information and, if they understand it, their brain will then contain the same idea. What is "property" is the right to the utilization of that idea for profit (and technically not for profit as well, though in practice you can use patented ideas for your own little experiments in your lab and no one will ever know or care).

Fear that an idea will be stolen is why intellectual property rights exist but those same IP rights seem to be rather ineffectual in protecting the inventor instead having the system rip him off..

]

That depends entirely on the inventor. Many startup companies, including several whose founders I personally know, have their intellectual property as their only real asset. They came up with an idea, patented it, and are working on developing it. Based on the idea and their exclusive rights to it, they can convince angel investors and venture capitalists to provide them funding. Some companies also make it their business simply to develop and sell (or license) intellectual property, rather than going to market with finished products, they can focus their entire company simply on research and development because the IP they produce is valuable enough in itself. Both of these scenarios are a huge boon for innovation.

Anyway if you are interested you should read up some on intellectual property, as it is quite an interesting topic.

Our governments have indebted us, and future generations, to them. Mostly by debasing our money. Do we feel satisfied when we have collected enough fiat tokens to purchase what we need or do we feel we have to spend them for what we want and before they disappear under our noses. If we had real money and it was our property not to be taxed away just because we worked to collect some then we would feel less like slaves and we could hold real "savings".

I'm honestly not at all sure what you mean here.

First: Our money is not debased. Spend a $1000 dollars today and the product you get will be vastly, almost incomparably, superior, to the product that money would have gotten you a decade or two ago. Look at computers, how does a $1000 computer bought today compare to a $1000 computer bought in 2000, or in 1990? Look at a $20,000 car and the features you get in it now, in terms of safety, comfort, etc, and compare that to a car from 1980 or 1990 - again, no comparison. Take a look at healthcare, what do we get now for the price we pay? Access to advanced procedures and technology, a variety of 3d imaging techniques, robotic surgeries with vastly reduced invasiveness and recovery times, etc. What did we get for the same price in the 50s or 60s? Certainly a lot less.

The point here is: the advancement of technology is a HUGE deflationary factor that absolutely dwarfs all inflationary forces in our economy. The quality and features and variety of products we can buy today for a given price is incomparably superior to that which was available in the past. The kinds of things most people have in their homes today are things no one would even have dreamed of 30 or 40 years ago.

Second: It is our choice what to do with our money, whether save or spend. If one is concerned with inflationary pressures but wants to save, they have many options, such as purchasing stocks or bonds, or even investing in fixed income instruments which still outpace inflation. One can also purchase hard assets with their money, such as real estate, or gold, or other commodities, things that retain their relative value to other goods and services over time.

Edited March 16, 2010 by Bonam

[Pliny]

You are right, curiosity will never die. But we live in a time where simple curiosity is almost never sufficient to come up with something new and useful. Developing something new and useful now takes large investments in facilities, equipment, personnel, etc.

I believe curiosity is sufficient. It provides the incentive to find the means.

Certainly large corporations are always looking for new products and investing millions and billions in research. How could someone without those vast resources be a threat to their intellectual property?

The cost of development can be millions or billions or tens of billions, and the potential reward needs to reflect that or it will simply not be worth it. Patents have a fixed term to allow people to benefit from their innovation, after which they pass into the public domain. They can also be bought and sold.

The thing is that expensive and convoluted patent and copyright laws are no guarantee, especially to someone without millions and billions, that he will benefit from his idea.

No, the idea is not property. When a patent is filed, the information becomes public. Anyone can read the information and, if they understand it, their brain will then contain the same idea. What is "property" is the right to the utilization of that idea for profit (and technically not for profit as well, though in practice you can use patented ideas for your own little experiments in your lab and no one will ever know or care).

Actually patent and copyright laws make an "idea" property. It is property that no one is allowed to profit from without consent of the owner. If two people on opposite sides of the world have the same idea at the same time, each unaware of the other, then whose property is it? The one that runs down to the patent office?

That depends entirely on the inventor. Many startup companies, including several whose founders I personally know, have their intellectual property as their only real asset. They came up with an idea, patented it, and are working on developing it. Based on the idea and their exclusive rights to it, they can convince angel investors and venture capitalists to provide them funding. Some companies also make it their business simply to develop and sell (or license) intellectual property, rather than going to market with finished products, they can focus their entire company simply on research and development because the IP they produce is valuable enough in itself. Both of these scenarios are a huge boon for innovation.

I don't see it that way. How does restricting the use of an idea to one person or company improve innovation? If there were any merit to an idea wouldn't thousands of researchers having access to the idea be more creative and conducive to innovation?

Wouldn't a patent kill someone's desire to do research along the patent lines?

Anyway if you are interested you should read up some on intellectual property, as it is quite an interesting topic.

What do you suggest?

It isn't that I haven't looked at it at all but I don't feel I have sufficient knowledge to make a good argument.

I plan on reading Against Intellectual Property by N. Stephen Kinsella when I can get to it.

It is available Here - My link

I'm honestly not at all sure what you mean here.

First: Our money is not debased.

I call the metamorphosis of a dollar gold coin containing a dollars weight in gold into a piece of paper stating it is a dollar (a dollar being a specific weight of gold or silver)a debasement of money. Paper was always a money substitute and never the money itself. Now it is.

If I had a dollar gold coin, for simplicity containing one ounce of gold, in 1970 it was worth $35 in government fiat dollars.Today that ounce of gold is worth over $1100 fiat dollars. I call that debasement of our money.

Spend a $1000 dollars today and the product you get will be vastly, almost incomparably, superior, to the product that money would have gotten you a decade or two ago. Look at computers, how does a $1000 computer bought today compare to a $1000 computer bought in 2000, or in 1990? Look at a $20,000 car and the features you get in it now, in terms of safety, comfort, etc, and compare that to a car from 1980 or 1990 - again, no comparison. Take a look at healthcare, what do we get now for the price we pay? Access to advanced procedures and technology, a variety of 3d imaging techniques, robotic surgeries with vastly reduced invasiveness and recovery times, etc. What did we get for the same price in the 50s or 60s? Certainly a lot less.

The free market and competition certainly does provide us more today. Comparing something you buy today that wasn't available ten or twenty years ago isn't a fair comparison. The fact is my $1000 ten years ago would have bought me more of what was available at that time than my thousand dollars today. For twenty thousand dollars I could have bought four new medium priced cars in 1960 or two houses. Today I can buy one lower-medium priced new car for that and forget about buying a house for that.

The point here is: the advancement of technology is a HUGE deflationary factor that absolutely dwarfs all inflationary forces in our economy. The quality and features and variety of products we can buy today for a given price is incomparably superior to that which was available in the past. The kinds of things most people have in their homes today are things no one would even have dreamed of 30 or 40 years ago.

Your argument sounds logical that technology is a huge deflationary factor but you have to make the comparison of what a dollar will buy today and what a dollar bought a few decades ago to make it an honest comparison. A million dollars may have bought me a computer in 1960 but I would not have bought one if I had a million dollars or even a few million dollars back then. It would be an impractical and illogical purchase.

Second: It is our choice what to do with our money, whether save or spend. If one is concerned with inflationary pressures but wants to save, they have many options, such as purchasing stocks or bonds, or even investing in fixed income instruments which still outpace inflation. One can also purchase hard assets with their money, such as real estate, or gold, or other commodities, things that retain their relative value to other goods and services over time.

All your options to save involve a level of risk and a level of education to make correct and optimal decisions. The degree of risk stretches from Las Vegas to Government bonds. You know as well as I do that the higher the return on an investment the greater the risk. If you want to be real safe invest in Government bonds and GICs but they too are no guarantee if confidence in government is eroded and the returns are small. People will take greater risks and invest in things like mutual funds and blue chip stocks but there is no 100% guarantee you will increase your investment.

Buying commodities and assets like real estate can be risky but they are better than investing in other things. Once again you have to have a level of understanding of markets, economics and human behavior to minimize your risk on these investments.

In order to make it simple for the average person why not just have his money retain it's value or increase it slightly over time instead of eroding it's purchasing power and making it less valuable. Inflation and deflation are perhaps not desirable in perpetuity but inflation is the choice of governments for controlling price levels because they like to control price levels. Besides taxes you lose 2-4% per year in purchasing power on your dollar.

Edited March 18, 2010 by Pliny

[Bonam]

I believe curiosity is sufficient. It provides the incentive to find the means.

This is just not true. Is curiosity enough to develop, for example, fusion power? No, this takes billions of dollars of investment.

Certainly large corporations are always looking for new products and investing millions and billions in research. How could someone without those vast resources be a threat to their intellectual property?

The property rights protect that small someone without vast resources from the huge companies. If they weren't there, then the second that huge company got wind of some small inventor's good idea, they'd set up a production line and be churning out the product. Meanwhile the person whose idea it was could do nothing. A patent allows the person the exclusive right to develop it, and thereby makes it viable for individuals and smaller companies to try to develop new things.

The thing is that expensive and convoluted patent and copyright laws are no guarantee, especially to someone without millions and billions, that he will benefit from his idea.

No, not a guarantee. Nothing is guarantee. Someone could have exclusive rights to develop something and still fail to bring it to market in such a way as to make a profit. That happens all the time. But at least it gives them a chance, rather than being completely pre-empted by some large corporation that adopts their idea without any compensation.

Actually patent and copyright laws make an "idea" property. It is property that no one is allowed to profit from without consent of the owner. If two people on opposite sides of the world have the same idea at the same time, each unaware of the other, then whose property is it? The one that runs down to the patent office?

The idea is not property, it cannot be, since anyone can simply read a patent and their mind will contain the same idea. And the text of patents is publically available. The property is the right to use the idea. If people on opposite sides of the world have the same idea at the same time, then they will most likely go to patent it in their own country first. Each country has their own "patent office". You can patent something in the US but it will not be protected, in, for example, China.

In many countries, the ownership of the IP is indeed granted to the person that is "first to file". In the US, however, if multiple parties file a patent for the same thing, an investigation is carried out to determine who really thought of it first. Evidence such as engineering notebooks, emails, etc, can be looked at in such cases.

I don't see it that way. How does restricting the use of an idea to one person or company improve innovation? If there were any merit to an idea wouldn't thousands of researchers having access to the idea be more creative and conducive to innovation?

Wouldn't a patent kill someone's desire to do research along the patent lines?

I already identified why it encourages innovation. By having the chance to get exclusive rights to make profit from an idea, people are motivated to invest more time and energy into coming up with and developing these new ideas, since they wont simply be adopted (stolen) instantly and without compensation by someone with established infrastructure.

What do you suggest?

It isn't that I haven't looked at it at all but I don't feel I have sufficient knowledge to make a good argument.

I plan on reading Against Intellectual Property by N. Stephen Kinsella when I can get to it.

It is available Here - My link

I'm actually not sure what books to recommend. I learned about patent law in a course on engineering law during my undergrad. However, if you are interested, I would suggest also reading something with a more neutral viewpoint. "Against Intellectual Property" sounds like a book that will, obviously, try to convince you that IP is bad.

If I had a dollar gold coin, for simplicity containing one ounce of gold, in 1970 it was worth $35 in government fiat dollars.Today that ounce of gold is worth over $1100 fiat dollars. I call that debasement of our money.

The free market and competition certainly does provide us more today. Comparing something you buy today that wasn't available ten or twenty years ago isn't a fair comparison. The fact is my $1000 ten years ago would have bought me more of what was available at that time than my thousand dollars today. For twenty thousand dollars I could have bought four new medium priced cars in 1960 or two houses. Today I can buy one lower-medium priced new car for that and forget about buying a house for that.

That's my point. Compare that medium priced car you buy today with one you bought in the 60s. Today's car will be vastly more fuel efficient, more comfortable, packed with safety features and electronic gadgets. How much would you have to pay to buy such a thing in the 60s? Much much more than today, if it was even possible (certainly not the electronic gadgets).

Your argument sounds logical that technology is a huge deflationary factor but you have to make the comparison of what a dollar will buy today and what a dollar bought a few decades ago to make it an honest comparison. A million dollars may have bought me a computer in 1960 but I would not have bought one if I had a million dollars or even a few million dollars back then. It would be an impractical and illogical purchase.

Nevertheless the cost of all kinds of products, such as computers, has been plummeting on a per performance basis and will continue to do so. Consider for example hard drive cost per amount of data stored. Notice the logarithmic axis on the graph.

This is just one example. Almost every kind of technology is decreasing in cost in the same rapid, exponential, fashion.

All your options to save involve a level of risk and a level of education to make correct and optimal decisions. The degree of risk stretches from Las Vegas to Government bonds. You know as well as I do that the higher the return on an investment the greater the risk. If you want to be real safe invest in Government bonds and GICs but they too are no guarantee if confidence in government is eroded and the returns are small. People will take greater risks and invest in things like mutual funds and blue chip stocks but there is no 100% guarantee you will increase your investment.

Buying commodities and assets like real estate can be risky but they are better than investing in other things. Once again you have to have a level of understanding of markets, economics and human behavior to minimize your risk on these investments.

Yes, making your money grow optimally over time takes a certain amount of understanding. So does making money in the first place, you need to have some useful skill or ability to be able to get a job to make money. People who are incapable of thinking and making correct decisions make less money. That is part of the free market and there is nothing wrong with it.

In order to make it simple for the average person why not just have his money retain it's value or increase it slightly over time instead of eroding it's purchasing power and making it less valuable. Inflation and deflation are perhaps not desirable in perpetuity but inflation is the choice of governments for controlling price levels because they like to control price levels. Besides taxes you lose 2-4% per year in purchasing power on your dollar.

So the government should determine its fiscal policy based on guaranteeing returns for these "simple" people? It should just forget about what the market is doing and deliver equality to everyone, regardless of their level of ability? Sounds like a socialist viewpoint to me.

Edited March 18, 2010 by Bonam

[Pliny]

Well, I won't bother repeating what I have already said. I would just like to comment on your last paragraph.

So the government should determine its fiscal policy based on guaranteeing returns for these "simple" people? It should just forget about what the market is doing and deliver equality to everyone, regardless of their level of ability? Sounds like a socialist viewpoint to me.

I don't know how you could misconstrue me as having a socialist viewpoint in any respect.

Having savings and guaranteeing their value is not done by government, it is done by having honest money. No fiscal policy of government, other than the guarantee of safeguarding honest money, is necessary to ensure the value of the savings of these "simple" people does not diminish over time.

PS: The established "intellectual property" industry will always argue for the sustaining of the industry. I suppose it would do me best to totally understand the industry rather than hear arguments against it. However, if I did understand the industry I might have a career and never read Against Intellectual Property.

Edited March 19, 2010 by Pliny

[Pliny]

Double post

Edited March 19, 2010 by Pliny

[Bonam]

I don't know how you could misconstrue me as having a socialist viewpoint in any respect.

Having savings and guaranteeing their value is not done by government, it is done by having honest money. No fiscal policy of government, other than the guarantee of safeguarding honest money, is necessary to ensure the value of the savings of these "simple" people does not diminish over time.

I know you do not have any socialist inclinations hence I thought it would be effective to point out how your suggestion in this one instance seemed to have some socialist features to it. What you ask is indeed something that is done by government (within the current framework of our society). You suggested that fiscal policy be designed so as to allow "simple people" to retain the value of their money without having to understand the markets or make informed decisions. This is a goal, a value set for government, that you propose, that places the goal of equalizing outcomes for people in this respect, and hence seems to me an inherently socialist train of thought. My point of view is that this need not be a primary consideration in the setting of government fiscal policy.

No fiscal policy of government, other than the guarantee of safeguarding honest money, is necessary to ensure the value of the savings of these "simple" people does not diminish over time.

The translation of this statement is that you want 0 inflation. So that the money that a simple person stuffs under their mattress will be worth the same decades later, because they cannot be expected to invest that money in something that will make it grow. A zero inflation goal would be a significant paradigm shift in our fiscal policy.

Edit:

Just to add to what I said above, there are certainly many things to be said for a currency backed by a hard standard such as gold. And there may be many valid arguments to make for a zero inflation goal. I just don't think arguing it from the direction of "making it easy for simple people to save" is the way to go.

Edited March 19, 2010 by Bonam

[bloodyminded]

The trouble is he isn't wrong.

I read Paxtons diatribe against Goldberg and if Goldberg had nothing to say or was totally wrong Paxton wouldn't bother to comment. It wouldn't be worth his time.

It's not just Paxton. But these historians were ignoring the book, not bothering to comment...until they realized that the flawed thesis has gained some real traction, and is being disseminated among the general population through such sober scholarly geniuses as Glenn Beck and Bill O'Reilly. Hell, the tea-party protests are chock full of people equating liberals with fascists. (And these are the self-same deep thinkers who decried the earlier, equally false equations of Bush-with-fascism.)

These left-wing academics have a lot to lose. I see why they are mobilizing against Goldberg. He simplifies their "science" too much.

They are respected scholars who examine fascism. And in fact, they are the oens who have been consitently railing against the conflation of conservatism and fascism, explaining that in fact fascism is neither left nor right, but takes elements of both. They are "mobilizing agaisnt Goldberg" because his ideas are bad, his scholarship doesn't rise to even basic standards, and because his entire thesis is about attacking the left...period.

He evn sits there in interviews with Beck and O'Reilly and nods wisely along with their "fascism-equals-liberalism" tripe.

Who cares if it is left or right that is promoting big government. They are progressives/socialists and progressives/socialists are not limited to liberals or conservatives. Liberals used to be about small government and conservatives were, and have always been about, the maintaining of the status quo. If there is a communist government in power conservatives would be communists. Paxton at least acknowledged Goldberg's correct description of "classical liberalism". The socialists did highjack the term liberal since liberals were not about "conserving" the status quo which by definition excluded socialist ideology.

Once we have achieved a certain level of social liberalism they will become the new conservatives wishing to maintain the status quo and the liberals will be the old conservatives. This keeps the general public confused enough about politics that they just throw up their hands in frustration. "How come Republicans are growing government faster than the Democrats? It just doesn't make sense"

Fascism is a totalitarian "socialist" ideology. Left and right, as you have said yourself, are irrelevant.

So...first you tell me that Goldberg's thesis is solid, and now you explicitly disagree with his thesis entire.

Edited March 19, 2010 by bloodyminded

[Pliny]

I know you do not have any socialist inclinations hence I thought it would be effective to point out how your suggestion in this one instance seemed to have some socialist features to it. What you ask is indeed something that is done by government (within the current framework of our society). You suggested that fiscal policy be designed so as to allow "simple people" to retain the value of their money without having to understand the markets or make informed decisions. This is a goal, a value set for government, that you propose, that places the goal of equalizing outcomes for people in this respect, and hence seems to me an inherently socialist train of thought. My point of view is that this need not be a primary consideration in the setting of government fiscal policy.

Sorry, Government need make no regulation regarding money and therefore the idea is not socialist in any respect. That money retain it's purchasing power or value over time is a natural occurrence not requiring any government legislation. It is only governments desire to control prices that they continually inflate the money supply which continually inflates prices.

The translation of this statement is that you want 0 inflation. So that the money that a simple person stuffs under their mattress will be worth the same decades later, because they cannot be expected to invest that money in something that will make it grow. A zero inflation goal would be a significant paradigm shift in our fiscal policy.

Edit:

Just to add to what I said above, there are certainly many things to be said for a currency backed by a hard standard such as gold. And there may be many valid arguments to make for a zero inflation goal. I just don't think arguing it from the direction of "making it easy for simple people to save" is the way to go.

Ensuring people's savings retain value is perhaps one thing that government should be doing. They do it by not printing money and not extending credit beyond real savings and not debasing the currency.

A zero inflation rate would indeed be a significant paradigm shift but inflation is a tool of government to control prices.

I am not making the argument that simple people can save. I am making the argument that savings are the only true method to create wealth through investment. Creating "money' out of thin air, as banks currently do, is no way to create wealth.

Edited March 20, 2010 by Pliny