[davelj]

[quote=flu]

I don’t see why folks who are sitting on these pensions haven’t realized this yet…It has happened so many times in history, airline, auto workers,etc. Make no mistake, it’s going to happen again. Either negotiated ahead of time or in court.[/quote]

File under: You can’t get blood from a stone.

And at some point the taxpayers will decide that they’re stones. But it’s hard to know in advance where the breaking point is. But I don’t think we’re too far off.

[davelj]

[quote=flu]

I don’t see why folks who are sitting on these pensions haven’t realized this yet…It has happened so many times in history, airline, auto workers,etc. Make no mistake, it’s going to happen again. Either negotiated ahead of time or in court.[/quote]

File under: You can’t get blood from a stone.

And at some point the taxpayers will decide that they’re stones. But it’s hard to know in advance where the breaking point is. But I don’t think we’re too far off.

[davelj]

[quote=flu]

I don’t see why folks who are sitting on these pensions haven’t realized this yet…It has happened so many times in history, airline, auto workers,etc. Make no mistake, it’s going to happen again. Either negotiated ahead of time or in court.[/quote]

File under: You can’t get blood from a stone.

And at some point the taxpayers will decide that they’re stones. But it’s hard to know in advance where the breaking point is. But I don’t think we’re too far off.

[davelj]

[quote=flu]

I don’t see why folks who are sitting on these pensions haven’t realized this yet…It has happened so many times in history, airline, auto workers,etc. Make no mistake, it’s going to happen again. Either negotiated ahead of time or in court.[/quote]

File under: You can’t get blood from a stone.

And at some point the taxpayers will decide that they’re stones. But it’s hard to know in advance where the breaking point is. But I don’t think we’re too far off.

[davelj]

Another good recent article on the topic, but with a global perspective.

http://jessescrossroadscafe.blogspot.com/2010/10/financial-times-martin-wolf-offers.html

[davelj]

Another good recent article on the topic, but with a global perspective.

http://jessescrossroadscafe.blogspot.com/2010/10/financial-times-martin-wolf-offers.html

[davelj]

Another good recent article on the topic, but with a global perspective.

http://jessescrossroadscafe.blogspot.com/2010/10/financial-times-martin-wolf-offers.html

[davelj]

Another good recent article on the topic, but with a global perspective.

http://jessescrossroadscafe.blogspot.com/2010/10/financial-times-martin-wolf-offers.html

[davelj]

Another good recent article on the topic, but with a global perspective.

http://jessescrossroadscafe.blogspot.com/2010/10/financial-times-martin-wolf-offers.html

[davelj]

[quote=davelj][quote=Rich Toscano][quote=davelj] But taking into account unempolyment + capacity utilization + asset deflation + a low savings rate (which will increase and cut into consumption) + a massive amount of debt that needs to get paid down… probably leads to low inflation for a while. What “a while” is is hard to know…[/quote]

Good list, although I would quibble with the massive amount of debt item… in theory that SHOULD lead to higher saving and lower inflation, but in practice, my strongly held opinion is that it will lead to higher inflation as the political pressure to inflate away the debt is overwhelming.

Anyway, I completely agree that there are factors in place that are holding inflation in check for now (but as you say, how long “now” lasts is a whole different question).[/quote]

Ultimately the question comes down to this… how much “quantitative easing” (“money printing” in the everyday lexicon) can the Fed engage in and not produce meaningful inflation given the circumstances? The answer is not at all straightforward.

On the one hand we see this: http://calculatedriskimages.blogspot.com/2010/06/household-net-worth-q1-2010.html

Domestic household net worth declined peak-to-trough by $17 trillion. Now it’s “only” down about $11 trillion (after rallies in stocks and housing prices). But, as the graph notes – oops! – we’re still above the long-term trend! When the S&P was around 800 and housing prices were at the trough last year – lo and behold – net worth as a % of GDP was about in line with the long-term trend. Bizarre that both housing prices and the S&P 500 were at roughly fair value back then based on their individual long-term trends. Funny how that works. But I digress…

So, we know that the Fed can’t just print up $11 trillion to fill the current “hole” (a hole only relative to the bubble peak, of course); that would be massively inflationary eventually. On the other hand, the Fed can probably print up a couple of trillion before inflation is ignited (particularly if net worth trends back down, which it probably will do here shortly). That is, “some part” of that hole can be plugged with funny money without dire long-term inflation consequences. (And I’m admittedly simplifying the whole process and thinking here – household net worth is just ONE issue to contemplate in the inflation/deflation debate.) So, the $64 trillion question is: What is that number – between $1 trillion and many trillions – that can be printed up and over what period? I don’t know the answer. But I’m betting it’s much closer to the lower number than the higher numbers. One way or another, we’re going to find out…[/quote]

I just read this article today and thought it fit in well with this thread and previous post of mine. I like Dean Baker’s analogy of a counterfeiter. (Also, he approaches the issue from a “demand” standpoint, which is better than my “net worth” approach above.) What Dean doesn’t know – and no one on the planet does – is how much “counterfeiting” the economy can take before real, sustained inflation kicks in which can’t be easily controlled. Nevertheless, I like his analogy here.

http://www.guardian.co.uk/commentisfree/cifamerica/2010/oct/11/useconomy-usemployment

[And, by the way, Baker both identified the housing bubble early and was against all of the bailout activity, so he’s not a tool of the banksters or the Fed. Just to be clear.]

[davelj]

[quote=davelj][quote=Rich Toscano][quote=davelj] But taking into account unempolyment + capacity utilization + asset deflation + a low savings rate (which will increase and cut into consumption) + a massive amount of debt that needs to get paid down… probably leads to low inflation for a while. What “a while” is is hard to know…[/quote]

Good list, although I would quibble with the massive amount of debt item… in theory that SHOULD lead to higher saving and lower inflation, but in practice, my strongly held opinion is that it will lead to higher inflation as the political pressure to inflate away the debt is overwhelming.

Anyway, I completely agree that there are factors in place that are holding inflation in check for now (but as you say, how long “now” lasts is a whole different question).[/quote]

Ultimately the question comes down to this… how much “quantitative easing” (“money printing” in the everyday lexicon) can the Fed engage in and not produce meaningful inflation given the circumstances? The answer is not at all straightforward.

On the one hand we see this: http://calculatedriskimages.blogspot.com/2010/06/household-net-worth-q1-2010.html

Domestic household net worth declined peak-to-trough by $17 trillion. Now it’s “only” down about $11 trillion (after rallies in stocks and housing prices). But, as the graph notes – oops! – we’re still above the long-term trend! When the S&P was around 800 and housing prices were at the trough last year – lo and behold – net worth as a % of GDP was about in line with the long-term trend. Bizarre that both housing prices and the S&P 500 were at roughly fair value back then based on their individual long-term trends. Funny how that works. But I digress…

So, we know that the Fed can’t just print up $11 trillion to fill the current “hole” (a hole only relative to the bubble peak, of course); that would be massively inflationary eventually. On the other hand, the Fed can probably print up a couple of trillion before inflation is ignited (particularly if net worth trends back down, which it probably will do here shortly). That is, “some part” of that hole can be plugged with funny money without dire long-term inflation consequences. (And I’m admittedly simplifying the whole process and thinking here – household net worth is just ONE issue to contemplate in the inflation/deflation debate.) So, the $64 trillion question is: What is that number – between $1 trillion and many trillions – that can be printed up and over what period? I don’t know the answer. But I’m betting it’s much closer to the lower number than the higher numbers. One way or another, we’re going to find out…[/quote]

I just read this article today and thought it fit in well with this thread and previous post of mine. I like Dean Baker’s analogy of a counterfeiter. (Also, he approaches the issue from a “demand” standpoint, which is better than my “net worth” approach above.) What Dean doesn’t know – and no one on the planet does – is how much “counterfeiting” the economy can take before real, sustained inflation kicks in which can’t be easily controlled. Nevertheless, I like his analogy here.

http://www.guardian.co.uk/commentisfree/cifamerica/2010/oct/11/useconomy-usemployment

[And, by the way, Baker both identified the housing bubble early and was against all of the bailout activity, so he’s not a tool of the banksters or the Fed. Just to be clear.]

[davelj]

[quote=davelj][quote=Rich Toscano][quote=davelj] But taking into account unempolyment + capacity utilization + asset deflation + a low savings rate (which will increase and cut into consumption) + a massive amount of debt that needs to get paid down… probably leads to low inflation for a while. What “a while” is is hard to know…[/quote]

Good list, although I would quibble with the massive amount of debt item… in theory that SHOULD lead to higher saving and lower inflation, but in practice, my strongly held opinion is that it will lead to higher inflation as the political pressure to inflate away the debt is overwhelming.

Anyway, I completely agree that there are factors in place that are holding inflation in check for now (but as you say, how long “now” lasts is a whole different question).[/quote]

Ultimately the question comes down to this… how much “quantitative easing” (“money printing” in the everyday lexicon) can the Fed engage in and not produce meaningful inflation given the circumstances? The answer is not at all straightforward.

On the one hand we see this: http://calculatedriskimages.blogspot.com/2010/06/household-net-worth-q1-2010.html

Domestic household net worth declined peak-to-trough by $17 trillion. Now it’s “only” down about $11 trillion (after rallies in stocks and housing prices). But, as the graph notes – oops! – we’re still above the long-term trend! When the S&P was around 800 and housing prices were at the trough last year – lo and behold – net worth as a % of GDP was about in line with the long-term trend. Bizarre that both housing prices and the S&P 500 were at roughly fair value back then based on their individual long-term trends. Funny how that works. But I digress…

So, we know that the Fed can’t just print up $11 trillion to fill the current “hole” (a hole only relative to the bubble peak, of course); that would be massively inflationary eventually. On the other hand, the Fed can probably print up a couple of trillion before inflation is ignited (particularly if net worth trends back down, which it probably will do here shortly). That is, “some part” of that hole can be plugged with funny money without dire long-term inflation consequences. (And I’m admittedly simplifying the whole process and thinking here – household net worth is just ONE issue to contemplate in the inflation/deflation debate.) So, the $64 trillion question is: What is that number – between $1 trillion and many trillions – that can be printed up and over what period? I don’t know the answer. But I’m betting it’s much closer to the lower number than the higher numbers. One way or another, we’re going to find out…[/quote]

I just read this article today and thought it fit in well with this thread and previous post of mine. I like Dean Baker’s analogy of a counterfeiter. (Also, he approaches the issue from a “demand” standpoint, which is better than my “net worth” approach above.) What Dean doesn’t know – and no one on the planet does – is how much “counterfeiting” the economy can take before real, sustained inflation kicks in which can’t be easily controlled. Nevertheless, I like his analogy here.

http://www.guardian.co.uk/commentisfree/cifamerica/2010/oct/11/useconomy-usemployment

[And, by the way, Baker both identified the housing bubble early and was against all of the bailout activity, so he’s not a tool of the banksters or the Fed. Just to be clear.]

[davelj]

[quote=davelj][quote=Rich Toscano][quote=davelj] But taking into account unempolyment + capacity utilization + asset deflation + a low savings rate (which will increase and cut into consumption) + a massive amount of debt that needs to get paid down… probably leads to low inflation for a while. What “a while” is is hard to know…[/quote]

Good list, although I would quibble with the massive amount of debt item… in theory that SHOULD lead to higher saving and lower inflation, but in practice, my strongly held opinion is that it will lead to higher inflation as the political pressure to inflate away the debt is overwhelming.

Anyway, I completely agree that there are factors in place that are holding inflation in check for now (but as you say, how long “now” lasts is a whole different question).[/quote]

Ultimately the question comes down to this… how much “quantitative easing” (“money printing” in the everyday lexicon) can the Fed engage in and not produce meaningful inflation given the circumstances? The answer is not at all straightforward.

On the one hand we see this: http://calculatedriskimages.blogspot.com/2010/06/household-net-worth-q1-2010.html

Domestic household net worth declined peak-to-trough by $17 trillion. Now it’s “only” down about $11 trillion (after rallies in stocks and housing prices). But, as the graph notes – oops! – we’re still above the long-term trend! When the S&P was around 800 and housing prices were at the trough last year – lo and behold – net worth as a % of GDP was about in line with the long-term trend. Bizarre that both housing prices and the S&P 500 were at roughly fair value back then based on their individual long-term trends. Funny how that works. But I digress…

So, we know that the Fed can’t just print up $11 trillion to fill the current “hole” (a hole only relative to the bubble peak, of course); that would be massively inflationary eventually. On the other hand, the Fed can probably print up a couple of trillion before inflation is ignited (particularly if net worth trends back down, which it probably will do here shortly). That is, “some part” of that hole can be plugged with funny money without dire long-term inflation consequences. (And I’m admittedly simplifying the whole process and thinking here – household net worth is just ONE issue to contemplate in the inflation/deflation debate.) So, the $64 trillion question is: What is that number – between $1 trillion and many trillions – that can be printed up and over what period? I don’t know the answer. But I’m betting it’s much closer to the lower number than the higher numbers. One way or another, we’re going to find out…[/quote]

I just read this article today and thought it fit in well with this thread and previous post of mine. I like Dean Baker’s analogy of a counterfeiter. (Also, he approaches the issue from a “demand” standpoint, which is better than my “net worth” approach above.) What Dean doesn’t know – and no one on the planet does – is how much “counterfeiting” the economy can take before real, sustained inflation kicks in which can’t be easily controlled. Nevertheless, I like his analogy here.

http://www.guardian.co.uk/commentisfree/cifamerica/2010/oct/11/useconomy-usemployment

[And, by the way, Baker both identified the housing bubble early and was against all of the bailout activity, so he’s not a tool of the banksters or the Fed. Just to be clear.]

[davelj]

[quote=davelj][quote=Rich Toscano][quote=davelj] But taking into account unempolyment + capacity utilization + asset deflation + a low savings rate (which will increase and cut into consumption) + a massive amount of debt that needs to get paid down… probably leads to low inflation for a while. What “a while” is is hard to know…[/quote]

Good list, although I would quibble with the massive amount of debt item… in theory that SHOULD lead to higher saving and lower inflation, but in practice, my strongly held opinion is that it will lead to higher inflation as the political pressure to inflate away the debt is overwhelming.

Anyway, I completely agree that there are factors in place that are holding inflation in check for now (but as you say, how long “now” lasts is a whole different question).[/quote]

Ultimately the question comes down to this… how much “quantitative easing” (“money printing” in the everyday lexicon) can the Fed engage in and not produce meaningful inflation given the circumstances? The answer is not at all straightforward.

On the one hand we see this: http://calculatedriskimages.blogspot.com/2010/06/household-net-worth-q1-2010.html

Domestic household net worth declined peak-to-trough by $17 trillion. Now it’s “only” down about $11 trillion (after rallies in stocks and housing prices). But, as the graph notes – oops! – we’re still above the long-term trend! When the S&P was around 800 and housing prices were at the trough last year – lo and behold – net worth as a % of GDP was about in line with the long-term trend. Bizarre that both housing prices and the S&P 500 were at roughly fair value back then based on their individual long-term trends. Funny how that works. But I digress…

So, we know that the Fed can’t just print up $11 trillion to fill the current “hole” (a hole only relative to the bubble peak, of course); that would be massively inflationary eventually. On the other hand, the Fed can probably print up a couple of trillion before inflation is ignited (particularly if net worth trends back down, which it probably will do here shortly). That is, “some part” of that hole can be plugged with funny money without dire long-term inflation consequences. (And I’m admittedly simplifying the whole process and thinking here – household net worth is just ONE issue to contemplate in the inflation/deflation debate.) So, the $64 trillion question is: What is that number – between $1 trillion and many trillions – that can be printed up and over what period? I don’t know the answer. But I’m betting it’s much closer to the lower number than the higher numbers. One way or another, we’re going to find out…[/quote]

I just read this article today and thought it fit in well with this thread and previous post of mine. I like Dean Baker’s analogy of a counterfeiter. (Also, he approaches the issue from a “demand” standpoint, which is better than my “net worth” approach above.) What Dean doesn’t know – and no one on the planet does – is how much “counterfeiting” the economy can take before real, sustained inflation kicks in which can’t be easily controlled. Nevertheless, I like his analogy here.

http://www.guardian.co.uk/commentisfree/cifamerica/2010/oct/11/useconomy-usemployment

[And, by the way, Baker both identified the housing bubble early and was against all of the bailout activity, so he’s not a tool of the banksters or the Fed. Just to be clear.]

[davelj]

[quote=CA renter]

In general, volunteer departments are in rural areas where paid fire departments are not needed, or where they can’t afford one. If you look at a map of the U.S., you’ll quickly see why we appear to have such a large volunteer force. Things are different from department to department, but in many (most?) cases, these departments would not have a staffed station. If a call comes in, the volunteers carry radios around with them and they meet where the call is located (usually one or two will go to the station first to get the engine, or it’s possible someone might bring the engine home). Can you imagine the reponse times in an urban/suburban setting?[/quote]

I don’t know much about this but I thought a lot of volunteer departments had a fire station and folks just volunteered for one night per week (or every two weeks) but stayed in the station for that night or two. So, it’s like a full-time station perpetually staffed by part-timers.

[quote=CA renter]
In urban/suburban areas, if there is a volunteer component to a paid department, it would be used for training new recruits. Of course, the promise/hope of a job in the paid force is the incentive that makes these kids work for “free” (it still costs the department WRT administrative and training costs, equipment, insurance, etc.). If they don’t think the volunteer experience will land them a job, or significantly increase their chances, I guarantee you there would be precious few full-time volunteers, if any (and the ones who would volunteer F/T are the weird “groupie” types that are actually very dangerous — nobody wants to hire those).[/quote]

That makes sense but if 73% of all fire fighters are indeed volunteers and we know that a huge proportion of the total population in the U.S. is in urban areas, then there must be a lot of volunteers in some major metropolitan areas as well. I agree that the rural model doesn’t translate perfectly to the urban model, but clearly a lot of folks are willing to do this work on a very part-time basis for free. In my view, we should figure out how to use these folks.

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